Construction Financing Closes for DC USA; $149.5 Million for Urban Retail in Washington DC; 500,000 Square Feet, Anchored by Target Underway in Columbia Heights

"DC USA is the largest and most significant component of Columbia Heights' revitalized retail corridor," said Mayor Williams. "Once completed, DC USA will bring more than half a million square feet of quality retail and approximately 1,000 jobs to residents of Columbia Heights, Mount Pleasant, Adams Morgan and 16th Street Heights. In addition, the project is expected to add more than $12 million a year in taxes to the General Fund."

The three-level complex will be anchored by a two-level 180,000 square foot Target store, the first in the District. Other anchor tenants with signed leases include Bed Bath & Beyond, Best Buy, Marshalls and Staples. There will also be a 40,000 square foot Washington Sports Club complete with a swimming pool and a regulation-sized basketball court. Other smaller specialty retailers who have signed leases include Lane Bryant, Radio Shack, Caribou Coffee, The Vitamin Shoppe, Mattress Discounters, Quiznos, and Panda Express. With 500 feet of frontage on both 14th Street and Irving Streets and 250 feet on Park Road, most retailers will have direct street level access to their stores. The project's design by Bower Lewis Thrower Architects of Philadelphia maximizes street-level transparency and provides for an atrium lobby entrance on 14th Street to access Target, Bed Bath & Beyond, Best Buy and Marshalls. DC USA, which is approximately 60% pre-leased, will also include 15,000 square feet of space leased to local and minority-owned businesses at below-market rates.

The project involves an innovative combination of public and private financing including tax increment financing (TIF) that is being used for the parking facility. The legislation for the TIF was originally introduced by Councilman Jim Graham whose steadfast commitment to the project has been a key to its movement through the legislative and administrative approval processes. DC USA, according to Councilmember Graham "realizes a long standing ambition to revitalize Columbia Heights as a vibrant retail destination. As a community, we are particularly delighted to welcome Target and the other committed tenants to the District of Columbia and to Ward 1."

"With its mix of national, regional and local retailers, DC USA proves that a neighborhood-based retail model works," said Anthony Freeman, President and CEO of NCRC. "DC USA helps Columbia Heights once again become a center of commerce: a place to live, work and shop."

DC USA, upon completion, will be structured as a three-unit condominium. Target will own its store, the developers will own the remainder of the retail space and NCRC will own the parking facility. Financing for the project includes a conventional construction loan of $88.6 million provided by Citibank and the $46.9 million of tax-exempt bonds being issued by NCRC and purchased by Citibank. The bonds are being secured by a TIF note which pledges the District's additional sales and real estate tax revenue generated by the project to pay the debt service on the bonds. The Developer's equity investment constitutes the balance of funds required for the project.

DC USA will generate significant economic benefits for the District of Columbia including generating approximately 1,000 permanent jobs and 700 construction jobs. "National retailers locating within the District means we can keep more jobs and sales taxes here," said Dr. Natwar M. Gandhi, the District of Columbia's Chief Financial Officer. "This means added revenue for other things that can improve the lives of District residents."

DC USA is the centerpiece of NCRC's efforts to transform the area immediately surrounding the Columbia Heights Metro station at 14th and Irving Streets. There are currently 600 residential units underway, the historic Tivoli Theater has been renovated and a Giant supermarket opened last spring. "For so many years people have had to go outside the District to do their shopping," according to Robert Moore, the President and CEO of Development Corporation of Columbia Heights which has been active for many years in developing housing, job training programs and local business initiatives. "DC USA will not only bring high-quality businesses to Columbia Heights but will create jobs for local residents and business opportunities for local and minority businesses."

Andy Ditton, director of Citibank Community Development, noted, "We are thrilled to partner with Grid, Gotham and NCRC on this pivotal development that heralds the return of large-scale retail to the District of Columbia." With over $136MM of its capital in the project, DC USA marks Citibank's largest investment to date in the Mid-Atlantic region.

Grid Properties and Gotham Organization are well known for their development of Harlem USA, the retail and entertainment complex, opened in 2000, which is widely credited with jump-starting the resurgence of Harlem. The Clark Construction Group, Inc. and The Sherman R. Smoot Corporation of Washington D.C. are the general contractors. The project's leasing agents are Newmark, Knight, Frank. Completion is scheduled for early 2008.