LARGEST CLEVELAND WAREHOUSE RENOVATION BEGINS

Bingham Building to Begin Leasing Luxury Loft Apartments in January 2004

(CLEVELAND, OH December, 2003)-Bingham Burnside LLP, a Chicago-based developer, has begun an $80 million renovation of the W. Bingham Building, the newest and one of the largest redevelopment projects in downtown Cleveland's Historic Warehouse District. When completed, the Bingham Building will offer 340 luxury loft apartments with full amenities, including a 9,000 ft. grocery store, indoor parking, a staffed fitness center, concierge and doorman.

Bingham Burnside closed on construction and mortgage financing in January 2003, and construction began almost immediately. Model suites are slated to be open in December 2003, with apartments available by late spring 2004.

"We have developed a strong track record, developing many homes and multi-family units in and around downtown Chicago and were attracted to the historic development happening in downtown Cleveland," said Neal Singer, a partner with Bingham Burnside.

The Bingham renovation project will have an immediate impact on economic development in downtown Cleveland, creating 300 union construction jobs over the next 18 months and approximately 25 additional permanent jobs once the construction is completed.

Financing for the Bingham renovation was provided through the U.S. Housing and Urban Development Department's 220 Urban Renewal Program. The loan was facilitated by Draper and Kramer, a mortgage banker from Chicago, through a partnership between PFC Corporation of Newport Beach, CA and an investment through the AFL-CIO (American Federation of Labor-Congress of Industrial Organizations). Locally, National City Bank invested $16 million in historic tax credits and conservation easements for the project, and the Cleveland Development Partnership provided a $1.25 million bridge loan during acquisition and construction. Additional bridge loans were financed by ColeTaylorBank and LaSalle Bank of Chicago.

The City of Cleveland also provided a second mortgage for twenty years with some interest deferral. Bingham Burnside worked with American Express Tax and Business Services to help structure the transaction.

The conservation easements granted to Bingham provided the largest tax deduction to date for the Warehouse District with the easements valued at close to $33 million, according to Tom Yablonsky, executive director of the Historic Warehouse District Development Corporation.

The first phase of the Bingham renovation will include 79 one- and two-bedroom units with 120 additional units and a penthouse planned for the second phase. The final phase will develop 141 additional units to include one-, two- and three-bedroom apartments, along with full landscaping of patio gardens and the completion of all common areas throughout the building.

Principals of Bingham Burnside LLP are George "Bud" Arquilla, Jr., George Arquilla III, and Neal Singer of Burnside Construction Company; and John Helander, all of the Chicago area. Burnside Construction was founded in Chicago in 1911 and has built more than 25,000 homes.

The Bingham Building was designed by one of Cleveland's most prominent architectural firms Walker & Weeks in 1915, and originally housed one of the Midwest's largest hardware companies, the W. Bingham Company.

Bingham Burnside management is working with Sandvick Architects and Marous Brothers Construction Co. as partners in this renovation. "Both Sandvick and Marous Brothers are strong Cleveland companies with a wealth of experience in historic renovation projects, particularly in the warehouse district," Singer said. "We purposely contracted with companies that understand the unique challenges of historic preservation." Kennedy Wilson has been tapped as the property management company.

The Bingham renovation continues the historic renovation of one of Cleveland's oldest neighborhoods. The Historic Warehouse District is a unique, mixed-use office, residential and retail area in downtown Cleveland. After decades of neglect, renovation of the area has continued since the 1980s, creating Cleveland's trendiest residential neighborhood.

"Cleveland's vibrant downtown neighborhood, the Historic Warehouse District, offers stylized living in a contemporary urban setting," said Cleveland Mayor Jane L. Campbell. "The Bingham Building is the most recent Warehouse District project to be renovated into living space offering splendid views of downtown Cleveland and housing options for persons of all walks of life."

Within the Warehouse District, the corridor along W. 9th Street has the largest concentration of housing in downtown Cleveland with seven recent residential projects, including the Bingham Building.

"The development of the Bingham Building will bring the total unit count for the Warehouse District to about 2,000," Yablonsky said. "That starts to create the critical mass needed for certain types of retail and services, such as the grocery store planned for the Bingham Building. I suspect we will see more service-oriented development in the near future."

Bingham Burnside officials are committed to bringing a more upscale lifestyle to warehouse district living. "The Bingham Apartments will provide the excitement of living right in the heart of downtown Cleveland's entertainment district, but will also create the most upscale and luxurious neighborhood available in downtown Cleveland," explained Singer.