The Axiom at Capitol Yards delivered 246 luxury apartments in July 2008.

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1 The Axiom at Capitol Yards delivered 246 luxury apartments in July 2008.

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3 TABLE OF CONTENTS ANNUAL REPORT About the Capitol Riverfront BID 2 Letter from the Chairman and Executive Director 4 Clean and Safe 6 Public Realm 7 Economic Development 8 Marketing, PR, and Branding 10 Events and Community Building 12 Financials 14 Board of Directors and Staff 15 STATE OF THE CAPITOL RIVERFRONT Development Summary 16 Office Market 18 Residential Market 20 Retail Market 22 Parks, River, and Environmental Sustainability 24

4 ABOUT THE CAPITOL RIVERFRONT BID Within the Capitol Riverfront we are witnessing the rapid transformation of an entire neighborhood. Property owners in the Capitol Riverfront agreed that it was imperative for a business improvement district (BID) to be established and services be provided. The Capitol Riverfront BID was organized to 1) address issues that are developing rapidly and that confront this emerging neighborhood and 2) provide management services and a unified voice where previously none had existed. BIDs have typically been applied to mature downtown environments, so organizing a BID in a new, emerging area like the Capitol Riverfront was a break with tradition. The BID provided property owners an opportunity to understand and address issues that were occurring as fast as their individual development projects. The Capitol Riverfront BID was officially established by the DC Council in July 2007 and by Executive Order of the Mayor in August These approvals came after a year-long planning process that involved property owners and other community stakeholders a process that identified issues unique to this rapidly developing area that would shape our boundaries, goals, budget development, BID tax, and work programs. The BID is governed by a board of directors comprised of twenty-one (21) voting members that pay the BID tax. Five (5) at-large community stakeholders that are BID tax exempt also participate in board meetings in a non-voting capacity. Our FY08 budget was approximately $1.3 million and is funded through a special tax that owners vote upon themselves. Our organization is staffed by four (4) ful-time professionals and nine (9) Clean and Safe Team members. In FY08, the Capitol Riverfront BID provided the following services: 1. Clean Teams every Monday Friday 2. Hospitality/Safety Ambassadors every Monday Friday 3. Marketing, branding, and PR initiatives 4. Economic development and business attraction efforts 5. Advocacy and educational outreach for the neighborhood 6. Infrastructure analysis and coordination 7. Community-building events and activities Our future activities will involve the maintenance and programming of the new parks that will be constructed in the Capitol Riverfront by Our ultimate mission is to create and provide management services to a neighborhood that is clean, safe, friendly, and vibrant. We believe this will support the development of a new mixed-use community in Washington, DC a business center, urban neighborhood, retail and entertainment district, and regional riverfront destination with world-class parks. 2

5 C A P I T A L B E LT W A Y W H E R E I S T H E CAPITOL RIVERFRONT? DISTRICT OF COLUMBIA MARYLAND VIRGINIA 23th St Virginia Ave 19th St WHITE HOUSE 14th St 12th St 9th St 6th St UNION STATION Mass. Ave Maryland Ave Constitution Ave 2nd St 4th St 6th St NATIONAL MALL U.S. CAPITOL E Capitol St CAPITOL HILL 14th Street Bridge Tidal Basin Independence Ave Maine Ave 7th St D St I St M St S Capitol St Capitol South Navy Yard Pennsylvania Ave 8th St Eastern Market George Washington Parkway VIRGINIA P O T O M A C R Reagan National Airport East Potomac Park I V E R 2nd St N St P St Nationals Park ANACOST I A R I V E R Frederick Douglass Bridge 1mile 11th St Bridge 1kilometer The BID encompasses an area of approximately 500 acres located between the U.S. Capitol building and the Anacostia River. Upon build-out over 60% of the area will have been demolished and rebuilt with new office, residential, retail, and hotel uses. Four new parks will also be constructed that will enhance the sense of place and community in the Capitol Riverfront. The BID boundaries are defined as: To the north by I-295 To the south by the Anacostia River To the east by 15th Street SE To the west by South Capitol Street and the Frederick Douglass Bridge (an extension west to 2nd Street SW and Q/P Streets SW includes the Buzzard Point area in the BID) 3

6 LETTER FROM THE CHAIRMAN & EXECUTIVE DIRECTOR The Capitol Riverfront BID has been fully operational since its approval by the District Council and Mayor Fenty in the summer of And what a difference a year and a half can make in the life cycle of an organization and a neighborhood undergoing enormous change. The Capitol Riverfront BID was created to assist property owners in identifying and responding to a variety of issues that would confront a rapidly developing neighborhood, such as perceptions of cleanliness and safety; creating brand or name recognition in the marketplace; accessibility, parking, and infrastructure capacity; the quality of the public realm; coordinated economic development strategies; advocacy; and building community and sense of place. Through partnerships with District Government agencies and other stakeholders, the Capitol Riverfront BID has not only created a baseline of services but has become a leader for the neighborhood in addressing these issues. The BID has worked with property owners and other BID members to act collectively and speak in one voice to our elected officials and decision makers so that action can be taken. Our Clean and Safe team has worked to create a highquality public realm and a standard of great service, where litter and trash is collected daily, where grass in the parkways is cut, and where our hospitality/safety ambassadors welcome employees, visitors, and residents while answering questions and providing directions. These teams also assist in the setup for the weekly community events such as the farmers market and our highly successful summer concert series. Our BID has also taken the lead in creating a recognizable image and brand for the neighborhood the Capitol Riverfront by coordinating the many individual efforts of developers and property owners into one unified marketing campaign. These efforts will continue for several years as we establish a sense of place and destination for the Capitol Riverfront in the regional marketplace. Even with the downturn in the economy the Capitol Riverfront BID continues to facilitate economic development in the neighborhood through business attraction efforts, infrastructure coordination, and the provision of accurate information. The BID has become a respected partner in our efforts to achieve our ultimate build-out scenarios: 33.9 million square feet of total development potential; 15.5 million SF of office space; 9,100 residential units; 1,000,000 SF of retail, restaurant, and entertainment venues; over 1,200 hotel rooms; and four new parks and the riverwalk trail system. Building community for our tenants, residents, and visitors is an important goal to us as we see our new neighborhood grow quickly. The Capitol Riverfront BID has embraced this concept by supporting the weekly DOT farmers market, coordinating a summertime concert series, and hosting evening outdoor movies during baseball season. But more is coming with the maintenance and programming of our new parks, the hosting of music and food festivals, and the coordination of community planting and clean-up days. Much has already been accomplished but much work remains to be done. The Capitol Riverfront BID is committed to be the management entity, advocate, and change agent in this exciting new neighborhood on the Anacostia River. And as the neighborhood grows and evolves over time, as issues and opportunities emerge every year, and as more residents, employees, and visitors come to our area, the Capitol Riverfront BID is committed to be the constant in this ever-changing environment. We look forward to partnering with you over the coming years in achieving the vision of an exciting, mixed-use business center, urban neighborhood, entertainment district, and regional riverfront destination a new neighborhood that all of Washington can be proud of and call their own. We hope that you enjoy this first of many annual reports on the activities and accomplishments of the Capitol Riverfront BID. ERIC SIEGEL Chairman, Capitol Riverfront Business Improvement District MICHAEL STEVENS, AICP Executive Director, Capitol Riverfront Business Improvement District 4

7 TIMELINE: THE CAPITOL RIVERFRONT UNFOLDS 2004 GSA selects Forest City to develop SEFC, now The Yards U.S. DOT HQ begins construction Anacostia Waterfront Corporation (AWC) created Baseball s return to DC officially announced Capitol Hill Tower and Courtyard Marriott begin construction Half Street delivered Yards riverfront park delivered Yards Boilermaker retail opens Capitol Quarter townhomes continue to be delivered 1995 BRAC decision consolidates NAVSEA to Navy Yard ,500 new employees come to Navy Yard, bringing the total to 13,000 employees 300 M Street, 80 M Street, & Maritime Plaza I completed JBG site selected for U.S. DOT HQ DC receives HOPE VI grant for Arthur Capper Carollsburg (ACC) development 2005 Land acquisition intensifies 20 M Street begins construction 2008 Nationals Park opens Jefferson & Axiom at Capitol Yards, Onyx on First delivered (960 Apts.) 100 M Street delivered (80,000 leased by Parsons Engineering) 1015 Half Street begins construction Foundry Lofts at The Yards begin construction $800K donation for Diamond Teague Park Capitol Quarter townhomes under construction Farmers Market, lunchtime concerts, and outdoor movie series Yards Park agreement signed new office buildings & Navy campus expansion begin construction 2003 Anacostia Waterfront Initiative Framework Plan completed Federal Gateway I & Maritime Plaza II delivered 2006 ACC demolition begins Stadium construction begins Capitol Hill Tower and Courtyard Marriott open Capper Senior #1 delivered PILOTs for roads, sewers, & parks approved 100 M, Onyx on First, and Jefferson & Axiom at Capitol Yards all begin construction 2007 AWC & NCRC folded into DMPED Navy Yard Metro expanded U.S. DOT HQ delivered + 6,500 employees 20 M Street delivered 55 M Street, Capitol Yards, & Velocity Condos begin construction Douglass Bridge lowered Old Capper seniors home demolished Infrastructure improvements Capitol Riverfront BID created First Farmers Market 2009 Foundry Lofts, Capitol Yards, Velocity Condos, Capitol Quarter townhomes delivered (700 units) 55 M Street delivered (275,000 SF) Diamond Teague Park opens Boilermaker Retail Shops begin construction Numerous events Yards Park and Canal Park begin construction 5

8 t A Capitol Riverfront hospitality ambassador provides assistance. q Trash cans with Capitol Riverfront nameplates were added throughout the BID. CLEAN & SAFE The Capitol Riverfront BID s Clean & Safe team maintains the day-to-day quality of the public realm, increasing the level of cleanliness, the appearance, and safety throughout the BID. The six clean team members pick up litter and empty trash cans on the street; maintain the right of way by trimming weeds, raking leaves, and clearing snow; remove handbills/ graffiti; and respond to illegal dumping. The two hospitality and safety ambassadors create a welcoming environment in the Capitol Riverfront. They actively monitor activities on the streets, greet passersby, answer questions, and provide directions. All of the team members carry Nextel radios to communicate with the supervisor and fill out reports at the end of each day to provide a summary of work tasks and happenings in the neighborhood. The clean team collects about 300 bags of trash per month, for a total of 3,600 bags per year, while the hospitality ambassadors provide between 30 and 40 assists per day for a total of 9,100 assists in FY2008. The perception of the BID as clean or very clean increased from 6% a week before clean & safe service began in 2007 to 58.4% after one year of operations. The BID sent out a perception survey about the Capitol Riverfront one week before the Clean and Safe team service began. At that time, only 6% of respondents thought the neighborhood was clean or very clean and only 6.1% thought it was safe or very safe. The perception of cleanliness and safety has increased after a year of Clean and Safe team operations. Year two of the perception survey shows 58.4% of respondents think the BID is clean or very clean and 44.9% perceive the BID as safe or very safe. The Clean and Safe team also participated in opening weekend of Nationals Park by working overtime hours to provide the best fan experience possible to new visitors to the Capitol Riverfront.

9 q Employees in the Capitol Riverfront enjoy lunch and the water wall at Tingey Plaza behind the U.S. DOT. PUBLIC REALM During the first year of operations, the Capitol Riverfront BID enhanced the quality of the public realm with several streetscape projects. The BID worked with the DC Department of Public Works to place additional trash cans in high-pedestrian areas and added Capitol Riverfront nameplates to the trash cans. In order to create a clean, unified look and feel along M Street, the BID planted flowers in several tree boxes and painted all the light poles the same color as the new poles installed at U.S. DOT. Also, the BID hung decorative light-pole banners along the major corridors throughout the BID and gateway signage that says Welcome to the Capitol Riverfront at four main entrance points into the BID. t 97 decorative banners were hung along major corridors in the BID.

10 t The Capitol Riverfront skyline takes shape, as seen from the 41,888-seat Nationals Park, completed in ECONOMIC DEVELOPMENT & QUALITY OF LIFE The Capitol Riverfront BID emphasizes economic development activities as one of our core work programs. These activities include business attraction efforts; infrastructure analysis and coordination; transportation and access planning; research and information; and advocating for the public parks. The BID has partnered with property owners, the District Government, and other entities to facilitate these economic development activities in the Capitol Riverfront. The Capitol Riverfront has quickly emerged as an exciting new neighborhood that surrounds Nationals Park. The Capitol Riverfront BID has become our partner in economic development initiatives and we look forward to collaborating with them on future projects. Neil Albert, Deputy Mayor for Planning & Economic Development Business Attraction A top priority of the BID has been the attraction of office tenants, restaurants, retailers, and residents for the commercial and residential buildings that are under construction and completed. We collaborate with property owners and brokers to give presentations and tours to numerous office tenant and retail prospects, and have an ongoing effort with the Washington, DC Economic Partnership to recruit retailers at the annual ICSC convention in Las Vegas. Our office space, showcasing the Anacostia Riverfront model, serves as a marketing center and showroom for the neighborhood s development dynamic and leasing opportunities. Infrastructure Analysis As it became apparent that the neighborhood s new development would exceed the capacity of the existing water/sewer systems, the BID partnered with the DC Government, property owners, and the DC Water and Sewer Administration to upgrade these underground utilities. This planning process resulted in a special assessment district being created in the BID that funded the upgrading and replacement of these inadequate utility lines during 2008 when streets were already under construction for baseball preparations. The DC Government and BID property owners shared in the costs of these utility upgrades and replacements. p Mayor Adrian Fenty accepts an $800,000 donation from Florida Rock Properties for the construction of Diamond Teague Park, part of Florida Rock s successful PUD approval for their Riverfront development.

11 t 100 M Street, a 225,000 SF office building completed in 2008, welcomes Parsons Engineering (who pre-leased 80,000 square feet) in January Transportation/Access Planning Transportation systems and access became top priorities with the opening of Nationals Park in March The BID worked with the Nationals, DC s Department of Transportation, WMATA, and other stakeholders in the development of the transportation operations and parking plan (TOPP) for the Capitol Riverfront. The TOPP guided transportation, parking, and Metro station improvements that led to the successful first season in Nationals Park, where over 60% of attendees arrived by Metro, shuttle bus, walking, or bicycles. Public Parks The BID has been a strong advocate for the construction of four new public parks in the Capitol Riverfront Canal Park, The Yards Riverfront Park, Diamond Teague Park, and Tingey Square. As a part of that process, the BID has been involved in discussions that would result in the BID assuming responsibility for the maintenance and programming of these park resources. The BID sees these parks as a unique opportunity to build community and a sense of place in the neighborhood, and they must be maintained and programmed at a world-class level. These parks will become assets in our business and residential attraction efforts. p The Foundry Lofts, a historic Navy Yard building that is now being converted into a 170-unit loft apartment building with 10,000 SF of retail, broke ground in May Research and Information The BID strives to be an information clearinghouse on development activity and other trends in the Capitol Riverfront. Our research and data gathering efforts have focused on development activity including summaries of completed, under construction, and planned projects; residential sales and leasing activity; type and value of public and private investments; Metro ridership statistics; traffic counts; census data and neighborhood demographics; and available commercial lease space. Our offices can produce maps and graphs illustrating many of these data sets and development summaries. The BID will conduct original research in coming years that documents the fiscal impacts and benefits of this area to the city. At the request of the BID the Capitol Riverfront also received designation as a CoStar office submarket in August

12 The BID focuses on branding the Capitol Riverfront name, promoting the Capitol Riverfront s development dynamic, and marketing the Capitol Riverfront neighborhood s four destination qualities a new business center, urban neighborhood, entertainment and ballpark district, and parks and riverfront destination. The Capitol Riverfront was in the press over 115 times in FY08, including newspapers such as The Washington Business Journal, The Washington Times, The Washington Post, The New York Times, The Examiner, and Express; magazines such as DC Modern Luxury, Washingtonian, and On-Site Magazine; and several web-based media/blogs including DCist, DCMud, DCRealEstate, Bisnow, UrbanTurf, and of course JDLand. The BID has become our best advocate for branding the Capitol Riverfront as a new neighborhood in DC and raising the public s awareness of its destination qualities. Chris Smith, President & CEO, William C. Smith & Co. MARKETING, PUBLIC RELATIONS, & BRANDING p In June 2008, the BID launched a bi-monthly newsletter called Capitol Riverfront Connections. t Capitolriverfront.org serves as a primary source to disseminate information to real estate professionals, government officials, and the public at large; in FY08 the website had a total of 63,063 individual sessions and averaged 5,255 individual sessions per month.

13 p The Capitol Riverfront BID partnered with the Washington Nationals to show a promotional video before every Nationals home game. MARKETING MATERIALS AND INITIATIVES During the first year, the BID created a marketing brochure, showcase boards, and the project delivery and lifestyle maps of the neighborhood. These publications served as the initial marketing and outreach materials to promote and brand the Capitol Riverfront assets. The BID also developed a website with features such as updated relevant news stories, a development database, real-time photographs, an interactive map, and event announcements. In FY08 the website had a total of 63,063 individual sessions and averaged 5,255 individual sessions per month. In June 2008, the BID launched a semimonthly e-newsletter called Capitol Riverfront Connections. The e-newsletter reaches about 2,500 people and provides relevant information about the progress of the Capitol Riverfront and the neighborhood s attractions and events, and drives people to the BID website and the websites of BID projects. In addition, the new BID offices on the 10th floor of 1100 New Jersey Ave SE with a scale model of the development along the Anacostia updated to reflect current development plans, large wall displays, and conference space serves as a marketing center where property owners and brokers bring prospective tenants and retailers to learn about the Capitol Riverfront. Lastly, working with the Nationals, the BID produced a 30-second video that was shown on the stadium jumbotron before every Nationals home game and sent out the Capitol Riverfront marketing brochure to all season ticket holders. p BID publications serve as initial marketing and outreach materials to promote and brand the Capitol Riverfront assets. TRADE SHOWS AND CONFERENCES The BID staff attends and often presents at tradeshows and conferences to further promote and educate people about the Capitol Riverfront. This past year the BID participated in the International Council of Shopping Centers (ICSC) Convention in Las Vegas and ICSC Mid-Atlantic, the GWCAR REAL Tour, International Downtown Association Annual meeting, GSA Office space information meeting, Urban Parks Conference, ULI Urban Marketplace, and more.

14 t Capitol Riverfront lunchtime concerts showcased lively musical artists throughout the summer. The Anacostia River will be our front porch and the riverfront park the community s living room a social gathering place for a variety of activities and recreational opportunities. Michael Stevens, Executive Director, Capitol Riverfront BID E V E N T S & COMMUNITY BUILDING The Capitol Riverfront produces special events in order to build and foster a sense of community among residents and employees, attract visitors, provide a memorable experience, and animate open spaces. The DOT Farmers Market, Capitol Riverfront Concerts, Riverfront Reel outdoor movies, and other events produced during this first year are the beginning of what will become a much larger programming schedule when construction is completed on the four new parks and riverwalk trail. u A fall happy hour event brought 350 real estate and business professionals to the roof of the Jefferson at Capitol Yards in September.

15 t Farm-fresh produce was available at the farmers market every Tuesday from May through November. Farmers Market & LUNCHTIME Concerts Farm-fresh produce, baked goods, prepared food, and crafts created a 15-vendor DOT Farmers Market from 10 a.m. to 2 p.m. every Tuesday from May through November. The farmers market was produced as a partnership between the BID and U.S. DOT. For the market s second season there were several improvements, including the new location at 3rd Street SE, unified tents, and additional signage on the street. The Capitol Riverfront Concerts showcased lively musical artists and created an outdoor café atmosphere with a special lunch menu every Wednesday from May through July. JBG Companies sponsored the ten-week summer concerts on Tingey Plaza behind U.S. DOT and even held an encore performance for the highly popular doo-wop group, The Jewels. Riverfront Reel This summer the Capitol Riverfront BID also produced Riverfront Reel, an outdoor movie series featuring ten classic baseball movies including Field of Dreams, Bad News Bears, A League of Their Own, and The Natural. Riverfront Reel was held on Tingey Plaza behind U.S. DOT where an inflatable 32-foot screen was placed in front of the lawn. Moviegoers came to enjoy a picnic, listen to music, and play Nintendo Wii on the giant screen before showtime. The movies also exposed Nationals fans to activity in the BID beyond baseball and provided them with an activity post-game. Tingey Plaza is located between the drop-off for the RFK Stadium shuttle and the ballpark, which allowed hundreds of fans to enjoy the movies. The BID also partnered with the DC Commission on the Arts and Humanities to bring holiday music to the Navy Yard Metro station as part of the Music in Public Places program, and partnered with Cultural Tourism DC and Forest City Washington to host two WalkingTown DC walking tours, for a total of about 200 people interested in learning about the history and the dynamic future of the Capitol Riverfront. t Riverfront Reel outdoor movie series on Tingey Plaza behind U.S. DOT.

16 FINANCIALS Statement of Financial Position: September 30, 2008 (Unaudited) and September 30, 2007 (Audited) UNAUDITED AUDITED ASSETS Cash and Cash Equivalents $290,743 $8,397 Accounts Receivable, net 893, ,434 Prepaid Expenses 6, Property and Equipment, net 19,374 13,165 Total Assets $1,210,347 $190,701 LIABILITIES AND NET ASSETS Accounts Payable and Accrued Expenses 25,585 35,273 Line of Credit & Loans 90,715 75,000 Deferred Revenue 827,339 - Notes Payable Stakeholders - 151,111 Net Assets 266,709 (70,683) Total Liabilities and Net Assets $1,210,347 $190,701 Statement of Activities: Year Ended September 30, 2008 (Unaudited) and Period from Inception to September 30, 2007 (Audited) UNAUDITED AUDITED SUPPORT AND REVENUE Assessment Revenues $1,230,897 $168,434 Contributions and Other Revenue 113,588 28,319 Total Support and Revenue 1,344, ,753 EXPENSES Administration 180, ,066 Marketing 240,665 61,636 Public Realm 9,120 - Clean & Safe Services 454,289 19,202 Community Building 7,512 - Economic Development 33,205 12,381 Professional Fees 70,992 52,974 Other Expenses 11,223 10,176 Total Expenses $1,007,093 $267,436 CHANGE IN NET ASSETS $337,392 ($70,683) FINANCIAL HIGHLIGHTS 1) 45% of 2008 costs went toward Clean and Safe Services 2) 27% of 2008 costs went toward Marketing and Economic Development 3) Fiscal year end 2008 exceed budgeted surplus by approximately $87,000 4) During 2008, $80,000 in stakeholders loans were forgiven and contributed to the BID for Board designated projects, remaining balances were paid back. 5) 2009 budget reflects a budgeted surplus of $9,300, with significant resources going toward Clean and Safe Services, Public Realm, Transportation and Access, Economic Development, Community Building, and Marketing the BID This information has been derived from the financial statements audited by E. Cohen & Company. The complete set of audited financial statements is available upon request from the Capitol Riverfront Business Improvement District. 14

17 BOARD & STAFF BOARD MEMBERS THREE-YEAR TERM Dodd Walker, Akridge Eric Siegel, Cohen Companies (chairman) Danny Ellis, Faison David Jacobs, JBG Greg Lamb, JPI Amy Phillips, Monument (secretary) Brad Fennell, William C. Smith & Co. (treasurer) TWO-YEAR TERM Jeffrey Cohen, COFELD Bert Donohoe, Donohoe Real Estate Services Cindy Muller, Lerner Enterprises Steve Cohen, Opus East Steven Gewirz, Potomac Investments Marvin Rosskopf, Ruben Companies Sheldon Stein, Valhal ONE-YEAR TERM Daryl Jackson, Capitol Hill Tower Coop Jim Dautenhahn, DRI Leon Kafele, ICP Partners David Brainerd, Madison Marquette Linda Cogburn, Monday Real Estate Vincent Orange, Pepco (vice chairman) John Clark, Steuart Investment AT-LARGE STAKEHOLDERS Cristina Amoruso, Barracks Row Main Street Greg O Dell/Erik Moses, DC Sports & Entertainment Glen O Gilvie, Earth Conservation Ramsey Meiser, Forest City Washington Gregory McCarthy, Washington Nationals BID STAFF Michael Stevens, AICP Executive Director Kathleen Kruczlnicki Office Manager & Events Coordinator Claire Schaefer Deputy Executive Director Ted Skirbunt Director of Research & Information Systems Leon Johnson Operations Manager, Clean & Safe Teams 15

18 OVERALL DEVELOPMENT From January 2001 to October 2008, $2 billion of development projects have been completed in the Capitol Riverfront BID. In 2008 the Capitol Riverfront continued to develop as a business center, retail and entertainment destination, and walkable urban neighborhood with three groundbreakings that will deliver 379,000 SF of office space, 31,000 SF of retail space, and 330 residential units. Upon build-out the Capitol Riverfront will see nearly $8 billion in development projects comprising a total of 15.5 million SF of office space; 9,100 residential units; 1,200 hotel rooms; more than 1 million SF of retail space; four new parks; and a riverwalk trail DEVELOPMENT HIGHLIGHTS Five projects totaling $1.12 billion were completed: The $687.5 million baseball stadium for the Washington Nationals hosted more than 2.3 million visitors in Three residential buildings totaling $333 million and 960 new units. One $100 million office building comprised of 225,000 SF of office and 15,000 SF of retail. PROJECTS UNDER CONSTRUCTION AS OF OCTOBER 31, 2008 INCLUDE Two office buildings totaling $280 million, with 654,000 SF of new office space and 36,000 SF of retail space Four residential projects totaling $377 million and 767 residential units Estimated Delivery Office Sq. Ft. Retail Sq. Ft. Residential Units Hotel Rooms Total Sq. Ft. Estimated Total Cost Existing/Recently Completed 6,225, ,280 1, ,370,161 $2 billion ,000 33, ,087,332 $317 million , , ,500 $410 million ,902, ,000 1, ,950,400 $1 billion ,803, ,000 5, ,645,265* $4 billion Totals 15,585,714 1,026,780 9,102 1,125 33,984,658* $7.7 billion Source: Capitol Riverfront BID, October 2008 * Total sq. ft. numbers include the allowed zoning by right on lots where a building program has not yet been determined 16

19 Development in the Capitol Riverfront Business Improvement District H ST CAPITOL SOUTH 3 BLOCKS Existing I ST 2 3 EASTERN MARKET 5 BLOCKS Parks Riverwalk Trail P ST Q ST SOUTH CAPITOL ST HALF ST N ST NATIONALS PARK POTOMAC AVE 1ST ST 1ST ST L ST NEW JERSEY AVE NAVY YARD N PL Diamond Teague Park (spring 2009) (2011) 2ND ST Canal Park 2ND ST CANAL ST WASA M ST TINGEY SQ 3RD ST NAVY YARD The Yards Park (2010) R I TINGEY ST WATER ST V E 4TH ST R W A L K ST 5TH ST K T R A ISAAC HULL AVE I L Sports Field PATTERSON AVE 7TH ST Blue Castle PAULDING ST KENNON ST SICARD ST M ST 8TH ST DAHLGREN AVE 9TH ST Virginia Ave Community Garden L ST 34 N ST WASHINGTON NAVY YARD O ST 11TH ST BRIDGE 35 WATER ST Boathouse Row T ST 1ST ST R ST S ST PEPCO V ST HALF ST Capitol Yards, JPI Residential Apt. 1,352 units; Retail 21,000 SF New Jersey Avenue William C. Smith & Co. Mixed Use 1.5 million SF Virginia Ave, Highgate Holdings Office 421,000 SF 4. Plaza on K, DRI Development Office 795,000 SF; Retail 30,000 SF South Capitol Street, Lerner Office 320,000 SF; Retail TBD Half Street, Opus East Office 379,000 SF; Retail 21,000 SF FREDERICK DOUGLASS BRIDGE 7. Velocity Condos, Cohen Companies/ADC Residential Condos 200 units (First Phase) Office/Mixed Use TBD (Subsequent Phases) 8. Akridge Mixed Use TBD 9. Capitol Hill Tower, Valhal Residential Co-Op 344 units; Retail 8,000 SF 10. Courtyard by Marriott, Valhal Hotel 204 rooms; Retail 4,000 SF 11. Capitol Quarter & Capper/Carrollsburg EYA, Mid-City Urban & Forest City Residential Townhouses 323 units; Residential Apartments & Condos 1,859 units 12. SC 1100, Ruben Companies Office 320,000 SF; Retail TBD M Street, Lerner Office 180,633 SF; Retail 10,000 SF M Street, Monument Realty Office 135,000 SF; Retail 5,000 SF M Street, Spaulding & Slye Colliers Office 275,352 SF 16. Onyx on First, Faison/Canyon-Johnson Residential Apartments 266 units M Street, Opus East Office 225,000 SF; Retail 15,000 SF New Jersey Avenue, Donohoe Office 203,000 SF; Retail 8,000 SF 19. Federal Gateway I, William C. Smith & Co. Office 293,000 SF; Retail 18,000 SF 20. Federal Gateway II, William C. Smith & Co. Office 213,000 SF; Retail 12,000 SF M Street, Potomac Investments Office 278,500 SF; Retail 3,000 SF M Street, Forest City Office 500,000 SF; Retail 20,500 SF M Street, Akridge Office 350,000 SF; Residential 300 units; Retail 60,000 SF 24. Half Street, Monument Realty Office 275,000 SF; Retail 50,000 SF; Residential 340 units; Hotel 196 rooms 25. Square 701, 1st and M St., LLC, Cofeld, Welch Family & Michael Meisel Office 350,000 SF; Retail TBD (Phase I) Residential TBD (Phase II) 26. U.S. Department of Transportation, JBG Office 1,350,000 LSF; Retail 22,300 SF 27. The Yards, Forest City Washington Office 1.8 million SF; Retail 400,000 SF Residential Apts. & Condos 2,800 units 28. RiverFront on the Anacostia, FRP Development Office 545,000 SF; Retail 80,000 SF; Residential 275 units; Hotel 325 Rooms V Street, Akridge Mixed Use M SF Half Street, Douglas Development Office 477,562 SF 31. Coast Guard Headquarters Monday Real Estate Office 570,000 SF 32. Marine Bachelor Enlisted Quarters Residential Dorms 166 units 33. Admiral at Barracks Row, Old City Development, LLC Retail 3,000 SF; Office 19,000 SF M Street Retail 7,480 SF; Office 920 SF 35. Maritime Plaza, Brickman Office 345,000 SF (PUD allows for additional Office, Hotel) 36. Cohen Companies Office 250,000 SF (available FAR) 17

20 OFFICE Despite the recent credit crises and economic downturn, the Capitol Riverfront BID is well positioned to weather the current economic climate. The build-out of established downtown markets, when combined with the city s height restriction and federal government presence, will continue to push development into emerging office submarkets such as the Capitol Riverfront. The Capitol Riverfront offers tenants with expiring leases a variety of LEED-certified Class A space within walking distance to the Capitol, proximity to multi-modal public transit, numerous housing options, office lease rates $10 15 PSF lower than downtown submarkets, and access to the river OFFICE DEVELOPMENT HIGHLIGHTS Creation of the Capitol Riverfront Submarket in CoStar One office building was completed in 2008 totaling 225,000 SF of office space, 15,000 SF of retail space and $100 million. As of October 2008, two office buildings were under construction, totaling 654,000 SF of office space, 36,000 SF of retail, and $280 million. CAPITOL RIVERFRONT OFFICE MARKET 26% 14% 4% 56% TOTAL PLANNED (8,705,747 SF) EXISTING PRIVATELY OWNED, RENTED (4,025,967 SF) TOTAL UNDER CONSTRUCTION (654,000 SF) EXISTING GOVERNMENT OWNED, OCCUPIED (2,200,000 SF) Source: Capitol Riverfront BID, October

21 2. PLAZA ON K Office: 795,000 SF Retail: 30,000 SF HALF STREET Office: 379,000 SF Retail: 21,000 SF M STREET Office: 180,633 SF Retail: 10,000 SF M STREET Office: 225,000 SF Retail: 15,000 SF 1 2 NJ AVE I FEDERAL GATEWAY I Office: 293,000 SF Retail: 18,000 SF M ST Nationals Park S CAPITOL ST 22 F. DOUGLASS BRIDGE 13 8TH ST 26 EXISTING UNDER CONSTRUCTION PLANNED/FUTURE PARKS/OPEN SPACE 20 11TH ST BRIDGE M STREET Office: 275,000 SF Retail: 15,000 SF M STREET Office: 376,000 SF Retail: 56,000 SF V STREET Mixed use: 2.7 million SF 26. NAVY YARD Office: 2.2 million SF NEW JERSEY AVE Mixed Use: 1,500,000 SF 11. FEDERAL GATEWAY II Office: 213,000 SF Retail: 12,000 SF 16. SQUARE 701 Office: 350,000 SF M STREET Office: 250,000 SF S. CAPITOL Office: 320,000 SF Retail: TBD M STREET Office: 278,500 SF Retail: 3,000 SF 17. FOREST CITY PHASE II Office: 1,400,000 SF 22. RIVERFRONT ON THE ANACOSTIA Office: 545,000 SF Retail: 80,000 SF S. CAPITOL Office: 320,000 SF Retail: TBD M STREET Office: 500,000 SF Retail: 20,500 SF 18. U.S. DEPT. OF TRANSPORTATION Office: 1,350,000 LSF Retail: 22,300 SF 24. COAST GUARD HQ Office: 570,000 SF M STREET Office: 275,352 SF NEW JERSEY Office: 203,000 SF Retail: 8,000 SF M STREET Office: 350,000 SF Retail: 60,000 SF 20. MARITIME PLAZA I & II Office: 345,000 SF HALF ST SW Office: 477,562 SF OFFICE STATISTICS 3Q 2008 Vacancy Rate*: 9.10% YTD Absorption 3Q 2008: 42,228 3Q 2008 Avg Full Service Rent PSF: $45.93 Source: Capitol Riverfront BID based on data from CB Richard Ellis, CoStar, and Lincoln Property Company *Does not include Government owned, occupied space Existing: 6,225,967 SF Under Construction: 654,000 SF Planned: 8,705,747 SF Source: Capitol Riverfront BID, October

22 RESIDENTIAL In October 2008, the Capitol Riverfront BID saw its estimated population increase by more than 100 people to a total of 1,100 residents as recently completed luxury apartment buildings began to lease units. As 700 or more residential units deliver in 2009 and completed residential buildings continue adding residents it is projected that the Capitol Riverfront population will approach 2,000 residents in Currently an estimated 25,000 people live within one mile of the intersection of 3rd Street SE and M Street SE, with an average household income of more than $86,000.* *Source: DC Economic Partnership, ESRI 2008 RESIDENTIAL DEVELOPMENT HIGHLIGHTS Three luxury apartment projects were completed in 2008, totaling 960 new units and $333 million with rents averaging $2.47 PSF. As of October 2008 four residential projects were under construction comprising 160 townhouses, 407 apartments, and 200 condos, for a total of $217 million. Capitol Riverfront BID Residential Unit & Population Growth # of units/population POPULATION RESIDENTIAL UNITS Source: Capitol Riverfront BID, population estimates based on 1.3 residents per unit and estimated absorption rates 20

23 2/3. JEFFERSON/AXIOM AT CAPITOL YARDS JPI, 694 units AT CAPITOL YARDS JPI, 237 units 5. CAPITOL QUARTER & CAPPER/CARROLLSBURG, EYA/Mid City Urban /Forest City, 2,182 units 6. VELOCITY CONDOMINIUMS Cohen Companies, 200 units CAPITOL HILL TOWER Valhal, 344 units S CAPITOL ST Nationals Park F. DOUGLASS BRIDGE NJ AVE 5 M ST I TH ST EXISTING UNDER CONSTRUCTION PLANNED/FUTURE PARKS/OPEN SPACE 11TH ST BRIDGE 8. ONYX ON FIRST Faison, 266 units 10. HALF STREET RESIDENTIAL Monument Realty, 340 units 15. FOUNDRY LOFTS Forest City Washington, 170 units 19. FACTORY 202 PN Hoffman, 250 units Eye at Capitol Yards, JPI, 421 units M Street, Akridge, 300 units 11. Square 701 Residential, Welch Family & Michel Meisel 12. The Yards Phase II, Forest City Washington 13. The Yards Phase II, Forest City Washington 14. The Yards Phase II, Forest City Washington 16. The Yards Phase II, Forest City Washington 17. The Yards Phase II, Forest City Washington Tingey Street, Forest City Washington, 190 units 20. Building 74, Forest City Washington 21. Marine BEQ, 166 units 22. RiverFront on the Anacostia, FRP Development, 275 units RESIDENTIAL STATISTICS Average Rent for new luxury high-rise apartment: $2.47 PSF Average new condo/co-op/townhome price: $446 PSF EXISTING: 1,830 units UNDER CONSTRUCTION: 767 units PLANNED: 6,505 units Source: Capitol RIverfront BID, October

24 RETAIL, ENTERTAINMENT, AND HOSPITALITY The retail, entertainment, and hospitality development highlight of 2008 was the completion of the catalytic 41,888-seat Nationals Park baseball stadium. More than 2.3 million people came to the Capitol Riverfront to attend Washington Nationals games, see Pope Benedict XVI, and attend events such as Opera in the Outfield. By comparison, in 2007 the Verizon Center saw a total of 2.4 million patrons at 220 events.* In addition, retailers such as Starbucks, Five Guys, Subway, Chicken Tortilla, Quiznos, Market Deli, Courtyard Café, Sizzling Express, Congressional Cleaners, CVS, The Port Café, and 27 restaurants and bars on Barracks Row are crowded with the estimated 35,000 employees, 1,100 residents, and more than 2.3 million visitors. * Source: Downtown BID 2007 State of Downtown report 2008 RETAIL, ENTERTAINMENT, AND DEVELOPMENT HIGHLIGHTS The 41,888-seat Nationals Park opened for its inaugural season. 100 M Street and Nationals Park delivered a total of 55,000 SF of retail space. Wachovia Bank opened in 20 M Street. As of October ,000 SF of retail space in five projects was under construction. The 204-room Courtyard Marriott averaged nearly an 80% occupancy rate. retail space in square feet 300, , , , ,000 50,000 0 Total Retail Space in the Capitol Riverfront 262, , ,280 72, Source: Capitol Riverfront BID, October

25 NEW JERSEY AVE Retail: TBD 15. FEDERAL GATEWAY I CVS, Five Guys, Subway, Chevy Chase Bank 20. NEIGHBORHOOD RETAIL Chicken Tortilla, Port Café, Quiznos, Al's Delicatessen, Dogma Day Care 24. HALF STREET 50,000 SF, 196 hotel rooms 30. BOILERMAKER SHOP 46,500 SF S CAPITOL ST M ST NJ AVE F. DOUGLASS BRIDGE I-295 8TH ST EXISTING UNDER CONSTRUCTION PLANNED/FUTURE PARKS/OPEN SPACE 22 11TH ST BRIDGE M STREET 56,000 SF PARK PAVILIONS 57,500 SF 37. NATIONALS PARK 40,000 SF 38. RIVERFRONT ON THE ANACOSTIA 80,000 SF, 325 hotel rooms 1. McDonalds Eye at Capitol Yards 4. Plaza on K at Capitol Yards Half Street 7. Velocity Condominiums 8. Market Deli 9. Capitol Hill Tower & Courtyard Marriott 10. SC M Street M Street M Street New Jersey Avenue 16. Federal Gateway II M Street M Street 19. Blue Castle 21. The Admiral M Street M Street 25. Square The Yards Phase II 27. Tingey Plaza 28. U.S. Dept. of Transp. 29. Building The Yards Phase II 33. Foundry Lofts 34. The Yards Phase II 35. The Yards Phase II V Street RETAIL STATISTICS EXISTING: 127,280 SF UNDER CONSTRUCTION: 54,000 SF PLANNED: 845,500 SF Source: Capitol RIverfront BID, October

26 PARKS, RIVER, AND ENVIRONMENTAL SUSTAINABILITY The Capitol Riverfront s four new parks and riverwalk trail will differentiate the community from other existing and emerging neighborhoods in the DC region. The 5.5-acre riverfront park at Forest City s The Yards will serve as a regional waterfront destination for generations to come and upon completion will be maintained and programmed by the Capitol Riverfront BID. Additionally, the Capitol Riverfront is home to more than 30 existing or planned LEED-certified buildings, the largest green roof in DC on the U.S. DOT building (65,000 SF), a LEED for Neighborhood Development pilot project at The Yards, the first LEED-certified stadium in the country, and larger tree boxes and permeable pavers to reduce run-off into the Anacostia River PARKS, OPEN SPACE, AND ENVIRONMENTAL SUSTAINABILITY HIGHLIGHTS $800,000 donation for the construction of Diamond Teague Park by Florida Rock Properties as part of PUD approval for their RiverFront on the Anacostia project Yards riverfront park construction, maintenance, and programming agreement signed; park scheduled to open in 2Q 2010 p The U.S. DOT building has the largest green roof in DC. p Public realm design standards such as larger tree boxes help reduce stormwater run-off into the Anacostia River. 24

27 1. CANAL PARK 2. JOY EVANS BEFORE & AFTER SCHOOL DAY CARE 3. VIRGINIA AVE COMMUNITY GARDEN 4. BOATHOUSE ROW NJ AVE I M ST 2 8TH ST 3 S CAPITOL ST 6 Nationals 4 Park 7 11TH ST 8 9 BRIDGE 5. TINGEY PLAZA 6. TINGEY SQUARE F. DOUGLASS BRIDGE 7. THE YARDS PARK 8. DIAMOND TEAGUE PARK 9. ANACOSTIA RIVERWALK TRAIL 25

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