Executive Investment Summary

Ellenwood Town Center / The Villages of Ellenwood

Ellenwood Town Center

Georgia’s Largest New Live/Work/Play Community Ellenwood Partners LLC will be developing a $300 million, 400-acre assemblage of land at the intersection of Interstate 675 and Anvil Block Road, just south of I-285 in Clayton County. Located less than 10 miles from Atlanta’s Hartsfield International Airport, this new retail and residential live/work/play community with ramp frontage off of I-675, will also command more than 6,000 feet of frontage along Anvil Block Road. This road is currently so heavily traveled that the county has planned to expand it from 2 to 5 lanes.

Ellenwood Town Center / The Villages of Ellenwood as proposed will contain a million square feet of commercial development with retail, office and mini-storage space and a theater connected by bike trails and roads to a residential neighborhood of more than 1,000 new homes including 433 single-family detached units, 231 townhomes, 100 ranch condominium units and 326 multifamily units. With its pedestrian-friendly design, this development will allow families who live in the farthest reaches of the community to cycle or walk to jobs, shopping or entertainment without using its roadways.

Clayton County, Georgia, with a population of 252,733(1) packed into a land area of 146 square miles, is one of Georgia’s most densely populated counties. Even so, its high quality of life continues to attract new residents; it added almost 6,000 in the 2002 annual count. Next to Clayton is Henry County, the nation’s third fastest-growing county. Dekalb County, to Clayton’s north, also made this ranking.

The Assemblage Over the last 30 months, National Retail Real Estate Services, Inc. has assembled Ellenwood Town Center’s 400 acres from a total of 42 parcels / land owners. Liberty Development Corporation has contracted with National Retail to purchase these parcels. National Retail and Liberty Development Corporation have formed Ellenwood Partners, LLC to manage the development of this project.

Liberty Development has contracted to purchase the land at its pre-rezoning value. Two critical elements proposed for Ellenwood Town Center are on the September 18 zoning agenda for Clayton County: a new land use plan and a site-specific rezoning request. Approval of these zoning and land use changes are projected to increase the development’s land value by approximately $8.4 million. The agreed-upon price for the land is as follows:

• Residential parcels $7,659,000

• Commercial parcels $25,312,500

National Retail has guided the Ellenwood Town Center plans through all of the regional planning and zoning approvals necessary for building a Planned Unit Development (PUD) of its size. It has passed the Atlanta Regional Commission’s (ARC) Livable Cities Initiative review and the Georgia Regional Transportation’s (GRTA) Development of Regional Impact review.

In addition, Ellenwood Partners LLC is in the process of applying to the Clayton County Commission to approve Ellenwood Town Center as a Redevelopment Area and Tax Allocation District (TAD) under the Georgia Redevelopment Powers Law.

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The Opportunity

Ellenwood Town Center is the largest single PUD within an infill location in Georgia. For the development to win approval by the ARC and GRTA, it had to pass rigorous evaluation of its inter-jurisdictional impacts on: the natural environment, the region’s economy, public transportation, public services (water, sewer, solid waste and other facilities) and on the ability of people to find adequate housing that is reasonably accessible to jobs.

It passed. Ellenwood Town Center’s interconnectedness, its quality of life built-ins, will attract new residents at a mix of income ranges into its neighborhoods of new single family homes, condos, townhomes and multifamily units. These homes will be joined to each other and to the development’s retail, entertainment and office space by a neighborhood-intensive, pedestrian-friendly interconnected network of bicycle/jogging trails and green pathways that will eventually link to the county’s growing public transportation network. This system of pathways will encourage the use of alternative modes of transportation to work and other destinations, helping to improve metro Atlanta’s air quality.

Challenges

The question that might be asked by prospective investors is: “Why hasn’t this property been developed before?” Although the Ellenwood site offers all the advantages of a attractive infill location in a strong market with adjacent interstate access, some key challenges have prevented this site from being redeveloped to date:

• Restrictive roadway system. The current road system limits the flow of traffic between Ellenwood – as well as its neighboring communities – and I-675. The county is now planning to upgrade and expand Anvil Block Road and all adjacent roads.

• Nonexistent sewer capacity. Clayton and DeKalb recently reached an intergovernmental agreement wherein a DeKalb treatment facility will allocate a capacity of 2 million gallons per day to the Ellenwood community.

• Zoning and land use plan. The County is in the process of changing its current zoning and land use plan for this area of the county, which now allows only two uses: low-density, single family residential, and light industrial.

• Topographical problems. Seismic testing shows rock present beneath the 14 land areas tested in depths ranging from approximately two to 33 feet beneath existing grades. A significant amount of float rock and exposed surface rock also exists on the site.

County and Community Involvement

With these issues, Clayton County recognizes it will take a major incentive to induce a developer to build on the infill site assembled for Ellenwood Town Center. One mechanism the county can use to mitigate the significant developmental problems that burden the site is by designating Ellenwood Town Center a Redevelopment Area and Tax Allocation District (TAD).

The state’s Redevelopment Power’s Law provides for the creation of such districts for financing public improvements and stimulating private investment in underdeveloped and distressed areas. Within the TAD, the County is able to leverage the value of positive growth in the tax base to finance public improvements. The Ellenwood Town Center TAD will be used to pay for over $17 million in public road and infrastructure improvements that will enhance the development’s live/work/play interconnectivity. It is scheduled to be approved before the end of October.

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Building Phases and Financing

The Building Phases. The 400-acre Ellenwood Town Center Redevelopment area is broken into 14 major tracts scheduled to open in five phases (see Exhibit 1 for Tract information). Tracts H, J, K and L, which are predominantly residential, will open in June 2004. Tracts A and I will open January 2005. Tracts B, E, G and D, which includes the theater, will open in May 2005 – in time for the summer movie crowd. Tracts C and F, predominantly retail, will open in August 2005, in time for back-to-school shopping.

Financing

Action Items Date $Cost $Value Details

Acquire all land 01-Nov-03 Funds required to purchase

-Residential 7,659,000$ all parcels currently under

-Commercial 25,312,500$ contract

-Total 32,971,500$ 54,500,000$ (1)

Loan-to-Value 60%

Development Loan - Residential 01-Nov-03 12,223,000$ Develop 764 residential lots

-Total Initial Funding 45,194,500$ 75,230,000$ (2)

Loan-to-Value 60%

Construction Loan - Commercial 01-Apr-04 81,640,000$ Build 1 million SQFT Retail

-Total Initial Funding 126,834,500$ 185,379,000$ (3)

Loan-to-Value 68%

(1) - Post-Zoning, Post-TAD Value(2) - Post-Zoning, Post-TAD Value + Residential Lot Value(2) - Post-Zoning, Post-TAD Value + Residential Lot Value + Cap Value of Retail

The opportunity presented by Ellenwood Town Center / The Villages of Ellenwood has brought together the public and private sectors in Clayton County to enrich the county’s quality of life offerings with a live/work/play community that will serve as a model to future developments. The demand is proven for a new community that offers such old fashioned, small town connectedness.

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