MINNEAPOLIS, MN (May 2008) – Granite City Food & Brewery Ltd. (Nasdaq: GCFB) a Modern American upscale casual restaurant chain, today announced the signing of a long-term development agreement with United Properties, a nationally recognized real estate investment and development company. United Properties, based in Minneapolis, Minnesota, offers development expertise in office, industrial, retail, medical, residential and mixed-use projects and currently has 17 projects totaling almost 3 million sq. ft.. under development in Minneapolis, Milwaukee, Wis. and Denver, Colo.
Highlights of the Agreement:
* 22 new restaurants to be built in 2009 – 2012
* United will act as our developer for these 22 stores and have the first option to develop anything above this minimum amount through 2012.
* United will be responsible for all costs related to the land and building.
* GCFB will have the right of first offer to purchase stores owned by United.
* The annual lease rate on all land and buildings developed by United will reduce GCFB’s current lease rate by 100 basis points on fee simple transactions.
* United will periodically sell buildings developed for GCFB and will share a portion of the profits with GCFB
John Breitinger, vice president – Retail Development, United Properties said, “We are excited to partner with Granite City. We really admire their operations. We will help them accelerate the growth of their business by bringing our development and site selection expertise, capital and our construction experience.”
Steve Wagenheim, CEO and President of Granite City commented, “Our development agreement with United Properties enables Granite City to properly plan and manage our long-term real-estate needs and a balanced development cycle. We are pleased to have a Company such as United Properties realize the national potential of the Granite City concept. We look forward to the relationship and the benefits this brings to our Company.”
He added, “Those benefits include a strong foreseeable pipeline of sites and the flexibility in site selection, with a team approach to all areas of our business. It further increases our ability to lower our overall cost of capital, as well as reducing our building costs by eliminating middleman pricing when raw goods and FFE are ordered for each store individually. Finally, I would be remiss in not thanking Don Dunham and the Dunham Corporation for serving as our primary developer during the early stages of our lifecycle.”
About Granite City
Granite City Food & Brewery Ltd. is a Modern American upscale casual restaurant chain that operates 25 restaurants in twelve (12) states. The menu features affordable yet high-quality, family favorite menu items prepared from made-from-scratch recipes and served in generous portions. The sophisticated yet unpretentious restaurants, proprietary food and beverage products, attractive price points and high-service standards combine for a great dining experience. Granite City opened its first restaurant in St. Cloud, Minnesota in 1999.
About United Properties
United Properties, based in Minneapolis, Minnesota, specializes in commercial real estate development and investment. Since 1975, United Properties has provided development services for the retail, residential, office, medical and industrial sectors. The company’s residential development focuses on Applewood Pointe senior cooperative housing. In addition to a large presence in the Minneapolis-St. Paul market, United Properties expanded to Colorado through the opening of a retail development office and the acquisition of Ojala and Company. Formed in 1916, its investments group acquires, manages, finances, analyzes and disposes of United Properties’ real estate investments, which includes more than 60 office, industrial and retail properties. (www.uproperties.com). United Properties was founded in 1916 by the Hamm family and now is owned by the Pohlad family, private investors based in the Twin Cities.
Aethlon Capital, which has worked with Granite City since 2002 was responsible for brokering the deal between Granite City and United Properties. Aethlon Capital, www.aethlon.com. is a private investment bank that specializes in private equity and debt financings, mergers and acquisitions and strategic advisory services for public and private companies.
Certain statements made in this press release of a non-historical nature constitute “forward-looking Statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated. Such factors include, but are not limited to, changes in economic conditions, changes in consumer preferences or discretionary consumer spending, a significant change in the performance of any existing restaurants, the ability to obtain financing for, and complete construction of, additional restaurants at acceptable costs, and the risks and uncertainties described in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 10,2008.