MEDIA ARTS RELOCATING TO CAMPUS IN MADRONE BUSINESS PARK

Manufacturer of Kinkade art transferring 400 employees

MORGAN HILL -- Toeniskoetter & Breeding, Inc. (TBI) Development and Media Arts Group, Inc. have reached an agreement for Media Arts to relocate its headquarters and production facilities to a new campus to be built in the Madrone Business Park. San Jose-based Media Arts Group (NYSE:MDA) designs, manufactures and markets products based on the works of painter Thomas Kinkade. It would be the first New York Stock Exchange company to establish its headquarters in Morgan Hill.

“We have been working with Media Arts for the past year and are extremely pleased that they are moving to Morgan Hill,” Mayor Dennis Kennedy said. “Media Arts is a family-oriented business, and Morgan Hill prides itself on our small town, rural character. We are a very good match.”

Craig Fleming, President and CEO of Media Arts Group, said the move is being made to accommodate growth, achieve efficiencies and capitalize on state-of-the-art manufacturing opportunities. Morgan Hill provides a very desirable location both as a place to do business and as an area for employees to live, he said.

Media Arts is currently headquartered at 521 Charcot Avenue in San Jose and occupies five buildings totaling 161,000 square feet. Approximately 400 jobs will be transferred to Morgan Hill.

Brad Krouskup, President of TBI Development, said Media Arts would initially be located in three buildings totaling 273,000 square feet, including 62,000 square feet for administration, 155,000 square feet for offices and manufacturing and 56,000 square feet for distribution. The campus would include sites for two additional buildings to accommodate growth.

Located on a new street off the Madrone Parkway named “Lamp Post Way,” the campus will convey the peace and inspiration captured in the paintings of Thomas Kinkade.

“We have integrated the Kinkade concept into a functional corporate campus,” San Jose Architect Kenneth Rodrigues said. “While the buildings are sizeable, various design elements will be utilized to create both a work environment and a freeway presence that are rich, warm and inviting.”

The Media Arts buildings are expected to feature stone entries, walls covered by creeping fig, and pedestrian arcades with tiered trellises supporting flowering vines. Classical architectural features may include exterior columns and window surrounds.

Spaces between buildings will be extensively landscaped, and antique lamp posts will line the street. The landscaping also will include stone walls, fences and other elements common in Kinkade paintings.

Mr. Kinkade co-founded Media Arts Group, Inc. in 1990. The company is a leading designer, manufacturer, marketer and branded retailer of art-based home decorative accessories, collectibles and gift products based on Mr. Kinkade’s works. The Company's primary products are canvas and paper lithographs that feature Mr. Kinkade's unique use of light and his inspiring themes. Media Arts reported revenues of $126.3 million in 1999.

The 110-acre Madrone Business Park is located on the north side of Cochrane Road between Highway 101 and Monterey Highway. Madrone Business Park is a development of TBI-Mission West LLC, an entity formed by TBI Development in conjunction with Berg & Berg Enterprises and Mission West Properties, a publicly traded real estate investment trust (REIT).

The Madrone Business Park borders on two sides of TBI Development’s existing and fully developed 30-acre Cochrane Business Ranch. At completion, the Madrone Business Park will include 1.5 million square feet of commercial and industrial space; a Courtyard by Marriott and a Marriott Residence Inn; two free-standing restaurants and a Chevron Service Station.

Founded in 1983, Toeniskoetter & Breeding, Inc. Development has developed more than 1.5 million square feet of buildings and serves as managing general partner for a number of diversified real estate properties throughout Santa Clara and Santa Cruz counties. In addition to the Madrone Business Park and Cochrane Business Ranch, the company is developing an office building of classical architecture across from the San Jose Arena at 450 West Santa Clara Street. Previous developments include the 52,000-square- foot O’Connor Health Center in San Jose, 70,000-square-foot western headquarters for Integrated Circuit Systems in San Jose, 38,000-square-foot retail and medical office complex named Gateway Square in Campbell, 93,000-square-foot Granite Creek Business Center in Scotts Valley and the historical restoration and award-winning office complex at 1960 The Alameda.

Created in 1998 and based in Cupertino, Mission West Properties is a self-managed, self-administered and fully integrated real estate investment trust engaged in the management, leasing, marketing, development and acquisition of commercial R&D properties, primarily in Silicon Valley. Mission West Properties includes substantially all of The Berg Group’s operating properties, which currently total 5.31 million square feet of buildings, and it has the right to acquire current development and future projects completed by The Berg Group. In addition to the Madrone Business Park, these projects include a 515,000-square-foot, five-building campus to be built in Mountain View to house Microsoft’s Silicon Valley headquarters, as well as headquarters for its Web TV and Hot Mail divisions. Mission West Properties is listed on the American and Pacific Coast exchanges under the symbol MSW.

Toeniskoetter & Breeding, Inc. Construction will be constructing the Media Arts Group buildings, and Toeniskoetter & Breeding Property Management will provide property management services.