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Kilroy Realty Corporation Joins Appeal in Legal Challenge Against the El Segundo Corporate Campus

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LOS ANGELES, Oct 22, 2002 (BUSINESS WIRE) -- Kilroy Realty Corp. (NYSE:KRC) announced today that it has joined an appeal of the legal challenge to the Environmental Impact Report for the El Segundo Corporate Campus.

Officials with Kilroy Realty, which has been a corporate citizen of El Segundo for 50 years, said the company has a major stake in the quality of life in El Segundo. As such, it will continue its battle to ensure that the project by Thomas Properties Group and its silent partners is not built without adequate environmental review by the City of El Segundo in conformance with state law.

Kilroy and CAGES (Citizens Against Gridlock in El Segundo) are co-plaintiffs in the legal challenge to the city's environmental review of the project. The lawsuit charges that the city did not follow the appropriate procedures under state law when it approved the Corporate Campus project, which would add 21,000 daily automobile trips to surrounding streets.

Kilroy also said it is in support of the call issued by CAGES for the city to require Thomas and its partners to post a $350 million bond to shield the city from potential lawsuits that could result from exposures to chromium emissions on the youth soccer fields proposed for the Corporate Campus site.

In addition to charging that the City Council's environmental review of the project was lax and that the potential legal liabilities were ignored, the citizens group also filed a Public Records Act demand for documents disclosing the financial capacity of Thomas and his partners to post the bond or indemnify the city.

CAGES said the action was taken after a review of records filed with the South Coast Air Quality Management District (AQMD) revealed low levels of hexavalent chromium, a known carcinogen, have been documented in the air at the proposed Corporate Campus site. The group said the cancer risks were shown to be low, but the risk of personal injury lawsuits bankrupting the city is high.

As part of its development agreement with El Segundo, Thomas has agreed to sell five acres of land to the city for $5 million. The city has announced plans to spend another $2 million to develop soccer fields for a program serving about 900 city youths and to bring children to the facility in city shuttles.

Northrop Grumman Corp., whose manufacturing plant is across the street from the proposed project, sent a letter to the city in November 2001 cautioning against placing facilities such as daycare centers, playgrounds or athletic facilities within the "cancer risk from toxic air pollution maps" prepared by the aerospace company firm in compliance with state law (AB 2588).

CAGES, the citizens' group, said that according to maps on file with the city Planning Division, the proposed soccer fields are located within the contours of Northrop's risk assessment maps. They said Northrop appropriately alerted the city to the air emissions issue, but the City Council disregarded the information and the potential legal liability that could arise.

Kilroy Realty Corporation, a member of the S&P Small Cap 600 Index, is a Southern California-based real estate investment trust active in the office and industrial property sectors. For more than 50 years, the company has owned, developed, acquired and managed real estate assets primarily in the coastal regions of California and Washington. Principal submarkets for KRC's current development program include West Los Angeles, El Segundo and coastal San Diego. At June 30, 2002, the company owned 7.6 million square feet of commercial office space and 5.1 million square feet of industrial space. More information is available at www.kilroyrealty.com.

CONTACT:
Kilroy Realty Corp.
C. Hugh Greenup, 310/481-8400
or
Tyler H. Rose, 310/481-8484

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