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NEW ISSUE - BOOK-ENTRY ONLY RATING: Moody's Investors Service "Aa2/VMIGl" (See "RATING" herein.) In the opinion of Nixon Peabody LLP, Bond Counsel, under existing law and assuming compliance with the tax covenants described herein, and the accuracy of certain representations and certifications made by the Agency and the Institution described herein, interest on the Series 2006 Bonds is excluded from gross income for Federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended (the "Code"). Bond Counsel is also of the opinion that such interest is not treated as a preference item in calculating the alternative minimum tax imposed under the Code with respect to individuals and corporations. Interest on the Series 2006 Bonds is, however, included in the adjusted current earnings of certain corporations for purposes of computing the alternative minimum tax imposed on such corporations. Bond Counsel is further of the opinion that, by virtue of the Act, interest on the Series 2006 Bonds is exempt from personal income taxes of the State of New York and its political subdivisions, including The City of New York. See "TAX MATTERS" herein regarding certain other tax considerations. NEW YORK CITY INDUSTRIAL DEVELOPMENT AGENCY $20,000,000 Variable Rate Demand Civic Facility Revenue Bonds (Grace Church School Project), Series 2006 Dated: Date of Delivery Price: 100% Due: June 1, 2036 The New York City Industrial Development Agency's $20,000,000 Variable Rate Demand Civic Facility Revenue Bonds (Grace Church School Project), Series 2006 (the "Series 2006 Bonds") are being issued under and pursuant to an Indenture of Trust dated as of June 1, 2006 (the "Indenture") between the New York City Industrial Development Agency (the "Agency") and The Bank of New York, New York, New York, as trustee (the "Trustee"). The Series 2006 Bonds are payable solely out of the installment sale payments or other receipts, funds or moneys of the Agency pledged therefor or otherwise available to the Trustee for the payment thereof, including those derived under a Installment Sale Agreement and Assignment of Lease dated as of June 1, 2006 (the "Installment Sale Agreement") between the Agency and Grace Church School (the "Institution"). The principal of and interest on the Series 2006 Bonds, including any payments made with respect to the optional or mandatory purchase of the Series 2006 Bonds, are supported by an irrevocable direct pay letter of credit (the "Letter of Credit") issued by Wachovia Bank, National Association (the "Bank"). The Letter of Credit will permit the Trustee to draw up to an amount sufficient to pay (a) the principal of the Series 2006 Bonds when due, whether at stated maturity, upon redemption or acceleration, (b) the principal portion of the Purchase Price of the Series 2006 Bonds tendered by the owners thereof and not remarketed, and (c) with respect to interest on the Series 2006 Bonds or the interest portion of the Purchase Price of the Series 2006 Bonds tendered by the owners thereof and not remarketed, an amount equal to thirty-four (34) days' interest accrued on the Series 2006 Bonds at a maximum interest rate often (10%) per annum. The Letter of Credit will terminate on the earlier of June 28, 2009 or on the occurrence of certain events as specified therein. The Series 2006 Bonds are being issued in order to provide for the financing of a portion of the costs of (i) the acquisition of a leasehold interest in the land and the acquisition, improvement, renovation and equipping of nine contiguous, multi-story buildings located at 84-98 Fourth Avenue, New York, New York, (ii) the acquisition of a leasehold interest in the land and the construction, improvement and equipping of an athletic center on the underground level of 65 East 10th Street, New York, New York, all for use as a school serving students from junior kindergarten through grade eight (the "Facility"); and (iii) the financing of certain costs of issuance of the Series 2006 Bonds (collectively, the "Project"). The Series 2006 Bonds will be issued in fully registered form without coupons and, when issued, will be registered in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ("DTC"), which will act as "Securities Depository," as herein described, for the Series 2006 Bonds. Individual purchases will be made in book-entry-only form, in denominations of $100,000, or any integral multiple of $5,000 in excess thereof. Purchasers will not receive certificates representing their ownership interests in the Series 2006 Bonds. Principal and interest will be paid by the Trustee to DTC which will in turn remit such principal and interest to its Participants (as defined herein) for subsequent distribution to the Beneficial Holders (as defined herein) of the Series 2006 Bonds. Prior to any change in Interest Rate Determination Method, the Series 2006 Bonds will bear interest at the Weekly Interest Rate, which will be a variable rate established by First Albany Capital Inc., as Remarketing Agent for the Series 2006 Bonds; and interest on the Series 2006 Bonds will be payable on the first Business Day of each month in each year, commencing August 1, 2006. The Bonds will be subject to mandatory tender for purchase as provided herein on the effective date of any change in Interest Rate Determination Method. This Official Statement describes the Series 2006 Bonds only while bearing interest at a Weekly Interest Rate. Any Series 2006 Bond will be purchased upon demand of the owner thereof, at a Purchase Price of par plus accrued interest, on any Business Day (as defined herein) upon seven (7) days' notice and delivery of such Bond to The Bank of New York, as tender agent (in such capacity, the "Tender Agent"). The Series 2006 Bonds are subject to optional and mandatory redemption prior to maturity, and are subject to mandatory tender for purchase, as more fully described herein. BE A DEBT OF THE STATE OF NEW YORK OR THE CITY OF NEW YORK AND NEITHER THE STATE OF NEW YORK NOR THE CITY OF NEW YORK SHALL BE LIABLE THEREON. THE SERIES 2006 BONDS DO NOT GIVE RISE TO A PECUNIARY LIABILITY OR CHARGE AGAINST THE GENERAL CREDIT OR TAXING POWERS OF THE STATE OF NEW YORK OR OF THE CITY OF NEW YORK NOR SHALL THE SERIES 2006 BONDS BE PAYABLE OUT OF ANY FUNDS OF THE AGENCY OTHER THAN THOSE PLEDGED THEREFOR. THE SERDZS 2006 BONDS DO NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE AGENCY. THE AGENCY HAS NO TAXING POWER. The Series 2006 Bonds are offered when, as and if issued and received by the Underwriter, subject to prior sale, withdrawal or modification of the offer without notice and subject to the approving opinion of Nixon Peabody LLP, New York, New York, Bond Counsel. Certain legal matters will be passed upon for the Agency by Richard E. Marshall, Esq., Vice President for Legal Affairs of the Agency; for the Institution by its special counsel, Orrick, Herrington & Sutcliffe LLIJ New York, New York; for the Bank by its Counsel, Windels Marx Lane & Mittendorf, LLP, New York, New York; and for the Underwriter by its counsel, Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC., New York, New York. It is expected that the Series 2006 Bonds will be available for delivery to DTC in definitive form in New York, New York on or about June 28, 2006. First Albany Capital Inc. Dated: June 22, 2006 This Official Statement does not constitute an offer to sell or a solicitation of an offer to buy, nor shall there be any sale of Series 2006 Bonds by any person in any jurisdiction in which such an offer, solicitation or sale is not authorized or in which the person making such offer, solicitation or sale is not qualified to do so, or to any person to whom it is unlawful to make such an offer, solicitation or sale. The Underwriter has provided the following statement for inclusion in this Official Statement: The Underwriter has reviewed the information in this Official Statement in accordance with, and as a part of, its responsibilities to investors under the federal securities laws as applied to the facts and circumstances of this transaction, but the Underwriter does not guarantee the accuracy or completeness of such information. No dealer, broker, salesman or other person has been authorized to give any information or to make any representations not contained in this Official Statement, and, if given or made, such information or representations must not be relied upon as having been authorized by the Agency, the Institution, the Bank or the Underwriter. The information and expressions of opinion set forth herein are subject to change without notice, and neither the delivery of this Official Statement nor any sale hereunder shall, under any circumstances, create any implication that there has been no change in the affairs of the Agency, the Bank or the Institution, or in any other matter since the date hereof. The Agency makes no representation, warranty or certification as to the adequacy, accuracy or completeness of the information set forth in this Official Statement other than as set forth under the captions "THE AGENCY" and "ABSENCE OF LlTlGATlON-The Agency". UPON ISSUANCE, THE SERIES 2006 BONDS AND RELATED INSTRUMENTS WILL NOT BE REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER ANY STATE SECURITIES LAW, AND THE INDENTURE HAS NOT BEEN QUALIFIED UNDER THE TRUST INDENTURE ACT OF 1939, AS AMENDED, IN RELIANCE UPON THE EXEMPTIONS CONTAINED IN SUCH ACTS. THE REGISTRATION, QUALIFICATION OR EXEMPTION THEREFROM OF THE SERIES 2006 BONDS AND RELATED INSTRUMENTS IN ACCORDANCE WITH THE APPLICABLE SECURITIES LAWS OF THE JURISDICTIONS WHEREIN THE SECURITIES MAY BE OFFERED OR SOLD SHALL NOT BE CONSTRUED AS A RECOMMENDATION OF SUCH SECURITIES BY ANY PERSON.

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