MURIEL BOWSER MAYOR May 2, 2024 The Honorable Phil Mendelson Chairman Council of the District of Columbia 1350 Pennsylvania Avenue, N.W. Suite 504 Washington, DC 20001 Dear Chairman Mendelson: Enclosed for consideration and adoption by the Council of the District of Columbia is a proposed resolution entitled “Provident Group Girard Properties Inc. Revenue Bonds Project Approval Resolution of 2024” (the “Resolution”). The Resolution authorizes the issuance, sale, and delivery in an aggregate principal amount not to exceed $15,000,000. These bonds will be used for the financing, refinancing, or reimbursing of costs incurred by Provident Group Girard Properties Inc. for its project located at 654 Girard Street, N.W., in Ward 1. In accordance with Section 490 of the Home Rule Act, we have determined that the bonds, when, as, and if issued, shall be without recourse to the District. The bonds shall not be general obligations of the District; shall not be a pledge of or involve the full faith and credit or the taxing power of the District; shall not constitute a debt of the District; and shall not constitute a lending of public credit for private undertakings as prohibited in section 602(a)(2) of the Home Rule Act. The bonds shall not give rise to any pecuniary liability of the District and the District shall have no obligation with respect to the purchase of the bonds. I urge the Council to take prompt and favorable action on the measure. Sincerely, Muriel E. Bowser Enclosures 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 ~ Chairman Phil Mendelson at the request of the Mayor A PROPOSED RESOLUTION IN THE COUNCIL OF THE DISTRICT OF COLUMBIA To authorize and provide for the issuance, sale, and delivery in an aggregate principal amount not to exceed $15 million of District of Columbia revenue bonds in one or more series pursuant to a plan of finance and to authorize and provide for the loan of the proceeds of such bonds to assist Provident Group Girard Properties Inc., in the financing, refinancing, or reimbursing of costs associated with an authorized project pursuant to section 490 of the District of Columbia Home Rule Act. RESOLVED, BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this resolution may be cited as the "Provident Group Girard Properties Inc. Revenue Bonds Project Approval Resolution of 2024". Sec. 2. Definitions. For the purposes of this resolution, the term: ( 1) "Authorized Delegate" means the Mayor or the Deputy Mayor for Planning and Economic Development, or any officer or employee of the Executive Office of the Mayor to whom the Mayor has delegated or to whom the foregoing individuals have subdelegated any of the Mayor's functions under this resolution pursuant to section 422(6) of the Home Rule Act. (2) "Bond Counsel" means a firm or firms of attorneys designated as bond counsel from time to time by the Mayor. 2 (3) “Bonds” means the District of Columbia revenue bonds, notes, or other 33 obligations (including refunding bonds, notes, and other obligations), in one or more series, 34 authorized to be issued pursuant to this resolution. 35 (4) “Borrower” means the owner, operator, manager and user of the assets 36 financed, refinanced, or reimbursed with proceeds from the Bonds, which shall be Provident 37 Group Girard Properties Inc., a nonprofit corporation organized and existing under the laws of 38 the District of Columbia, which is exempt from federal income taxes under 26 U.S.C § 501(a) as 39 an organization described in 26 U.S.C. § 501(c)(3) and which is liable for the repayment of the 40 Bonds. 41 (5) “Closing Documents” means all documents and agreements, other than 42 Financing Documents, that may be necessary and appropriate to issue, sell, and deliver the 43 Bonds and to make the Loan contemplated thereby, and includes agreements, certificates, letters, 44 opinions, forms, receipts, and other similar instruments. 45 (6) “District” means the District of Columbia. 46 (7) “Financing Documents” means the documents, other than Closing Documents, 47 that relate to the financing or refinancing of transactions to be effected through the issuance, sale, 48 and delivery of the Bonds and the making of the Loan, including any offering document, and any 49 required supplements to any such documents. 50 (8) “Home Rule Act” means the District of Columbia Home Rule Act, approved 51 December 24, 1973 (87 Stat. 774; D.C. Official Code § 1- 201.01 et seq. ). 52 (9) “Issuance Costs” means all fees, costs, charges, and expenses paid or incurred 53 in connection with the authorization, preparation, printing, issuance, sale, and delivery of the 54 Bonds and the making of the Loan, including, but not limited to, underwriting, legal, accounting, 55 3 rating agency, and all other fees, costs, charges, and expenses incurred in connection with the 56 development and implementation of the Financing Documents, the Closing Documents, and 57 those other documents necessary or appropriate in connection with the authorization, 58 preparation, printing, issuance, sale, marketing, and delivery of the Bonds and the making of the 59 Loan contemplated thereby, together with financing fees, costs, and expenses, including program 60 fees and administrative fees charged by the District, fees paid to financial institutions and 61 insurance companies, initial letter of credit fees (if any), compensation to financial advisors and 62 other persons (other than full-time employees of the District) and entities performing services on 63 behalf of or as agents for the District. 64 (10) “Loan” means the District’s lending of proceeds from the sale, in one or 65 more series, of the Bonds to the Borrower. 66 (11) “Project” means the financing, refinancing or reimbursing of all or a portion 67 of the Borrower’s costs of: 68 (A) Refinancing certain existing indebtedness, the proceeds of which were 69 used to finance the acquisition from Howard University of long term leasehold interests in an 70 approximate 61,452 square foot multifamily residential rental building, comprising 80 rental 71 housing units located at 654 Girard Avenue, NW, in Washington, DC (the “Facility”); 72 (B) funding certain working capital costs, to the extent financeable relating 73 to the Bonds; 74 (C) funding interest on the Bonds and any credit enhancement costs, 75 liquidity costs or debt service reserve fund relating to the Bonds; and 76 (D) Paying allowable Issuance Costs. 77 4 Sec. 3. Findings. 78 The Council finds that: 79 (1) Section 490 of the Home Rule Act provides that the Council may, by 80 resolution, authorize the issuance of District revenue bonds, notes, or other obligations 81 (including refunding bonds, notes, or other obligations) to borrow money to finance, refinance, 82 or reimburse costs, and to assist in the financing, refinancing, or reimbursing of, the costs of 83 undertakings in certain areas designated in section 490 and may effect the financing, refinancing, 84 or reimbursement by loans made directly or indirectly to any individual or legal entity, by the 85 purchase of any mortgage, note, or other security, or by the purchase, lease, or sale of any 86 property. 87 (2) The Borrower has requested the District to issue, sell, and deliver revenue 88 bonds, in one or more series, in an aggregate principal amount not to exceed $15 million, and to 89 make the Loan for the purpose of financing, refinancing, or reimbursing costs of the Project. 90 (3) The Project is located in the District and will contribute to the health, 91 education, safety, or welfare of, or the creation or preservation of jobs for, residents of the 92 District, or to economic development of the District. 93 (4) The Project is an undertaking in the area of housing, within the meaning of 94 section 490 of the Home Rule Act. 95 (5) The authorization, issuance, sale, and delivery of the Bonds and the Loan to 96 the Borrower are desirable, are in the public interest, will promote the purpose and intent of 97 section 490 of the Home Rule Act, and will assist the Project. 98 Sec. 4. Bond authorization. 99 (a) The Mayor is authorized pursuant to the Home Rule Act and this resolution to assist 100 5 in financing, refinancing or reimbursing the costs of the Project by: 101 (1) The issuance, sale, and delivery of the Bonds, in one or more series, in an 102 aggregate principal amount not to exceed $15 million; and 103 (2) The making of the Loan. 104 (b) The Mayor is authorized to make the Loan to the Borrower for the purpose of 105 financing, refinancing or reimbursing the costs of the Project and establishing any fund with 106 respect to the Bonds as required by the Financing Documents. 107 (c) The Mayor may charge a program fee to the Borrower, including, but not limited to, 108 an amount sufficient to cover costs and expenses incurred by the District in connection with the 109 issuance, sale, and delivery of each series of the Bonds, the District’s participation in the 110 monitoring of the use of the Bond proceeds and compliance with any public benefit agreements 111 with the District, and maintaining official records of each bond transaction, and assisting in the 112 redemption, repurchase, and remarketing of the Bonds. 113 (d) The Bond authorization set forth in this resolution includes the authorization to issue 114 refunding Bonds to refinance any Bonds previously issued under this resolution to finance the 115 Project; provided that the maximum principal amount of Bonds outstanding at any time does not 116 exceed the maximum principal amount of Bonds authorized hereunder. 117 Sec. 5. Bond details. 118 (a) The Mayor and each Authorized Delegate is authorized to take any action reasonably 119 necessary or appropriate in accordance with this resolution in connection with the preparation, 120 execution, issuance, sale, delivery, security for, and payment of the Bonds of each series, 121 including, but not limited to, determinations of: 122 6 (1) The final form, content, designation, and terms of the Bonds, including a 123 determination that the Bonds may be issued in certificated or book- entry form; 124 (2) The principal amount of the Bonds to be issued and denominations of the 125 Bonds; 126 (3) The rate or rates of interest or the method for determining the rate or rates of 127 interest on the Bonds; 128 (4) The date or dates of issuance, sale, and delivery of, and the payment of interest 129 on, the Bonds, and the maturity date or dates of the Bonds; 130 (5) The terms under which the Bonds may be paid, optionally or mandatorily 131 redeemed, accelerated, tendered, called, or put for redemption, repurchase, or remarketing before 132 their respective stated maturities; 133 (6) Provisions for the registration, transfer, and exchange of the Bonds and the 134 replacement of mutilated, lost, stolen, or destroyed Bonds; 135 (7) The creation of any reserve fund, sinking fund, or other fund with respect to 136 the Bonds; 137 (8) The time and place of payment of the Bonds; 138 (9) Procedures for monitoring the use of the proceeds received from the sale of 139 the Bonds to ensure that the proceeds are properly applied to the Project and used to accomplish 140 the purposes of the Home Rule Act and this resolution; 141 (10) Actions necessary to qualify the Bonds under blue sky laws of any 142 jurisdiction where the Bonds are marketed; and 143 (11) The terms and types of credit enhancement under which the Bonds may be 144 secured. 145 7 (b) The Bonds shall contain a legend, which shall provide that the Bonds are special 146 obligations of the District, are without recourse to the District, are not a pledge of, and do not 147 involve the faith and credit or the taxing power of the District, do not constitute a debt of the 148 District, and do not constitute lending of the public credit for private undertakings as prohibited 149 in section 602(a)(2) of the Home Rule Act. 150 (c) The Bonds shall be executed in the name of the District and on its behalf by the 151 manual or facsimile signature of the Mayor, and attested by the Secretary of the District of 152 Columbia by the Secretary of the District of Columbia’s manual or facsimile signature. The 153 Mayor’s execution and delivery of the Bonds shall constitute conclusive evidence of the Mayor’s 154 approval, on behalf of the District, of the final form and content of the Bonds. 155 (d) The official seal of the District, or a facsimile of it, shall be impressed, printed, or 156 otherwise reproduced on the Bonds. 157 (e) The Bonds of any series may be issued in accordance with the terms of a trust 158 instrument to be entered into by the District and a trustee to be selected by the Borrower subject 159 to the approval of the Mayor, and may be subject to the terms of one or more agreements entered 160 into by the Mayor pursuant to section 490(a)(4) of the Home Rule Act. 161 (f) The Bonds may be issued at any time or from time to time in one or more issues and 162 in one or more series. 163 Sec. 6. Sale of the Bonds. 164 (a) The Bonds of any series may be sold at negotiated or competitive sale at, above, or 165 below par, to one or more persons or entities, and upon terms that the Mayor considers to be in 166 the best interest of the District. 167 8 (b) The Mayor or an Authorized Delegate may execute, in connection with each sale of 168 the Bonds, offering documents on behalf of the District, may deem final any such offering 169 document on behalf of the District for purposes of compliance with federal laws and regulations 170 governing such matters and may authorize the distribution of the documents in connection with 171 the sale of the Bonds. 172 (c) The Mayor is authorized to deliver the executed and sealed Bonds, on behalf of the 173 District, for authentication, and, after the Bonds have been authenticated, to deliver the Bonds to 174 the original purchasers of the Bonds upon payment of the purchase price. 175 (d) The Bonds shall not be issued until the Mayor receives an approving opinion from 176 Bond Counsel as to the validity of the Bonds of such series and, if the interest on the Bonds is 177 expected to be exempt from federal income taxation, the treatment of the interest on the Bonds 178 for purposes of federal income taxation. 179 Sec. 7. Payment and security. 180 (a) The principal of, premium, if any, and interest on, the Bonds shall be payable solely 181 from proceeds received from the sale of the Bonds, income realized from the temporary 182 investment of those proceeds, receipts and revenues realized by the District from the Loan, 183 income realized from the temporary investment of those receipts and revenues prior to payment 184 to the Bond owners, other moneys that, as provided in the Financing Documents, may be made 185 available to the District for the payment of the Bonds, and other sources of payment (other than 186 from the District), all as provided for in the Financing Documents. 187 (b) Payment of the Bonds shall be secured as provided in the Financing Documents and 188 by an assignment by the District for the benefit of the Bond owners of certain of its rights under 189 9 the Financing Documents and Closing Documents, including a security interest in certain 190 collateral, if any, to the trustee for the Bonds pursuant to the Financing Documents. 191 (c) The trustee is authorized to deposit, invest, and disburse the proceeds received from 192 the sale of the Bonds pursuant to the Financing Documents. 193 Sec. 8. Financing and Closing Documents. 194 (a) The Mayor is authorized to prescribe the final form and content of all Financing 195 Documents and all Closing Documents to which the District is a party that may be necessary or 196 appropriate to issue, sell, and deliver the Bonds and to make the Loan to the Borrower. Each of 197 the Financing Documents and each of the Closing Documents to which the District is not a party 198 shall be approved, as to form and content, by the Mayor. 199 (b) The Mayor is authorized to execute, in the name of the District and on its behalf, the 200 Financing Documents and any Closing Documents to which the District is a party by the 201 Mayor’s manual or facsimile signature. 202 (c) If required, the official seal of the District, or a facsimile of it, shall be impressed, 203 printed, or otherwise reproduced on the Financing Documents and the Closing Documents to 204 which the District is a party. 205 (d) The Mayor’s execution and delivery of the Financing Documents and the Closing 206 Documents to which the District is a party shall constitute conclusive evidence of the Mayor’s 207 approval, on behalf of the District, of the final form and content of the executed Financing 208 Documents and the executed Closing Documents. 209 (e) The Mayor is authorized to deliver the executed and sealed Financing Documents and 210 Closing Documents, on behalf of the District, prior to or simultaneously with the issuance, sale, 211 10 and delivery of the Bonds, and to ensure the due performance of the obligations of the District 212 contained in the executed, sealed, and delivered Financing Documents and Closing Documents. 213 Sec. 9. Authorized delegation of authority. 214 To the extent permitted by District and federal laws, the Mayor may delegate to any 215 Authorized Delegate the performance of any function authorized to be performed by the Mayor 216 under this resolution. 217 Sec. 10. Limited liability. 218 (a) The Bonds shall be special obligations of the District. The Bonds shall be without 219 recourse to the District. The Bonds shall not be general obligations of the District, shall not be a 220 pledge of, or involve the faith and credit or the taxing power of, the District, shall not constitute a 221 debt of the District, and shall not constitute lending of the public credit for private undertakings 222 as prohibited in section 602(a)(2) of the Home Rule Act. 223 (b) The Bonds shall not give rise to any pecuniary liability of the District and the District 224 shall have no obligation with respect to the purchase of the Bonds. 225 (c) Nothing contained in the Bonds, in the Financing Documents, or in the Closing 226 Documents shall create an obligation on the part of the District to make payments with respect to 227 the Bonds from sources other than those listed for that purpose in section 7. 228 (d) The District shall have no liability for the payment of any Issuance Costs or for any 229 transaction or event to be effected by the Financing Documents. 230 (e) All covenants, obligations, and agreements of the District contained in this resolution, 231 the Bonds, and the executed, sealed, and delivered Financing Documents and Closing 232 Documents to which the District is a party, shall be considered to be the covenants, obligations, 233 and agreements of the District to the fullest extent authorized by law, and each of those 234 11 covenants, obligations, and agreements shall be binding upon the District, subject to the 235 limitations set forth in this resolution. 236 (f) No person, including, but not limited to, the Borrower and any Bond owner, shall have 237 any claims against the District or any of its elected or appointed officials, officers, employees, or 238 agents for monetary damages suffered as a result of the failure of the District or any of its elected 239 or appointed officials, officers, employees or agents to perform any covenant, undertaking, or 240 obligation under this resolution, the Bonds, the Financing Documents, or the Closing 241 Documents, or as a result of the incorrectness of any representation in or omission from the 242 Financing Documents or the Closing Documents, unless the District or its elected or appointed 243 officials, officers, employees, or agents have acted in a willful and fraudulent manner. 244 Sec. 11. District officials. 245 (a) Except as otherwise provided in section 10(f), the elected or appointed officials, 246 officers, employees, or agents of the District shall not be liable personally for the payment of the 247 Bonds or be subject to any personal liability by reason of the issuance, sale or delivery of the 248 Bonds, or for any representations, warranties, covenants, obligations, or agreements of the 249 District contained in this resolution, the Bonds, the Financing Documents, or the Closing 250 Documents. 251 (b) The signature, countersignature, facsimile signature, or facsimile countersignature of 252 any official appearing on the Bonds, the Financing Documents, or the Closing Documents shall 253 be valid and sufficient for all purposes notwithstanding the fact that the individual signatory 254 ceases to hold that office before delivery of the Bonds, the Financing Documents, or the Closing 255 Documents. 256 12 Sec.12. Maintenance of documents. 257 Copies of the specimen Bonds and of the final Financing Documents and Closing 258 Documents shall be filed in the Office of the Secretary of the District of Columbia. 259 Sec.13. Information reporting. 260 Within 3 days after the Mayor’s receipt of the transcript of proceedings relating to the 261 issuance of the Bonds, the Mayor shall transmit a copy of the transcript to the Secretary to the 262 Council. 263 Sec. 14. Disclaimer. 264 (a) The issuance of Bonds is in the discretion of the District. Nothing contained in this 265 resolution, the Bonds, the Financing Documents, or the Closing Documents shall be construed as 266 obligating the District to issue any Bonds for the benefit of the Borrower or to participate in or 267 assist the Borrower in any way with financing, refinancing, or reimbursing the costs of the 268 Project. The Borrower shall have no claims for damages or for any other legal or equitable relief 269 against the District, its elected or appointed officials, officers, employees, or agents as a 270 consequence of any failure to issue any Bonds for the benefit of the Borrower. 271 (b) The District reserves the right to issue the Bonds in the order or priority it determines 272 in its sole and absolute discretion. The District gives no assurance and makes no representations 273 that any portion of any limited amount of bonds or other obligations, the interest on which is 274 excludable from gross income for federal income tax purposes, will be reserved or will be 275 available at the time of the proposed issuance of the Bonds. 276 (c) The District, by adopting this resolution or by taking any other action in connection 277 with financing, refinancing, or reimbursing costs of the Project, does not provide any assurance 278 that the Project is viable or sound, that the Borrower is financially sound, or that amounts owing 279 13 on the Bonds or pursuant to the Loan will be paid. Neither the Borrower, any purchaser of the 280 Bonds, nor any other person shall rely upon the District with respect to these matters. 281 Sec. 15. Expiration. 282 If any Bonds are not issued, sold, and delivered to the original purchaser within 3 years of 283 the date of this resolution, the authorization provided in this resolution with respect to the 284 issuance, sale, and delivery of the Bonds shall expire. 285 Sec. 16. Severability. 286 If any particular provision of this resolution or the application thereof to any person or 287 circumstance is held invalid, the remainder of this resolution and the application of such 288 provision to other persons or circumstances shall not be affected thereby. If any action or 289 inaction contemplated under this resolution is determined to be contrary to the requirements of 290 applicable law, such action or inaction shall not be necessary for the purpose of issuing the 291 Bonds, and the validity of the Bonds shall not be adversely affected. 292 Sec. 17. Compliance with public approval requirement. 293 This approval shall constitute the approval of the Council as required in section 147(f) of 294 the Internal Revenue Code of 1986, as amended (Code”) , and section 490(k) of the Home Rule 295 Act, for the Project to be financed, refinanced, or reimbursed with the proceeds of the Bonds. 296 This resolution approving the issuance of the Bonds for the Project has been adopted by the 297 Council after a public hearing held in accordance with section 147(f) of Code, as such section 298 may be amended, and the corresponding regulations promulgated by the United States 299 Department of the Treasury. 300 Sec. 18. Transmittal. 301 The Council shall transmit a copy of this resolution, upon its adoption, to the Mayor. 302 14 Sec. 19. Fiscal impact statement. 303 The Council adopts the fiscal impact statement in the committee report as the fiscal 304 impact statement required by section 4a of the General Legislative Procedures Act of 1975, 305 approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1- 301.47a). 306 Sec. 20. Effective date. 307 This resolution shall take effect immediately. 308 Provident Group Girard Properties Inc. Revenue Bond Project FACT SHEET Provident Group Girard Properties Inc. has requested that the District issue up to $ 15 million in tax-exempt bonds for its project located at 654 Girard Street, N.W., Washington, DC, in Ward 1. The Applicant Provident Group Girard Properties Inc. (“Provident”) is a nonprofit corporation organized and existing under the laws of the District of Columbia. Howard University (“Howard”) is an independent, 501(c) (3) nonprofit, coeducational, nonsectarian institution of higher education located principally on three campuses in the District of Columbia. Proposed Project The project comprises the financing, refinancing, or reimbursing of all or a portion of Provident’s costs of: (A) Refinancing certain existing indebtedness, the proceeds of which were used to finance the acquisition from Howard University of leasehold interests in an approximate 61,452 square foot multifamily residential rental building, comprising 80 rental housing units, located at 654 Girard Street, N.W., in Washington, DC (the “Facility”); (B) Funding certain working capital costs, to the extent financeable relating to the bonds; (C) Funding interest on the bonds and any credit enhancement costs, liquidity costs or debt service reserve fund relating to the bonds; and (D) Paying allowable bond issuance c osts. Financing Plan A summary of the proposed sources and uses of funds is attached (see Table 1). Feasibility/Structure/Security of the Bonds Preston Hollow Capital, LLC, the prospective purchaser of the bonds, has deemed this transaction financially feasible based on its assessment and analysis . Public Purpose Benefits The Project will increase options of affordable housing units in the District. Howard University is creating a model that will combine residential, student and faculty housing. The DC Revenue Bond Program can be used for affordable housing. The District’s private activity volume cap is very limited. By using the DC Revenue Bond Program to help finance the project, volume cap allocation will be available for other housing projects in the District. Legal and Regulatory Affairs Orrick, bond counsel to the DC Revenue Bond Program, has preliminarily determined that the applicant is a 501(c)(3) organization, and the project constitutes a permissible undertaking under Section 490(a)(1) of the District of Columbia Home Rule Act. Based on the foregoing, OAG, Bond Counsel, and the IRB program have determined that the proposed project complies with criteria for approval of a proposed financing through the District’s Revenue Bond Program. TABLE 1 FINANCING PLAN SOURCES Bond Proceeds $15,000,000 Equity $300,000 USES Total Cost Tax-Exempt Bond Proceeds Equity Refinance/Refunding $12,960,000 $12,960,000 Costs of Issuance: Program Fee $37,500 $37,500 Bond Counsel Fees $200,000 $100,000 $100,000 Borrower’s Counsel $100,000 $50,000 $50,000 Other Counsels’ Fees $175,000 $68,750 $106,250 Underwriter/Placement Fee $75,000 $37,500 $37,500 Trustee’s Fees $12,500 $6,250 $6,250 Other Costs: Net Capitalized Interest $450,000 $450,000 Debt Service Reserve Fund $1,290,000 $1,290,000 Total costs: $15,300,000 $15,000,000 $300,000 GOVERNMENT OF THE DISTRICT OF COLUMBIA OFFICE OF THE ATTORNEY GENERAL Commercial Division Tax & Finance Section MEMORANDUM TO: William Liggins Director, Revenue Bond Program Office of the Deputy Mayor for Planning and Economic Development FROM: Patrick Allen Senior Assistant Attorney General Commercial Division DATE: March 27, 2024 SUBJECT: Legal Sufficiency Certification of the “Provident Group Girard Properties Inc. Revenue Bonds Project Approval Resolution of 2024”. This is to certify that the Commercial Division has reviewed the above-referenced resolution and found it to be legally sufficient . If you have any questions in this regard, please do not hesitate to call me at (202) 724-7754. _________________________________ Patrick Allen Senior Assistant Attorney General