MURIEL BOWSER
MAYOR
6/3/2020
The Honorable Phil Mendelson, Chairman
Councilof the District of Columbia
1350 Pennsylvania Avenue, N.W., Suite 504
Washington, DC 20004
Dear Chairman Mendelson:
Enclosed for consideration by the Council is legislation entitled the Reunion Square Tax Increment
Financing Second Emergency Declaration Resolution of 2020, the Reunion Square Tax Increment
Financing Second Emergency Act of 2020, and the Reunion Square Tax IncrementFinancing
Temporary Act of 2020.
This legislation would authorize, on an emergency and temporary basis, the issuanceof tax increment
financing (TIF) to support the Reunion Square development project, which will transform an
underutilized site located near the Anacostia Metrorail Station into a thriving mixed-use project,
contributing to the stabilization and revitalizationofthe Anacostia neighborhood in Ward 8 (Project).
The Council approved the Reunion Square Tax Increment Financing Emergency Act of 2020
(Emergency Act) on March 3, 2020 and the Mayor subsequently signed the Emergency Act on March
17, 2020. The Committee on Business and Economic Development scheduled a public hearing to be
held on the permanent versionofthe Emergency Act for April 2, 2020. On March 11, 2020 the Mayor
declared a Public Emergency and Public Health Emergency in response to several confirmed and
presumptive positive cases of COVID-19 in the Washington, DC area. Since March 11, 2020 the
numberofconfirmed cases of COVID-19 has increased exponentially, and on March 30, 2020 the
Mayor issued a stay at home order for all District residents. The spread of COVID-19 has severely
impacted the ability of Council committees to hold hearings, markups, and conduct regular business.
As aresult, the April 2, 2020 public hearing on the Reunion Square permanent TIF legislation was
cancelled.
The current legislation seeks TIF authorization to support the entirety of the Reunion Square project,
including certain infrastructure and site costs for multiple buildings within the Reunion Square
development project that comprise approximately 315,000 square feet ofoffice space, 43,000 square
feet ofretail, a 120 room hotel and 133 residential units dedicated to seniors. The office building will
house the new headquarters for the District Department of Health, I am requesting the Council
approve this second emergency to ensure that the District Department of Health is able to move
forward with
their relocation, to avoid any additional costs to the District, and to ensure that this important Project
moves forward.
The attached emergency and temporary legislation proposes tax increment bond financing in the
aggregate amount not to exceed $45.8 million to support the eligible componentsofthe Project. Of this
total, no more than $16.9 million in aggregate principal will be issued as a TIF bond. The TIF proceeds
would fund infrastructure costs and development costs within the Reunion Square TIF area that are
required for this Project to move forward.
As always, please feel free to reach out Acting Deputy Mayor John Falcicchio at
John.Falciechio@dc.gov should you have any questions regarding this Project. I look forward to
prompt and favorable consideration of this legislation.
Sincerely,
Muril Boviser
Enclosures
 Chairman Phil Mendelson
at the request ofthe Mayor
ABILL
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
To authorize, on an emergency basis, the issuance of tax increment financing bonds to support
the development project on a portionofthe land known as Reunion Square, located to the
10 east of Martin Luther King Jr. Avenue S.E., to the north of Chicago Street $.E., to the
i W Street S.E.
west of Railroad Avenue S.E., and to the south of
12
13 BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, thatthis
14 act may be cited as the Reunion Square Tax Increment Financing Second Emergency Act of
15 2020.
16 Sec. 2. Definitions.
17 For the purposes of this act, the term:
18 (1) Authorized Delegate means the Deputy Mayor for Planning and
19 Economic Development, the Chief Financial Officer, the Treasurer, or any officer or employee
of the executive office of the Mayor to whom the Mayor has delegated any of the Mayor's
functions under this act pursuant to section 422(6)of the Home Rule Act.
(2) Available Increment shall have the same meaning as set forth in the
Reserve Agreement.
(3) Available Real Property Tax Revenues means the revenues resulting
from the imposition of the tax provided for in Chapter 8ofTitle 47 of the District of Columbia
Official Code, inclusive of any penalties and interest charges, exclusive of the special tax
27 provided for in section 481 of the Home Rule Act pledged to payment of general obligation
28 indebtedness of the District.
29 (4) Available Sales Tax Revenues means the revenues resulting from the
30 imposition of the tax under Chapter 20 of Title 47 of the District of Columbia Official Code,
31 including penalty and interest charges, exclusiveofthe portionthereofrequired to be deposited
32 in the Washington Convention Center Fund established pursuant to section 208 of the
33 Washington Convention Center Authority Act of 1994, effective September 28, 1994 (D.C. Law
34 10-188; D.C. Official Code 10-1202.08), and any amounts to be made available to the
35 Washington Metropolitan Transit Authority pursuant to section 7101 of the Fiscal Year 2018
36 Budget Support act of 2017 (D.C. Law 22-0033; 64 DCMR 7652), and section 2 of the Stable
37 and Reliable Source of WMATA Revenues act of 1982 (D.C. Law 4-103; D.C. Official Code 9-
38 1111.15(6)(2)(A)).
39 (5) Available Tax Increment, with respect to any series of bonds, means the
40 sumofthe Available Sales Tax Revenues and Available Real Property Tax Revenues generated
41 in the Reunion Square TIF Area in any fiscal year of the District minus the sum of Available
42 Sales Tax Revenues and Available Real Property Tax Revenues generated in the Reunion Square
43 TIF Area in the base year.
44 (6) Bond Counsel meansa firm or firms of attorneys designated as bond
45 counsel from time to time by the Mayor.
46 (7) Bonds means the District of Columbia Class A Bonds, Class B Bonds
47 and any other revenue bonds, notes, or other obligations, in one or more series, authorized to be
48 issued pursuant to this act. Unless otherwise specified, the term Bonds shall include Refunding
49 Bonds.
50 (8) | Chairman means the Chairman of the Council of the District of
51 Columbia.
52 (9) Chief Financial Officer means the Chief Financial Officer established
33 by section 424(a)(1) of the Home Rule Act.
34 (10) Closing Documents means all documents and agreements, other than
55 Financing Documents, that may be necessary and appropriate to issue, sell, and deliver the
56 bonds, and includes agreements, certificates, letters, opinions, forms, receipts, and other similar
37 instruments.
58 (11) Council means the Council of the District of Columbia.
59 (12) Debt Service means principal, premium, if any, and interest on the
60 bonds.
61 (13) Development Costs has the same meaning as in section 2(13)ofthe Tax
62 Increment Financing Authorization Act of 1998, effective September 11, 1998 (D.C. Law 12-
63 143; D.C. Official Code 2-1217.01(13)) and may include any costs for District tenant
64 improvements in the Project.
65 (14) Development Sponsor means Four Points LLC, Curtis Investment
66 Group, and Blue Sky Housing LLC as Development Sponsors or any other entity that undertakes
67 the developmentofthe Project with the approvalofthe Mayor.
68 (15) District means the District of Columbia.
OC) (16) Financing Documents means the documents, other than Closing
70 Documents, that relate to the financing or refinancing of transactions to be affected through the
1 issuance, sale, and delivery of the bonds, including any offering document, and any required
nR supplements to any such documents.
3 (17) Home Rule Act means the District of Columbia Home Rule Act,
74 approved December 24, 1973 (87 Stat. 774; D.C. Official Code 1-201.01 et seq.).
75 (18) Project means the financing, refinancing, or reimbursing of,
76 Development Costs incurred within the Reunion Square TIF Area.
77 (19) Refunding Bonds means the District of Columbia bonds, notes, or other
78 obligations, in one or more series, authorized to be issued pursuant to this act to refund the
79 Bonds.
80 (20) Reserve Agreement means that certain Reserve Agreement, dated as of
81 April 1, 2002, by and among the District, Wells Fargo Bank Minnesota, N.A., and Financial
82 Security Assurance, Inc.
83 (21) TIF means tax increment financing.
84 Sec. 3. Creation of the Reunion Square TIF Fund.
85 (a) There is established as a nonlapsing fund the Reunion Square TIF Fund. The
86 Chief Financial Officer shall deposit into the Reunion Square TIF Fund the Available Tax
87 Increment and any other taxes or fees specifically designated by law for deposit in the Reunion
88 Square TIF Fund.
89 (b) The Mayor may pledge and create a security interest in the funds in the Reunion
90 Square TIF Fund, or any sub-account within the Reunion Square TIF Fund, for the payment of
91 debt service on the bonds without further action by the Council as permitted by section 490(f) of
92 the Home Rule Act. The payment of debt service shall be made in accordance with the
93 provisions of the Financing Documents entered into by the District in connection with the
94 issuance of the bonds.
95 () fat the endofany fiscal year of the District, the balance of cash and investments
96 in the Reunion Square TIF Fund exceeds the amount of debt service (including prepayment of
97 principal and interest), reserves on any bonds, and any approved bond-related administrative
98 expenses during the upcoming fiscal year, 50% of the excess shall be used to prepay the
99 principal of the bonds and the remaining 50% of the excess shall be transferred to the
100 unrestricted balanceofthe General Fund of the District of Columbia,
101 Sec. 4. Creation of the Reunion Square TIF Area.
102 (a) There is created a TIF area designated as the Reunion Square TIF Area. The
103 Reunion Square TIF Area is defined as: Square 5784, Lots 899, 900, and 1101; Square 5783,
104 Lot 1018; and Square 5772, Lots 827, 829, 984, 1017,and 1020.
105 (>) As provided under section 3, the Available Tax Increment from the Reunion
106 Square TIF Area shall be deposited in the Reunion Square TIF Fund and may be used for the
107 purposes set forth in section 3
108 () (1) _ The base year for determination of Available Sales Tax Revenues from
109 locations within the Reunion Square TIF Area shall be the tax year preceding the year in which
110 this act becomes effective.
coal (2) The base amount for determination of Available Real Property Tax
112 Revenues shall be:
113 (A) $121, 881 in base year 2020;
114 (B) $121, 881 in baseyear 2021;
WS () $121,881 in base year 2022;
116 (D) $129, 193in base year 2023;
17 (E) _ $136, 945 in base year 2024; and
118 (F) $141,738 in base year 2025 and each base year thereafter.
119 (d) The Reunion Square Street TIF Area shall terminate on the earlier of
120 (1) Twenty-five years after the issuance of the last Bonds issued pursuant to this
121 act;
122 (2) The date on which the Bonds are paid in full or are defeased and are no longer
123 outstanding, or
124 (3) September 30, 2025if no Bonds are issued.
125 Sec. 5. Class A Bond authorization.
126 (a) The Council approves and authorizes the issuanceofone or more series of Class
127 A Bonds in an aggregate principal amount not to exceed $16.9 million to fund the Project. The
128 Class A Bonds, which may be issued from time to time, in one or more series, shall be tax-
129 exempt or taxable as the Mayor shall determine and shall be payable and secured as provided in
130 section 7(a).
131 (b) The Mayor may pay from the proceeds of the Class A Bonds the financing costs
132 and expenses of issuing and delivering the Class A Bonds, including, but not limited to,
133 underwriting, legal, accounting, financial advisory, credit enhancement, marketing, sale, and
134 printing costs and expenses.
135 Sec. 6. Class B Bond authorization
136 (a) The Council approves and authorizes the issuanceof one or more series of Class
137 B Bonds in an aggregate principal amount not to exceed $45.8 million, less the issued gross
138 Class A Bond amount, to reimburse Development Costs of the Project and financing costs
139 incurred by the District and to fund capitalized interest and required reserves. The Class B
140 Bonds, which may be issued from time to time, in one or more series, shall be tax-exempt or
141 taxable as the Mayor shall determine and shall be payable and secured as provided in section
142 7(b).
143 (b) The Mayor may pay from the proceeds of the Class B Bonds the financing costs
144 and expenses of issuing and delivering the Class B Bonds, including, but not limited to,
145, underwriting, legal, accounting, financial advisory, credit enhancement, marketing, sale, and
146 printing costs and expenses.
147 (c) _ The Class B Bonds also may be issued as a TIF note to the Development Sponsor
148 and may be held and used as security for debt incurred or to be incurred by the Development
149 sponsor, an agent of the Development Sponsor, or another party selected by the Development
150 sponsor and Approved by the District.
151 Sec. 7. Payment and security.
152 (a) For the Class A Bonds:
153 (1) Except as may be otherwise provided in this act, the principal of,
154 premium, if any, and interest on, the Class A Bonds, and the payment of ongoing administrative
155 expenses related to the bond financing shall be payable solely from proceeds received from the
156 saleofthe bonds, income realized from the temporary investmentof those proceeds, Available
157 Tax Increment and any other taxes or fees deposited in the Reunion Square TIF Fund, income
158 realized from the temporary investment of the monies in the Reunion Square TIF Fund prior to
159 payment to the Class A Bondholders, and other funds that, as provided in the Financing
160 Documents, may be made available to the District for paymentofthe bonds from sources other
161 than the District, all as provided for in the Financing Documents.
162 (2) There is further allocated to the payment of debt service, on the Class A
163 Bonds the Available Increment, subordinate to the allocation of Available Increment to the
164 Budgeted Reserve, as defined in the Reserve Agreement, all as more fully described in the
165 Reserve Agreement and to the extent that the Reserve Agreement continues to apply to the
166 Available Increment, to be used for the payment of debt service on the Class A Bonds to the
167 extent that the revenues allocated in subsection (a) of this section are inadequate to pay debt
168 service on the Class A Bonds. The allocation of Available Increment authorized by this
169 subsection shall be made in compliance with all existing contractual obligations of the District
170 with respect to the Available Increment and shall terminate on the date on which all of the Class
171 A Bonds are paid or provided for and are no longer outstanding pursuant to their terms.
172 (3) Payment of the Class A Bonds shall be secured as provided in the
173 Financing Documents and by an assignment by the District for the benefit of the Class A
174 Bondholders of certain of its rights under the Financing Documents and Closing Documents to
175 the trustee for the Class A Bonds pursuant to the Financing Documents.
176 (4) The trustee or paying agent is authorized to deposit, invest, and disburse
177 the proceeds received from the sale of the Class A Bonds pursuant to the Financing Documents.
178 (b) For the Class B Bonds:
179 (1) Except as may be otherwise provided in this act, the principal of,
180 premium, if any, and interest on, the Class B Bonds, and the payment of ongoing
181 administrative expenses related to the Class B Bond financing shall be payable solely
182 from proceeds received from the sale of the subordinate Class B Bonds and income
183 realized from the temporary investment of those proceeds, the Available Tax Increment
184 and any other taxes or fees deposited in the Reunion Square TIF Fund, income realized
185 from the temporary investmentofthe monies in the Reunion Square TIF Fund prior to
186 payment to the Class B Bondholders, and other funds that, as provided in the Financing
187 Documents, may be made available to the District for paymentofthe subordinate Class B
188 Bonds from sources other than the District, all as provided for in the Financing
189 Documents.
190 (2) Paymentofdebt service on the Class B Bonds from monies deposited in
191 the Reunion Square TIF Fund or income realized from the temporary investment of those
192 monies shall be subordinate to (i) the paymentofdebt service on the Class A Bonds from
193 monies deposited in the Reunion Square TIF Fund or income realized from the temporary
194 investment of those monies and (ii) any reasonable reserves required by the District.
195, (3) Payment of the Class B Bonds shall be secured as provided in the
196 Financing Documents and by an assignment by the District for the benefit of the Class B
197 Bondholders of certain of its rights under the Financing Documents and Closing
198 Documents to the trustee for the s Class B Bonds pursuant to the Financing Documents.
199 (4) The trustee or paying agent is authorized to deposit, invest, and disburse
200 the proceeds received from the sale of the Class B Bonds pursuant to the Financing
201 Documents.
202 Sec. 8. Bond details.
203 (a) The Mayor is authorized to take any action reasonably necessary or appropriate in
204 accordance with this act in connection with the preparation, execution, issuance, sale, delivery,
205 security for, and payment of the bonds of each class and series, including, but not limited to,
206 determinations of:
207 (1) The final form, content, designation, and terms ofthe bonds, including a
208 determination that the bonds may be issued in certificated or book-entry form;
209 (2) The principal amountof the bonds to be issued and denominations of the
210 bonds;
21