2023 District of Columbia Code › Title 2 - Government Administration › Chapter 2 - Government Contracts and Business Development › Subchapter IX-A - Small and Local Business Enterprise Development and Assistance › Part D - Programs for Certified Business Enterprises › Subpart 2 - Requirements of programs › § 2–218.49a. Equity and development participation

§ 2–218.49a. Equity and development participation.
(a)(1) In all development projects conducted pursuant to a disposition under § 10-801, small investors, disadvantaged investors, or certified equity participants shall invest a minimum of 20% of the total sponsor equity, excluding debt financing, mezzanine financing, or other equity contributions by limited or institutional investors.
(2) Demonstration by a project sponsor of its intent and ability to meet the 20% equity requirement pursuant to paragraph (1) of this subsection shall be a condition precedent to the transfer of any District-owned property for a covered project.
(3) In meeting the equity investment requirement in paragraph (1) of this subsection, a certified equity participant may be a 100% sponsor of a component of a covered project; provided, that the certified equity participant participation totals 20% of the total equity of the covered project.
(b) For each government-assisted project involving development, in addition to complying with the general subcontracting provisions in § 2-218.46, at least 20% of the dollar volume of non-construction development goods and services shall be subcontracted to small business enterprises, and if there are insufficient qualified small business enterprises to completely fulfill this requirement, then the requirement may be satisfied by contracting 20% of that dollar volume to any qualified certified business enterprises; provided, that all reasonable efforts shall be made to ensure that qualified small business enterprises are significant participants in the overall development goods and services work.
(c)(1) No more than 25% of the total 20% equity participation requirement (equal to 5%) set forth in subsection (a) of this section may be met by a certified business enterprise providing development services in lieu of a cash equity investment that will be compensated by the developer in the future at a date certain (“sweat equity contribution”).
(2) The developer and the certified business enterprise shall sign a service agreement describing the following:
(A) A detailed description of the scope of work that the certified business enterprise will perform;
(B) The dollar amount that the certified business enterprise will be compensated for its services and the amount the certified business enterprise is forgoing as an investment in a project;
(C) The date or time period when the certified business enterprise will receive compensation;
(D) The return, if any, the certified business enterprise will receive on its sweat equity contribution; and
(E) An explanation of when the certified business enterprise will receive its return as compared to other team members or investors.
(d) This section shall not apply if the entity that controls the development project is an entity tax-exempt under 26 U.S.C. § 501(c), or other not-for-profit entity.
(e) This section shall not apply to any development project for which a contract for purchase of one or more parcels of real property has been executed prior to March 2, 2007.
(Oct. 20, 2005, D.C. Law 16-33, § 2349a; as added Mar. 2, 2007, D.C. Law 16-192, § 2132(f), 53 DCR 6899; Apr. 20, 2010, D.C. Law 18-141, § 2(k), 57 DCR 1485; Apr. 8, 2011, D.C. Law 18-357, § 2(a), 58 DCR 763; June 10, 2014, D.C. Law 20-108, § 2(aa), 61 DCR 3892.)
Section References
This section is referenced in § 2-218.75.
Effect of Amendments
D.C. Law 18-141 rewrote subsec. (a); and added subsec. (a-1).
D.C. Law 18-357, in subsec. (a-1)(3), substituted “in lieu of the unmet equity participation requirement. Any fee collected in accordance with this provision shall be deposited into the Small Business Micro Loan Fund established by § 2-218.75(b).” for “in lieu of the unmet equity participation requirement.”; added subsec. (a-1)(4)(C); and, in subsec. (a-1)(5), substituted “Department of Small and Local Business Development” for “Office of the Deputy Mayor for Planning and Economic Development”.
The 2014 amendment by D.C. Law 20-108 rewrote the section.
Emergency Legislation
For temporary (90 day) addition of section, see § 2132(f) of Fiscal Year 2007 Budget Support Emergency Act of 2006 (D.C. Act 16-477, August 8, 2006, 53 DCR 7068).
For temporary (90 day) addition of section, see § 2132(f) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2006 (D.C. Act 16-499, October 23, 2006, 53 DCR 8845).
For temporary (90 day) addition of section, see § 2132(f) of Fiscal Year 2007 Budget Support Congressional Review Emergency Act of 2007 (D.C. Act 17-1, January 16, 2007, 54 DCR 1165).
For temporary (90 day) amendment of section, see § 2(a) of Alternative Equity Payment Allocation Emergency Amendment Act of 2010 (D.C. Act 18-589, October 20, 2010, 57 DCR 10143).
For temporary (90 day) amendment of section, see § 2(a) of Alternative Equity Payment Allocation Congressional Review Emergency Amendment Act of 2011 (D.C. Act 19-1, February 2, 2011, 58 DCR 1236).
For temporary (90 days) repeal of D.C. Law 20-108, § 4(c), see § 7005 of the Fiscal Year 2015 Budget Support Emergency Act of 2014 (D.C. Act 20-377, July 14, 2014, 61 DCR 7598, 20 STAT 3696).
For temporary (90 days) repeal of D.C. Law 20-108, § 4(c), see § 7005 of the Fiscal Year 2015 Budget Support Congressional Review Emergency Act of 2014 (D.C. Act 20-449, October 10, 2014, 61 DCR 10915, 20 STAT 4188).
For temporary (90 days) repeal of D.C. Law 20-108, § 4(c), see § 7005 of the Fiscal Year 2015 Budget Support Second Congressional Review Emergency Act of 2014 (D.C. Act 20-566, January 9, 2015, 62 DCR 884, 21 STAT 541).
Editor's Notes
Applicability of D.C. Law 20-108: Section 4(a) of D.C. Law 20-108 provided that applications pending as of June 10, 2014, shall not be subject to the provisions of the act.
Section 4(b) of D.C. Law 20-108 (b) provided that, except as provided in § 2-218.46(f), contracts existing or pending as of June 10, 2014, shall not be affected by the provisions of the act.
Section 4(c) of D.C. Law 20-108 provided that the act shall apply upon the inclusion of its fiscal effect in an approved budget and financial plan, as certified by the Chief Financial Officer to the Budget Director of the Council in a certification published by the Council in the District of Columbia Register.
Section 4(c) of D.C. Law 20-108 was repealed by D.C. Law 20-155, § 7005.