Attorney General Schwalb Secures Revised Providence Hospital Deal That Protects $5 Million in Healthcare Resources for the District

OAG Rejected Initial $1 Sale Proposal and Negotiated New Terms to Support Healthcare Services in DC, Including Plans for Potential Ward 5 Urgent Care Center & Millions of Dollars in Medical Equipment


Attorney General Brian L. Schwalb today announced that the Office of the Attorney General (OAG) has negotiated and secured a revised proposal to sell the Providence Hospital campus — approximately 22 acres of Ward 5 property with buildings that have been mostly vacant for six years. The purchaser, Vision PH Associates (Vision PH), plans to develop hundreds of new housing units, including affordable units, on the campus which will help address the District’s housing shortage. OAG’s approval of the sale required the preservation of significant public health resources for the District, including $5 million in health services funding, plans for a new Ward 5 urgent care center on the Providence campus, and renewed use of millions of dollars in medical equipment. The deal will not affect health services currently offered in several campus buildings operated by providers other than Providence.

“Ward 5 residents made clear that this deal must balance the need for additional housing and community development with continued access to healthcare services. Today’s agreement does exactly that — providing millions of dollars in public health resources and paving the way for significant residential and commercial expansion,” said Attorney General Schwalb. “As the District’s independent Attorney General charged with protecting charitable assets, I am proud of the work we do with the business and nonprofit communities to secure the best possible outcomes for all Washingtonians. I want to thank the dozens of community members who came forward to make their voices heard, as well as the teams at Providence and Vision PH, whose cooperation in our review helped achieve a universally beneficial resolution.”

“Since taking office, I have focused on moving the Providence Redevelopment forward. I appreciate Attorney General Schwalb's partnership in these efforts by securing a deal that minimizes risks to the immediate Michigan Park community, maximizes benefits to the District, and creates a pathway for an inclusive development at this Ward 5 hub,” said Ward 5 Councilmember Zachary Parker. “I have heard loud and clear from residents that they want access to healthcare as part of the development, and I greatly appreciate that this deal includes plans for a new family urgent care center and maintaining healthcare facilities at the site. I look forward to working with community partners and city leaders to ensure the Providence Redevelopment delivers for Ward 5 neighbors.”

In 2023, Providence, a DC nonprofit healthcare entity, agreed to sell the Providence campus to Vision PH for $1 as part of a plan to redevelop the site with townhomes and multifamily apartments. Vision PH is a joint venture of real estate developers formed by EYA, LLC and Aroli Group LLC (known as the Menkiti Group).

The District’s State Health Planning and Development Agency (SHPDA) asked OAG to review the proposed sale under DC’s Healthcare Entity Conversion Act (HECA), which requires any conversion of a nonprofit healthcare entity’s charitable assets to for-profit purposes to be adequately valued, protected, and preserved consistent with the nonprofit’s stated public-interest mission. While HECA does not require that Providence continue to provide healthcare services on the campus, or that the campus be used to provide healthcare, it does require that the assets Providence uses to advance its nonprofit purpose—providing and supporting healthcare services—be protected and preserved for the benefit of the District and its residents. 

The OAG review process was especially critical for Providence’s proposed conversion given that Ward 5 residents have frequently expressed the continuing need for healthcare services in the community. These concerns were reiterated by many residents during a public comment period that was part of the review process.

OAG’s independent experts determined that the $1 purchase price that Providence initially agreed to sell the campus for did not reflect the true value of the campus — even accounting for the extensive, value-depleting demolition and remediation costs necessary to clear the campus for residential housing development. As a result, OAG concluded that the originally proposed sale would not adequately preserve Providence’s charitable assets, which DC taxpayer dollars have supported for decades.

Following its evaluation, OAG informed Providence and Vision PH that it would only approve the proposed sale on certain conditions. Under these conditions, Providence and Vision PH have agreed to:

  • Contribute $5 million to support healthcare services in the District. These funds will be placed in a charitable healthcare trust. If an urgent care center is approved and established on the Providence campus, the trust will use the funds to help support the center. If a center is unable to be established, the trust will otherwise dedicate the funds to support healthcare services in the District, as HECA requires.
     
  • Include plans for an urgent care center as part of Vision PH’s proposal to redevelop the Providence campus.
     
  • Transfer millions of dollars worth of Providence’s functional medical equipment to the District or District-designated charitable healthcare providers, including diagnostic and medical imaging equipment.

During redevelopment, Vision PH will facilitate continued operation of the healthcare services that remain on the campus. These services, which Providence does not provide, include a senior assisted living facility, a first responder clinic, and two medical office buildings offering a wide range of specialty and general practitioner care.

Read the revised proposal here.

This matter was handled by Estefania Torres Paez, Cara Spencer, and Adam Gitlin, of the Antitrust and Nonprofit Section, and Alexandra Cain and Maximilian Tondro, of the Equitable Land Use Section, with the substantial support of paralegal, Leland Held, multiple legal interns, and other support staff.

 

OAG’s Oversight of District Nonprofits

OAG is responsible for oversight of charitable organizations and their assets in the District of Columbia, and tasked with protecting residents from fraud by charities and nonprofits. By law, nonprofits and charities are required to keep OAG up to date about plans to end or change their status.

Most recently, OAG:

  • Sued a police accountability nonprofit and its Executive Director for illegally spending charitable funds on luxury vacations and designer clothes.
     
  • Sued the former Treasurer of an elementary school’s parent-teacher organization for using nonprofit funds for personal enrichment.
     
  • Resolved actions against a lodge of the Fraternal Order of Police for running an illegal off-premises liquor sales program; the Coast Guard Auxiliary Association for improper payments to its Board President; Delta Phi Epsilon, Inc. for using nonprofit funds for personal gain; several charter schools, including Options Public Charter School, as well as the president of the Park Southern Neighborhood Corporation, an affordable housing organization, for mismanagement of nonprofit funds; and several organizations for misuse of nonprofit funds, including Casa Ruby, a DC organization whose leader misappropriated funds intended to serve LGBTQ+ youth.
     
  • Secured a court order requiring District nonprofit Howard Theatre Restoration, Inc. to dissolve for failing to function in support of the District’s historic Howard Theatre.
     
  • Secured $950,000 from the Washington Hebrew Congregation’s preschool for violations of the Nonprofit Corporations Act in addition to violations of several childcare safety laws that put children at risk.