NOTICE OF ESTABLISHMENT OF THE HILTON HEAD LAKES WEST TRACT MUNICIPAL IMPROVEMENT DISTRICT Notice is hereby given pursuant to Section 5-37-100 of the Code of Laws of South Carolina 1976, as amended, that the City Council of the City of Hardeeville (the "City Council"), the governing body of the City of Hardeeville, South Carolina (the "City"), enacted the following ordinance on October 16, 2025 (the "Ordinance"), establishing the Hilton Head Lakes West Tract Municipal Improvement District. Exhibits referenced in the Ordinance are on file in the office of the City Clerk in the City Hall of the City located at 205 Main Street, Hardeeville, South Carolina 29927, and may be requested by email to coliver@hardeevillesc.gov for inspection and review in the office of the City Clerk during normal business hours. AN ORDINANCE NO. 2025-10-02C AUTHORIZING THE ESTABLISHMENT OF THE HILTON HEAD LAKES WEST TRACT IMPROVEMENT DISTRICT; PROVIDING FOR THE FINANCING OF IMPROVEMENTS WITHIN THE IMPROVEMENT DISTRICT BY ASSESSMENTS, THE ISSUANCE OF BONDS, OR OTHER REVENUES AS HEREIN DESCRIBED; AND OTHER MATTERS RELATING THERETO. BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF HARDEEVILLE, SOUTH CAROLINA, AS FOLLOWS: Section 1 Findings. The City Council of the City of Hardeeville (the ("City Council") the governing body of the City of Hardeeville, South Carolina (the "City"), hereby makes the following findings of fact in connection with the enactment of this ordinance (this "Ordinance"): (a) Pursuant to Title 5, Chapter 37 of the Code of Laws of South Carolina 1976, as amended (the "Act"), governing bodies of the municipalities of the State of South Carolina (the "State") are authorized to establish improvement districts and thereafter to acquire, own, construct, establish, install, enlarge, improve, expand, operate, maintain, and repair, and sell, lease, and otherwise dispose of any improvements therein and to finance such acquisition, construction, establishment, installation, enlargement, improvement, expansion, operation, maintenance, and repair, in whole or in part, by the imposition of assessments in accordance with the Act, by special district bonds, by general obligation bonds of the municipality, by revenue bonds of the municipality, or from general revenues from any source not restricted from such use by law, or by any combination of such funding sources. (b) As set forth in Resolution No. 2025-07-24C adopted by the City Council on September 4, 2025 (the "Resolution"), the City has received a petition (the "Petition") of LK Development Group LLC, a Delaware limited liability company, Millrose Properties South Carolina, LLC, a Delaware limited liability company, and TPG AG EHC III (LEN) Multi State 1, LLC, a Delaware limited liability company (collectively, the "Petitioner") petitioning the City for, and consenting to, the creation of an "improvement district" (within the meaning of Section 5-37-20(3) of the Act) pursuant to the provisions of the Act, to be referred to as the Hilton Head Lakes West Tract Improvement District (the "Improvement District"), which shall consist of approximately 2,605.86 acres of real property, which is described more specifically in Exhibit A to this Ordinance. The Petitioner is the "owner" (within the meaning of Section 5-37-20(6) of the Act) of the parcels of real property that are the subject of the Petition and included within the Improvement District. (c) Pursuant to the Resolution, the City approved an "improvement plan" (within the meaning of Section 5-37-20(4) of the Act), entitled "Hilton Head Lakes West Tract Improvement District, City of Hardeeville, South Carolina, Improvement Plan," dated May 12, 2025, and attached to the Resolution as its Exhibit B (as the same may be amended from time to time, the "Improvement Plan"), which Improvement Plan contemplates the establishment of the Improvement District. The Improvement Plan contemplates the construction of certain public improvements within or benefiting the Improvement District as more particularly described therein (collectively, the "Improvements") which constitute "improvements" within the meaning of Section 5-37-20(2) of the Act. All Improvements are to be located within the corporate limits of the City and are described with greater specificity in the Improvement Plan. (d) Pursuant to the Act, the cost of the Improvements may be paid by the imposition of an "assessment" (within the meaning of Section 5-37-20(1) of the Act) upon real property in the Improvement District ("Assessments"), by special district bonds of the City, by general obligation bonds of the City, or by revenue bonds of the City. (e) Pursuant to Section 5-37-45(A)(1) and (B) of the Act, the City may include within the Improvement District an area in which Improvements have been constructed or are under construction at the time of the establishment of the Improvement District, provided the area proposed for inclusion within the Improvement District is subject to a development agreement pursuant to the South Carolina Local Government Development Agreement Act within three years prior to the date of the Resolution. (f) The entirety of real property proposed to be included within the Improvement District is subject to that certain Third Partial Restatement and Amendment to Development Agreement (Hilton Head Lakes West Tract) dated as of April 3, 2025 (as amended, the "Development Agreement"). (g) In accordance with Section 5-37-40(A) of the Act, the City Council hereby finds and determines that (i) the Improvements would be beneficial within the Improvement District; (ii) the Improvements would preserve or increase property values within the Improvement District; (iii) the Improvements are likely to encourage development in the Improvement District; (iv) the general welfare and tax base of the City would be maintained or likely improved by creation of the Improvement District in the City; and (v) it would be fair and equitable to finance all or part of the cost of the Improvements by the Assessment upon the real property within the Improvement District. (h) Pursuant to the Resolution, the City Council did order that a public hearing be held on October 2, 2025, on the question of the establishment of the Improvement District (the "Public Hearing"). Pursuant to Section 5-37-60 of the Act, the entire text of the Resolution was published once a week for two successive weeks in the Jasper Sun Times, a newspaper of general circulation in the City, on September 10, 2025, and September 17, 2025. The last date of publication was not less than ten days prior to the date of the Public Hearing. (i) Pursuant to Section 5-37-50 of the Act and the provisions of the Resolution, the Public Hearing was held on October 2, 2025, which date was neither sooner than 20 days nor more than 40 days following the adoption of the Resolution, and neither less than ten days nor more than 120 days before the second reading and passage of this Ordinance. (j) The City Council hereby finds that the Improvements may be financed by the City through the issuance of assessment revenue bonds (the "Bonds"), secured by and to be serviced from the Assessments, as more specifically provided in the ordinances authorizing the issuance of the Bonds (together with any other sources pledged to secure and service such Bonds), so as to provide funds, inter alia, to pay the costs of acquiring, equipping, and constructing the Improvements, interest coming due on the Bonds during the construction period of the Improvements, funding debt service reserves for the Bonds, and paying the costs incurred in connection with the authorization, issuance, and sale of the Bonds. (l) The City Council determines that no funds from any sources other than the Bonds and the Assessment are reserved, allocated, or otherwise set aside by the City pursuant to the budget or financial policies of the City for the financing of any portion of the costs of acquisition, construction, and equipping of the Improvements proposed to be funded from the Bonds and the Assessment. (m) The City Council finds that the cost of the acquisition, construction, and equipping of the Improvements, including interest on the Bonds during the construction period of the Improvements, debt service reserves required to be established in connection with the issuance of the Bonds, and costs incurred in connection with the authorization, issuance, and sale of the Bonds, to be funded from proceeds of the Bonds, is expected to be not in excess of $84,270,000. Section 2 Establishment of Improvement District. The Improvement District as described above and more fully set forth in the Improvement Plan is hereby established and the adoption of the Improvement Plan is hereby authorized. Section 3 Financing of Improvements. The estimated cost of the Improvements is approximately $60,000,000, and the total costs of the Improvements to be derived from Assessments is not expected to exceed such amount. In order to finance the portion of the costs of the Improvements to be derived from Assessments, including interest on the Bonds during the construction period of the Improvements, debt service reserves required to be established in connection with the issuance of the Bonds, and costs incurred in connection with the authorization, issuance, and sale of the Bonds, the City intends to issue not exceeding $84,270,000 of Bonds, in one or more series, secured by and to be serviced from the imposition of the Assessments (together with any other sources pledged to secure and service such Bonds) on all parcels of real property located within the Improvement District. The Bonds described in this Section 3 may be combined with or constitute a portion of a larger debt issue including bonds issued for other purposes. Section 4 Imposition of Assessments; Basis for and Rates of Assessment. (a) The Assessments shall be imposed on real property in the Improvement District benefitting from the Improvements in accordance with the assessment report, the assessment roll, and the rate and method of apportionment of assessments to be developed for the City by MuniCap, Inc., which shall establish the Assessments fairly reflecting the benefits derived from the Improvements by each of the individual parcels within the Improvement District. The proposed basis for the Assessments is the allocation of Assessments equally per residential unit built or expected to be built on the parcel. The methodology and procedure for allocating Assessments shall provide that as real property within the District is subdivided, the Assessment on the parent parcel will be reallocated to the parcels that result from the subdivision on the basis of the residential units that may be built on the parcels. The sum of the Assessments on all parcels resulting from a subdivision shall equal the total Assessment of the parcel prior to the subdivision. (b) Two Assessments are proposed to be levied—Assessment A and Assessment B, as more fully described in the Improvement Plan. Assessments within the Improvement District shall be set at a rate or rates which shall be sufficient to produce revenue sufficient to fund the principal of and accrued interest on the Bonds, as well as administrative expenses with respect to the Improvement District. (c) Assessments within the Improvement District shall not be imposed upon the Improvements, nor shall they be imposed upon any portion of the Property that does not receive a benefit from the Improvements. Assessments will not be imposed on real property parcels within the Improvement District that are owned by a public entity. Assessments will not be imposed on real property located outside the Improvement District. (d) The total of the Assessments to be imposed shall equal the sum of (i) the principal amount of the Bonds that are issued and to which Assessments are pledged (expected to be approximately $84,270,000) (ii) interest on such Bonds and ongoing expenses with respect to such Bonds; and (iii) administrative costs of the Improvement District (projected to be $3,269,665). The projected total annual Assessment for the first assessment year is expected to be $4,161,850. Thereafter, the projected annual Assessment A is expected to increase by two percent per annum, and Assessment B is expected to increase by three percent per annum. It is anticipated that the Assessments will be imposed prior to the initial borrowing but will not be collected until required to pay debt service on the borrowing. Section 5 Publication of Ordinance. Pursuant to the provisions of Section 5-37-100 of the Act, this Ordinance shall be published in its entirely in at least one newspaper of general circulation within the City as designated by the City Manager, which shall constitute the publication required by said Section 5-37-100. Section 6 General Repealer; Severability. All rules, regulations, resolutions, and parts thereof, procedural or otherwise, in conflict herewith, to the extent of such conflict, are hereby repealed. The provisions of this Ordinance are hereby declared to be separate and if any section, phrase or provision shall for any reason be declared by a court of competent jurisdiction to be invalid or unenforceable, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions hereunder. Section 7 Effective Date. This Ordinance shall be effective on the seventh day after this Ordinance has been published in accordance with Section 5-37-100 of the Act and Section 5 hereof. DONE AND ENACTED IN MEETING DULY ASSEMBLED this 16th day of October, 2025. IPL0285091 Oct 29 2025