MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Wednesday, August 2, 2023
The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee (the “Board”) was held pursuant to public notice published in The Daily News on Wednesday, July 26, 2023, and posted on the Board’s website at: www.memphishehf.com. The published meeting time was 12:00 Noon. The meeting was held in the conference room in the offices of the Board, located at 65 Union Avenue, Suite 1120, Memphis, TN 38103.
The following Directors were present:
Daniel T. Reid, Chairman Monice Hagler, Secretary (Zoom)
James Jalenak (Zoom) Cliff Henderson
Katie Shotts (Zoom)
The following Directors were absent:
Buckner Wellford Dr. Manoj Jain
Staff and others attending: Stephanie Bryant, Bryce Miller and JP Townsend; Charles E. Carpenter and Corbin I. Carpenter, General Counsel; Lavanda Mayfield (Zoom), legal assistant to General Counsel; Cheryl Hearn, Deputy City Attorney.
Also participating in person and/or via remote Zoom virtual platform were Onie Green, a resident of Hope Heights; Keisha Small, a resident of Hope Heights; Becky Scott, a resident of Memphis Towers; Joyce Warren, a resident of Memphis Towers; Alex Ulhmann of the Memphis Tenants Union; Joe B. Kent, a member of the public; Javier Bailey and Shaun Franklin of the Office of the Shelby County Assessor of Property; G.A. Hardaway, Tennessee State Representative, District 93; Ribqahdevorah S. YhIsreal, a resident of Hope Heights; Norma Lester, a member of the public; Renee Weiss, Tom Mignogna, Mayra Orellana and Angelica Sinito of Millennia Housing Development, Ltd representing Memphis Towers and The Memphian (f/k/a Serenity Towers); Frank Stockdale Carney of Evans Petree, PC and Mendel Fischer and Shrage Marasow of MCF Capital, LLC representing New Horizon Apartments; Phil Balderston, Brett Goldenhorn, Stephanie Reed, Tameca Parker, and Pauline Olden of Odin Properties and David Upton representing Creekside Meadows (f/k/a Bent Tree) and Mill Creek Apartments; David Shores and Alex Shores of Multi-South Management Services and Sally Colace representing Macon Manor Apartments; Mark Jobe and Dakota Beasley of Glankler Brown, PLLC representing New Horizon Apartments; and several members of the public were also present.
With a quorum present, the regular meeting of the Board was called to order at 12:00 Noon by Daniel T. Reid, Chairman.
Chairman Reid stated that in compliance with the Open Meetings Law codified in Section 8-44-101 to 8-44-108 inclusive of the Tennessee Code Annotated, as amended, The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee is holding its regular meeting on Wednesday, August 2, 2023 @ Noon as an open public meeting in its conference room located at 65 Union Avenue, Suite 1120, Memphis, Tennessee 38103.
Chairman Reid stated supplemental Board meeting materials could be accessed on the Board’s website: www.memphishehf.com and reminded all attendees participating via remote access to enter their name and affiliated entities into the Zoom platform for record keeping purposes.
Approval of Minutes
Cliff Henderson moved for approval of the Minutes of the June 28, 2023 Regular Meeting, which was seconded by Katie Shotts and the motion passed unanimously after proper roll call vote of the Board members.
Finance Committee Report
Cliff Henderson presented the financial results for the month ended June 30, 2023. After discussion,
Katie Shotts moved for acceptance of the Finance Committee Report for the month ended June 30, 2023, properly seconded by James Jalenak, and the motion passed unanimously after a proper roll call vote of the Board members.
Attorney’s Report
Charles Carpenter presented the legal report, as follows:
1. Carpenter reported that there are a number of PILOT Property claims that have been received since the last Board meeting. Carpenter reminded the Board that under the statutory authority, the Board has no financial or legal liability for any of these claims, and once received, his firm works cooperatively with the PILOT Lessee to make sure these claims are managed on a timely basis. Carpenter reported that material suppliers have become more aggressive and summarily file these nonpayment claims on a prompt basis; and because the property is titled in the Board’s name, all filed notices are received by the Board. Carpenter reported that for this period claims have been filed for Notice of Non-payment for (i) The Boulevard Apartments, (ii) Tillman Cove Apartments, (iii) Hillcrest Apartments, (iv) Cedar Run Apartments, (v) Pinebrook Pointe Apartments, and (vi) Grahamwood Place Apartments. Carpenter reported there is also one (1) complaint that was filed against Hillcrest Apartments regarding the condition of the unit which is being investigated at this time. Carpenter will continue to monitor all reported matters and keep the Board advised.
2. Carpenter reported PILOT property and Bond activities for the month of July 2023, to wit:
a. The Boulevard PILOT Freddie Mac refinancing closed.
b. Melrose Place Apartments PILOT term expiration.
c. Southland Lakes Bond Series 2005-A bond redemption, scheduled to be redeemed August 9, 2023.
3. Carpenter reported that a resolution is currently pending in the Memphis City Council modifying its delegation of authority granted to the Health, Educational and Housing Facility Board of the City of Memphis, TN to require developments and lessees in connection with PILOT properties be required to provide 24-hour security personnel on site or have an active crime prevention program. Carpenter reported this resolution was filed without any prior notice to the Board. However, since that time, the proposed resolution has been delayed, and the Board has been given an opportunity to meet with the sponsor and will continue to provide additional information to Memphis City Council so that as this resolution proceeds forward it would be more balanced and it would not just be a wholesale application, but more strategic to the properties that actually need that sort of mandate. Carpenter reminded the Board that many of the PILOT properties already have security personnel as well as crime prevention programs and other tenant benefits, and the Board will incorporate this into the exiting platform of services that are already being provided. Carpenter’s firm will continue to monitor this matter as it progresses through Memphis City Council and will keep the Board advised.
4. Carpenter reminded the Board that at the June 28, 2023 Board meeting, he reported that Tennessee Housing Development Agency (THDA) had announced the awardees of the Round One Low Income Housing Tax Credit (LIHTC) program. Carpenter stated that the Board had three (3) awardees that were granted approval by THDA:
a. Greenbriar Apartments was approved without conditions and is scheduled to close on or before October 12, 2023. The developer for this project is Alco Properties.
b. Edgeview at Legends Park was approved with conditions. This is a public private partnership with the Memphis Housing Authority (MHA) and Pennrose Management Company. The applicant is currently working with THDA to address the conditions to allow a 2023 closing date.
c. The Memphian was approved with conditions. The developer for this project is Millennia Housing. The applicant is currently working with THDA to address the conditions to allow a 2023 closing date.
Carpenter stated that the two (2) applications approved with conditions are on today’s Board Meeting Action Agenda, and he will defer any further comments until that time.
5. Finally, for informational purposes, Carpenter stated that last week, the Fed rate was increased by twenty-five (25) basis points and the Fed is keeping its options open at its remaining 2023 upcoming meetings to be held on September 20, 2023 and November 1, 2023, where it may continue to raise the federal interest rate in an effort to bring down inflation. Carpenter reported that one announcement of significance is that despite having rising interest rates for new construction loans, Housing and Urban Development (HUD) lenders reported having a large amount of 221(d)(4) new construction funds available and that is still going to be a very positive incentive for developers to go forward in the State of Tennessee with new construction. There being no further questions or comments, the Legal Report was concluded.
Public Comment
Chairman Daniel Reid opened the meeting up for public comment and advised that all comments should be limited to about two (2) minutes. Charman Reid expressed his appreciation to those in attendance to make a public comment and asked that those making a public comment to be specific in their comments in the interest of the time allotted and not to repeat a comment that has already been made so that the Board will be able to get the full story. Charles Carpenter also expressed his appreciation for everyone’s attendance in person, stating that the Board has previously been holding Zoom and in-person hybrid meetings, with this being the first meeting since the Board reinstituted its in-person attendance requirement and apologized for the cramped conditions due to the number of attendees and stated that the Board would like to provide an opportunity for each person to give their public comment to the Board members.
1. Onie Green introduced herself as a resident of Hope Heights. Green stated that during her time living at Hope Heights, she believes Millennia Housing are manipulators, compulsive liars, discriminate, show favoritism, and when you go to them with a problem, they act like you are the problem. Green stated she had a situation when her hot water was off a couple of months ago, and she went into the office and spoke to the manager and the manager told her not to come in there with her problems because other residents have the same problem she has. Green stated that she was trying to explain herself and the manager body shamed her and said that with a body like hers, she wouldn’t be talking about anybody. Green stated that there was then an altercation, and she is now going to court for eviction. Green stated that she told the manager she was a flying monkey because she is a narcissist. Green stated that she has lived at Hope Heights for three (3) years and had never had a problem with management until that point. Green stated that Millennia Housing mistreats elderly people, stating even though she is not elderly, but the things she has seen, she feels like it is not fair the way they have to live. Green stated that Millennia does not fix anything and they always so they will give residents notice, but when the Millennia Housing Board comes, management will start doing things and clean up the garage and try to hurry up and fix things. Green stated that when the hot water went down because a hot water pipe burst, it was fixed overnight, and management cleaned up the water before the Fire Marshall came. Green stated that when the elevator went down, which is currently down again, management shows favoritism by only sending certain residents to a hotel and the rest of the residents have to stay there at Hope Heights. Green stated that the residents that where there are all on disability and the lady in the office said that those residents have no income and are all on disability, and asked why they were complaining. Green stated the lady was trying to humiliate the residents by stating that they are all on disability so they cannot complain. Green stated that the lady in the office said that if white people were in the office, residents wouldn’t be acting like this, and the only reason they are acting this way toward management is because the management is black. Green stated that this is not right, and the member of management fled the scene like she doesn’t work there anymore. Green stated that if the Board would like further evidence, she also has that.
2. Keisha Smalls introduced herself as a resident of Hope Heights. Smalls stated that she had a stroke this month and had a stroke before moving into Hope Heights. Smalls stated that the problem is the elevator is not working and residents have to climb up the steps, which is stressful and depressing. Smalls stated that the harassment and nastiness from management is ridiculous. Small stated that Millennia Housing does not need to own any properties in Memphis, TN because they do not treat the tenants right.
3. Becky Scott introduced herself as a resident at Memphis Towers and a member of the Memphis Tenant Union. Scott stated that she has been the target of retaliation and harassment for her organizing activities. Scott stated that she has now had several fabricated lease violations perpetrated against her. Scott stated that she and other members of her group and community partners have been harassed by unqualified and unprofessional security guards after meetings on multiple occasions. Scott stated that she would like to see Millennia Housing held accountable for the various human rights abuses that they have perpetrated against both vulnerable and marginalized people. Scott stated how it has been affecting her personally is that she has severe anxiety, which has been through the roof since he has lived at Memphis Towers. Scott stated she is on heart medication, which she potentially is about to have to have increased because she has been having more heart problems and more palpitations. Scott stated that she feels as though there are a lot of other small, innumerable ways that the staff finds to target her and intimidate her. Scott stated that they are very rude, disrespectful, and demeaning and she could not list all of the subtle and unsubtle ways they harass her in the time she has allotted. Scott stated she would sum it up by saying that she never feels safe in her own home, always wondering when the next shoe is going to drop, when the next violation is going to hit. Scott stated she feels like she is being psychologically terrorized, and she has done nothing wrong except advocate for her and her neighbor’s right to be treated with decency and to live in a place with basic standards of health and safety, which is her right as a human being, and is also her right under HUD regulations. Scott stated that in summary, she would just like to please ask the Board not to continue to give Millennia Housing a blank check to abuse, neglect, and mistreat people the way they do.
4. Joyce Warren introduced herself as a resident at Memphis Towers. Warren stated that she has lived in Memphis Towers for ten (10) years and Millennia has done nothing but lie, deceive, and mistreat their tenants there. Warren stated that Millennia takes their money, their food, and treats them like they are nothing and it’s not right. Warren stated to keep giving Millennia money would keep giving them power to do what they are doing.
5. Alex Ulhmann introduced himself as an organizer that works for the Memphis Tenants Union and he has been working at Memphis Towers for just around two (2) years now. Ulhmann stated that the Memphis Tenants Union came to Memphis Towers because they got a call from a resident that was talking about the issues there and the Memphis Tenants Union went there and quickly saw that this person was right and there were a ton of issues there. Ulhmann stated that from the beginning, the Memphis Tenants Union organizers have experienced harassment and started retaliation for organizing efforts. Ulhmann stated that all those things are protected under Section 8 in the code of federal regulations. Ulhmann stated that they have a right to be there and a right to organize and they have had to fight every day to make sure that right is protected. Ulhmann stated that the Board has already heard from residents about the mistreatment, and he would let them speak to that, but he can speak to what has happened as an organizer. Ulhmann stated that in the last Board meeting he attended virtually, representatives from Millennia said that they have tried to work with the Memphis Tenants Union, and he would like to give some background on that statement because he finds that completely ridiculous. Ulhmann stated that the Memphis Tenants Union delivered a demand letter in March that detailed what residents felt like they needed to have in the building to feel safe in their own homes. Ulhmann stated that was twenty-four (24) hour security with the person at the front desk with the management company to be chosen by tenants, key cards that opened the front door and the front door being locked, and emergency pull cords in their homes that work. Ulhmann stated that currently, if someone pulls an emergency pull cord and no one is there, that call goes unanswered.
Ulhmann stated these are very basic things that he thinks everyone would want their mother, grandmother, brother, or sister to have in their home, especially when they are elderly or disabled, which the majority of the residents at Memphis Towers and Hope Heights are. Ulhmann stated when the Memphis Tenant Union delivered that letter, the management took the letter and put it down on the front desk and stated that they did not need to see that, and they would not accept it and that same day residents received retaliatory notices to vacate. Ulhmann stated that those notices were in violation of HUD regulations, which gives residents thirty (30) days and these notices only had ten (10) days on them, which is another act of intimidation by Millennia. Ulhmann stated that the next day following up on those claims, he and another organizer came to Millennia to talk to residents and figure out what they were going to do about these retaliatory notices. While at the property, Ulhmann stated the property manager instructed an armed security guard to forcibly remove them from the building. Again, Ulhmann stated that they have a right to be there and do what they should be doing, which was talking to residents. Ulhmann stated that the manager didn’t care and had an armed security guard force them out of the building and called the police. Ulhmann stated that they have had the police called on them before, but this police officer was not interested in having a discussion about what their rights were, so the police officer issued he and the other organizer a violation of trespassing.
Weeks later, Ulhmann stated they tried to get into the building and tried to resolve it in some way and had no luck so he came back to the building to have a meeting with another resident and the same property manager instructed a different armed security guard to put him in handcuffs. Ulhmann stated that he tried to leave once he realized that is what they were going to do, and they didn’t care, they put him in handcuffs and held him for forty-five (45) minutes until the Memphis Police came and issued him a violation of trespassing. With the help of residents, Ulhmann stated that they went to the District Attorney’s Office and had him personally write a letter to Millennia instructing them of their rights to organize, and until that moment, they had done nothing to resolve the issue. Ulhmann stated that he had to bring up that point because it is so emblematic of how Millennia treats the Board and treats them by saying one thing and they do the complete opposite. Ulhmann stated that they do not think that this type of actor should be in charge of vulnerable residents in our community and this is putting residents in harm's way and giving Millennia tax dollars to do it, and we are at tune of millions of dollars in tax breaks. Ulhmann stated that they are imploring the Board to hold Millennia accountable and ensure that residents don’t continue to experience the same harassment and mistreatment, and they are just asking for the basic needs that they would want for any member of their family or just in general of our community.
6. Joe B. Kent introduced himself as a local conspiracy theorist and stated the following: “I pledge allegiance to the taxpayer and the jurisdiction in hand. With that pledge, I promise to practice rigorous public oversight to best ensure taxpayer justice for all.” Kent continued by first stating that in one of the Board’s previous meetings, Buckner Wellford stated that the Board has a lot of cash on its balance sheet that should be used for blight remediation and housing. Kent stated he has that estimated at about twelve million dollars that is in excess. Kent stated that he wonders if there is going to be an open brainstorming conversation about how that can optimally be used for the community because it is just sitting there on the balance sheet. Secondly, Kent stated that he does not keep up with this Board as much as he does others, so please correct him if some of his assertions are incorrect or misguided. Kent stated that at Serenity Towers, rents will go up fifty percent (50%) and they will receive a twenty (20) year PILOT, and he would like to know the estimated amount of that total PILOT. Kent stated that developer fees are going to be fifteen million dollars on that. Kent stated that it just seems way out of whack. Kent stated that should the maximum PILOT of twenty (20) years be granted, the developer will pocket fifteen million dollars, and that seems way out of whack. Kent stated that he is appealing to the Board as taxpayers, not as a Board, because he understands the Board consideration of Edgeview at Legends Park Project, but just to keep in mind as taxpayers, as this is more of an oversight issue, Kent stated that taxpayers contributed nine million dollars in cash equity to that development. Kent stated the business partner did not contribute any cash equity, and to please correct him if he is wrong on that, but that is what he read and he would love the feedback on that, but it is really a Shelby County commission and Memphis City Council thing.
7. Javier Bailey introduced himself as the Chief Administrative Officer for Assessor Melvin Burgess and he is attending today’s meeting in his official capacity. Bailey stated that his office was asked by State Representative G.A. Hardaway to do a deep dive into the conditions, the ownership and the financing for Serenity Towers, which they have just spent a few days doing. Bailey stated that his office has appointed a team to take a look at the project. Bailey officially requested that no action be taken by the Board to approve a Bond or PILOT issue for this particular property until his office can present an official report to the Board regarding those matters. Bailey stated that his office just did a similar thing for the Shelby County Commission at The MED and are working with A2H and a couple of other outfits to go in and do a condition report on The MED and give them some honest, across-the-board, third-party evaluation of the condition of the property.
Bailey stated that State Representative G. A. Hardaway also asked if his office would be engaged to undertake that process for Serenity Towers, which the Assessor has accepted. In fact, his office will be delivering a letter to Millennia tomorrow of official notice pursuant to Chapter 5 of Title 67, which gives them the authority to do so, to enter upon the land, and his office has hired an independent inspector to go in with a group of appraisers and take a look at the improvements, what the remaining economic life of those improvements are, and so forth. Bailey stated that this will also provide the Board with an assessment of what the property is actually worth, what the conditions really are, and so forth. Bailey stated that anytime another governmental entity requests such a thing, his office usually honors that, and in this case, his office has undertaken that process. Bailey stated that this is particular to Serenity Towers. Bailey stated that it is also relevant because the property has changed hands a bunch of times and Millennia was also one of the management teams on that particular property and his office has done a complete title search of the property and there is some question about who the true owners are. Bailey stated that his office checked the address that is listed for the new LLC and it went to a sign company in Cleveland, Ohio, which immediately raised some red flags because if they are going to get tax breaks, particularly for the next two (2) years where the sales ratio has cost both the City and the County millions of dollars in losses, his office would like to ask that at least the Board knows who they are dealing with. Bailey asked that the Board table any action until such time as his office can get the Board an official report. Bailey stated that the report will be turned into the legislator that requested it and the Board will be copied on it as well.
8. G.A. Hardaway, Sr introduced himself as State Representative for District 93. Hardaway stated that there is a lot of confusion in the initial research that he has done on just who these folks are, but whoever they are, they have his full legislative attention, and that is not something you want if you are not doing things in an orderly and lawful manner. Hardaway stated that his preliminary research says they are going to find problems. Hardaway respectfully requested that the Board not issue any new incentives, any new funds, and that everything be put on hold until he knows what he doesn’t know and thanked the Board for doing the right thing.
9. Ribquahdevorah S. YhIsreal introduced herself stating that she has been keeping herself abreast of everything that has been going on with Millennia Incorporated. YhIsreal stated that she has only been in their establishment, which is Hope Heights, for only five (5) months, and she has tried to keep her mouth shut but she keeps her eyes peeled and she watched the television and sees what is going on. YhIsreal stated that she is looking at Serenity Towers, Memphis Towers, and Hope Heights, and what she is seeing is Millennia is taking advantage of disability individuals, elderly, and because they are low income, Millennia feels they have no right to complain and that is not true. YhIsreal stated that she is looking at the fact that the elevators since she has been there have been down, no hot water, and then when they come down, like a previous tenant stated, they quickly do something. YhIsreal stated she has called Code Enforcement, and she has watched them come in, and Ms. Johnny, who was the manager, run and leave it on someone else. YhIsreal stated that they are paying thirty percent (30%) of their income, which is not much, but it is low income, and they said it was for elderly.
YhIsreal stated that when she got there, there are other people in the premises, and they are having homeless people come in and sleep inside the building, and they have to go and do what they have to do. YhIsreal stated that she does not know what is going on and she knows they are getting funds from HUD and tenants are giving their thirty percent (30%), but she just wants to know what is going on with Millennia. YhIsreal stated that she knows they are out of Cleveland, Ohio, and what are they doing with the money. YhIsreal stated that they are not fixing the elevators and tenants are walking up and down the stairs, and it is just a mess. YhIsreal stated that she wanted to come in today because she just found out the Board was having this meeting, but something needs to be done to Millennia and the Board needs to stop giving them funds because it is just disrespectful.
10. Norma Lester introduced herself stating that at one time she was a gerontology nurse and has always been an advocate for the elderly, and now that she is elderly, she is more so an advocate. Lester stated that she really didn’t know anything about the Board’s organization, but she is certainly happy to learn about it and glad for the opportunity to be here today. Lester stated that she is concerned about Millennia and became involved with them last year. Lester stated that she would like to applaud State Representative Hardaway for stepping up to the plate and who actually saw for himself the conditions that are over there. Lester stated that her concern is that does not seem to be oversight and she cannot understand why Millennia is constantly being paid and no one is coming out to make sure that the services are being delivered. Lester stated that the conditions are deplorable, that there is a band-aid approach, and that she has personally been there, and the elevators do not work half the time. Lester stated that she does not have relatives there, but she is just concerned, and she knows were it not for the grace of God, could be one of those people over there. Lester stated that as responsible adults and taxpayers, we need to hold them accountable. Lester stated that they are operating as Millennia now, and that they were previously operating as Global Ministries Foundation and they basically shut them down under that and now they are coming back under Millennia. Lester stated that she did not know about other properties that they are managing, but she did know about Serenity Towers and about Memphis Towers. Lester stated that she appreciates what the Board is doing, and she just wants everyone to be sincere in their commitment to the elderly and making sure that they are getting the services that they require and that they need and that we as taxpayers are paying for it. Lester expressed her appreciation to the Board and stated that her goal is to advocate for those who cannot advocate for themselves.
Chairman Dan Reid thanked everyone for their public comments and stated that the Board would not be aware of these issues if these members of the public were not present to make their comments.
There were no further questions or comments.
Action Items-
1. Final Bond Resolution for Legends Park Senior LLC (d/b/a Edgeview at Legends Park)
Chairman Dan Reid stated that this agenda item has been deferred to the Board’s September 13, 2023 Board Meeting. There were no further questions or comments.
2. Status Update for Millennia Housing (d/b/a Memphis Towers)
Tom Mignogna, representative for Millennia Housing, began by stating that he would like to show the Board some before and after pictures of Memphis Towers. Mignogna stated that he was on site on August 1, 2023 and stated that Millennia Companies is in twenty-six (26) states and has acquired some of the most challenging projects across the country, a lot of the projects are Section 8 that have had to be rehabilitated with low income housing tax credits, tax exempt bonds, and other forms of financing so that Millennia can do the acquisition rehabs on the substantial rehabilitations that these properties require. Mignogna stated that many of these properties are over forty (40) years old and have experienced hardware repairs. Mignogna stated that Millennia also understands the frustration of the residents that come with trying to live through substantial rehabilitation.
Mignogna stated that at the close of 2020 and at the head of COVID, it was a seventeen-million-dollar construction project, seventy thousand per unit, and right now Millennia is approaching twenty-one million dollars based on cost overruns, material price increases, and unforeseen conditions. Mignogna stated that right now, Millennia is at seventy thousand six hundred dollars per unit on the rehab and he sees a potential for twenty-one point five million dollars because Millennia has identified other issues as well that haven't been formalized in the construction contract. Mignogna stated that Towers A and C are completed, and Tower B is the last tower to be completed of units and then the General Contractor will focus on the common areas and first floor amenities. Mignogna stated that Tower B is projected to be complete and resident move-ins to commence in September and expects a punch list of final completion probably in November 2023.
Mignogna stated that when a property undergoes (in-place) physical rehabilitation, Millennia tries to work with the residents throughout and trust their concerns and frustrations, and it is not easy. Once the physical restoration of the property is completed, Mignogna stated that Millennia finds that is when they can focus on the management standpoint to also address a lot of the social concerns and issues. Mignogna stated that Millennia will go through many staff members who can or cannot provide the level of service that Millennia expects. Mignogna stated that it is very illuminating to hear the comments made today and they will be followed up on.
Memphis Towers is eighty-seven (87%) complete according to the latest draw schedule and Mignogna stated that Millennia expects to be done by Thanksgiving. Mignogna stated the scope of work is all new kitchens, bathrooms, ceilings, walls, all restored and repaired or replaced as needed, and roofs and windows, and replaced almost all the plumbing, which Millennia is still working on. Mignogna stated the forty years of grease caused five-inch pipes to be narrowed down to two inches, so some issues are still being discovered and the General Contractor is replacing them. Common areas, electrical and security are all a focus and part of Millennia’s scope of work. Mignogna continued by showing pictures to the Board showing conditions at the start of the project and conditions of what residents were living in. Mignogna stated that a lot of conditions were found once the General Contractor began work and started tearing walls open, and more problems, which cannot be discovered in an occupied unit during pre-development.
Mignogna stated that Millennia recapitalized the project in December 2022 with additional funds, with the owner himself putting in over one million one hundred thousand dollars of cash, so there is an investment, and it is not just public money. Mignogna stated that Millennia is very proud of the unit transformations, further stating that he and his team walked several vacant units and a few occupied units on August 1, 2023 in Tower C and found the conditions to be very representative of the pictures shown to the Board. While the General Contractor is working on common areas in Tower B, Millennia will have maintenance techs continue to work on plugging holes, hammer holes, scrapes from wheelchairs, etc., which Mignogna stated is an ongoing maintenance issue that Millennia will continue to represent.
Mignogna stated that Millennia not only did the “lipstick” and put in the nice finishes, but Millennia also updated systems, fire panel, plumbing, HVAC, electrical all getting work done through the substantial rehabilitation that is really addressing all the major concerns with the buildings. Millennia is trying to provide a bright, clean, finished product. Mignogna stated that Millennia knows the residents are not happy and they have stories of mostly what Millennia is finding to be security issues as well as personality conflicts with management that Millennia will continue to work through.
National Security OPS is Millennia’s security company, a security company started by a former military gentleman for properties and employees are trained not only in dispute resolution but also in basic training protocols to be able to handle security issues and challenging circumstances. Mignogna stated that security is on the property seven days a week for a minimum of eight (8) hours, most likely in the later hours after business. Duties include foot patrol of the hallways, monitoring ingress and egress, the doors around the property, stairwells, and the parking lot area and access control for the front door, whether by the security team or by management, and they all provide Millennia with reports.
There was a member of the Memphis Tenant Union team present that was filming Mignogna’s statements to the Board. Mignogna asked if the individual could stop filming and asked if he was with a news outlet. The individual stated that this is a public meeting. Alex Ulhmann also stated that this is a public meeting. Mignogna asked the individual to stop shaking his head at him during this presentation. The individual stated that Mignogna cannot control his reactions, and if he is wrong, he is wrong. Charles Carpenter stated to the Board room and to Mignogna that this is a public meeting and do not to be distracted by other individuals and to go ahead and make his presentation.
Mignogna continued by showing the Board a second quarter incident report as an example of what Millennia is seeing from Memphis Towers and to provide insight on what was happening in April, May and June 2023. Mignogna stated that Millennia has found through the incident reports that within the four walls, Memphis Towers does have some levels of crime reported, but the majority of the issues raised come from outside in the neighborhood. Mignogna reported that in the month of July there were one hundred seventy-seven (177) reports filed in coordination with the Memphis police Department and only two (2) of those one hundred seventy-seven (177) originated from Memphis Towers and the rest fall within a half a mile radius of the property and not tied to the property. Mignogna described efforts being made by reaching out to the VA Hospital as well as other hospitals to see if they can coordinate a security patrol or a neighborhood stabilization plan.
Mignogna stated that he was able to accomplish a similar effort in Cleveland, Ohio with Ohio University Circle where Cleveland’s medical district has University Hospital and a nonprofit there were able to coordinate and collaborate with the stakeholders in the neighborhood and through stabilization and security outreach, were able to provide safety and an overlap in security and opportunities by overlapping shifts and working together to support each other. Mignogna stated that he is hopeful to get somewhere with that for Memphis Towers. Mignogna asked that if the Board has any contacts with the VA or Bonaire Healthcare System they could share, it would be helpful to get in touch with the right people to have a serious discussion, as Memphis Towers, given its location, is a beacon and Millennia can try to keep people out and keep people in, but they would rather have a neighborhood where everyone feels safe inside and outside the property, and all the cameras and armed security might be a deterrent, but it is not going to be a fix.
Mignogna stated that the security company handles mostly off-hours and provides a heightened level of security at Memphis Towers and the management company is supposed to patrol each floor everyday through multiple staffers providing multiple rounds of the property’s occupied units while Tower B is under construction. Once Tower B is complete, management will continue their rounds and maintain a patrol log associated with their security patrols around Tower A, Tower B, and Tower C. Mignogna stated that Millennia has asked management to patrol the perimeter of the property within the fence and gate. Management also engages with Memphis Police Department (MPD) on letters of agency and the rest are authorizations and certainly is collaborative with MPD on all those issues.
Mignogna stated the next focus if the security cameras that are set up around the perimeter of the property and in each hallway inside each Tower and making sure those are up and activated and reported. Mignogna stated that management had a router that was stolen, which set those cameras down, and a new router has since been delivered and Millennia is working on getting those back up.
Mignogna reported that Millennia is currently working on key fobs as well as having new alarmed push bars on all doors around the perimeter. Mignogna stated he doesn’t know if that will be effective because many doors are propped open and when the alarms sound, residents are able to pop batteries out of the alarm bars, but Millennia will continue to replace and upgrade those security items. The front door be monitored by management and security until the key fob vendor, who has been engaged, can install the updated software needed to program the keys. Mignogna stated what they do not want to do is have a door that someone can get in and out of, so that programming is underway, and Millennia expects to hear back from the vendor as to the timing so that they can get the key fobs out.
Mignogna moved forward to discuss pest control at Memphis Towers, reporting that the occupied Towers are treated fully once a month by Cook’s Pest Control by treating two floors every Wednesday, and with eight floors, that is essentially the property is fully treated for pest control every month. If bed bugs are reported or found by the pest control company, notice is provided to the tenant and the management company, and Cook’s Pest Control returns the following Monday for four (4) consecutive treatments to the unit for pest control of bed bugs. Mignogna stated that there are currently twelve (12) units identified to have bed bugs and management keeps records of notices and of all the residents who have been found to have bed bugs. Mignogna stated that sometimes residents will not let them in, and management repeatedly asks until they can resolve the issue because the last thing Millennia wants is bed bugs spreading to other units and to residents that do not have bed bugs. Mignogna stated that management is actively working to control that situation and management also independently sets traps for rodents in common areas, bathrooms, machine rooms, and in different areas associated with the project.
Mignogna introduced Renee Weiss and Angelica Sinito also in attendance representing Millennia Housing and are able to address any questions regarding Serenity Towers. There being no further questions or comments,
There was no action taken by the Board and the update was provided for informational purposes for the Board.
3. 1st Bond Inducement Resolution for The Memphian TN TC, LP (f/k/a Serenity Towers)
Charles Carpenter reported at the Board’s June 28, 2023 Board meeting that this project was given conditional approval by the Tennessee Housing Development Agency (THDA) and it was this conditional approval that allows this matter to go forward. Carpenter asked a representative for Millennia Housing to provide a status update on the current status of this conditional approval. Angelica Sinito stated that Millennia is still working with THDA through the conditional commitment and Millennia has submitted all requested documents back to THDA and working diligently with the general contractor and architect to update everything per THDA’s request. Sinito stated Millennia is expecting an updated letter from THDA that would be a commitment to close and that closing would occur mid-October 2023. Carpenter advised the Board that according to its Policies and Procedures, the Board will require a firm commitment from THDA before it could move forward with any consideration of this agenda item. Carpenter recommended that this agenda item be deferred to the Board’s September 13, 2023 Board meeting. There being no further questions or comments,
Action was deferred to the Board’s September 13, 2023 Board Meeting for the 1st Bond Inducement Resolution for The Memphian TN TC, LP (f/k/a Serenity Towers).
4. 1st PILOT Closing Extension for The Memphian TN TC, LP (f/k/a Serenity Towers)
Angelica Sinito stated that the PILOT closing would be in conjunction with the THDA firm commitment, and the bond closing and Millennia is waiting for the updated letter from THDA. Charles Carpenter recommended that this agenda item also be deferred to the Board’s September 13, 2023 Board Meeting. There were being no further questions or comments,
Action was deferred to the Board’s September 13, 2023 Board Meeting for the 1st PILOT Closing Extension for The Memphian TN TC, LP (f/k/a Serenity Towers).
Thereupon, Alex Ulhmann asked if the Board has now moved on from the status update and agenda items associated with Millennia Housing. Carpenter advised that is correct. Ulhmann asked if there were any comments from the status update provided by Millennia Housing. Carpenter advised that the update was received by the Board and there was no action to be taken today based on the previous meeting and the concerns the Board has seen, it wanted to have an update, which was provided. Carpenter stated that the presentation that was made can be uploaded to the Board’s website for reference and made available. Ulhmann asked if the agenda item will come up at the Board’s next meeting too or if the Board is planning on taking any action relevant to Memphis Towers. Carpenter advised that the Board will continue with its oversight, and it should be on next month’s agenda as well. Carpenter advised members present from the Memphis Tenants Union that they are welcome to stay, but the Board has completed its information regarding Memphis Towers and Millennia Housing.
Members of the Memphis Tenants Union left the meeting.
5. PILOT Transfer Application for Mazal in New Horizon, LLC (d/b/a New Horizon Apartments)
Charles Carpenter introduced this agenda item stating that a thorough submittal conference took place, and as the Board is familiar with New Horizon Apartments, it is one of the Board’s largest projects with a total of eight hundred ninety-eight (898) units and asked representatives for New Horizon Apartments to come forward and make a presentation to the Board.
Frank Carney, Mendel Fischer, and Shrage Marasow entered the meeting.
Carpenter asked representatives to provide a status of the purchase contract, if due diligence has been completed, and the timing that is being anticipated should the Board approve this transfer application. Mendel Fischer introduced himself, stating that this is the first in-person appearance before the Board, but that he has had quite a few engagements virtually on the Board’s Zoom platform previously, but he is happy to be here in person to present the project to the Board. Fischer stated that the contract has been completed, and if the Board approves this application, closing is anticipated in the next thirty to forty-five (30-45) days. Fischer advised the Board that his team has the commitment from their bank to continue and enhance the renovations, as was put together in the PILOT Transfer Application. This will get the down units up and upgrade the existing tenant’s apartments once they own the complex.
Carpenter advised that this property is on the Board’s watchlist and is an extremely unique project because of its size. Carpenter also stated that the property has had fire damage, a number of security issues, and Carpenter stated that this was outlined in the application and was discussed during the submittal conference, but for the benefit of the Board, Carpenter asked Fischer to articulate the approach that he anticipates using to bring the property back to full operational conditions as well as the security and other tenant benefits that would be in compliance with the Board’s PILOT program.
Fischer responded that as far as security is concerned, it is number one, especially for the size of the property. Fischer stated that he owns another property in the Whitehaven area that has over six hundred (600) units, and it is a very peaceful and quiet property with 24-hour security. Fischer stated that he plans to take out some of the trees to provide an openness from the front to the back of the property. Fischer plans to add more lighting, stating that the property has decent lighting, but he does find that lighting, cameras, and personnel are key for security and that is number one. Fischer said that personnel at their other properties are all Identified and they have three (3) security companies that they work with, but his team is very pleased with their other properties with them and have seen results of what is actually going on at the properties. Fischer stated that his team is working with the current management company to make sure that they are maintaining the property for the last few months they have been under contract to make sure the security is upkept.
Regarding tenant benefits, Fischer stated that there are certain programs on the property today and his team plans to continue those, including Red Door, which assists the residents. Fischer stated that his team’s real goal is to upgrade the tenant’s experience and one of the things his team has found in the over five (5) years of doing business in Memphis, TN is to give the tenants more of an upper-class environment of living. Fischer provided examples of vinyl flooring versus carpets, new kitchens, new colors, and more updated units. Fischer stated that when you give the tenants something new that they haven't had in twenty or thirty years, it gives the tenant more respect, which results in less crime, better retention, and wanting to live in a community that when you come home you feel safe and that has happened in all of his properties throughout Memphis. Fischer stated that the money his team has invested in Memphis is tremendous, they are not looking for any recognition, but they have done this with other properties and look to do the same with this property.
Carpenter stated that the PILOT Transfer Application does comply with the board’s policies and procedures and this developer does have other properties in the Board’s PILOT program that are in good standing and recommended approval. There being no further questions or comments,
James Jalenak moved to approve the PILOT Transfer Application for Mazal in New Horizon, LLC (d/b/a New Horizon Apartments). Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Mendel Fischer and Shrage Marasow left the meeting.
6. PILOT Refinancing Application for Bent Tree, LLC (d/b/a Creekside Meadows)
David Upton and Philip Balderston entered the meeting.
Upton began by introducing himself and Philip Balderston, the owner of Creekside Meadows Apartments. Upton stated that what representatives are asking for today is permission to move forward the refinancing of this property. Upton stated that the property currently has two (2) sources of short-term debt, one being a construction loan and the other being an investor loan from a retirement fund. Upton stated that Berkadia is a refinancing lender and ownership has been conditionally approved for a Freddie Mac thirty (30) year permanent financing that will carry a fixed interest rate.
Thereupon, Upton passed out to the Board a proposed sources and uses table with an addendum and detailed capital improvements proposals. Upton stated that he would go through the details of the proposed sources and uses table, which includes the proposal to set aside funds from the refinancing for capital improvements for both Creekside Meadows and Mill Creek Apartments. Upton again stated that this is a proposed Freddie Mac thirty (30) year fixed rate refinancing and some of the proceeds from that would go into two (2) separate local bank accounts and representatives would report to the Board on a monthly basis on the capital improvement plan for both Creekside Meadows and Mill Creek Apartments.
Upton advised that the amount of the refinancing loan has been reduced from the time of the original refinancing application to $13,345,000. The proceeds will be used to pay off a floating construction loan at 7.75%, which has been in place for 3.5 years, as well as another source of financing, Sage Capital. Upton stated that Sage Capital is an investment partner that provided a loan to Creekside Meadows of $3,786,494 and has a 12% interest rate, and ownership would be replacing this debt with long term debt. Upton stated that the refinancing application proposes that $1.3 million dollars of refinancing proceeds be set aside for the capital improvements plan for Creekside Meadows and $750,000 of refinancing proceeds be set aside for the capital improvements plan for Mill Creek Apartments. Upton stated that most of these repairs needed are exterior repairs that have been identified and would enhance the curb appeal of both properties. Upton advised that ownership has also submitted a PILOT Term Extension Application for Creekside Meadows for its consideration at the October Board meeting and his hope is that the Board will feel comfortable at that point to move forward with consideration of that application and ownership will maintain the property with the type of curb appeal that it needs to have.
Cliff Henderson asked if the representatives could go through the uses portion of the refinancing proceeds as it relates to the Sage Real Estate Funds. Philip Balderston stated that a letter from Sage Real Estate has been provided to the Board as part of the Creekside Meadows PILOT Refinancing Application. Balderston stated that Sage Real Estate provided 85% of the capital for Creekside Meadows, and those funds primarily come from working people, who are Sage Real Estate’s clients. Those funds will be returned to them as part of the refinancing, as well as roughly $2 million dollars to the reserve for capital expenditures and part of the capital expenditures ownership has expended over the last 3.5 years. Balderston stated that the Board was also provided with a breakdown of all money spent to date, which is approximately $5,000,000 since the purchase of the property. Balderston stated that those funds will be returned such that Odin Properties can go and do additional transactions. Upton stated that $1,992,429 is what is being returned to Odin Properties as part of the refinancing proceeds, which will make those funds available for use on their properties. Upton stated that Odin Properties envisions that the proposed work for both properties can be completed by the end of the year 2023.
Upton reviewed the capital improvements plan for Creekside Meadows, stating the two (2) biggest expenditures are repaving the parking lot and painting of the exterior of the majority of the buildings. Upton stated that new paint and an all-new parking lot will give the property a whole different look, as the property has had problems with graffiti over the years and it is a challenge to match the brick color to cover it. Upton stated the capital improvement plan for Creekside Meadows also includes dumpster enclosures, electrical upgrades and exterior lighting. Upton discussed a ditch on the east side of the property, located outside the property on airport authority property that has also been dredged and cleaned by the Creekside Meadows property owner. Upton stated that all railings have been painted, all the doors have been painted, and work is still being done on the frames and some of the larger capital expenditures will require the proceeds from refinancing to complete.
Balderston stated that Creekside Meadows is an asset that was built many years ago, and nationally there is very little in the way of capital that is available to be invested in these types of assets and the HEHF Board and the PILOT Program is what allows that to happen. Balderston stated that when he first appeared before the Board, he received comments from the Board concerning Creekside Meadows that were important to he and his team to hear and since that time, a lot of work has been done and the property looks a lot better. Balderston stated that the residents are happy to live there and the additional $1.3 million dollars from the refinancing loan proceeds will take the property through the next thirty (30) years. Balderston stated that he takes the condition of the asset very personally and the residents and he would like to make these expenditures happen.
Upton stated that the Board has expressed concerns about a refinancing of Mill Creek Apartments approved by the Board on July 24, 2021, and approximately a year later, the property was placed on the Board’s PILOT Default list for non-compliance. Upton stated that ownership has taken those comments very seriously and has come up with a capital improvement plan for this property as well that will help with curb appeal and the overall progress of the property. Upton stated these capital improvements include gutter and downspout replacement and repairs throughout. Upton stated that the entire property has been power washed and those funds have already been spent, but that showed places where siding needs to be replaced. Upton referenced compliance reports provided by internal and external monitors for the Board and those reports and notes from the Board have been used to make the recommendations to ownership for necessary repairs. Balderston stated that those repairs are ongoing and siding is currently being replaced as of the morning of August 2, 2023. Upton continued stating that the property has AC pads and sometimes there is erosion around those pads, and cleanup and improvement for areas surrounding AC units throughout is a large part of the property’s proposed improvements. Proposed improvements also include exterior door replacements, erosion repair, replacement or repair of the front gate system. Upton stated that some of these items have been done and some have not. Balderston stated that after hearing prior comments from the Board, it was important for ownership to get started on this work right away, so a lot of these items are in progress now. Balderston stated that he is basically paying for this personally. Upton continued listing proposed work including siding and breezeway repairs, and a seal coat and striping of the parking lot, as it is in better shape than the parking lot at Creekside Meadows.
Upton stated that the goal is to get the PILOT Refinancing Application for Creekside Meadows approved, set up the reserve accounts for each property, and report to the Board monthly on to report contracts in place and pricing. Upton stated that ownership can engage in a third-party engineering contract to provide reporting to the Board as well. Upton stated again that the Board has received a PILOT Term Extension Application for Creekside Meadows to be considered at the Board’s October Board meeting and the Board will see the repairs being done and completed by the end of the year 2023 and that the funds are being spent on those items and hopefully the Board will feel comfortable that this property is where it needs to be. Upton advised that the Mill Creek PILOT Term is due to expire within the next year, and ownership is hoping, with the right amount of progress, ownership can apply for a PILOT Term Extension for Mill Creek Apartments early, and the board can move forward then.
Katie Shotts commented that representatives stated the $1.3 million dollars would take Creekside Meadows through the next thirty (30) years, and asked if the $750,000 is intended to do the same for Mill Creek Apartments form the refinancing proceeds? Balderston responded that siding is the biggest issue at Mill Creek Apartments and those proceeds would take care of those issues. Balderston stated that the siding at the property was put up when the property was first constructed, which was more the fifty (50) years ago, and the new siding presumably should last about the same period of time. Balderston stated that on an ongoing basis, there will be additional reserves that will be necessary, and ownership will make sure to take care of any issues on an ongoing basis as well as any capital items that may come up. Balderston stated that the $750,000 represents the capital items that are needed today at Mill Creek Apartments. Upton stated that Balderston is not saying that is all that will need to be done, and when the financing Creekside Meadows has now is replaced with a thirty (30) year Freddie Mac fixed rate loan, there will be a reserve fund. Upton stated now, the reserve fund is funded at approximately $100,000 per year now, and when the refinancing loan is closed, the lender will have a list of items they will require which is anticipated to overlap with the list provided to the Board today.
Upton stated that Odin Properties will provide the list of requirements, once it is provided by the Freddie Mac lender. Upton stated that ownership will present the Board with a ten (10) year plan, and Mill Creek Apartments currently has a reserve fund that is paid monthly to continue to do capital reserve on a yearly basis. Upton stated that both properties will be in good shape to start out at the beginning of a new ten (10) year PILOT and that is what representatives want to get the Board comfortable with. Balderston stated that Mill Creek Apartments is a low income housing tax credit (LIHTC) federal property in its extended compliance period. Balderston reminded the Board of his comments at the June 28, 2023 Board meeting where he stated that a property has an initial fifteen (15) year compliance period, and after the initial fifteen (15) year period is up, there is a fifteen (15) year extended period, and those tax credits can be re-syndicated. Balderston expects some sort of tax credit re-syndicated within the next ten (10) years for Mill Creek Apartments and he believed these capital funds can get them there. Upton stated that it would be nice to have some sort of bond or tax credit deal on Creekside Meadows sooner rather than later, further stating that if ownership could apply and be successful and get funding, ownership would be willing and interested in doing that.
Upton stated that with the $1.3 million set aside for Creekside Meadows and $750,000 set aside for Mill Creek through the refinancing loan for Creekside Meadows he thinks will get the Board comfortable if ownership can do good work. Upton stated what he and ownership envision the Board coming up with an extension that will get them through this and see what else the Board thinks is needed and keep moving forward. Balderston commented that he hopes the Board, internal and external monitors can see that in the last thirty (30) days there has been substantial difference made at Creekside Meadows, it is in good shape now, and he wants to be sure to bring it to great and that is what he will do over the next three to six (3-6) months, but additional capital is needed to do it and is part of this refinancing request.
Monice Hagler asked if the Board could hear a report from its internal compliance monitors. Bryce Miller stated that he was at the property on August 1, 2023 and has been to the property weekly over the last few months. Miller stated that he observed a lot of these improvements that have been listed in the information submitted by the PILOT Lessee. Miller asked for clarification concerning the security arm at the front of Creekside Meadows, stating the arm was broken at his recent visit, but it was not broken the week prior. Miller explained that this seems to be an ongoing issue at the property. Balderston stated that people run into the security arm, and that he has capitalized a brand-new gate as part of this process, and no more security arm because it keeps getting run into and this is part of the capital improvements plan submitted as part of the refinancing request. Miller stated that of the capital improvements list provided, approximately sixty percent (60%) of those items have been completed. Balderston agreed, stating that the less capital-intensive items have been completed in the last thirty (30) days. Miller stated that his observations confirm that statement and work seems to be ongoing at both sites. Upton states that the biggest items are going to be painting and milling of the parking lot, and the dumpster enclosures will also help. Upton stated that what ownership has agreed to do whatever the Board deems appropriate, and Board legal counsel can draft a letter of intent if that is appropriate, but ownership would like to do whatever is necessary to provide the Board accountability. Hagler asked Carpenter about the proposal of the escrow account and if that is something that would work in this instance? Carpenter stated that it has not been done before, but if the Board approves it, his office can set up an escrow structure along with the Board’s compliance department that would work in a situation like this.
Balderston introduced Tameca Parker to the Board, who was attending virtually on the Board’s zoom platform. Balderston stated that she is a new addition to the Odin Properties team in Memphis and will be helping oversee all Odin Properties in Memphis. Balderston stated that she has a strong familiarity with Creekside Meadows and Mill Creek Apartments and Odin Properties looks forward to her taking Odin Properties into the next phase of the company in Memphis.
Carpenter stated that the Board is very familiar with both of these properties, and they are located in an area with a significant need for affordable housing. Carpenter stated that the developer has done a good job in bringing these properties up to standard and asked what the current occupancy rate is for both properties. Balderston stated that Creekside Meadows is approximately ninety-five percent (95%) occupied and Mill Creek is approximately eighty-five percent occupied. Carpenter also stated for the record that his office received a letter of support from State Representative Joe Towns, Jr., which has been shared with the Board. Carpenter stated that the mission of the Board is to facilitate affordable housing and that is the area that needs affordable housing.
Carpenter continued by stating that the challenge the Board has had and expressed on the record previously is the credibility issue, particularly with Mill Creek moving forward with a refinancing and then the Board had issues and it was placed on the Board’s watchlist and in looking at the initial PILOT Refinancing Application for Creekside Meadows, it looked like the same thing all over again. But since that time, Carpenter stated that the developer and his team have done a good job in structuring an arrangement that takes care of both properties and gives the Board some comfort that the housing would be in line with the policies and procedures of the Board.
Carpenter stated that Cliff Henderson has mentioned the credibility issue in previous Board meetings, and it would be important as the Board deliberates and moves forward, whether those concerns have been properly addressed, and if not, what sort of assurances would be necessary to get the Board comfortable with moving forward at this time. Balderston stated that he took these comments very personally and he will attend each Board meeting until both properties are off the watchlist. Balderston stated that he feels both properties are close to that point based on his walkthroughs of the properties the morning of August 2, 2023. Cliff Henderson stated that this is a step in the right direction, but it should not have taken this kind of oversight from the Board to get to this point. Henderson stated that there has been a lot of effort expended on both sides and a lot of the items the Board is seeing here are regular capital expense and operational type things that should have been happening on a daily basis. Henderson stated that is disappointing, and he thinks representatives heard the message, but it felt like the Board prompted this and the Board shouldn’t be doing this as part of its role. Henderson stated that the work that has been done over the last two to three (2-3) months hopefully exemplifies where ownership truly is, and this is the right step forward to maintain momentum where it doesn’t take this type of oversight.
Katie Shotts stated that she still is not seeing tenant benefits. Balderston stated that part of the PILOT Refinancing Application submission included a whole detail of all the tenant benefits, especially at Creekside Meadows. Balderston stated the Creekside Meadows has whole buildings on site that are occupied by the church and Creekside Meadows supports them, as well as after school programs and special events that are happening every week. Balderston stated that the Church also has a group of units, free of charge, and management cooperates with them on events there every week, so there is a substantial amount of extracurricular activity that is supported by ownership there and none of that would be possible without the PILOT. Shotts stated that she was referencing Mill Creek Apartments. Balderston stated that there is a nonprofit, Red Door, that is newly on site at Mill Creek Apartments and are provided units free of charge that are supported by ownership and Red Door has regular event that are supported by management on site and at the pool there. Balderston stated that there are also after school and tutoring events on site. Balderston stated that the resident benefits that are supported by the PILOT are extremely expensive, and as shown in resident testimonials previously provided to the Board, residents appreciate those things and ownership hopes to continue to provide those benefits indefinitely.
Upton again stated if the Board approves this application today, ownership will move forward with renovations, and there is another application that has been filed for a PILOT Term Extension Application for Creekside Meadows. Upton stated that it was urgent to get the PILOT Term Extension application filed because the current PILOT Term expires in October 2023. Upton stated that he would like the Board to work with Odin Properties on some type of PILOT Term Extension while the work is being done and Odin Properties will put together a more extensive presentation for the Board on the tenant benefits for both properties, and that the Board will have a good chance to look at it and make sure each member feels like it is what it should be based on the PILOT and the funds, and the Board will have another chance to do that more extensively with the upcoming PILOT Term Extension Applications. Balderston stated that he hopes for both properties to be off the watchlist in short order.
Katie Shotts stated that the Board agenda includes Creekside Meadows and Mill Creek Apartments under the PILOT Default Status Update portion of the agenda and asked if there will be additional information provided at that time, or if what has been previously stated by representative's present would satisfy those reports. Dan Reid stated that this report just given would be sufficient to cover those agenda items as well. There being no further questions or comments,
Cliff Henderson moved to approve the PILOT Refinancing Application for Bent Tree, LLC (d/b/a Creekside Meadows). Monice Hagler seconded, and the motion passed unanimously after proper roll call vote of the Board members.
PILOT Default Status Updates:
1. Creekside Meadows (Bent Tree)
2. Mill Creek Apartments
Reports for Creekside Meadows (Bent Tree) and Mill Creek were covered during the Board’s action item and consideration of the PILOT Refinancing Application for Creekside Meadows (Bent Tree).
3. Macon Manor
David Shores, Alex Shores and Sally Colace entered the meeting.
David Shores introduced himself and Alex Shores with Multi-South Management Services, LLC and Sally Colace, the owner of Macon Manor Apartments. Alex Shores gave an overview of repairs that have been made to the property and what repairs are still remaining. Alex Shores stated that on the South parcel, all siding has been repaired around the building and painted. Shores stated that a new dumpster enclosure has been built, including the concrete pad and block walls. There is an amenity area being installed with grills and picnic tables for residents to use. On the North parcel, Shores stated that all siding has been replaced, all buildings have been repainted, windows have been replaced, asphalt has been completed, dumpster enclosures have been installed and the block walls should go in soon as the pads are in place, as well as upgraded exterior lighting.
Shores stated that upgrades on the interiors of the units have begun with new countertops, new cabinets, all new interior doors, vanities, new flooring, paint, and appliances. Shores stated that twelve (12) units will be complete by August 4, 2023, another three (3) units will be delivered the week of August 7, 2023 and another round of unit upgrades will begin following that. Shores stated that erosion control has started with complete removal of trees on the North parcel. The area was graded down, put in new sod, and cleaned out all of the drain lines so that it drains out the property on the street as it should. David Shores stated that at this point, management is basically down to finishing interiors on the remaining five (5) units and then it will take some time to place the residents, and as units become available, they anticipate completing another fifty (50) units this year. In addition, the completion of the dumpster enclosures on the North side and getting tables and grills installed. Alex Shores stated that the dumpster enclosures should be complete before summer’s end, meaning all exterior work should be complete by the end of August or mid-September 2023. Alex Shores stated that approximately $700,000 has been spent on the exterior of the project.
David Shores introduces Sally Colace, stating that she and her husband Joe Colace, who was not able to be in attendance today, were the owners of the property and have been very supportive in their ownership of the property and the property looks great.
Charles Carpenter asked Bryce Miller to make a comment on his observations of the property. Miller stated that this was one of the first properties he saw when he started with the Board just over one (1) year ago and the amount of difference that he has seen in the last year is remarkable. Miller stated that though he has not seen any unit interiors, the exterior of both parcels is night and day. Miller stated that he and Martin Edwards, Jr. visited the property approximately two (2) weeks prior to the Board meeting and Edwards didn’t even recognize the property because of the substantial difference that has been made. Carpenter asked what the current occupancy is at the property? David Shores stated that occupancy is currently at eighty-seven percent (87%). Alex Shores stated that they are doing everything they can to get units upgraded and units are pre-leasing very quickly as soon as they are completed. Alex Shores also stated that as soon as units are completed and turned over to management to be occupied, current residents are typically transferring to the upgraded units and management is trying to maintain around ninety percent (90%). Carpenter stated that this is an excellent report and thanked the owner.
Carpenter stated that affordable housing is the mission of this Board and to have a responsible owner that comes in and provides quality housing is greatly appreciated. Carpenter stated that this property is providing an update today to make a determination if they would come off the watch list. Based on the statements of the representatives, they should have everything completed in sixty (60) days or less and it would be the option of the Board to either take it off the watch list at this time based on the substantial progress that has been made or ask representatives to come back in October when everything is completed and take it off the watchlist at that time.
The Board determined that they would require representatives to appear at the October Board meeting to provide an update and make a determination on whether to remove the property from the Board’s watchlist at that time. Sally Colace asked if she would need to be present at the October Board meeting. Dan Reid stated that the Board’s policy is that owners are required to attend when their property is on the Board’s watchlist, but based on today’s report and if all items are completed as expected, the Board will provide leniency and will entertain removing this property form the Board’s watchlist at the October Board meeting. Reid thanked representatives for their attendance and for performing the work that has been done in a timely fashion.
4. New Horizon
Dakota Beasley introduced herself as a representative in attendance on behalf of Mark Jobe with Glankler Brown, PLLC, who was not able to attend in person, but is in attendance on the Board’s Zoom platform. Beasley stated that the Board has received a written update from the current ownership of New Horizon Apartments, but she will provide a brief overview. Beasley stated that there has been a lot of construction and renovation process over the last few months and since June 1, 2023, work has been completed on two hundred eighty (280) units, which ownership is proud of and will continue working to get all units renovated. Beasley stated there are still two hundred units (200) that will require renovations to have all right hundred ninety-eight (898) units complete and fully renovated. Beasley stated that without the down units, occupancy is currently at seventy-four percent (74%) and with down units, occupancy is at sixty-eight percent (68%). DNS Security continues to provide 24/7 security with a direct phone line available 24/7 for residents to call security, if needed. Beasley stated that two (2) of the managers have completed the Citizens Police Academy with the South Precinct of Memphis Police Department (MPD) and those managers also attend monthly meetings at the South Precinct. Red Door is also on the property and Beasley stated that their work has expanded with free after-school meals for children every day, in class and remote tutoring options, counseling, conflict resolution, free dental care, and a mobile clinic for children.
Since the last update, Beasley stated that Red Door has provided the following activities: a six-week summer camp, entrepreneurship training for teens ages 13-17, and a soccer camp. Beasley stated that there are three (3) different mission teams that visited the property and worked with residents and on July 30, 2023, Heal 901 hosted a back-to-school drive where food and prizes were provided as well as three hundred (300) backpacks that were full of school supplies. HEAL 901 is also on the property and has helped with thirty-four (34) job referrals and mediated seventeen (17) incidents on the property. In terms of the formerly vacant area, as of now, Beasley reported that Chessway, Berwind and Kingsgate are fully occupied, and work was completed in fifty-two (52) two- and three-bedroom units and fifty (50) electrical inspections successfully passed. On burned units, the entire roof has been replaced at 3611 Queensland and electrical work is in progress on Baroness. Beasley stated that current ownership will continue to rehabilitate these units and cooperate with the new buyer to ensure a smooth transition without impacting the tenants. Beasley stated that ownership is very appreciative of the Board’s assistance and support during this process.
Bryce Miller was asked to provide a report as well, and he stated that he has observed the slowing of construction as far as the rehabilitation. Miller reported that the property did have a recent fire approximately two (2) months ago and it took out a significant portion of one of the buildings. Miller stated that the area was quickly secured and boarded up, within two (2) days of the fire taking place. Miller reported that security seems to be operating even better than prior visits and a few different procedures have been implemented as far as getting people onto the property. Miller reported that security on his most recent visits has been at a higher level than previous visits, which is saying a lot because security at the property for the past year has been operating well. Miller reported that although construction has slowed, that was expected with the PILOT Transfer Application being filed with the Board, but security and maintenance of the property has remained the same or improved, and the rest of the property is at status quo.
Corbin Carpenter stated that with the transfer of ownership, his office has not seen any official documentation yet with the purchase and the acquisition. It was stated earlier in today’s meeting that the construction will be continued, and Carpenter asked if a representative could explain whether construction will continue with the current construction company and contract that is in place with the property being delivered to new ownership in full working order, or if it will be a different process. Frank Carney, legal counsel to the purchaser, stated that new ownership will continue with the construction, and they are fully aware of the requirements for the property under the PILOT and have incorporated those into their plans. Carney stated that with the Board’s approval of the transfer earlier in the meeting, new ownership plans to close the transaction in the next thirty to forty-five (30-45) days and they do not expect all units to be complete at that time and will continue the work to bring the property to full operation.
New Business
There was no new business.
Chairman Reid stated that the next meeting of the Board is scheduled for Wednesday, September 13, 2023 @ Noon. There being no further business, the meeting was adjourned by the Chairman at 02:05 p.m.