MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Tuesday, August 7, 2018
The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee was held pursuant to public notice on Tuesday, August 7, 2018. The published meeting time was 12:00 Noon. The meeting was held at the Board office, located at 65 Union Avenue, Suite 1120, Memphis, TN 38103.
The following Directors were present
Daniel T. Reid, Chair Brittney Rowe
Monice Hagler Cliff Henderson
James Jalenak Dr. Manoj Jain
The following Director was absent:
Also present were:
Staff members Martin Edwards, Jr., Lauren Magallanes, and Stephanie Wright were in attendance. Charles E. Carpenter and Corbin I. Carpenter, General Counsel, and Cheryl Hearn, Assistant City Attorney, were also in attendance.
Frank Stockdale Carney representing Thompson Courts and Chapel Homes, Van Menard and Theresa Thomas representing Chapel Homes, and members of the public James Stokes and Myrthel Stokes were also in attendance.
With a quorum present, the regular meeting of the Board was called to order at 12:00 Noon by Chairman, Daniel T. Reid.
Approval of Minutes
Brittney Rowe moved for approval of the Minutes for July 9, 2018. Cliff Henderson seconded and the motion passed unanimously
Finance Committee Report
Daniel T. Reid started by making clarifying comments in connection with the revised financials for the period ending April 30, 2018. Thereafter, Reid presented the financial results for the month ended May 31, 2018. A discussion of the financials was completed and
Monice Hagler moved for acceptance of the Finance Committee Report for May 31, 2018, and properly seconded by James Jalenak, the motion passed unanimously.
Daniel T. Reid presented the financial results for the month ended June 30, 2018. Thereafter, a discussion of the financials was completed.
Dr. Manoj Jain moved for acceptance of the Finance Committee Report for June 30, 2018, and properly seconded by Brittney Rowe, the motion passed unanimously.
Charles Carpenter presented the legal report, as follows:
1. For the Board’s information, Carpenter reported no new lawsuits or claims for the period.
2. Carpenter reported receipt of Notice of an Internal Revenue Service (IRS) audit regarding the Lamar Crossing Apartments Series 2007 Bonds. Carpenter stated that this appears to be a routine audit and documents are being pulled together in preparation for responding. Carpenter will keep the Board informed moving forward with this audit.
James Stokes and Myrthel Stokes entered the meeting.
3. Carpenter reported on the Oakshire PILOT property. The owner had previously requested a termination of the PILOT, which it had the right to do under the Lease Agreement, however, during the several months which passed, without the PILOT Lessee completing the termination of the PILOT, the primary lender had initiated foreclosure proceedings and the property has been foreclosed with the PILOT still in place. Under the Board’s existing PILOT policies, if the primary lender forecloses, the PILOT can continue. Carpenter reported that he is currently determining who the new owner is and what its plans are going forward. Either it will comply with the PILOT policies or the Board will terminate the PILOT. Carpenter will report to the Board in the coming meeting with any new information.
4. Carpenter reported Bonds and PILOTs have closed for Keystone Landing and Pendleton Place. These closings took place in July 2018 and post-closing filings and related activities are taking place with the State of Tennessee and the Internal Revenue Service by bond counsel.
5. Carpenter reported closings for Cedar Run Apartments PILOT and Country View Apartments PILOT.
6. Carpenter reported on the three (3) Millennia Housing properties, (i) Cavalier Courts, (ii) Gospel Gardens, and (iii) Hope Heights are part of the Action Items appearing for Final Bond Resolutions. All are scheduled to close in the month of August 2018. Carpenter reported that PILOTs will also be closing with each property.
7. Carpenter reported on a pending closing for South City Phase II MHA PILOT, which does not count against the Health, Educational, and Housing Facility Board’s annual allocation. This closing is also scheduled to take place in the month of August 2018.
8. For informational purposes, Carpenter reported that there is a rebranding of one of the PILOT properties, Winbranch Apartments, located in Whitehaven on Millbranch near Winchester Rd. There will be no change in ownership or management, simply a new and improved public marketing campaign by the owners changing the name from Winbranch apartments to another name. Other than updating its records to reflect the new name for the property no other changes will be necessary by the Board.
9. There was a brief discussion as to Board policies when the Board’s annual allocation has expired for the year. Following discussion among members of the Board, Carpenter made a recommendation that he meet with Board members and staff to draft a recommendation for improved delegation of authority from th City moving forward. The Board agreed and asked that staff appear at the next Board meeting with the recommendation.
The above concluded the legal report and there was a brief question and answer session with members of the Board.
Martin Edwards, Jr. stated the PILOT committee met and their recommendations would be detailed in the Action Items portion of the meeting.
PILOT REFINANCING FOR THOMPSON COURT APARTMENTS
Martin Edwards, Jr. made a staff recommendation for the adoption of the refinancing. After a brief discussion of the property and its history,
James Jalenak moved to approve PILOT REFINANCING FOR THOMPSON COURT APARTMENTS. Buckner Wellford seconded, and the motion passed unanimously.
PILOT TRANSFER APPLICATION FOR CHAPEL PLACE HOMES
Van Menard, Frank Stockdale Carney, and Theresa Thomas entered the meeting.
Van Menard and Frank Stockdale Carney appeared before the board to discuss the ownership position and the form of entity changes at the second tier ownership level. Theresa Thomas with Omega Property management was also present as the property manager of Thompson Court. Van Menard explained that the original owner, Mr. Gary Gibbs, has made changes to the ownership entities for estate planning purposes, however, the principal parties of the original PILOT Lease remain the same, as well as, management remains the same for the PILOT
Lessee. Carpenter indicated to the Board that the changes represent a restructuring of ownership at the second and third tiers of ownership for estate planning purposes and does not adversely impact the interests of the Board, as PILOT Lessor. After additional discussion, it was determined by the Board that this will be a PILOT Refinancing for Chapel Place Homes and will not be considered a PILOT Transfer. Further,
Monice Hagler moved to approve PILOT REFINANCING FOR CHAPEL PLACE HOMES. Brittney Rowe seconded and the motion passed unanimously.
Van Menard, Frank Stockdale Carney, and Theresa Thomas left the meeting.
NOTE: During the course of the presentation for this agenda item, Mr. Menard made references to being acquainted with Board members, Jalenak, as well as Cliff Henderson. James Jalenak mentioned for the record that he does not readily recall a connection with Van Menard, and wanted to publicly clarify for the record that he has no known connection with Menard and has no direct or indirect interest in the Chapel Place Homes project. Cliff Henderson similarly advised that he is acquainted with Menard but had no idea that he would appear before the Board on this matter and further reiterated for the record that he has no direct or indirect interest in the Chapel Place Homes project.
AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR RIDGEWAY CROSSING APARTMENTS
Martin Edwards, Jr. reported to the Board concerning the PILOT application for Ridgeway Crossing Apartments which came in during the published 2018 PILOT Calendar Round II. Edwards explained the property is located south of Hickory Ridge Mall. The project consists of 584 units and was purchased at foreclosure. This property will become part of the SAFEWAYS Program. The new ownership is planning on spending $3 million+ in renovations and tenant benefits on the property and the property has no debt at this time. LEDIC Management company will be the new management company for the property. Edwards made a staff recommendation to approve the PILOT application. Following discussion among the board,
Buckner Wellford moved to approve AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR RIDGEWAY CROSSING. James Jalenak seconded and the motion passed unanimously.
Buckner Wellford left the meeting.
FINAL BOND RESOLUTION FOR CAVALIER COURTS APARTMENTS
Charles Carpenter reported on the three (3) Millennia Housing properties, (i) Cavalier Courts, (ii) Gospel Gardens, and (iii) Hope Heights being purchased by the Ohio based developer from Global Faith Ministries (GFM). Millennia Housing has set up separate, single asset entities for each of the three properties before the Board for which it is seeking final bond resolutions for each property today. Each property has been approved by Tennessee Housing Development Agency (THDA) and received the required volume cap allocation and tax credit allocation. Each property is scheduled to close the month of August 2018, with tax-exempt bonds, 4% low income housing tax credits and implementation of new PILOTs for each property. Following further discussion of his interaction with members of the working group involved with the bonds, Carpenter made a recommendation that each of the three separate properties is in compliance Board policies and are ready for Board consideration of approvals of Final Bond Resolutions for each property. There being no questions,
Brittney Rowe moved to approve FINAL BOND RESOLUTION FOR CAVALIER COURTS APARTMENTS. Dr. Manoj Jain seconded and the motion passed unanimously.
FINAL BOND RESOLUTION FOR GOSPEL GARDENS APARTMENTS
Brittney Rowe moved to approve FINAL BOND RESOLUTION FOR GOSPEL GARDENS APARTMENTS. Monice Hagler seconded and the motion passed unanimously.
FINAL BOND RESOLUTION FOR HOPE HEIGHTS TOWER APARTMENTS
Brittney Rowe moved to approve FINAL BOND RESOLUTION FOR HOPE HEIGHTS TOWER APARTMENTS. Monice Hagler seconded and the motion passed unanimously.
Executive Director Report
1. Martin Edwards, Jr. reported that there has been additional discussion with members of the City administration concerning extending the term of PILOTs granted by the Health, Educational, and Housing Facility Board and the discussions are moving forward. Edwards will continue to update the Board as discussions continue.
2. The Health, Educational, and Housing Facility Board of the City of Memphis was cited in an Atlanta publication as a Board that had an effective low income housing PILOT Program. The article did mention one challenge with the Board’s PILOT Program, being the limited ten (10) year term of PILOTs granted by the Board which makes it hard for developers to sustain the property as affordable following the termination of the PILOT.
3. Edwards also reported receipt of a letter from Elmington Capital concerning potential new projects. This developer has previously developed two other properties with PILOTs and will be coming before the Board with two additional properties, both being second phases of the current property PILOTs.
The above concluded the Executive Director Report and there was a brief question and answer session with members of the Board.
There was no official new business.
There being no public comment, it was announced that the next scheduled meeting of the Board will be held on Wednesday, September 12, 2018 @ Noon. There being no further business, the meeting was adjourned by the Chair at 1:05 p.m.