MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Wednesday, August 6, 2025
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 30, 2025, which simultaneously caused the continuous posting to the Daily Memphian website at: www.dailymemphian.com, and the public notice was continuously published 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 Board offices, located at 65 Union Avenue, Suite 1120, Memphis, TN 38103.
The following Directors were present:
Daniel T. Reid, Chairman Monice Hagler
Cliff Henderson Howard Eddings, Jr.
Vincent Sawyer (Zoom) Courtnee Melton-Fant
The following Director was absent:
Buckner Wellford
Staff and others attending: Trey McKnight, Stephanie Bryant, JP Townsend and Nikki Abraham; Charles E. Carpenter and Corbin I. Carpenter (Zoom), General Counsel; Katrina Shephard (Zoom), legal assistant to General Counsel; Cheryl Hearn, Deputy City Attorney.
Also participating in person and/or via remote Zoom virtual platform were Doug McGowen, Memphis Light, Gas, and Water (MLGW) President and CEO, Staley Cates, Vice Chairman of Southeastern Asset Management and President of Poplar Foundation, and Seth Hoedl, Waide Warner, and Jason Mulligan of Post Road Foundation, all appearing in connection with the Smart Memphis Fiber Initiative; Thomas Robinson and Warner Russell of Alco Management Inc., representing Hilldale Apartments; Tony Weng and Jevon Allen of Christian Church Homes and Cliff Causey representing Covenant Gardens Senior Apartments; Jim Reedy of Reedy and Company representing Wilson Crossing Townhomes; Tie Lasater and Nathan Chandler of Key City Capital, David Shores of Multi-South Management Services, LLC, Lou Sarube, Sarah Brinkman, and Glenn Pressley of Arbor Realty Trust, all representing Grahamwood Place Apartments and Pinebrook Pointe Apartments; Frank Stockdale Carney, Esq. of Evans Petree Law Firm, Mendel Fischer, Shrage Marasow, and Neil Knopf, all representing Bridgeport Manor, Coronado Manor, Eden Pointe, Grainge Hill, Scenic Hills, Timber Pines, and Watkins Manor Apartments; Michael Finch of MLK50; Austin (A.T.) Harrison, Markayla Love, and Jan Kidder of Memphis Interfaith Coalition for Action & Hope (MICAH); Alex Uhlmann of the Memphis Tenant Union; Mike Humes; Nikia King; Michael Peeber, Zachary Amos; La Francine Bond; 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 6, 2025 @ 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.
Smart Memphis Fiber Initiative Presentation
Doug McGowen, Staley Cates, and Jason Mulligan entered the meeting.
Chairman Reid began by introducing McGowen, Cates, and Mulligan, all in attendance in person for their presentation and invited Board Director Cliff Henderson to provide opening remarks. Henderson began by presenting a Housing Continuum chart that was presented and used at the Tennessee Housing Development Agency (THDA) Tennessee Housing Conference in Nashville, TN earlier this year. The Housing Continuum chart displays from left to right, going from being homeless to supportive housing to affordable housing up to market rate and home ownership. Henderson stated that the Board’s work is focused in the middle of this chart at affordable housing, and this chart provides a good depiction of these levels. Henderson stated that in looking at Tennessee average renters versus Mid-South renters, 42% are renters in the Memphis area versus 33% statewide; the housing age in Tennessee is a median of 36 years versus 50 years in the Memphis area. Henderson also referenced the wealth distribution between renters and owners, stating that this data supplements the need for capacity with what the Board is doing through the PILOT program. Henderson stated that as the Board goes forward, he is proposing three (3) draft horizons for the Board to consider and look at over the next few months; (1) The first horizon will focus on safety and compliance and continue to improve with some support of the PILOT properties and look at some digitizing of current operations and then form stronger analysis of property conditions; (2) The second horizon will focus on networking and partnerships, which is illustrated with the guests in attendance today for this presentation. Henderson stated that these partnerships, with their resources, will better enforce the Board’s requirements and also build a stronger network to help with safety and compliance needs; (3) The third horizon focuses on community and once the Board works through the first two horizons, how can it focus on the benefits for the residents themselves and, referencing the housing continuum chart, move residents to the right toward market rate and home ownership for those that wish to do so and give those opportunities. Henderson stated that the Board will establish a Strategy subcommittee that will begin meeting in the coming weeks to start building momentum, by following the outline just presented. Henderson stated that with what the Board is doing now, and with the presentations around digitalization and digital equity, this is something, with the Smart Memphis Fiber Initiative, the Board can coordinate these activities and take advantage of and elevate the Board’s mission. Henderson then turned the meeting over to McGowen for his comments.
McGowen began by thanking the Board for allowing him to be at this meeting today. McGowen stated that this project began with the City of Memphis under Mayor Strickland’s Administration, and this initiative continues to be led by the City of Memphis and Mayor Young, but there are a lot of partners involved. McGowen stated that during COVID, administrators found that so many young people were out of school and did not have access to sufficient internet bandwidth in their homes in order to be able to take part in digital learning. McGowen stated that the City of Memphis took it upon themselves to put digital learning hubs into all libraries and community centers, MLGW put in high-speed fiber internet there, and there were parking lots full of children doing their homework. McGowen stated what they found is that there is not a velocity of quality, high-speed internet in many neighborhoods, with approximately 35% of neighborhoods having no access to high-speed internet. This created the context for the city’s young people and this initiative. McGowen stated that at the same time, the City of Memphis wanted to embark on a smart internet for all of the infrastructure of the city, and there is a smart plan for traffic signalization and other things, and Mayor Strickland wanted these two things brought together.
McGowen stated that the opportunity for the utility had been explored before he began with MLGW, but there were discussions on potentially doing what Chattanooga did in bringing internet through fiber-based internet. McGowen stated that MLGW was fully occupied at that time with the power supply study, so MLGW went to a third-party and put out an RFP (request for proposal), stating the City of Memphis had $22 million, and the RFP was put out to see who would come to town and help enable Memphis’s Smart City Infrastructure. Meridiam was the winning bidder for the RFP, and they brought resources totaling approximately $850 million. Meridiam is an S Corporation, whose business model seeks a return on its investments, which returns are reinvested by Meridiam into other communities. Meridiam brought its resources of $850 million investment to match the City of Memphis’s $22 million, with the idea that it will facilitate the installation of ubiquitous fiber across the entire community. McGowen stated that there is currently high-speed fiber throughout Memphis, including East Memphis, Chickasaw Gardens and Central Gardens, to name a few, as there is a commercial business case for putting high-speed fiber there. McGowen stated that in low-income communities, however, people are unable to pay a premium for high-speed fiber. The desire is to have as close to 100% connectivity for every property in the City of Memphis, but McGowen stated the guarantee with this initiative is a minimum of 85% of all properties will be connected in the City of Memphis in every single neighborhood, which is the bottom baseline threshold, but it is anticipated to be higher.
McGowen stated that the bottom line is that a lot of partners came together to make this happen, the City of Memphis and the engineering department came together with MLGW, who is the attachment authority for this fiber, and Meridiam came to town and formed mStreet Fiber Memphis (formerly Blue Suede Networks). The idea is that mStreet Fiber Memphis will build out this fiber across the entire community with connectivity of 85% of the properties in the City of Memphis at minimum, and there will be an internet service provider named Ting. McGowen stated that the City of Memphis has allocated $22 million, $15 million for building and $7 million for incentivization. Approximately half of the $7 million for incentivization will be used for learning orientation about digital literacy and why access to high-speed internet is important, and the other half will be used to offset cost of drops to individual properties. McGowen stated that there is a real opportunity here, and he has been working with Staley Cates, the Post Road team, and has spoken with several members of the Board and other representatives, and the group believes there is a real opportunity for successful connection of this ubiquitous high-speed internet. McGowen stated that when he says ubiquitous and high-speed, this will be the best internet in the country, not just an improvement of what we have, but will be the best in the country.
McGowen stated this is a real opportunity also for the residents living in the properties that participate in the Board’s PILOT program. McGowen stated that this is the context of why he and others are here and this is a real thing and is being built today and they have already connected thousands of homes and is anticipated to be completely built out by 2028. McGowen stated there are a lot of good things that can come from this, but there is real value added here as an immediate connection for the properties that participate in the Board’s PILOT program, which is an immediate uptick for this offering, which is real value in his personal opinion. McGowen stated he is before the Board today to provide context on why this is being talked about today and that this is an actual project that is underway.
Chairman Reid asked how many miles of internet cabling this is, to which McGowen responded that the City of Memphis has five thousand miles of overhead and underground power, which is largely the rights of way that are going to be connected, so this is a large project and it is limited just to the Memphis City limits for now. McGowen stated he believes there is opportunity to expand that, but it is a huge construction project and that is why it takes this amount of money to get it done. Chairman Reid thanked McGowen for his attendance today.
Doug McGowen left the meeting.
Chairman Reid turned the meeting over to Staley Cates. Cates thank the Board for having him today. Cates stated that some of his biggest previous civic projects he has worked on were Memphis Grizzlies and Crosstown Concourse, and this project will be bigger than either of those as the impact would be huge. Cates stated that sometimes these impacts are hard to measure, but what he found compelling about this from the beginning of this initiative is that this is the evident community need.
Cates referenced that Chattanooga can be used as a template where $400 million was spent and a UTC study said that the impact was $2.7 billion in economic benefits. Cates stated that some cities go for Google Fiber, including Austin, TX and Nashville, TN, and if this project goes off premises past and dollars invested, Cates stated this project is much bigger than Google Fiber because it offers much more coverage at better speeds and that is huge in what it can do. Cates referenced McGowen’s earlier remarks, stating that the educational uses are the most important, and it is not just about the virtual uses like what households experienced during the pandemic with the difference between private school students and public-school students, but there is also a teacher shortage. Cates stated that one day, there is going to be a remote learning environment that makes sense where every student can go to whatever school they want to, but there must be fiber to pipe that information to a screen. Cates stated that there are other powerful uses, and referenced Board policies and procedures and the security at PILOT properties, and this would offer the opportunity to put in place cameras and drones and other types of technology with this fiber, and this is the backbone of anything that is going to be crime-fighting. Cates stated that another aspect of fiber is jobs through people applying for jobs, getting trained for a job, and working for a remote boss in whatever city they might be in, and there must be fiber in the home. Another aspect is healthcare, Cates stated, which Jason Mulligan will be presenting more specifically, is another facet of the fiber through things like telehealth access and other things, and this project has several healthcare partners lined up.
Cates stated that the impact of this fiber initiative is gigantic and it is easy to see how it covers all these different areas, which overlap nicely with the Board’s PILOT program and what the Board is doing. Cates stated there is a bifurcation between the high-income and low-income communities, and Ting is the service provider who people will be paying directly for the internet service, and it will take care of itself if high income neighborhoods and people will be paying Ting instead of AT&T U-verse or Comcast. Cates stated that current top speeds being offered are a few hundred kilobytes speed, but this initiative will be 2 gigabytes in speed and will be marketed at approximately $90 per month in high-income neighborhoods. Cates stated that these speeds will crush other internet providers in those areas, which is why those companies are fighting this initiative, but Cates stated that it does not matter who the provider is, the initiative is to get the fiber in place and accessible and get people to use it, particularly in low-income neighborhoods, but it will not sell itself in low-income neighborhoods because there is an affordability issue. There is also the issue of who is going to teach the user to use it. Cates stated the people are ripped off every day because they have internet on their smartphone that is a rip off for the speed and the cost compared to what it should look like. Cates stated that this can be used with wireless devices and is not making someone choose between their smartphones and fiber.
Cates stated that his foundation, Poplar Foundation, and Post Road Foundation with Rockefeller and Ford backing out of New York, have combined to have a Post Road Memphis for this initiative to drive adoption in the low-income neighborhoods, and that is why this group is here before the Board today, asking for an investment from the Board, to go with other investors, because if aligns with the Board’s mission and goals and the residents this Board and the initiative aims to serve. Cates stated that many conversations are centered around devices, but devices are worthless if there is not someone teaching you how to use it, and that is as important to this initiative and this group as the devise. Cates stated this group hopes to bring grants for devices and other forms of investment as well, and turned the meeting over to Post Road representatives.
Seth Hoedl introduced himself and Waide Warner, co-founders of Post Road Foundation, and Jason Mulligan, all with Post Road Foundation. Hoedl provided comments on Post Road Foundation, stating that it works to drive economic development, health, jobs, and education through broadband access and making sure there are networks and everyone in communities can use those networks. Hoedl went into the origin of the name of the foundation, stating that 250 years ago, post roads as actual roads were the communication infrastructure of the time in the 18th century, and the founding fathers felt that post roads were so essential, and also as a democracy, that they gave Congress the explicit authority to spend money to build post roads. Hoedl stated that post roads are the only type of infrastructure that is actually explicitly mentioned in the United States Constitution. Hoedl stated that both he and Warner feel that broadband, especially fiber optic-based broadband is just as essential to economic development and human development in the 21st century as post roads were 250 years ago in the 18th century, of the nation’s founding. Hoedl stated that is the origin of the name and what motivates their work to create this platform that communities can use to benefit themselves. Hoedl stated that in the foundation’s eight-year history, the foundation has helped facilitate nearly one billion dollars of private capital into fiber optic networks, with most of that being in Memphis, and in a smaller project in Alabama, as well as the foundation helped to develop some applications that use those networks as part of a smart grid project that is being supported by the Department of Energy in Maine. Hoedl stated his foundation hopes to do the same thing in Memphis and has been in communication with McGowen and MLGW about that. Hoedl stated he would have Jason Mulligan review specifics of what Post Road would like to implement in Memphis, but turned the meeting over to Waide Warner for comment. Warner stated that he has spent most of his career in internet infrastructure and referenced McGowen’s earlier comments and stated that this Smart Memphis Fiber initiative is as smart and as forward thinking as any initiative he has ever seen and this will take Memphis to the next level and Memphis will become a model for the country. Warner stated this is a remarkable combination of public money, private money, and philanthropy and is a mix that is quite smart and has disarmed the incumbents who would oppose it. Warner then turned the meeting over to Jason Mulligan.
Mulligan stated that he is based in Memphis and has spent his career leading mission driven teams, first as an officer in the Army, to scaling biotech labs, to turning around a community nonprofit here in Memphis. Mulligan stated that each step along the way has helped him to understand how to break down silos, work across diverse teams, earn trust, and ultimately deliver complex change with integrity. As the leading representative for Post Road Memphis, Mulligan stated he is honored to step into the role of digital inclusion and dignity is at the heart of what this team and initiative is seeking. Mulligan stated that this project is about bridging families who today are on the wrong side of the divide and have been for a long time. Mulligan stated that Post Road Memphis is stepping forward by creating a coalition of partners that are centered on long term trust-based relationships, not transactional relationships, across housing, hospitality, healthcare, education, philanthropy, technology, and city government leadership. Mulligan stated that Post Road Memphis has been working with this group and formed a close-knit relationship over the past 18 months because what they expect and what they have learned from other fiber implementations is that it takes a community, leadership, and intentionality. Mulligan stated that is how Post Road Memphis has approached building relationships with this working group, with deep intentionality, shared vision, and aligned purpose. Mulligan stated that Memphis has a once in a generation opportunity to leapfrog legacy systems. Mulligan emphasized this statement twice. Mulligan stated that this Smart Memphis Fiber Initiative is not about speed, it is about equity. Mulligan reviewed a map that specified areas of Memphis where the divide is starkest and access to reliable broadband is wither nonexistent or unaffordable. Post Road Memphis is focusing on these neighborhoods and communities because they have long been neglected by the big telecoms and now there is a chance to do something about it and start to truly bridge this divide.
Mulligan reviewed McGowen’s comments, stating that Meridiam won the RFP approximately two years ago, and their local entity was formed, Blue Suede Networks, and has now been rebranded as mStreet Fiber Memphis. mStreet Fiber’s focus on this project is infrastructure and they are building it out in close partnership with MLGW, Congruence, and other contractors to lay the fiber down, whether it is aerial or underground. Mulligan stated that the internet provider at this stage is Ting, which has been previously mentioned, and all of that gets to the fiber is laid down, the internet service provider to connect people to service, but to bring this to life, it takes a full enablement and suite of services, which is where Post Road Foundation comes in. Mulligan stated that the suite of services starts with affordability, access, devices, and skills, with the number one issue across the country, but specifically in Memphis, being affordability. Mulligan stated that the crux of the plan, particularly with low-income and income qualified housing complexes, is to offer low cost and no cost, ultra-fast, highly reliable broadband. Mulligan stated that with access, this will not be fiber to the curb, but fiber to the unit, which is a game changer and really enables the kind of quality service that high-income people are already enjoying. Mulligan stated this is the leapfrog moment.
Mulligan stated that skills and devices work hand in hand, and without secure reliable devices and the understanding of how to use the internet in a safe way that actually leads to better quality life outcomes, these two are ineffective, so it takes this suite of services. Mulligan explained that the working group met with EPB Chattanooga (Electric Power Board Chattanooga) on discovery sessions over the last year as well as with a successful fiber implementation team in Wilson, NC, and several others from around North America, taking the learning from those sessions and surveys in Memphis, and then going out and leading face-to-face, in-person, community listening sessions. Mulligan stated that he has facilitated surveys with hundreds of families around Memphis and the conclusion is people are using the internet in these areas the same way high-income families are, but with a much more difficult time and it is frustrating and expensive for them. Mulligan stated may families are paying $60+ per month for unsecured hotspots. Mulligan stated that many other parents and students do not have the ability to access necessary school databases, so they are going to other places like McDonalds parking lots or wherever they can to get internet access. Mulligan stated this is an eyes wide open approach that is community focused and listening and open to adapt and evolve the model as it goes. Mulligan stated that this working group is partnering with University of Memphis’s Research and Educational Policy team to help specifying and being intentional about what outcomes the group is starting with and measuring over the horizon of this project.
Mulligan stated that affordability is at the heart of this vision and began describing the increase in the internet speed that would become the new baseline, rather than a luxury, for this initiative in comparison to the fastest internet offerings today, which are much slower for both upload and download speeds than this new baseline, particularly for the most underserved Memphians. From there, Mulligan stated this model enables direct cyber-secure telehealth, with which this working group has a long-term strategy and partnership with Life Docs, Church Health Center, UT Health Hub and their coaching clinics around the city, that are all on board, not only to host digital navigators provided by University of Memphis, but also to enable telehealth solutions. Mulligan stated that for educational municipal applications, the starting point is laying the fiber down, coming behind it with digital navigator support, bringing it to life from there, a whole suite of services is then enabled, which today are not possible.
Cates stated that one thing the working group has wrestled with is the affordability and whether there should be some cost to the user so that they care about the service. Through early small trials, it has shown that a low-cost option, such as $10 per month, has not stopped adoption, but Cates stated the working group would love some feedback from the Board because cost to the user is not locked in. Mulligan stated that with these pilots that the working group is designing throughout the city for income qualified housing, the group wants to have a variety where some are no cost and then measuring the usage and how usage can eventually lead to better life outcomes. There was further discussion on low-cost options and pricing without compromising the quality. Mulligan stated that in the discovery sessions with other successful fiber implementations both on what worked and what didn't work, particularly for income qualified populations, with adoption rate being number one behind the educational use and how this can be an opportunity for not only better youth education, but adult education, which has come of often in listening sessions. Mulligan stated that these pilots will also be measuring how this fiber initiative can be an opportunity to address the truancy rate, which is still a big issue in Memphis, and health outcomes through the use of telehealth. Mulligan went on to state that with safety and crime, this project is woven through City leadership in a number of ways, but on the safety and crime side, the camera systems available, as well as employment. Mulligan stated the working Group is in conversations with the Chamber and economic development on how to identify properties to deliver this vision to, and this can become part of the Chamber's road map to attracting new businesses to Memphis so that there is a higher number of reasonable paying jobs and then the group will be able to pull this together with an eyes-wide-open holistically as an ecosystem play for Memphis.
Cates stated that the really important thing is being good stewards and being good financiers, and this all has been spoken as if all this would be philanthropic gifts, but that would not be smart because some of this can pay for itself. Cates explained that with high penetration numbers would drop to Meridiam’s bottom line, and the more Post Road would want to get a percent per month kind of payment for services, so it would not be smart if this whole initiative is philanthropic grants, but it does not get going without that. Cates also discussed the option of debt guarantees and some other finance options for the initiative that could be considered at some point, without the resident taking the risk. Mulligan walked the Board through what listening sessions in the community have been like, and stated that engagement was much higher than anticipated. Mulligan stated this initiative will have missed the opportunity if the digital inclusion efforts are not done with the highest degree of intentionality, but the potential benefits could be truly transformative for the City of Memphis. There was a brief discussion about the construction of the fiber with the plan to be complete by 2028. Cates added that his working group is not Meridiam, and their service is to drive the adoption and that success will be measured by penetration in the low-income neighborhoods. Mulligan stated that the affordable housing units that participate in the Board’s PILOT program provides an opportunity for this working group to explore the build plan and learn fast and understand what is takes to get adoption and better usage rates, but also provide better quality of life to residents in those areas.
Trey McKnight stated that in his previous position with EDGE, he structured the deal for mStreet Fiber Memphis (formerly Blue Suede Networks) and Meridiam with regards to bringing the additional pilot program to Memphis, Shelby County, and it is a good deal for the community and underserved and underprivileged communities. Monice Hagler asked what role this group sees that the Board plays in this process. Mulligan stated that the group is squarely looking for a partner to bring digital inclusion and digital equity to affordable or income-qualified housing. Cliff Henderson stated that the Board is several months from catching up to where this working group would desire the Board to be, and the Board has some work to do. Henderson stated that his earlier comments were focused on really initiating the Board down the path to get going, and he believes all can agree there should be overlap with this, but the question is the timing of when, and there is also the question of the Board not getting out too far ahead of this because the Board has some core business to take care of.
Henderson reiterated that the Board has created a strategy subcommittee to look at this strategy and he hopes to meet and over the next couple of months, have something running as a program to basically catch up and be able to partner and understand where the Board can partner with this initiative. Henderson stated there will be other things that the Board will have as priorities as well with some things that can be done with the Board’s core staff to do some things that the Board wants to focus on and have dual paths. Hagler asked if the door is open for ideas, to which Henderson responded yes. Henderson stated that he has documented and put these ideas together for the Board to react to as a kick starter, and then he would say that the Board would be mostly aligned, and would be working out those fine details as to how, what, when, and where. Henderson stated that this digital thread is something that the Board should be aware of and the Board needs to plan to converge with pretty quickly because this is rolling out. Henderson stated that he does not know how many people knew about this initiative, and some of the details and all the partners and people participating, but hopefully this gives the Board the breadth of what is happening. Cates stated there is a question that always comes out is if this is such a huge deal and so great, why have we not heard anything about it? Cates stated that for almost all the time that McGowen was working on this, they were keeping it quiet because they knew that both Comcast and AT&T would try to kill it, which they did, and Comcast showed up to City Council meetings at the last minute, and that is why it has been kept under the radar.
Howard Eddings, Jr. asked what the strategy is for working with people that do not know about it and will not have the opportunity to get all the information or to implement the plan around the digital literacy pieces, and how does this group plan to make that happen in a realistic and practical way. Mulligan stated that the realistic and practical way is to start working with low income MDUs (multi-dwelling units) is one complex at a time. Mulligan stated that this is built starting with digital literacy classes, locally employed digital navigators which are Lemoyne Owen College and University of Memphis students, so that when someone has an issue, they are hearing someone that is right down the street not someone out of state. Mulligan then reviewed the implementation process from the fiber being laid, to the internet service provider. Mulligan stated that the conversation is with the owner of the housing complex and not individual residents, which makes it easier because then the option is there to just connect, and Post Road Memphis Comes in with its suite of services including navigators, literacy classes, and devices, and that starts to move from a current baseline to higher baseline. Mulligan stated that the process is to learn, repeat and follow the process through the areas where Meridiam's building has been completed already, with a focus on the income qualified housing. Mulligan stated it is about starting with practical scenarios and then learning fast as they go. Eddings asked about the areas of focus and whether the areas are specific to this Board’s PILOT properties or outside of that. Mulligan stated that this is not an either or, and is focused on current fiber that is currently laid down and there is a passing, and then it is a conversation with the ownership group of that housing complex, or, if the group advances in the next few weeks and sees that there are a number of these units the participate in the Board’s PILOT program that there is already a passing or soon to be a passing, the group can bring Ting and Meridiam together to form a structure on how this needs to be done and start the process. Mulligan stated the working group is partnering with Tech Goes Home Tennessee, which is the gold standard for digital literacy courses and train over 5,000 Chattanooga residents a year and just under 90 a year in Memphis, so the disparity is great. Mulligan stated that this is a 15-hour course, and at the conclusion of the course, the resident gets a brand-new device, and then there are navigators to help those that need assistance with things like creating an email account, help navigating banking platforms, etc. Mulligan stated that the vision is not to project, but to listen and understand what is actually relevant for each resident of each housing complex that the working group is working with.
Cates stated that construction will take place based on what the construction plan is and the working group will not be able to have input on what areas are completed when, but the project should take four to five years overall, with hopes of completing sooner, but this working group must work with the construction schedule. Howard Eddings asked how the group plans for this to work in places like Orange Mound, where there are fewer MDUs than other areas of Memphis. Mulligan stated that income qualified housing is simpler in that this group can negotiate low-cost and no-cost contracts with the owners and learn what it is going to take to get to conversion and adoption. Mulligan stated that the idea is somewhat in parallel in that shortly after the group has an understanding from housing complexes, the group will apply what they have learned to single family homes and to residential. Cates stated that today’s discussion is more heavily concerning MDUs because of the presentation to this Board and the amount of PILOT properties in the Board’s portfolio, but this group has spent equal amounts of time thinking and strategizing about this house-by-house. There was some brainstorm discussion on options that could be utilized in different neighborhoods to encourage adoption of this service for single-family homes. Eddings asked if the plan is to approach the renter or owner, to which Mulligan stated initially, it is to approach the renter, but some owners that have multiple single-family rental homes, the group would look to arrive at similar terms that it is putting together for multi-family or bulk purchases. Chairman Reid thanked representatives for this presentation and for being here today.
Staley Cates and Jason Mulligan left the meeting.
Public Comment
Chairman Daniel Reid opened the floor for public comment and advised that all comments should be limited to two (2) minutes per speaker.
There was no public comment.
Approval of Minutes
Cliff Henderson moved for approval of the Minutes of the July 9, 2025 Regular Meeting, which was seconded by Courtnee Melton-Fant and the motion passed unanimously after proper roll call vote of the Board members.
Attorney’s Report
Charles Carpenter presented the legal report, as follows:
1. Carpenter reminded the Board of his previous reports of two (2) non-judicial foreclosure sales in connection with two (2) PILOT properties:
a. Cedar Run Apartments: Carpenter reported that Fannie Mae was the primary lender for this property and had filed this notice of non-judicial foreclosure sale, which was scheduled for sale on the courthouse steps on June 20, 2025 at 12 noon CT, and was rescheduled for July 21, 2025 to allow the PILOT Lessee to work with the lender in order to make acceptable arrangements. Fannie Mae and Cedar Run ownership were able to come to terms and that foreclosure has been cancelled and Cedar Run is now in good standing with Fannie Mae, and the Project will proceed forward with the PILOT as originally structured.
b. Sunrise Villas Apartments: Carpenter reported that this foreclosure took place on June 27, 2025 and Fannie Mae was the successful purchaser of Sunrise Villas. Immediately following that completed foreclosure, the attorneys for Sunrise Villas filed a temporary restraining order and injunction. The matter was heard on Friday, August 1, 2025 and the injunction was dissolved, so the foreclosure proceeded forward and Fannie Mae is now the owner of the property. Carpenter stated that his Firm is working with legal counsel pursuant to the policies and procedures of the Board to maintain the Project in the PILOT Program.
2. Carpenter reported one (1) new lawsuit regarding the Mason Village Apartments PILOT property filed by one of its tenants and the lawsuit is pro se, meaning the tenant filed it on her own behalf. Carpenter reported that the Board was sued in addition to the management company and the matter was set in General Sessions this week. Carpenter reported that he appeared on behalf of the Board at that time, and the tenant indicated that she wanted to hire an attorney, so that matter has been reset for September 23, 2025. Carpenter stated his Firm has advised the tenant as well as the judge of the Board’s statutory immunity in Tennessee Law based on the fact that it is serving as a public function of the City of Memphis, and he expects the Board to be dismissed at the next setting. Carpenter advised that this will not prevent the tenant from proceeding with her claim and the immunity is only for the Board, not for the PILOT Lessee or the management company.
3. Carpenter reported receiving notice from a law firm regarding Residences at Lakeview PILOT property. This is a claim for personal injuries that occurred at the property on July 10, 2025. Carpenter stated that his Firm will review this matter, ensure that the board is protected and keep the Board advised.
4. Carpenter reported on the fire damage that occurred at Sterling Townhomes, stating his Firm received a “MUST NOT BE OCCUPIED NOTICE” from the City of Memphis, and that notice was shared with the PILOT Lessee and management company. Carpenter reported that his Firm later received a “NOTICE OF CONDEMNATION HEARING”, which is scheduled for August 28, 2025 for this same property. That notice was also shared with the PILOT Lessee and management company. Carpenter stated that his Firm will represent the Board at that hearing and the activity has also initiated a Notice of Legal Default, of which his Firm is also moving forward with for this PILOT property. Carpenter reminded the Board that Sterling Townhomes was just recently brought into the Board’s PILOT program earlier this year 2025, and internal compliance inspector has been to the property to observe the fire damages. As this PILOT is new to the program, there are some issues, but the project is still in the construction phase and working through this challenge. Carpenter stated that his Firm will keep the Board advised as the process moves forward.
5. Carpenter reported that his Firm has been working with staff to coordinate the local agencies. Carpenter advised the Board that the City Administration has appointed John Zeanah to serve as the Chief of Development and Infrastructure for the City of Memphis. Carpenter stated this position aims to help with more efficiency and coordination with the various City departments.
6. Carpenter reported Bond activity for the month of July 2025 as follows:
a. Alco Management Inc. has three (3) properties that have been approved through Tennessee Housing Development Agency (THDA) for Low-Income Housing Tax Credits (LIHTC):
i. Hilldale Apartments: Carpenter reported that Hilldale Apartments is on the Board’s agenda today for a Final Bond Resolution.
ii. Ridgecrest Apartments: Carpenter reported that Ridgecrest Apartments is anticipating inclusion in the Board’s October 1, 2025 Board meeting at the latest for its Final Bond Resolution.
iii. Surrey Apartments: Carpenter reported that Surrey Apartments also is anticipating inclusion in the Board’s October 1, 2025 Board meeting at the latest for its Final Bond Resolution.
b. Carpenter reported at that Board’s July 9, 2025 Board meeting, in anticipation of Round Two allocation through THDA, the Board approved a Bond Inducement Resolution for Hospitality Hub-Hub North. Carpenter reported that the TEFRA hearing has been completed and the applicant is moving forward with their submission to THDA for Round Two consideration, which is ending on August 11, 2025.
7. Carpenter reported that he has provided the reminder to file the 2025 Annual PILOT Report due to the Tennessee Comptroller of the Treasury for all PILOT Lessees and is due by October 1, 2025 and that has now been posted to the Board’s website.
8. Carpenter reported that his Firm has been working with THDA and monitoring its incentive allocations statewide to ensure equity for the west grand division of the State, and monitoring THDA meetings regarding the 2026 QAP (Qualified Allocation Plan), that governs the priorities of how tax credits and other incentives for THDA would be administered in 2026. Carpenter stated there is a real tug-of-war between acquisition-rehab and new construction initiatives. Carpenter stated that emphasis has been on preservation and as the Board has heard previously, most of the affordable housing in Memphis is over fifty years old, so there is a lot of preservation needed, however, preservation is not adding units to address the growing affordability need. Carpenter stated studies have shown Memphis has a 33,000-38,000-unit need to address the ongoing housing shortage for affordable housing. The 2026 QAP is looking at putting more funds into new construction projects, but that has to be balanced, particularly in rural areas, where costs appear to be much higher in urban areas, which is one of the priorities of how THDA is scoring who will be eligible to receive those funds based on their scoring matrix. Carpenter stated that his Firm is looking at this very closely so that there would be equity on a statewide basis. Carpenter stated that other scoring criterion considers whether there is water and sewer lines in place, zoning status, status of development plans, and the financial readiness of the developer to go forward to closing. Carpenter stated that with THDA allocations, it does not roll over from year to year, and projects that are allocated these credits have to close before December 15th of each year. If the allocation is awarded and the project is not closed, then that allocation could be lost because the guidelines to carry over are very stringent.
9. Carpenter reported that NALHFA (National Association of Local Housing Finance Agencies), of which this Board is a part of, has sent out a member alert dealing with the Big Beautiful Bill that has been adopted into law. Carpenter stated that one piece that is included in the Big Beautiful Bill is that is has doubled the annual investment cap for Fannie Mae and Freddie Mac, going from $1 billion each to $2 billion each, with 20% of that targeted toward the rural communities. Carpenter stated that in acknowledgement of the severe need for increasing affordable housing that has been added. This is an additional $1 billion per year for Freddie Mac and Fannie Mae, which should have a positive impact on creating affordable housing in the nation.
10. Finally, Carpenter reported that earlier in the year, HUD (Housing and Urban Development) sent out information on the median area income and it lists what those area median income limits for each community across the nation are and that has been provided to Board staff and will be posted on the Board’s website. This report shows what the average median incomes are for the various multi-family housing tenants and families that live there, and that would be part of the PILOT Lease File Audits that are performed on PILOT Lessee’s lease files each year.
There being no further questions or comments, the Legal Report was concluded.
Action Items-
1. Final Bond Resolution for APP Hilldale Partners, L.L.L.P. (d/b/a Hilldale Apartments)
Thomas Robinson and Warner Russell entered the meeting.
Charles Carpenter introduced this agenda item reminding the Board that this property was induced by the Board and has been awarded THDA LIHTC. Carpenter reminded the Board that this property has also been approved for a PILOT. Carpenter reported his Firm has been working closely with the working group, the applicant has submitted the bond documents, and his Firm has reviewed them and approved them as being in substantially final form and in compliance with the Board’s policies and procedures and would recommend approval. Carpenter introduced representatives in attendance and invited them to make further comment regarding the Project. Thomas Robinson thanked the Board for its support and stated the working group is looking to close this transaction, both bond and PILOT, in September 2025. Robinson stated this is going to be a great development and a project that will make a high impact in the community and meet the needs of many new clients, and Alco Management Inc. appreciates its continued work with the Board. There being no further questions or comments,
Cliff Henderson made a motion to approve the Final Bond Resolution for APP Hilldale Partners, L.L.L.P. (d/b/a Hilldale Apartments). Howard Eddings, Jr. seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Thomas Robinson and Warner Russell left the meeting.
2. 1st Bond Inducement Resolution Closing Extension for Covenant Gardens Senior Apartments, LP
Clifford Causey entered the meeting.
Carpenter introduced this agenda item stating that the Board is familiar with this project as it has been before the Board previously. Carpenter reminded the Board that this is a new construction project that has been on and off based on some challenging issues with the Project, including its capital stack. Carpenter stated that the Board’s policy is that once a project is approved, that approval is good for a six (6) month period. If the project is not closed within that period, the applicant must come back before the Board to request a closing extension and to provide a status update to make a determination if the project should go forward. Carpenter stated that Round Two of THDA LIHTC awards is in progress now and all submissions must be completed by August 11, 2025. Carpenter advised the Board that this Round Two, unlike Round One, gives priority to new construction projects and Covenant Gardens Senior project applicants plan to resubmit application for consideration in Round Two, and if awarded, the project would be able to go forward. Carpenter invited Clifford Causey as representative in attendance for the project to make any further comment. Causey thanked the Board and Carpenter, stating that this project has faced some challenges and getting this project to manifestation, but the working group is closer than it has ever been to finalize. Causey stated his team members Jevon Allen and Tony Weng are also in attendance via the Board’s Zoom virtual platform, and are just as excited about this next step. Allen stated the project will reapply in this Round Two and has a competitive debt plan and the group is very optimistic and if awarded, will get the bond closed by the end of the year. There being no further questions or comments,
Howard Eddings, Jr. made a motion to approve the 1st Bond Inducement Resolution Closing Extension for Covenant Gardens Senior Apartments, LP. Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Clifford Causey left the meeting.
3. PILOT Refinancing Application for Wilson Crossing Townhomes, LLC
Jim Reedy entered the meeting.
Carpenter introduced this agenda item stating that this is an existing PILOT with the Reedy family, which have several PILOT properties in the Board’s PILOT program and they are all doing well and in good standing. Carpenter stated that his Firm and Board staff conducted the PILOT Refinancing Application submittal conference with the PILOT Lessee. Carpenter reminded the Board that when it reviews refinancing applications, the Board is looking at the uses of the proceeds and whether there is equity being paid and to ensure that if that is the case, it will not create an adverse effect to the property. In this case, Carpenter stated there is equity being paid out to the Reedy family who has invested a substantial amount of equity into the project; and now that the Project is complete and stabilized, the Reedy family is seeking to withdraw a portion of the equity, which will not create any hardship to the Project, to invest in other assets. Carpenter and Board staff have reviewed the sources and uses, and the application and property are in compliance with the Board’s policies and procedures and he would recommend approval. Carpenter turned the meeting over to Jim Reedy for comment.
Reedy thanked the Board for their consideration of this application, and stated he intends to invest the equity that is being returned back into the community in other properties and appreciates the Board’s support. There was discussion about the sources and uses table from the original PILOT application in comparison to the sources and use table submitted for this refinancing, with Cliff Henderson stating that Board materials reflect approximately $4.1 million will be returned to ownership through this refinancing. Reedy explained that his family has invested approximately $5 million into the project and will be leaving over $1 million in the project. There being no further questions or comments,
Cliff Henderson made a motion to approve the PILOT Refinancing Application for Wilson Crossing Townhomes, LLC. Monice Hagler seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Jim Reedy left the meeting.
4. Status of PILOTs in Legal Default:
Tie Lasater, Nathan Chandler, David Shores, Lou Sarube, Sarah Brinkman, and Glenn Pressley entered the meeting.
a. Grahamwood Place
b. Pinebrook Pointe
Charles Carpenter introduced this agenda item, stating that both Grahamwood Place and Pinebrook Pointe are owned by the same developer and can be discussed together. Carpenter stated that these two properties have been on the Board’s agenda for many recent meetings and welcomed all representatives in attendance. Carpenter stated that at the Board’s July 9, 2025 Board Meeting, there was a very robust discussion about these two properties because they have been on the agenda for a period of time. Carpenter stated that Tie Lasater was not present at the July 9, 2025 Board meeting, but his colleague Nathan Chandler was in attendance and addressed the Board at that time along with David Shores of Multi-South Management Company, the current management company for these two properties. Carpenter stated that today is a carry-over of that robust discussion, and there was a recommendation by Board staff at the July 9, 2025 Board meeting that each PILOT should be terminated, but the Board voted in favor of giving the PILOT Lessee and current management an opportunity to come up with a cure plan that was submitted by Multi-South Management, and there was to be an update on the roof issues because the roof issue was described as the primary issue which would determine how and when the PILOT Lessee would be able to come into compliance with the Board’s policies and procedures. Carpenter invited representatives to introduce themselves to the Board. Tie Lasater introduced himself, Nathan Chandler of Key City Capital, David Shores of Multi-South Management Services, and Lou Sarube, Sarah Brinkman, and Glenn Pressley of Arbor Realty Trust.
Lasater began his report by starting with the roofs, stating that it is the big pressing issue in stabilizing occupancy. Lasater stated that Key City initiated and found two vendors to start getting bids to reroof both assets. Simultaneously, Lasater stated Key City Capital is working an insurance claim against the subcontractor who originally did the work, but that could take way too much time, so Key City is going to have to initially take on the responsibility themselves, replace the roofs, and then go after the insurance separately. Lasater stated he does not have an exact date as to when that will be completed, but the bid process has started and he will be working through that. Lasater stated that these are two groups he has worked with on other assets across the United States previously and they can mobilize and get going on that as soon as Key City has gotten the bids finalized, which would ultimately be done before winter season gets here and that would tie into the plan for occupying up to at least 75%.
Lasater stated that Grahamwood is currently 51% occupied, so there has been a small increase in occupancy, but there needs to be an increase of 4.5%-5% month over month in order to get to 75%. Lasater stated Grahamwood has hit those numbers over the last two months and he thinks this can keep going with the data and projections that Multi-South Management put together into August and September based on tenants that are moving out and pre-leases that are in place, and they expect that 5% monthly increase to continue. Lasater stated he would let Shores speak more on evictions, but he thinks management has finally been able to execute on most of the evictions that have been needed this far to get down to paying tenants. Lasater stated that occupancy can get to 71%-72% without the roofs, however, the roofs are going to be necessary in order to get that last, roughly 5%, of occupancy needed to get to 75%, so he will have to have that done by probably the end of October in order to meet the November and December timeline. Carpenter asked for clarification because the Board was under the impression after previous statements that the roof issue was pervasive and it was not just relegated to one or two buildings, so Carpenter asked for clarity on the statement that roofs would have to be completed in order to take care of the last 5% of occupancy. Lasater stated that right now, temporary repairs are being done and working to better manage leaks, so there is enough units that can be turned and leased without having active leaks to get to 75%, but occupancy will not be able to get all the way to 75%, but only able to get to about 70%, and once the property is at 70%, he is going to have to have the roofs finished in order to completely renovate the remaining units that are needed in order to get to 75%.
Lasater stated that temporary fixes have stopped some of the leaks, but they are not going to be a solution that we can rely on for the next five years. Lasater stated again the temporary fixes have stopped some of the leaks, but it is going to be a temporary solution. Carpenter stated that based on the experience of the Board, roof leaks can come and go depending on the weather and other factors, and not only could ownership not rely on temporary fixes for five years, but it is also unlikely it could rely on those temporary fixes for five weeks, depending on weather and other factors and that is what the Board is trying to understand here. Lasater stated that part of the original workmanship has included where that company has come back and patched some of their work, and that will solve it for more than weeks, but not for the life expectancy of the product, as the product was supposed to have a 10-year warranty and it is not going to last ten years, but the patch will last long enough to turn units and until there is a reroof done in the fall. Lasater stated that once the reroof is done, Key City will be able to proceed with the major turns that are left at that point, as there are a number of units, roughly 20 units at Grahamwood, that have a major turn that needs to be done that will not be able to have work done until the roofs are complete. Lasater stated that those units have major damages from ongoing roof leaks and a patch will not fix those, and those buildings will have to be completely reroofed before any other work can be done on those buildings, but that being said, there will be a reroof of the entire property at both Grahamwood Place and Pinebrook Pointe. Lasater stated that the reroof would include removing the existing roofing systems that are on there and going down to decking and reroofing.
Lasater stated that the entry gate at Grahamwood is up and functioning and working now. Lasater stated that the laundry room plumbing has been completed, the flooring has been approved and should be done before the next Board meeting, and then the only thing remaining would be for the vendor to get the machines onsite, which Lasater stated is a partnership where Key City leases the machines, the vendor owns them and it is their equipment. Lasater stated he does not have a timeline on that as far as getting the equipment, but it should be able to happen quickly once the floors are done. Lasater stated that the pool has had temporary work done so it is up and running and functioning and usable for the remainder of the summer. Lasater stated that there is a replaster bid for approximately $20,000 that Key City has approved and has been approved to happen during pool down season, probably October, once the pool is down for the season, it will be drained and replastered. Lasater stated that the fence cleaning has all been done, all concrete work has been done on the retaining wall at the back, and some additional work was done and the fence line has been cleaned the whole way around the perimeter of the property, with a bunch of the trees and over brush from the outside of the fence being cleaned up, as well as gutters and downspouts. Lasater stated that the existing gutters and downspouts do not function and were aborted when the roofs were done and scuppers were installed. Lasater stated when the roofs are redone, those gutters and downspouts that are not used will be taken down, and the ones that are used will be replaced, so that will happen with the reroof during the fall. Lasater stated that security cameras are up and functioning at the entrance and egress of Grahamwood.
Lasater stated that Pinebrook is about 1.5% behind where Grahamwood is and is sitting right at 50% occupancy rate. Lasater stated that he was at the property this morning and there were a couple of move-ins happening that are part of that 50% occupancy. Lasater stated that there are 8 additional units that are preleased and 12 units that were marked move-in ready. Lasater stated that there are a couple of the 12 marked move-in ready units that Key City found some minor issues that need to be taken care of, some touch up items, and those have already been discussed with David Shores and management, but with that being said, 12 units will be move-in ready within the week, with 10 more units that are actively in the unit renovation phase as we speak. Lasater stated that they would add roughly 30 units online in the next couple of weeks for Multi-South Management to begin leasing up. Lasater stated that the gate is not up and done yet at Pinebrook, and he has a roughly $30,000 bid on that one that has been approved. Shores stated that there has already been a 50% down payment to the gate equipment company because they had to get specialized equipment to repair the gate, and repairs have started to the gate posts and electrical system. Lasater stated that he saw people at the property yesterday but did not know what they were doing. Lasater stated that gutters and downspouts will be addressed with the roofing at Pinebrook Pointe and he does have quote for that, along with the roofing bid. Lasater stated it will be an additional renovation to the gutters and downspouts of about $25,000. Lasater stated that there are a number of broken windows that he actively saw glass being delivered while he was onsite earlier this week. Lasater stated that he did notice one piece of glass was broken during delivery, but all the glass is there, approximately 10 pieces, that are being replaced as we speak. Lasater stated that for the fire damaged buildings, the contractor that Key City had will not be utilized going forward, so Key City is working on 2 new bids, but asked Shores to provide comment, as he does not know where management is in that process. Shores stated he is not sure, but they have received one bid. Shores asked Sarah Brinkman to comment. Brinkman stated that a contractor gave a bid, but they did it wrong, so now the contractor is going to have to revise it. Lasater stated that they have one bid in and are now waiting on another bid to be revised for the scope of work to match. Lasater reported that a car hit the front fence a couple of weeks ago around the property and that is being worked on and fixed, with portions of it being done earlier when he was onsite this week, but he is unsure if it is completed at this point. Brinkman stated when she drove by the property this morning, she did not see the hole. Lasater stated with that said, it should be done.
Lasater stated that Pinebrook mirrors very close to Grahamwood, with both properties having approximately 240 units, and the plan for leasing up is each property needs 12 net positive leases month over month, or a 5% increase month over month, to hit 75% by the end of the year. Lasater stated that there are not as many roof leak issues at Pinebrook impacting and affecting occupancy, and some of the fire units will have to be up and online to hit 75% occupancy and he is actively working on those bids now. Lasater stated that the little office center is back online and working in the Leasing Office for the tenants and he actually utilized it yesterday while he was onsite.
Carpenter stated that Board staff has spent an inordinate amount of time evaluating these properties, external monitors are also in attendance today to report to the Board, and asked Director of Operations, Stephanie Bryant, to administer this portion of the meeting, and then allow the Board to ask questions. Bryant began by stating that based on the information that has been submitted by Multi-South Management company, based on a certified rent roll from July 30, 2025, which reflected a 48.3% occupancy rate, not a 51% occupancy rate as was previously reported by Lasater, and this is actually a decline from the certified rent roll from June 23, 2025, which reflected a 48.7% occupancy rate. Bryant stated that she reported much of the same information at the Board’s July 9, 2025 Board meeting, but stated that Board and staff have heard a lot of promises, but have not seen a lot of action. Bryant stated there has been more work observed at Grahamwood in the last months’ time than has been observed in the many months prior, but staff stands by its recommendation of termination for Grahamwood from the PILOT program because staff does not have faith that ownership will follow through with the promises made based on previous history and staff observations of inaction. Bryant stated that per the July 9, 2025 Board meeting, the motion made by the Board included the requirement that a specific timeline and viable plan with concrete actions be provided prior to today’s Board meeting. Bryant stated there was no specific time frame given in any of the responses from Multi-South or Key City Capital. Bryant stated all the items that have been discussed today by representatives still do not have concrete dates associated with their respective completions, but rather vague references to quarter four or the end of the year.
Bryant began reporting on Pinebrook, stating that occupancy according to a July 30, 2025 certified rent roll from Multi-South Management references a 47.3% occupancy rate, not a 50% occupancy rate as previously reported by Lasater, which is also a decline in occupancy from the June 23, 2025 certified rent roll from Multi-South Management which references a 49.5% occupancy rate. Bryant stated that staff’s main concern with Pinebrook is that in December 2023, Lasater stated on the record that Key City had funds to remedy all fire-damaged units, but Key City was waiting on insurance proceeds, which it was reported by Lasater that Key City received those insurance proceeds shortly thereafter. Bryant stated that from December 2023 to now August 2025, and the fire-damaged units remain exactly as they were from an external observable standpoint. Bryant stated that she also has a conflict in the reporting from the July 9, 2025 Board meeting, when Nathan Chandler reported that Grahamwood would only be able to achieve no more than 65% occupancy without the reroof, but today, Lasater is reporting that the property can be up to 72% occupied without a reroof. Bryant stated there seems to be miscommunication between management and ownership. Bryant stated that after all the conversation that was had at the July 9, 2025 Board meeting and today, staff still has not found consistency or confidence in any report for either property, therefore staff also stands by its recommendation that Pinebrook Pointe also be terminated from the PILOT program. Trey McKnight stated that he would like to reiterate that staff recommends termination for both properties.
The Board’s external compliance inspectors David Hays and Dub Shinault of Wilbanks Architecture and Associates were welcomed by the Board and asked to provide a report to the Board of their observations. Hays stated that both properties, but particularly Pinebrook, have looked the same for quite a while. Hays stated the at Pinebrook, Building K fire damage has not changed, Building G, H and I are boarded up, more boarded up areas on Building D now, so very little evidence of completed work with no observable changes. At Grahamwood, Hays stated that externally, they have observed the issues with the drainage ditch and security gate, but he cannot speak to the condition of the flat roofs because they are not able to be observed. Hays stated that Grahamwood is in somewhat better condition than Pinebrook, but they have inspected these properties over and over for months ongoing now and would confirm the previous comments that were made by Bryant. Chairman Reid asked the Board’s internal compliance inspector, JP Townsend, if he agrees with the statements that have been made by Wilbanks, to which he concurred.
Lou Sarube of Arbor Realty Trust stated that he is the managing director of Arbor’s Bridge Loan program and is the lender on both Grahamwood Place and Pinebrook Pointe, as well as four other properties included in this owner’s portfolio that are not associated with the Board’s PILOT program. Sarube stated the Arbor is easily as frustrated as the Board is concerning these properties, and he has been onsite to both properties several times now. Sarube stated that Arbor was instrumental in having Multi-South Management put in place at both properties, and this is a 6-property portfolio, of which the Board is focused on 2 properties, and Arbor is focused on all 6 properties and in addressing all needs at all properties. Sarube apologized for not being present at the July 9, 2025 Board meeting, but stated he is here now and will be in attendance at every meeting that it is required going forward. Sarube stated that he is the financial commitment of his company to step up and cure all these issues for these two PILOT properties and make sure everything is back online and running in good condition, as it is in Arbor’s best interest to get these properties stabilized and get taken out on these loans and Arbor will do what it needs to from a financial standpoint to be able to do it. Sarube stated if that means stepping in and foreclosing on the assets, taking title to the assets, and running them with Multi-South management, they are prepared to do that, but that is not what Arbor wants, as it is a lender, but Arbor is prepared to do that if need be, and the Board has Strube’s commitment that Arbor will stand behind these two properties and it does not want to lose the PILOT on these two assets.
Cliff Henderson asked if Arbor is pushing to have the roofs redone and not waiting for the insurance payout. Sarube responded that Arbor is pushing for everything to be completed at all 6 properties, but yes, because the properties cannot wait for the roofs to be fixed. Henderson asked if the decision to move forward with remedying the roofs without waiting for the insurance was a decision made in the last few weeks. Sarube stated yes, and that he asked Brinkman, his senior asset manager, and one of his assistants to go and walk every vacant unit so that Arbor could determine what the condition of those assets is and with the help of Shores and Multi-South's help, Arbor has come up with a cost to get those units online, and it is Arbor’s focus to get both assets to 75% occupancy and getting all issues resolved.
Carpenter stated that throughout 2024, the Board was told by Lasater that there was to be a refinancing of this 6-property portfolio that was targeted for September 2024, and that everything would speed up from there, because of the covenants for the refinancing. Carpenter stated that September 2024 came and went and there was no refinancing. Carpenter asked for clarification of what happened because the Board never got a clear understanding from Lasater, and was led to believe that things had been worked out with Arbor. Carpenter asked Sarube if he could better explain the circumstances of the failed refinancing to the Board. Sarube stated he would do his best, and said that Arbor was working on refinancings with Lasater on a couple of the assets. Sarube stated that he is part of the Bridge Loan program, and Arbor is a top 10 Fannie Mae lender in the country, and these loans were being sized for agency refinancing. Sarube stated that unfortunately with the rates where they were being extremely high at that time, indexed to the 10-year treasury, the interest rates on the agency loans were extremely high, so a number of loans that in Arbor’s portfolio that were supposed to be taken out were not economical for the borrower to refinance those out and they had to stay in the bridge loans longer than anticipated. Sarube stated that these assets now are no longer in a condition because of the roofs and the moratorium on evictions, to be able to be taken out with an agency loan, but he sits here today to tell the Board that this is the goal for Arbor as a company where it does bridge loan lending to be a feeder to its agency business and that is the goal for all 6 of these properties, to be financed into an agency loan. Sarube stated that if Arbor has to take these assets back through foreclosure, he will work on the assets, stabilize them, and bring in another operator, and put them into a permanent loan, which is Arbor’s goal, but interest rates have made it very difficult to finance bridge loans that the agency wants right now unless of course ownership is willing to put significant cash in to do a refinance.
Henderson asked if the plan of action was submitted to the Board and provided in the Board materials. Bryant directed the Board to the action plan that was submitted in their meeting materials. Lasater asked what specifically the Board and staff is looking for timelines and dates on because a lot of it has been done in the last month, specifically at Grahamwood, so that he can help put together what it is that the Board and staff is looking for. Bryant stated that the Board and staff has been through this so many times with him, and the Board is looking for definitive dates on anything that is outstanding, which would be an improvement from what has been provided, and stated that a specific timeline on the reroofs at Grahamwood would be a start. Bryant stated that any timelines that have been provided within the last two years for these properties have never been followed through with. Bryant stated again that a specific timeline on the reroofs at Grahamwood would be a start, and referenced Lasater’s earlier comments regarding the contractor for the fire-damaged units at Pinebrook and that the contractor that was in place is no longer an option and Key City is now going a different route and accepting new bids for the work again. Bryant stated that the Board has head this so many times, and stated that there is not one solid date that has been provided in any of the formal response that was submitted in preparation for today’s Board meeting.
Bryant stated that in fact, it does not even give an estimate of when outstanding items could be complete, and today the Board is hearing November or December 2025, but we have been here since December 2023. Bryant stated that this does not include the time spend reviewing and trying to bring these properties back into compliance prior to the original legal defaults that were issued for these properties in October 2023. Bryant stated that at this point, a commitment to any date for any item would be an improvement at this point, but staff would have no confidence in a commitment at this point.
Sarube stated that the Board will receive timelines and commitments from Arbor at this point, even if Arbor must take these assets back, but he is here today to request that the PILOTs stay in place because as a lender on these assets, Arbor wants the PILOTs in place because they are instrumental to Arbor. Bryant reminded the Board that it had received a Notice of Non-Judicial Foreclosure on both Grahamwood Place and Pinebrook Pointe that was scheduled for March 6, 2025 on the courthouse steps, but the Board’s legal counsel was notified by attorney Spencer Clift of Baker Donelson Law Firm that those foreclosures has been postponed in the days prior to the scheduled sales, but has not received any additional information. At the Board's May 7, 2025 Board meeting, Lasater stated that the Non-Judicial Foreclosure sale was stopped and there is no status on that, ownership had negotiated a forbearance and renegotiated the loan so there was no update on that other than there is no foreclosure, and at the July 9, 2025 Board meeting, Brickman had stated that the foreclosures had been adjourned, but did not provided any additional clarity. Bryant stated that there was some confusion at the July 9, 2025 Board meeting concerning exactly where the foreclosure’s stood for these two assets and asked Sarube if he could provide the Board with clarity on the matters. Sarube stated that Arbor is in constant negotiations with Tie Lasater and Boone Lasater of Key City Capital for them to financially commit to Arbor, which has to do with debt service that Arbor is owed, as well as capital to improve the assets. Sarube stated that is the Lasater's make those financial payments, Arbor will continue to work with them and push off the foreclosure for twenty-nine (29) days at a time.
Sarube stated the current Foreclosure sale is scheduled for August 13, 2025, but there is still another payment due to Arbor and if that payment is made, Arbor will continue to work with the Lasater’s. Sarube stated that it is not Arbor’s desire to foreclose, and if the Lasater’s continue to financially commit to Arbor that Arbor can get the money that will go into paying operating expenses of the properties, renovate units, fix the roofs, and partially pay Arbor’s debt service, Arbor will continue to work with the Lasater’s and push the foreclosures off at intervals of 29 days, which is what Arbor has been doing. Sarube stated that the Lasater’s have a key hurdle pending for August 11, 2025, and if they do not make that hurdle, Arbor would look to foreclose on August 13, 2025, but he is not sure that Arbor would be prepared to do that from a financial standpoint because it is six (6) assets that would be foreclosed on, not just Grahamwood and Pinebrook. Sarube stated that Arbor would need to financially be able to move assets around because Arbor places its loans in different financing vehicles, so those would have to be pulled out of those vehicles and look to be placed elsewhere, so August 13, 2025 would be a very challenging date for Arbor, but if the Lasater’s miss their financial hurdles on August 11, 2025, it is done and Arbor will move forward with foreclosure. Bryant asked for confirmation from Sarube that Arbor has had commitment issues as well from Lasater and Key City Capital. Sarube stated yes, absolutely. Sarube stated that Arbor has been working with the Lasater’s and they have been financially committing to Arbor for the last several months through small amounts out of pocket to commit financially to Arbor, and if they show that commitment, together with Multi-South Management, he believes the he can get where he needs to be for Arbor.
Chairman Reid stated that staff has recommended termination and opened the floor for a motion from the Board to either terminate, or for the PILOT Lessee to appear before the Board in 30 days. Cliff Henderson stated that he is unsure what would happen differently in 30 days, stating that this comes down to a confidence issue, the Board has been reviewing these properties since October 2023, and there was confirmation at the July 9, 2025 Board meeting that rent rolls submitted prior to Multi-South's involvement, prior to quarter 1 of 2025, were inaccurate. Henderson stated it is a concern that both properties are following the same path, so this is not a concern of only the dwellings themselves, but also the management of those dwellings. Henderson stated for him personally, this comes down to does the Board believe it is best to take action and terminate the PILOT to prompt this option, or does the Board believe these properties are going to get incrementally better. Henderson stated that Arbor representatives being present is good, and he understands Arbor’s position, but he is also sure Arbor representatives understand the Board’s position that the Board granted a PILOT on behalf of the City of Memphis for a tax abatement benefit, and the City of Memphis is not getting minimum return for what the City of Memphis if providing as a benefit to ownership. Henderson stated he does not hear anything tangible being stated that is going to happen in the next 30 days. Henderson stated that while he appreciates hearing that roof repairs are going to move forward, that is something that should have happened 15 months ago. Henderson stated the decision should be based on if the Board were to extend these PILOT Terminations for another 30 days, something is going to change and break where things move forward. Henderson stated that the Board has heard from two different perspectives, both internal and external compliance monitors, and both are reporting the same observations, and he feels his hands are tied.
Sarube stated that Arbor has a significant financial commitment on these two property loans, as well as the four other loans with the borrowers, and Arbor too has been frustrated, but Arbor is at a position right now where the Board will see something in the next 30 days with dates and changes and that is his commitment. Sarube stated that Arbor representatives are walking each of these six properties every other week, and Shores of Multi-South is managing all six assets and Arbor will make changes and get the Board dates. Sarube stated that unfortunately, Arbor is tied to other people providing bids and dates of when work can be done, but Arbor will have dates for the roofs and expects work to begin in the next 30 days. Shores stated that the confusion with the roofs is that when he was last before the Board (July 9, 2025), he stated that there were over 100 roof leaks, and that Grahamwood could not get over 60% occupancy without repairs to the roof. Shores stated that he also said at that time that he believes that he could make some repairs to get beyond that before all roofs were replaced. Shores stated that is what he knew then and what he thought he was expressing. Shores stated that he can make progress with the occupancy by making repairs to the roofs at Grahamwood as they are now, and a full roof replacement is what is needed. Shores stated that work will begin on the roofs in the next 30 days if he can find a contractor that will start the work in the next 30 days, but he knows he is making repairs in order to get as many units as possible rented. Lasater stated that he should have started 15 months ago, and this ventures into some of his other assets as well and is approximately a $4 million fix. Lasater stated that $4 million fix coupled with some of the other issues that he was having to address, that this is the biggest hurdle and last hurdle he has to deal with and he is at that point now. Henderson asked how Lasater would explain Pinebrook, stating that there may not be the same amount of roofing issues at Pinebrook, but there are still the same large number of units offline. Lasater stated at Pinebrook, that is most of the fire-damage, and he is not sure what insurance collection Bryant referred to in her earlier comments, as he has not received insurance proceeds, and in fact, there is some money that is in escrow with his group, but he has not received direct insurance proceeds for the entirety of the fire. Howard Eddings asked if Lasater has received insurance proceeds for a portion? Lasater stated that he has received insurance proceeds for a portion, and that he has done a portion of the work, and there has been a lot of work done there on the fire-damage. Bryant stated that while she cannot reference the exact date of Lasater’s comment, that Lasater has previously reported on record to the Board that he received $1.2 million in insurance proceeds. Lasater stated that it is correct, and that work has been done, and units were turned and moved into.
Carpenter stated that this Board has over 120 active PILOT properties, and the Board has a lot developers that come before the Board, and it listens over and over, and the Board also records these meetings, so the Board has very detailed meeting minutes. Carpenter stated that the challenge here is that now representatives are here discussing financial issues, and this Board is focused on the tenants and the families that actually live in these properties, with the moldy interiors and the leaky roofs and so forth. Carpenter stated what the Board has also found from its experience is that when a PILOT is terminated, there is more activity that goes to benefit the tenants than when the PILOT is not terminated. Carpenter stated that the Board continued to receive excuses form this developer, but with the passing of each 30-day period, the results are the same, and the Board cannot judge by intentions, but rather must judge results, and in this case, the results speak for themselves. Carpenter stated that in this case, it has been just more of kicking the can down the road for almost two years now. There were discussions on the legal options the Board has in this case as to whether the Board can require the lender, Arbor, to take over the PILOT. Carpenter advised the Board that Arbor would not be able to come in and take control of the PILOT contract at the Board’s next meeting. Carpenter advised that there is the possibility of a voluntary Deed in lieu of Foreclosure or some other process of that type, but it would be a legal process that would have to take place for Arbor to take control of the PILOT that is in place. Monice Hagler asked for confirmation that there is an August 13, 2025 Foreclosure date set at this time, to which Sarube confirmed, but stated that he cannot state to the Board that Arbor is in a position to foreclose on August 13, 2025, but it also would not have to extend the full 29-day period, and if the financial obligations are not committed to, Arbor would have these assets foreclosed on prior to the next Board meeting. Carpenter stated that in Tennessee, a non-judicial foreclosure requires notice, and his Firm nor the Board have received any notice of the adjournment, on what the suspended dates or new dates are, so he is unsure, if Arbor moved forward with foreclosure on August 13, 2025, if that would be sufficient from a legal notice requirement. Brinkman stated that Arbor does know that the adjournment notices have been published every time that there has been an adjournment, and she will check with Spencer Clift of Baker Donelson Law Firm to ensure the Board and legal counsel are receiving those notices. Carpenter stated that his Firm works with Clift often, but has not been provided any additional notices or information concerning Grahamwood and Pinebrook up to this point. Sarube stated that if Arbor were to postpone the August 13, 2025 foreclosure date, there would be a new notice published with a new date.
Eddings asked for confirmation that there would only be a postponement if the appropriate action is taken. Sarube stated that a postpone would take place if there is financial commitment from Tie Lasater and Boone Lasater, however, with that postponement, it is very clear what needs to be done from the Board standpoint to get things where they need to be. Eddings stated that the Board can expect very little by way of construction or work getting done, but more important to the Board, that families will be able to move in at a reasonable amount of time. Eddings stated that even if Arbor were to extend or stop the foreclosure all together, the roofs will still have to be fixed so that people can move into those units, and asked what the Board can reasonably expect in terms of time, and putting a time frame and specific dates on everything and getting people in those units and getting them occupied. Eddings stated that based on the current rent rolls, it will take another 60-90 days to get that done, even if the roofs were done, unless there is a waiting list for these two properties. Shores stated there is not a waiting list.
Sarube stated that when he went into Grahamwood today, he learned there was a model unit, and expressed there is no need for a model unit, there is need for occupancy, and this is a unit that is in rent-ready condition. Sarube stated that while this is only one unit, it shows what Arbor is focusing on right now and trying to get people into these units. Sarube stated that he cannot commit to the Board that occupancy will increase by 12 units per month, as Lasater indicated earlier because he is more intimate with those numbers right now, because Sarube is just the lender, and he has lender liability has must make sure not to piece. Sarube stated that Lasater is running these assets with Multi-South and Arbor is actively involved in it right now. Sarube stated that if Arbor does foreclose on these assets, Arbor will have targets and dates for the Board, but that will take some time to get that information, but Arbor have dates, as was discussed this morning, and the one item Brinkman mentioned during their internal meeting was that there are no dates on the response provided to the Board, and only included some things that were done and some things that are being bid on, but no dates, and he realizes how important that is. Sarube stated that Arbor will work on dates but cannot say the properties will be at 75% occupancy by November, which he believes is unrealistic. Eddings asked Sarube if the Board were to accept staff’s recommendation to terminate the PILOTs, what would be Arbor’s response to that action. Sarube stated his response would be either to foreclose or get dates and bids and determine when work can start and when it would be complete. Sarube stated that Brinkman has walked every vacant unit, and there are a number of units that can be rented, or fixed and rented, and are not affected by roofs. Sarube stated that Arbor can start targeting those units and getting some occupancy in there, but he does not know what the cost is for those, but Arbor will address that and identify dates for those. There being no further questions or comments,
Courtnee Melton-Fant made a motion to Terminate the PILOT for Grahamwood Place Apartments. Cliff Henderson seconded, and the motion passed by majority after proper roll call vote of the Board members.
For the record, Howard Eddings, Jr. voted no on the motion to terminate the PILOT for Grahamwood Place Apartments.
There being no further questions or comments,
Cliff Henderson made a motion to Terminate the PILOT for Pinebrook Pointe Apartments. Courtnee Melton-Fant seconded, and the motion passed by majority after proper roll call vote of the Board members.
For the record, Howard Eddings, Jr. voted no on the motion to terminate the PILOT for Pinebrook Pointe Apartments.
Tie Lasater, Nathan Chandler, David Shores, Lou Sarube, Sarah Brinkman, and Glenn Pressley left the meeting.
Frank Carney, Mendel Fischer, and Neil Knopf entered the meeting.
c. Bridgeport Manor
d. Coronado Manor
e. Eden Pointe
f. Grainge Hill
g. Scenic Hills
h. Timber Pines
i. Watkins Manor
Charles Carpenter introduced this agenda item, stating that the properties listed ad items C-I on the Board’s agenda are owned by the same developer, and is a portfolio that staff has worked very hard over a similar period of time, and has been an approximately two-year labor with these properties. Carpenter directed the Board to its meeting materials, stating materials include reports from both internal and external compliance monitors, this is a large portfolio, and there have been some improvements. Carpenter turned the meeting over to Stephanie Bryant to begin these discussions. Bryant stated that she would like to make a few comments about the portfolio for the Board’s knowledge, followed by the properties being discussed individually. Bryant stated that staff has observed good-faith efforts at each of these properties. Bryant asked JP Townsend for comments on the portfolio before moving on the individual discussions. Townsend stated that he would like to thank Neil Knopf, property staff, and security for assisting him and others on each walkthrough. Townsend stated that the security staff for this portfolio is top notch and have always been vigilant throughout his inspections and stated that Knopf is probably one of the most active regional managers he has encountered throughout the entire HEHFB PILOT portfolio. Townsend stated that Knopf is always on property and quickly addresses any issues that may arise. Cliff Henderson asked, out of the seven (7) properties, how many properties have improved. Bryant responded that staff has moved four (4) properties out of Legal Default status and placed in different levels of additional compliance oversight and will detail that to the Board for each of those properties. Henderson stated that he understands from Bryant’s comments that four (4) properties have improved enough to be removed from legal default and asked if there were improvements made at the remaining three (3) properties, to which Bryant stated yes, but not enough to remove from Legal Default status. Bryant advised the Board that she would begin her report for each property by reporting on administrative compliance items, then would ask the Board’s internal compliance inspector, JP Townsend, to provide his comments, followed by comments from the Board’s external monitors David Hays and Dub Shinault of Wilbanks Architecture and Associates, and Bryant will end each report with the staff’s recommendation or movement of each property within the compliance oversight levels.
Bryant began with Bridgeport Manor, reporting the occupancy has increased for Q2 2025 to 59.7%, which is below the Board’s 75% minimum occupancy requirement. Bryant stated the challenge with this property is that ownership has continued to change the construction completion date(s), construction is not complete, and a variance was granted by the Board and a refinancing application was approved by the Board at the June 4, 2025 Board meeting that has not closed and Bryant has requested that the PILOT Lessee be prepared to provide an update to the Board on where that process stands today. Bryant reminded the Board that ownership has stated to the Board previously that construction would not be able to be completed without the refinancing proceeds. Bryant also reminded the Board that ownership has stated to the Board previously that once refinancing proceeds are funded, construction would be completed within six (6) months. Bryant stated that walkthroughs were performed on July 29, 2025 by JP Townsend, Nikki Abraham, and Trey McKnight on four properties (Coronado Manor, Eden Pointe, Grainge Hill, and Scenic Hills) and the remaining three properties (Bridgeport Manor, Timber Pines, and Watkins Manor) had walkthroughs conducted by JP Townsend and Nikki Abraham on July 30, 2025, all to ensure that staff could provide the Board with the most up-to-date status for each property. Trey McKnight stated that before Bryant began, he wanted to advise the Board Chairman and Board members that during the walkthroughs, he was extremely impressed and thanked Townsend and Abraham for walking him through the entire process and the need to see what exactly they are looking for, so he was impressed and thankful in terms of putting things back where it should be. Bryant turned the meeting over to Townsend for comment. Townsend advised the Board that during his reports, he will be reporting on the external observable conditions followed by a review of any tenant benefits that are outstanding for each property. Townsend stated that, as mentioned in previous meetings and reports, the exterior of all completed and occupied buildings at Bridgeport Manor have been and continue to be maintained. Townsend stated he noted during the walkthrough that some minor brickwork was being repaired, and his concern lies with the unoccupied areas of the property. Townsend stated that with the unoccupied areas of the property, there are still some fascia, soffit, and siding issues that remain. Townsend reported that most tenant benefit commitments are in place apart from the installation of a new security gate for enhanced security. Townsend stated that as for tenant benefits and safety, many of the properties in this developer’s portfolio offer additional tenant benefits that were not part of the original tenant benefit commitments. Townsend continued, reporting that a new playground has been installed, while also replacing areas of the existing playground, and additional common areas have been added. Townsend stated that concludes his comments for Bridgeport Manor.
Bryant asked the external compliance monitors to report their observations to the Board for Bridgeport Manor. Hays stated that his primary concern is the slow pace of construction and very little movement. Hays stated that the construction work that has been done so far to the occupied buildings has been upkept, but it is now a matter of he does not see what would be anticipated such as additional trades and workmanship or a lot of activity going on. Hays reported that there was a manhole cover at the back of the property that was left open for 2-3 months consecutively. Hays stated that the occupancy rate of 59.7% surprises him and he expected occupancy to be lower than that based upon his observations. Hays stated that there is no issue with the work that has been performed to date, but now it is at a slow pace. Bryant asked Mendel Fischer, a member of ownership who was in attendance, if he had an update to provide the Board on the status of the refinancing for Bridgeport Manor. Fischer stated that he is at the last stage of the final third-party reports. Fischer stated that the lender began those reports in May 2025, but due to the variance and refinancing application not being approved until the Board’s June 4, 2025 Board meeting, those reports were delayed, but the lender has resumed preparing those reports. Fischer stated that the property’s current loan was due to expire on August 31, 2025, but he was provided an extension to September, but he is doing everything he can to get the refinancing closed in the month of August 2025. Bryant stated that based on that update, staff’s recommendation is that Bridgeport Manor remain in a Legal Default status and report back to the Board at the September 3, 2025 Board Meeting to provide a status update on the refinancing, and the Board would determine next steps based on that report.
Carpenter asked what the status of contracts and construction schedules for the remaining 214 units that have not been completed. Fischer stated that he has submitted a construction schedule that would be executed upon receiving the proceeds from the refinancing. Bryant confirmed that information was previously submitted to Board staff, and it outlines approximately ten (10) buildings per month would be completed, following the receipt of funds from the refinancing. Carpenter advised that this recommendation by staff does not require a vote from the Board at this time and the Board would accept the recommendation and staff or representatives can answer any questions that the Board may have. Fischer asked if this status would change anything regarding the explanation provided to the lender following the variance and refinancing application approval from the Board at the June 4, 2025 Board meeting. Carpenter stated that this action would not change things for the lender, and he would be able to provide any additional letters necessary to lenders upon request from the PILOT Lessee following today’s meeting. Frank Carney, legal counsel to the PILOT Lessee, stated that if the lender would like a revised letter to explain the current status of the PILOT property, he would reach out to Carpenter. Carpenter stated that nothing happening today would delay the PILOT Lessee’s interaction with the lender in order to get the refinancing closed. Carpenter stated that by the Board’s September 3, 2025 Board meeting, this refinancing should be closed and moving forward toward construction completion, but if not, the Board would be looking at a different situation. There was a consensus, and Bridgeport Manor will remain in Legal Default status and the PILOT Lessee will appear before the Board to provide a status update on at the September 3, 2025 Board Meeting.
Bryant reported on Coronado Manor, formerly Willow Oaks, stating that occupancy rate for Q2 2025 was reported as 64.6%. Bryant stated that Coronado Manor is following the same phased approach as Bridgeport Manor, and construction is not yet completed. Bryant reminded the Board that a refinancing of this PILOT project was approved by the Board on June 7, 2023 for the purpose of completing renovations, and the construction completion date has been revised to September 2025. Bryant turned the meeting over to Townsend for his comments. Townsend stated that during the walkthrough of Coronado Manor, he observed several outstanding repairs that have now been made, and the property has had more movement recently than in quite some time. Townsend stated that there are still some compliance issues outstanding that deal with the internal work that remains on some of the final buildings on the property. Townsend stated that renovations have been made to the exterior brickwork, drives, and surfaces. Townsend stated that some tenant benefits are not in place, while others are in progress. Townsend stated that tenant benefits that are not in place include installation of enhanced security cameras, upgraded fence, installation of new security gate, repairs to all Comcast/Xfinity cables, renovation to a laundry facility, construction of a new community center, flooring and door replacement, and bathroom replacement.
Bryant asked Wilbanks representatives to report their observations to the Board. Hays stated that he concurs with Townsend comments, stating that this is a large complex that is occupied from the entrance of the property on the west side and extending around. Hays stated that ownership has covered a lot of vandalism before and there is cosmetic resurfacing on that side. Hays stated there was masonry brickwork occurring during his most recent site visit. Hays stated that there is no issue with the quality of work that has been done, but the issue again with this property is the pace of construction completion. Hays stated that in comparing Bridgeport Manor and Coronado Manor, that Bridgeport Manor does not have vandalism issues and security has tightened up at Coronado Manor, but between the two, Coronado Manor seems to be more problematic. Bryant stated that to Hays’s point, as Townsend reported, the security gate and new security cameras have not been installed at this property, per the tenant benefit commitments. Based on these findings, Bryant stated that staff’s recommendation is that this property remain in a Legal Default status and report back to the Board at the September 3, 2025 Board Meeting to provide a status update, and the Board would determine next steps based on that report. Bryant stated that the construction completion date for this property has been stated as September 2025, so she is hopeful that the PILOT Lessee will achieve that if construction continues at the pace that it has been for the past few weeks. Mendel Fischer stated that some things, like the resurfacing of the rest of the property, were observed, and the exterior work, except for a few items that Townsend pointed out during the walkthrough, which does help.
Fischer stated that he is committed to the completion of this property and thanked Townsend for recognizing Neil Knopf and his dedication to all the properties because he is very good. Fischer stated that it is very important to show the hands-on approach, and after the walkthrough, he feels certain that HEHFB staff was able to observe the progress that has been made and the commitment from ownership. Bryant stated again for the Board that staff’s recommendation is that this property remain in a Legal Default status and report back to the Board at the September 3, 2025 Board Meeting to provide a status update, and the Board would determine next steps based on that report. There was a consensus, and Coronado Manor will remain in Legal Default status and the PILOT Lessee will appear before the Board to provide a status update on at the September 3, 2025 Board Meeting.
Bryant reported on the compliance status of Eden Pointe, stating that staff has moved Eden Pointe to and Under Observations status, the first level of the Board’s compliance step program. Bryant reported that deficiencies that were expressed in the Notice of Legal Default have been cured at this property. Bryant stated that the property has reported an 80% occupancy rate for Q2 2025, which is above the Board’s 75% minimum occupancy rate threshold, and the property has reported an occupancy rate above the 75% minimum occupancy rate threshold for both quarters of 2025. Bryant advised the Board that any property that is stepped down from Legal Default status to Under Observation status will remain Under Observation for no less than ninety (90) days, and this compliance status will include monthly reviews. Bryant stated to the Board that movement down does not mean that staff will be reducing oversight, but it is indicative of the good faith effort made by the PILOT Lessee to cure outstanding deficiencies. Cliff Henderson asked for confirmation that although there are no deficiencies, due to the point that the property was in Legal Default status previously, staff is keeping the property under cautionary observation. Bryant confirmed this, stating this would be viewed as a probationary period. Mendel Fischer asked if he could be provided with a letter to submit to his lender stating that this property is no longer in Legal Default status. Bryant stated that the Board’s Legal Counsel would be able to provide that, as that is appropriate for the situation, and it would also be reflected in the meeting minutes that are prepared following today’s meeting and would then be a matter of public record. There was a consensus, and Eden Pointe was moved from Legal Default status to Under Observation status, a lower level of compliance oversight, and will remain in Under Observation status for a 90-day period, pending monthly reviews and inspections of the property by internal compliance staff.
Bryant reported on Grainge Hill, stating that reported occupancy for Grainge Hill is in compliance with the Board’s policies and procedures, and has been reported at 87% for Q2 2025. Bryant stated the reported occupancy rates have been in compliance since Q3 2024. Bryant reported that construction has been completed and was completed on time according to the original construction completion commitment, but there are still some outstanding compliance issues. Bryant turned the meeting over to Townsend for his comments. Townsend stated that overall, Grainge Hill is in compliance with all tenant benefit commitments, while also offering a summer food program and other benefits that are not part of the original commitments. Townsend stated that the manager of Grainge Hill has also taken her own time to tutor and help some of the younger tenants at this property and is deserving of recognition for that. Townsend stated that there are some minor exterior condition items outstanding, though Knopf has addressed one of the fencing areas since the walkthrough of this property that was a concern. Townsend stated the main issue is with a drainage ditch and wash-out of pavement, which has been temporarily fixed, but will need a long-term solution, and ownership and management have indicated they are actively working toward a solution. Townsend stated that staff is placing Grainge Hill at a lower level of compliance status but would like to continue additional compliance oversight until ownership has received a recommendation and submitted a cure plan for this issue. Bryant stated that as a result of the good faith effort by the PILOT Lessee, while also considering the outstanding issue with the drainage ditch awaiting a long-tern solution, staff has moved Grainge Hill to Compliance Concerns status, the second level of the Board’s compliance step program and recommends that the PILOT Lessee appear before the Board to provide a status update on a long-term solution to the drainage ditch issue at Grainge Hill at the November 5, 2025 Board meeting. Bryant stated that the property being moved to Compliance Concerns status will still entail monthly inspections, that other deficiencies have been remedied, and that the drainage ditch has been temporarily remedied and no longer poses a safety concern, and the PILOT Lessee has reported actively researching a long-term solution. Bryant stated that at the Compliance Concerns level, the second level of additional compliance oversight, and this level reflects that the property is overall in compliance but has some outstanding items that staff is paying close attention to. There was a consensus, and Grainge Hill was moved from Legal Default status to Compliance Concerns status, a lower level of compliance oversight, and the PILOT Lessee will appear before the Board to provide a status update on the long-term solution to the drainage ditch at the November 5, 2025 Board Meeting.
At this point, Austin (A.T.) Harrison spoke out of turn, but asked if Bryant could remind attendees what the levels of compliance oversight are. Bryant stated to the Board and all other attendees that the Board has four (4) levels of additional compliance oversight which include: (i) Under Observation, (ii) Compliance Concerns, (iii) Non-Compliance, (iv) Legal Default. Bryant stated that each of these properties in this developer's portfolio were placed in Legal Default status, so when staff is recommending movement within this step process, the property being discussed will still be under additional observation, will still be subject to no less than monthly inspections, and are not being returned to regular observation at this time.
Bryant continued by reporting on Scenic Hills and stated that this property is in compliance and has resolved the outstanding issues that were raised in the Notice of Legal Default. Bryant stated the reported occupancy for Q2 2025 is 84%, and that reported occupancy levels have been in compliance since Q4 2024. Bryant reported that staff has moved Scenic Hills to and Under Observations status, the first level of the Board’s compliance step program and advised the Board that the property will remain Under Observation for no less than ninety (90) days, and this compliance status will include monthly reviews. There was a consensus, and Scenic Hills was moved from Legal Default status to Under Observation status, a lower level of compliance oversight, and will remain in Under Observation status for a 90-day period, pending monthly reviews and inspections of the property by internal compliance staff.
Bryant reported on Timber Pines, stating that the reported occupancy rate is 74.5%, construction is complete, many deficiencies have been remedied, but some items remain outstanding. Bryant turned the meeting over to Townsend for his comments. Townsend stated that Timber Pines, while some of the outstanding issues have been addressed since the walkthrough, including fascia that has now been painted, there remain areas of fencing issues near a drainage ditch that pose a safety and security concern. Townsend stated that there are tenant benefits outstanding, including upgrading and replacing fencing, installed main gate, new laundry room, and installing interactive security intercom system for added security. Townsend stated that while there is a main gate that has been installed, but it is not functioning, the laundry facility is in place but also not functioning and has a “Stop Work” order posted and is awaiting inspection before this can be placed into service. Townsend reminded that Board that some of these tenant benefits are in progress of being implemented but have not been completed. Townsend stated that this property is set up in two parts, and some of these items are waiting for one half of the property to come into service. Bryant stated that as a result of the good faith effort by the PILOT Lessee, while also considering the outstanding fence issue and tenant benefit implementation that remains, staff has moved Timber Pines to Compliance Concerns status, the second level of the Board’s compliance step program and recommends that the PILOT Lessee appear before the Board to provide a status update at the November 5, 2025 Board meeting. There was a consensus, and Timber Pines was moved from Legal Default status to Compliance Concerns status, a lower level of compliance oversight, and the PILOT Lessee will appear before the Board to provide a status update at the November 5, 2025 Board Meeting.
Lastly, Bryant reported on the compliance status of Watkins Manor, stating that it is very different from the rest of this developer’s portfolio. Bryant provided background on this property, stating that Watkins Manor was in Environmental Court when this developer purchased this property in 2019, and remains under Environmental Court oversight today. Bryant reported that the PILOT was put in place for this property in 2021, and the property has never been able to be occupied, and ownership continues to work with Environmental Court of occupying the property. Bryant stated that construction began early on in the PILOT term, but has not been completed, and construction completion commitments have been revised two times, no to September 2025. Bryant stated that construction completion would not be attained by this commitment date of September 2025. Bryant stated that ownership and management cannot offer tenant benefits to tenants that are not there, and the staff has no other choice but to recommend termination at this time and turned the meeting over to David Hays for his comments. Hays stated he and Shinault performed a site inspection on July 15, 2025 and there was no occupancy at all. Hays stated that he did observe the grass being cut but has not observed any other progress. Bryant asked Townsend to report his observations. Townsend stated that the first two buildings are basically finished aside from HVAC units being installed, but he also cannot report that any tenant benefits have been implemented with no tenants occupying the property.
Cliff Henderson asked what the delay is for this property. Neil Knopf stated that there has been significant back and forth with both the City and County, the property has remained in Environmental Court for a long time, but ownership received approval several months ago from the City to begin occupying the property. At that point, the County raised permitting issues, MLGW then required ownership to re-address the property to go with the new 3-digit numbering scheme on the units, but the street name was also changed. Knopf stated that the property address is on North Watkins, but there is not a single unit that is addressed as a unit on North Watkins anymore, and the process has been made exceedingly complicated. Knopf stated that all the information is under Develop 901, and there are permits that were passes, but then another entity is saying there are no permits. Knopf stated he has met with the ownership’s attorney and members of Code Enforcement at the property and reviewed each permit individually and Code Enforcement agreed to honor and close out some permits, while requesting that others have inspections for plumbing and mechanical final inspections, which have now been passed and Knopf has submitted documentation showing those inspections were passed. Knopf stated that now, there are in a back and forth with the building inspector and fire inspector. Knopf stated that the building inspector visited the property with the ownership’s attorney and the building inspector stated he was agreeable to the condition but wanted confirmation from an engineer. Knopf stated that ownership has now presented a letter from an engineer in court, and now they are stating they want it attached to the permit before the case can be closed and that has also been done. Knopf stated now they are waiting for the property to be inspected for that portion. Knopf stated that the fire department also made some very specific requirements, including additional fire extinguishers on the property, a fire department lock installed, and the fire hydrant tested, and all items have been completed. Knopf stated he believes there is a clear path now, but it has been challenging for a long time with back-and-forth issues.
Monice Hagler asked what the issues were for the Environmental Court. Mendel Fischer stated that this property is located on North Watkins, right off the interstate exit, and is a property that has been down for many years. Fischer stated that when he purchased the property in 2019, there were several ideas on what to do with the property, and the property was already in Environmental Court at the time of purchase. Fischer stated that the City has every interest in the property because there has seen significant City investment on North Watkins, including the new library and park, so the City did not want to see this getting further blighted. Fischer stated that the challenge was throughout every bureaucracy really getting to it, including MLGW not honoring any of the infrastructure that was in place. Fischer stated that his team has put all new infrastructure in place, including electrical, sewer, and water lines, and that was not part of the initial construction plan, and that alone took over a year to complete and the rehabilitation could not begin until the infrastructure was completed. Fischer stated that once MLGW did come and put in new infrastructure that ownership paid for, over $300,000, then MLGW came in and re-addressed the property, and that spiraled into a whole new issue with Code Enforcement thinking permits were not taken out that were.
Fischer stated that the bureaucracy at best, and many agencies in between, the City of Memphis saying yes, Shelby County saying no, and most recently dealing with the court and the engineering letter that court required and the inspector would not upload the engineer's letter and now requiring ownership to upload the engineer’s letter instead, so there is additional bureaucracy that they are now navigating. Fischer stated he is now holding at a point where he can begin occupying the property. Fischer stated that he does understand the frustration of the Board because the PILOT has been in place for a period of time and no tenants are in place, but as his other properties have shown, his properties are occupied as soon as they can be occupied and he takes pride in doing what he committed to and the quality of the work, he apologized for his portfolio getting to a Legal Default status, and stated that the Board has his full commitment. Fischer stated that with Watkins Manor, he has had to go through the emotions of it, but he believes this would be a very big loss for the property and for the area if the PILOT were terminated. Fischer stated that with his entire PILOT portfolio, he is going above his original commitments, and that he has local partnership that provide other incentives for tenants, and managers that are committed to the tenants and they really help to develop them. Fischer and Knopf discussed other school programs that these other PILOT properties in this portfolio are involved in for the benefit of the residents. Knopf stated that the point Fischer is trying to make is that they understand the position they are in and how long this has taken, but asked that the Board consider the good that his properties have brought to these other communities, and that will be no different for this property is they are able to continue in the PILOT program as soon as they are allowed to begin occupying the property.
Henderson thanked Fischer and Knopf for their comments, and stated that as the property was acquired with no occupants, as it was already in Environmental Court at the time of purchase, he is looking at this circumstance from the perspective that there was not a decline in occupancy or conditions to initiate this property being placed in Legal Default Status, and given some of the challenges that have been stated, he is not in favor of termination. Henderson stated if this is viewed purely from a financial perspective from the City’s standpoint, current ownership took a chance to rehabilitate this property, ownership is losing money, and if this ownership group had not come alone, he is unsure who else would have taken that chance and the property could still have been sitting for a bit. Henderson stated that in his view, the City has not lost anything from this, and the property likely has additional value now compared to the when ownership acquired it, but given the circumstances and challenges with the bureaucracy, and also looking at the other properties in this developer’s PILOT portfolio and the good faith effort that has been made, he would not be in favor of termination. Chairman Reid stated that there are no tenant benefits, so the Board must document what this owner is doing in the communities in which they are present in, and he would request some correspondence from ownership on what has happened in those communities and how ownership has assisted people in those communities in which this ownership is involved, because if the facts are reviewed, this PILOT should be terminated. It behooves the Board to put some kind of documentation as part of this circumstance to bolster this decision if it is passed.
Austin (A.T.) Harrison left the meeting.
Eddings stated that it appears that staff is making its recommendation based on objectivity and the Board’s policies and procedures, but the Board can act subjectively in considering the comments of this developer and the commitment that this would make 214 additional units available. Henderson stated that this developer jumped into the Memphis market and has a portfolio of mixed performance, but Henderson appreciates what this owner has done and the good faith efforts that have been made, but he feels like this developer got ahead of himself and likely would have done some things differently if given the opportunity. Henderson stated that he does have some confidence that this developer can get where he needs to be and would like to allow the developer additional time to potentially get final inspections from the building inspector and fire department and show additional progress. There being no other questions or comments,
Cliff Henderson made a motion for Watkins Manor to remain in Legal Default status and for the PILOT Lessee to appear before the Board to provide a status update at the November 5, 2025 Board Meeting. Howard Eddings seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Frank Carney, Mendel Fischer, and Neil Knopf left the meeting.
Executive Directors Report
a. Trey McKnight reported that he and JP Townsend took John Zeanah, the new Chief of Development and Infrastructure for the City of Memphis, on a portfolio tour of approximately ten (10) PILOT properties and thanked Townsend for assisting him with that. McKnight stated that Zeanah walked away very impressed with what the Board does. McKnight stated that he and Townsend explained exactly what the Board does, how it does it, and why it does it, and Zeanah was very impressed.
b. McKnight reported that he will be in Nashville for the NALHFA March on Nashville for affordable housing and if Board members are interested to know the dates for that, he will look up those dates and let them know, but he believes the dates for that are soon. McKnight stated that attendees will hopefully be speaking to some officials with regards to getting more love to the City of Memphis and Shelby County.
Operations Report
Stephanie Bryant presented the Operations Report as follows:
a. Review of Compliance Oversight for July 2025
Bryant began by reminding the Board of the four (4) levels of additional compliance oversight that were put into place by staff in 2024 and this report will review movement of certain properties within these four (4) levels: (i) Under Observation, (ii) Compliance Concerns, (iii) Non-Compliance, (iv) Legal Default. Bryant reported as follows:
1.Under Observation:
a. One (1) property was moved from regular monitoring to “Under Observation” status during July 2025:
i. Residences at Lakeview (f/k/a Eden at Watersedge): declining occupancy rate and declining property conditions.
2. Compliance Concerns:
a. No properties were placed in “Compliance Concerns” status during July2025.
b. HEHFB Staff and legal counsel held a portfolio review on July24, 2025 and July31, 2025 with David Shemano (owner) and Jospeh Kahn (representative) concerning four (4) PILOT properties under “Compliance Concerns”:
i. Abington Apartments
ii. Country View Apartments
iii. Jamesbridge Apartments
iv. Lakes at Epping Way
(all four (4) PILOT properties in Shemano’s portfolio have been placed into “Compliance Concerns” status for declining property conditions and no progress shown following ongoing progress reports of concerns shared with ownership and current management)
3.Notice of Non-Compliance:
a. No properties were placed in “Notice of Non-Compliance” status July2025.
4.Legal Default:
a. No properties were referred to “Legal Default”, nor were any properties issues a "Notice of Legal Default” by the Board’s legal counsel during July 2025.
Howard Eddings asked if the Shemano portfolio was moved to a Compliance Concerns status based on a change in management from Multi-South Management. Bryant responded that these four (4) properties in the Shemano portfolio were placed under Compliance Concerns status based on decline of the conditions of the property. Bryant added that property conditions were beginning to decline while under Multi-South Management’s purview, but ownership initiated a change in the management company of their entire portfolio to AVAZ management in early 2025, and following that management change, property conditions drastically declined, so staff has had to take a more aggressive approach. Charles Carpenter advised the Board that staff and legal counsel have been advised that Shemano has had some illness and has now brought in a company that will help to address some of these issues. Carpenter stated that his Firm and staff have met with them concerning the portfolio, and this new company seems to be aggressive, but there would be more to report to the Board on this matter at the September 3, 2025 Board meeting.
b. HEHFB Suite 1120 Preliminary Floor Plan Update
Bryant stated that she has communication with Henry Turley Company representatives concerning the proposed renovation to the Board’s office suite and she has received some preliminary cost estimates for the construction only. Bryant stated that Henry Turley Company has selected A&R Construction as the contractor for the construction piece of the proposed renovation. Bryant stated she is in the process of reviewing final finishes and then will move to furniture considerations with the design team at The Crump Firm. Bryant stated that as those estimates come in, she plans to put the information together to be presented to the Finance Committee for review, followed by a presentation to the Board.
c. THDA-TNHC Early Bird Registration
Bryant reported that Early Bird Registration begins October 15, 2025 for the 2026 THDA Tennessee Housing Conference (TNHC), which will be held on February 23-24, 2026. Bryant advised the Board to be expecting additional information via email in the coming months.
There were no other questions or comments.
Finance Committee Report
Cliff Henderson presented the financial results for the month ended June 30, 2025. After discussion,
Howard Eddings, Jr. moved for acceptance of the Finance Committee Report for the month ended June 30, 2025, properly seconded by Monice Hagler, and the motion passed unanimously after a proper roll call vote of the Board members.
New Business
There was no new business.
Chairman Reid stated that the next regular meeting of the Board is scheduled for Wednesday, September 3, 2025 @ Noon. There being no further business, the meeting was adjourned by the Chairman at 02:50 p.m.