MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Wednesday, December 6, 2017
The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee was held pursuant to public notice on Wednesday, November 29, 2017. The published meeting time was 12:00 Noon. The meeting was held at the Board office, located at 65 Union Avenue, Suite 1120, Memphis, TN 38103.
The following Directors were present:
Daniel T. Reid, Chairman James Jalenak
Monice Hagler Dr. Manoj Jain
Nancy Willis (by phone)
The following Director was absent:
Also present were:
Staff members Martin Edwards, Jr. and Lauren Magallanes were in attendance. Charles E. Carpenter, General Counsel, Corbin I. Carpenter and Cheryl Hearn, Assistant City Attorney, were also in attendance.
With a quorum present, the regular meeting of the Board was called to order at 12:00 Noon by Chairman, Daniel T. Reid.
Approval of Minutes
Monice Hagler moved for approval of the Minutes for October 11, 2017. James Jalenak seconded and the motion passed unanimously.
Finance Committee Report
Daniel T. Reid presented the financial results for the month ended September 30, 2017. After a complete discussion of the financials:
Manoj Jain moved for acceptance of the Finance Committee Report for September 30, 2017, and properly seconded by James Jalenak, the motion passed unanimously.
Daniel T. Reid presented the financial results for the month ended October 31, 2017.
Ashley Davis moved for acceptance of the Finance Committee Report for October 31, 2017, and properly seconded by Monice Hagler, the motion passed unanimously.
Charles Carpenter presented the legal report, as follows:
1. The Forum Flats Bond and PILOT closings are moving forward. The bond financing has received HUD approval and will be issued as a rated public offering. Also, the bonds were successfully priced at a very competitive rate. As to the PILOT for the Forum Flats project, Carpenter stated the six (6) month commitment ended with today’s meeting and an extension would be needed; however, as the project is scheduled to close within the coming week, Carpenter recommended that the Board approve a waiver of the extension requirement and fee, and allow the PILOT to close without taking formal action on the extension, which process had been previously approved and utilized by the Board. Carpenter added that if the closing was not completed prior to the next meeting, the applicant would be required to show cause why the commitment should not be terminated, and if approved, would then be required to pay the extension fee and the timeframe would be computed from the December 2017 meeting.
2. The Sunrise Terrace PILOT closing is also moving forward. Carpenter advised that the Sunrise Terrace PILOT is in the same posture as Forum Flats regarding the need for an extension and asked that the same consideration be given for this project, as it is also scheduled to close within the coming week. Similarly, should the project not prior to the next meeting, the applicant would be required to show cause why the commitment should not be terminated, and if approved, would then be required to pay the extension fee and the timeframe would be computed from the December 2017 meeting.
3. Finally, matters relating to Highland Creek PILOT and Bent Tree PILOT were deferred for report by the Executive Director or action items listed on the agenda.
The above concluded the legal report and there being no further concerns or questions, the legal report was completed.
Martin Edwards, Jr. deferred discussion of the PILOT report, as all items are detailed in the Action Items portion of the meeting.
CONSIDERATION OF BOND INDUCEMENT RESOLUTION FOR CAVALIER COURT APARTMENTS
Martin Edwards, Jr. outlined the three (3) applications submitted by Millennia Housing Development and referenced the summaries in the Board packet. Edwards summarized his
thorough review of the applicant, the bond applications, background of the respective developments and added his support for approval. Manoj Jain asked for a complete overview of the bond process from the perspective of a Board member. Carpenter provided a complete overview from the application, bond inducement resolution through the final bond resolution. Carpenter added that on behalf of each property, Millennia has completed all prerequisites qualified for each property to obtain Board approval of an inducement resolution. Carpenter stated the process for which the applicant will be applying to the Tennessee Housing Development Agency (THDA) for allocations for volume cap and tax credits for each project, in tandem with its applications before the Board. Further, that although the properties are being considered separately, the applicant is proposing only one bond issuance. Finally, Martin Edwards stated the developer will be returning with PILOT applications for each property, as soon as the 2018 PILOT round is announced.
Manoj Jain moved for the approval of BOND INDUCEMENT RESOLUTION FOR CAVALIER COURT APARTMENTS. James Jalenak seconded and the motion passed unanimously.
CONSIDERATION OF BOND INDUCEMENT RESOLUTION FOR HOPE HEIGHTS APARTMENTS
There being no further questions or statements regarding the applicant or materials submitted, Martin Edwards stated his support for the Inducement Resolution approval.
Monice Hagler moved for the approval of BOND INDUCEMENT RESOLUTION FOR HOPE HEIGHTS APARTMENTS. James Jalenak seconded and the motion passed unanimously.
CONSIDERATION OF BOND INDUCEMENT RESOLUTION FOR GOSPEL GARDENS APARTMENTS
Manoj Jain moved for the approval of BOND INDUCEMENT RESOLUTION FOR GOSPEL GARDENS APARTMENTS. Ashley Davis seconded, and the motion passed unanimously.
CONSIDERATION OF 1ST EXTENSION BOND INDUCEMENT RESOLUTION FOR PENDLETON PLACE APARTMENTS
Martin Edwards detailed the strong background of the out of state developer and substantial rehabilitation planned for both Pendleton Place and Keystone Landing Apartments. Edwards added his support of the applicant’s request for extensions for both the Bond Inducement Resolutions and the PILOT approvals. Charles Carpenter added that THDA exhausted the allocation for the 2017 year and the developer is seeking an extension to be considered for the THDA 2018 allocation reservations.
Manoj Jain moved for the approval of 1ST EXTENSION BOND INDUCEMENT RESOLUTION FOR PENDLETON PLACE APARTMENTS. James Jalenak seconded and the motion passed unanimously.
CONSIDERATION OF 1ST EXTENSION BOND INDUCEMENT RESOLUTION FOR KEYSTONE LANDING APARTMENTS
James Jalenak asked for additional information on the Board’s role and interaction with the Tennessee Housing Development Agency (THDA). Charles Carpenter responded with detailed overview of the role and scope of duties and responsibilities between the agencies regarding the financing of multifamily housing in the state of Tennessee.
Ashley Davis moved for the approval of 1ST EXTENSION BOND INDUCEMENT RESOLUTION FOR KEYSTONE LANDING APARTMENTS. James Jalenak seconded and the motion passed unanimously.
CONSIDERATION OF AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR CEDAR RUN APARTMENTS
Martin Edwards referenced the summary sheet in the Board packet and stated the out-of-state developer paid cash for the property and has a strong rehabilitation plan and have already begun renovations. Charles Carpenter referenced the tenant benefit breakdown provided. Manoj Jain inquired about the estimated tax savings during the term of the PILOT, to which Charles Carpenter responded the savings would be based on 50% of the assessed value at the time that the PILOT is applied to the property. The assessment would be frozen for the entire ten (10) year term of the PILOT and would not be adjusted for improvements during the term; therefore, it would be difficult to quantify a dollar amount at this point. Martin Edwards cited the pro-forma hard dollar amounts for the 2018 year. Jain contemplated that while we are incentivizing the developer with a reduction in property taxes each year, we are also supporting substantial investments in the housing community. Charles Carpenter stated in general terms that our PILOT program incentives are measurable, while other PILOTs for job creation and other business development programs operate under a more complicated matrix. Martin Edwards added that an additional benefit of our PILOT program is for the preservation of affordable housing. Edwards also added the cumulative benefit to the tenants works out to be greater than the tax savings rendered.
Ashley Davis moved for the approval of AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR CEDAR RUN APARTMENTS. Manoj Jain seconded, and the motion passed unanimously.
CONSIDERATION OF 1ST EXTENSION PILOT APPLICATION FOR PENDLETON PLACE APARTMENTS
There was no other added discussion from the previous background provided.
Monice Hagler moved for the approval of 1ST EXTENSION PILOT APPLICATION FOR PENDLETON PLACE APARTMENTS. Manoj Jain seconded, and the motion passed unanimously.
CONSIDERATION OF 1ST EXTENSION PILOT APPLICATION FOR KEYSTONE LANDING APARTMENTS
There was no other added discussion from the previous background provided.
Ashley Davis moved for the approval of 1ST EXTENSION PILOT APPLICATION FOR KEYSTONE LANDING APARTMENTS. Manoj Jain seconded, and the motion passed unanimously.
Executive Director Report
1. Martin Edwards stated that consideration of the PILOT Application for Country View Apartments had been removed from the agenda due to missing information.
2. Edwards informed the Board of preliminary discussions with officials of the City seeking to enlarge PILOT terms of new and existing PILOTs. Edwards reminded the Board that any decision to modify the PILOT terms or delegation of authority to the Board would be a decision of the City Council. Edwards stated he would keep the Board informed of ongoing discussions with the City. After further discussion and exchange of ideas, Edwards encouraged ideas and suggestions from the Board on this issue.
The members then engaged in general discussion of topics of interest to members of the Board concerning properties in the PILOT portfolio to regional, statewide and local development opportunities and ways the Board could facilitate additional growth and preservation in the Memphis community.
Daniel Reid suggested establishing a driving tour with members of the Board to visit various properties in the PILOT program during the coming months. The idea was well received by the Board and staff was directed to coordinate the tour.
There being no public comment, it was announced that the next scheduled meeting of the Board will be held on Wednesday, January 10, 2018 @ Noon. There being no further business, the meeting was adjourned by the Chair at 12:51 p.m.