Wednesday, December 5, 2018


The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee was held pursuant to public notice on Wednesday, December 5, 2018. The published meeting time was 12:00 Noon.  The meeting was held at the Board office, located at 65 Union Avenue, Suite 1120, Memphis, TN  38103.

            The following Directors were present:                                           

                        Daniel T. Reid, Chair                                        James Jalenak

                        Monice Hagler                                                    Dr. Manoj Jain

                        Nancy Willis                                                      Cliff Henderson                                                                                    

            The following Directors were absent:

                        Brittney Rowe                                                    Buckner Wellford                                                                                                                                                  

            Also present were:

Staff members Martin Edwards, Jr., and Stephanie Wright were in attendance. Charles E. Carpenter and Corbin I. Carpenter, General Counsel, and Cheryl Hearn, Assistant City Attorney, were also in attendance.

Richard Hamlet, Tameca Parker, and Chasity Blackburn with Global Ministries Foundation representing Bent Tree Apartments, Geoff Benson with Adirondack Construction representing Bent Tree Apartments, Josh Kahane and Christopher Lamberson with Glankler Brown representing Bent Tree Apartments and James Stokes, a member of the public with Bass River Advisors 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.

James Stoked entered the meeting.

Approval of Minutes

Nancy Willis moved for approval of the Minutes for November 7, 2018. Monice Hagler seconded and the motion passed unanimously.


Finance Committee Report

Cliff Henderson presented the financial results for the month ended October 31, 2018. A discussion of the financials was completed and

Manoj Jain moved for acceptance of the Finance Committee Report for October 31, 2018, and properly seconded by Monice Hagler, the motion passed unanimously.


Attorney’s Report

Charles Carpenter presented the legal report, as follows:

1.     For the Board’s information, Carpenter reported no new lawsuits or claims for the period. However, the Board did receive a notice of claim from Morgan and Morgan. After due diligence, the property is a PILOT property, but the PILOT is with The Health, Educational and Housing Facility Board of Shelby County. This information was communicated to Morgan and Morgan and provided Stephen Anderson’s contact information. Stephen Anderson is the attorney for the Health, Educational and Housing Facility Board of Shelby County.

2.     Carpenter reported on Hope Heights, which will be the third closing of three Millennia Housing properties, (i) Cavalier Courts, (ii) Gospel Gardens and (iii) Hope Heights, purchased from Global Faith Ministries. As Carpenter had previously reported, Hope Heights closing was delayed due to issues with HUD that have now been resolved, and closing is scheduled for December 18, 2018. Hope Heights is formerly known as Madison Towers, which does still have Bonds outstanding. Step one will be to defease those Bonds. Step two will be to close the new Bonds and the PILOT. The defeasance is scheduled for December 14, 2018, with the closing of the new Bonds and PILOT on December 18, 2018. As the Board’s General Council, Carpenter recommends the second Bond closing extension for Hope Heights Apartments so that it may close with the PILOT, which will complete the trilogy of closings.

3.     Carpenter reported on the closing of the Highland Creek PILOT. As the Board had previously approved, the existing PILOT on the property was terminated and a new ten (10) year PILOT was applied. Carpenter also reported that this property would be seeking a term extension once the Resolution Committee and the Board have completed new policies and procedures in connection with the new delegation of PILOT authority from the City Council.

4.     Carpenter reported on the progress of the IRS audit of the Lamar Crossings Bond financing transaction. Carpenter had previously advised the Board that the Bond Counsel firm for the Bonds had dissolved and that as General Counsel, he had undertaken the engagement and had been in direct communications with the IRS. Once Carpenter continued with due diligence in the matter, it was determined that the Bonds were no longer outstanding because there was a default with this property and the successor bond trustee had made certain determinations with the Bonds and declared them to be uncollectable. This information has been communicated with the Internal Revenue Service and the current position of Carpenter that because there are no outstanding Bonds, there is  currently nothing to audit; therefore, the audit should be completed and closed. The Internal Revenue Service is currently considering that position, no additional information has been requested and Carpenter is waiting for a final response from the Internal Revenue Service on the matter. Carpenter will keep the Board advised.

5.     For informational purposes, Carpenter reported that the Treasurer’s Office of the City of Memphis had asked all PILOT entities, to wit: the Board, (ii) The Health, Educational and Housing Facility Board of Shelby County, (iii) Downtown Memphis Commission, (iv) EDGE and the (v) Shelby County Assessor’s Office to meet and discuss their respective PILOT programs and/or interaction with the City Treasurer’s Office. The meeting took place in early November 2018, and was more of an informational meeting and a coordination of records to ensure all records are consistent. It was agreed that the parties will meet again, as needed, as the Board works through the revised delegation of authority for its PILOTs.

6.     Carpenter sited two PILOT properties that are in default. The first property, Eastwood Park Apartments, is on the Agenda for Termination today, December 5, 2018. The second property is Graceland Farms, which was reported on in the November 7, 2018 Board of Directors meeting and is still pending. A report will be made in a future meeting on the status of Graceland Farms, as Carpenter continues to work with staff on the matter.

7.     Carpenter reported on a notice received on behalf of the Board from the Tennessee Comptroller’s Office. There is a new requirement for notice of outstanding Bond obligations for Industrial Development Corporations in the State of Tennessee. Carpenter has been in communication with the Comptroller’s office and his initial assessment is that the Board does not fall under this statutory requirement, because the Board is under a completely separate state enabling legislation as a Health, Educational and Housing Facility Board, not an Industrial Development Board, however, some of the requirements are the same. The State oversight could be applied to our Board, however, because the Board is under a different statute, Carpenter has raised this issue with the Comptroller, and the Comptroller is looking at that now. The State has not responded as of yet, but if the State does determine that the Board is not exempt, the Board will be required to adhere to this reporting requirement.

8.     Lastly, Carpenter reported that US Bank, as Trustee of several Board issued Bonds, has issued Notice of Non-Monetary Default on three Bond properties; (i) Parkview Apartments, (ii) Macon Manor, and (iii) Advantage Way. Parkview Apartments and Macon Manor  have PILOTs and Bonds. These properties have Non-Monetary Defaults because the properties have not submitted their required insurance information pursuant to the Lease Agreements. Carpenter stated that his office will be making contact with these properties to ensure the insurance information is provided so that the properties may be taken off of the default list.

The above concluded the legal report and there was a brief question and answer session with members of the Board.

Richard Hamlet, Tameca Parker, Chasity Blackburn, Geoff Benson, Chris Lamberson, Josh Kahane entered the meeting.



Martin Edwards, Jr. reserved comment for the action items.

Action Items:


After a brief introduction of the representatives in attendance for Bent Tree Apartments, Martin Edwards, Jr. began by addressing Chris Lamberson in reference to updates since receipt of a letter sent by Edwards to Lamberson on November 21, 2018. Lamberson responded by beginning the update with the drainage issue. Geoff Benson reported that the first section has been fenced in and Benson has been working to locate all underground elements and has been working with MLGW to verify all underground piping has been located in order to begin digging. Benson reported that the engineer on the project has required concrete piping materials as opposed to the original plans, which included corrugated piping materials. Benson reported this modification has caused a change in sourcing of materials, which has delayed the start of the project to repair the drainage issue on the property. Labor for the project has been sourced so that once all materials are sourced, the project will be able to begin and be completed. Edwards asked Benson to report on his need for any permits from the City of Memphis for the project. Benson reported that he took the plans for the project to the City of Memphis and was told there are no permits required for the project. Edwards requested that this information regarding no permit required be provided in writing to the Board. Carpenter requested a new time line for completion, as from previous presentations and reports to the Board, there was indication that this project would already be in process, yet it has not started. Benson reported that the anticipated time frame required would be six (6) to eight (8) weeks, following the sourcing and receipt of all materials required for the project, however, Benson could not provide a definite start date to the Board. Carpenter asked for clarification on the change in piping materials required by the engineers on the project, because it was previously reported to the Board that the engineers were the first on site. Benson reported that he priced corrugated piping materials in an effort to reduce the expense on his original quote of the project and did not communicate with the engineers in regards to piping materials until after new plans had been released for the project. At that point of communication, it was determined that concrete piping materials were required. Edwards again stated for the record, following the Benson’s report, that he wants a letter from the City of Memphis provided to the Board stating that there is no permit required for the project. James Jalenak addressed Benson as to the office within the City of Memphis that the construction plans were provided to for permit information. Benson briefly explained he would have to get more information on that and provide that information to the necessary parties involved. Jalenak then asked Benson, because of the change is piping materials, is there enough financing in the project to pay for the change. Jalenak then asked what will take place with the project if the materials cannot be found at the same or comparable price. Lamberson stated that Benson is trying to stay at the same pricing with the concrete materials as was originally quoted for the corrugated materials. Benson explained that would then be discussed between himself and Richard Hamlet. Benson stated that he will complete the project, and if there is any change in the cost of the project, that Benson will work that issue out with Hamlet. Benson stated that the over all project cost is estimated at $210,000.00.

Edwards then asked for an update on the fire damaged units, that are now re-boarded, and the meters have been pulled. Hamlet explained that those units are occupied. Chasity Blackburn explained that the units Edwards was referencing are down units that are boarded up. Tameca Parker explained that Code Enforcement required those down units be boarded up while work is being done. Josh Kahane reported that he has been working with Code enforcement issues in representing Bent Tree Apartments. Kahane reported that Code Enforcement requires any down unit that is being worked on to be boarded up in order to ensure no access while work is being completed.  Once Code Enforcement reinspects the completed unit and allows the property to move forward with the lease up, the boards are able to be removed from the property. Carpenter asked where Bent Tree Apartments is in regards to completion of these down units. Hamlett responded by stating that Bent Tree currently has twenty-eight (28) down units, with some dating back to when the property was purchased. Chasity Blackburn then explained Bent Tree’s process of working through natural vacancies first, then tackle down units. Chasity Blackburn stated the Bent Tree’s occupancy is currently at 87.5%. Edwards then requested that an update be provided on the shootings that took place on the property just a few weeks prior to today’s December 5, 2018 Board meeting. Lamberson asked Blackburn if there had been any developments in the case that she has been made aware of. Blackburn reported that no arrests have been made to her knowledge. Blackburn also reported that security was not on site at the time on the incident, and the crime was contained to one unit. The resident that occupies the unit was not home at the time of the incident, but rather involved the resident’s guest, and there was no evidence of forced entry. Carpenter stated that the Board is still in deliberations on the action to take at this time and asked if there is any statement that any of the representatives present for Bent Tree Apartments would like to make to the Board. Benson requested that the Board give the opportunity for the materials to be sourced and received and once that takes place, Benson will reach out the Lamberson to communicate to the Board a target start and completion date. Edwards stated to Lamberson that he would like to be provided with the contact person with the City of Memphis that Benson communicated with concerning the project.

Manoj Jain asked what other items are outstanding, outside of the drainage project issue at Bent Tree Apartments. Edwards cited that occupancy is the main focus, particularly with boarded up units on the property. Edwards also mentioned an area that has been discussed in prior meetings, but no known progress has been made as far as the driveways and numerous pot holes that were supposed to have been addressed. Hamlet stated that this is a continual issue, to which Edwards agreed. Chasity Blackburn stated that Bent Tree Apartments’ occupancy is above their competitors within the same zip code. Blackburn also stated, to address the pot hole issue, Bent Tree Apartments currently has a signed bid for $60,000.00 that will eradicate the pot holes. This project is expected to be completed in March 2019. Kahane verified that the pot hole issue is also being dealt with in Environmental Court and the issue is being addressed, just not effectively, and warmer weather will permit the correct repairs needed to successfully complete the job. Jain asked what plan is in place to resolve the number of down units on the property. Blackburn responded that the property must address natural vacancies first and foremost, and that down units are addressed second. Blackburn stated that one to two down units are completed each month. There being no further questions,

Nancy Willis moved to defer action to February 6, 2019 Board meeting for PILOT TERMINATION OF BENT TREE APARTMENTS. Cliff Henderson seconded and the motion passed unanimously.

Richard Hamlet, Tameca Parker, Chasity Blackburn, Geoff Benson, Chris Lamberson, Josh Kahane left the meeting.



Martin Edwards, Jr. reported that Eastwood Park Apartments was delivered a Notice of Default sixty (60) days ago, and provided pictures of the property for the Board’s information. Edwards reported on occupancy since the PILOT was applied to Eastwood Park Apartments in 2016 has never been reported above 47% occupied. Edwards referenced the pictures evidencing that there have been no improvements to the property and there has been no response received since the Notice of Default was sent to property ownership and management. Carpenter reminded the Board that this property had previously had extensive fire damage and made an application to the Board that it would not have to rebuilt those fire damaged units, but rather demolish them and take the insurance proceeds to enhance the other areas of the property. The Board approved the request however, the property did not follow through. Manoj Jain expressed a concern for the tenants at the property, why repairs have not been completed at the property and concern that there has been no response from the property ownership and management to the Board, staff, or General Counsel. Edwards responded by saying that ownership nor management has made an effort to improve the property, and that there are buildings on the property that even pose a danger to the tenants. Dan Reid also stated that there is no known mortgage on the property.

There being no further questions or comment,

Monice Hagler moved to approve PILOT TERMINATION OF EASTWOOD PARK APARTMENTS. James Jalenak seconded and the motion passed unanimously.



Martin Edwards reported on the occupancy of Abington Apartments is at 93% occupied. Edwards also provided pictures of the property, showing it is in excellent condition. Edwards also reported meeting with the resident manager and obtaining a current rent roll the week prior to this Board meeting and verified the occupancy numbers as well as walked the property. The property is in compliance with all inspections performed, including Edward’s inspection. After a brief discussion, Edwards, on behalf of the PILOT Committee, recommended approval of the refinancing for Abington Apartments.  There being no questions or comment,

James Jalenak moved to approve PILOT REFINANCING FOR ABINGTON APARTMENTS. Cliff Henderson seconded and the motion passed unanimously.



Carpenter reported this is the property that was previously reported on in the Attorney’s Report earlier in this Board meeting. Carpenter recommended approval of the second extension. Carpenter also requested, based on established precedent, that should the closing be completed prior to the next scheduled Board meeting, that the extension fee be waived, otherwise the extension fee will be applicable. There being no further questions,

Cliff Henderson moved to approve 2ND BOND CLOSING EXTENSION FOR HOPE HEIGHTS APARTMENTS. Nancy Willis seconded and the motion passed unanimously.


Executive Director Report

Martin Edwards, Jr. commented on the Mason Village Grand Opening event, which he attended, as well as Monice Hagler. Edwards stated that it was a very well attended event and the excellent progress that has been made at the property, including outstanding units. Edwards also mentioned an article written about the event in The Daily Memphian, which cited The Health, Educational and Housing Facility Board of the City of Memphis, specifically comments made by Edwards at the event which were quoted about utilizing infrastructure in this city to rebuilt housing.

Edwards also reported on PILOT Statistics in response to a conversation with Mayor Strickland at the Mason Village Grand Opening. Staff comprised PILOT statistics on projects that have been approved and/or closed since January 2016. Edwards stated that the statistics are very positive, citing over $369 Million Dollars in development costs since January 2016 to current date.

Edwards then reported on two PILOT properties of concern, Sunrise Terrace and Graceland Farms. Edwards stated that a meeting is scheduled with Sunrise Terrace owner for December 6, 2018 to discuss the property, budget, development costs, and timeline of construction to take place. This meeting will be reported on at the next Board meeting. Edwards then reported that Graceland Farms is still on his watchlist and he expects to have more information at the next Board meeting as well.

The above concluded the Executive Director Report.

New Business

Cliff Henderson notified the Board that he looks to rebid the Board’s investment portfolio being managed, as well as the annual audit. Henderson stated that he would be open to any suggestions of the Board, and will provide a full report at the next Board meeting.


Public Comment

There was no public comment.

It was announced that the next scheduled meeting of the Board will be held on Wednesday, January 9, 2019 @ Noon. There being no further business, the meeting was adjourned by the Chair at 1:13 p.m.