Wednesday, February 6, 2019


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, February 6, 2019. 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

                        Buckner Wellford                                               Cliff Henderson

                        Brittney Rowe (by phone)


            The following Director was absent:

                        Nancy Willis                                                                                                                                                                                                                       

            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.

Chasity Blackburn with Global Ministries Foundation representing Bent Tree Apartments, Geoff Benson with Adirondack Construction representing Bent Tree Apartments, Josh Kahane, Esq. and Christopher Lamberson, Esq. of 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

Monice Hagler moved for approval of the Minutes for December 5, 2018. Cliff Henderson seconded, and the motion passed unanimously.


Finance Committee Report

Cliff Henderson presented the consolidated financial results for the months ended November 30, 2018 and December 31, 2018. A discussion of the financials was completed and

Buckner Wellford moved for acceptance of the Finance Committee Report for November 30, 2018 and December 31, 2018, and properly seconded by James Jalenak, the motion passed unanimously.


Investment Advisor Selection

Cliff Henderson presented the Finance Committee report in connection with its evaluation and review of the Board’s Investment Advisor. The Finance Committee personally interviewed four candidates. The candidates were selected for interview based, among other criterion, on the basis of being an established fiduciary or otherwise regulated and also had significant experience with asset advising for nonprofit entities. As a result of the evaluations, on behalf of the Finance Committee, Cliff Henderson made a recommendation to change the Board’s Investment Advisor from the current vendor, Stephens, Inc. to Duncan Williams, Inc. After a complete discussion of the foregoing,

Manoj Jain moved for the acceptance of the Finance Committee recommendation to move the Board’s Investment account from Stephens, Inc. to Duncan Williams, Inc. Buckner Wellford seconded, and 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. 

2.     Carpenter reported that his office has received official notice from the IRS that the audit of the Lamar Crossings bond financing transaction has now been completed and officially closed.

3.     Carpenter reported on the progress of the new PILOT Application. Carpenter advised that he had met with the City of Memphis Treasurer’s office, the Shelby County Trustee, the Shelby County Assessor’s Office, had ongoing discussions with Board staff, and talked with various developers within the development community. Substantial progress has been made with the PILOT application as a result of these meetings and discussions, which will be further reported on later in this meeting. Carpenter also reported, as a result of these meetings, that the tax collectors have asked for assistance in collecting delinquent PILOT payments. Carpenter recommended that the Board assist as requested; however, the Board should discuss at a later time its position on assisting the taxing authorities with the collection of delinquent PILOT payments from expired or terminated PILOTs. It was advised that the Board had no ongoing working relationship with these lessees once the PILOT has expired or been terminated for noncompliance, and therefore would have less leverage to pursue such offenders than the taxing authorities.

4.     Lastly, Carpenter reported on the consummation of an agreement formed between the Health, Educational and Housing Facility Board of the City of Memphis and the Downtown Memphis Commission (DMC) in 2017 regarding PILOT properties located in the Central Business Improvement District (CBID). This agreement states in summary that the DMC would not charge CBID taxes to PILOT properties located in the CBID in consideration for these properties submitting, and having their construction plans approved by the DMC Design Review Board. As the agreement was finalized but not consummated by execution in 2017, it will have an effective date of January 1, 2019; however, PILOT properties located in the CBID between 2017 to January 1, 2019 would be grandfathered into the agreement. Further, it was made clear that the submission of the required construction drawings and related application to the Design Review Board would be the sole responsibility of the PILOT property applicant, without the assistance or responsibility of the Health, Educational and Housing Facility Board of the City of Memphis. 

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



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

Action Items:

Chasity Blackburn, Geoff Benson, Chris Lamberson, and Josh Kahane entered the meeting.


After a brief introduction of the representatives in attendance for Bent Tree Apartments, Martin Edwards, Jr. asked for an update on the ongoing drainage issue. Josh Kahane began the report by explaining the scope of the initial engineering plan, which was to perform underground excavation to construct underground cement tunnels the length of the property to flow into a reservoir on the western portion of the property. However, while mobilizing to begin the work on the initial plan, it was realized that the property had been originally graded in a way that would allow the water to naturally flow into the reservoir, could be reinstituted as a current viable, functional option. The revised plan would diminish the cost, allow the work to be completed more quickly and less intrusively for the tenants, and present an opportunity to reallocate funds to other projects onsite. It was determined that the original plan, due to a lack of maintenance, had stopped working and allowed tremendous overgrowth, debris and other items to fill the drainage way preventing the water from draining from the property. Following this discovery, the revised plans were presented to the engineer seeking to return to the initial drainage approach. After review, the engineer reportedly agreed that this would be a better approach than the underground excavation plan.  Kahane further reported that work had begun on the revised plan and all types of blockage and earth along the entire drainage area had been removed to allow water flow to access the western reservoir. Stones were then placed to create a tunneling system to better facilitate the water flow. The last item that had not begun is the cement work, which is reported to be strictly weather related. A copy of the revised engineering plan was provided to the Board, as well as a letter from the engineer expressing agreement that the revised approach was the preferred approach to correct the drainage issue. Kahane reported that there has been significant rainfall and that there have been videos taken of the revised plan working successfully.

In addition, Kahane reported on the Environmental Court monitoring in regard to the drainage issue. The inspector was reported to have visited the property and was pleased with the way the water was draining on the property. No indication of any further flooding has been reported. Notwithstanding the early success, the Environmental Court has not closed its file on the issue to allow further monitoring over a longer period of time. The matter has been reset for a court date of March 8, 2019 in Environmental Court. Geoff Benson with Adirondack construction claims that the revised plan will save approximately $140,000 versus the cost of the initial plan. These funds that have been saved are being reallocated to address other issues on the property. Benson reported that a contract is being drafted for his company’s services to perform asphalt work on the property for approximately $160,000. Buckner Wellford offered a suggestion to the Board that it would be reasonable to condition a decision on terminating the PILOT on spending an equivalent amount that was originally projected in the overall construction, to do a combination of this lower cost drainage remediation and additional upgrades to the property. Chris Lamberson expressed that is already the plan, however the main point was to get the drainage done and once completed and stabilized, the drainage solution is expected to work for years to come. Lamberson reminded the Board that the property owner and his team have solved the major remaining issue that was brought to the lessee by the Board, which was the drainage issue, and compliance was not based on expending a set amount of funds on the property. Wellford responded by explaining the chronic drainage problem on the property that was not being addressed until the property owner was required to do so by the Board. Once required to address the issue, the property owner hired the necessary parties to identify a solution to the problem. Once identified, the project seemed to stall until the lower cost option is now being presented, and the property owner and his team are providing assurances that the issue can be solved another way, however, the letter provided to the Board stating this is a viable option is not from the original engineering firm. The letter provided to the Board also is not a full endorsement of the plan, rather it states that is this lower cost option does work, it will require constant observation, remedial efforts, et cetera. Wellford expressed that the Board obviously hoped that the lower cost option does work, and that no money is spent unnecessarily, but there are also numerous problems based on history provided on the site. Wellford cited the parking lot condition, the potholes on the property, and boarded up units, stating that if the additional funds that were going to be used on the original drainage project were earmarked to address the other issues with the property, the funds would go a long way in rectifying those additional property issues. Lamberson asked would the Board propose that once the contract is executed, it be provided to the Board with the scope of work on the parking lot as well as the time frame and then report back to the Board. Geoff Benson stated that the time frame on the asphalt work is to begin February 2019, weather permitting. Wellford stated that a fairly quick follow up report that these things are being done provided to the Board would be acceptable to the him and the Board, as he stated there has been frustration expressed in PILOT Committee meetings in regards to the time spend by Board and Staff on this property, which has been considerable. Lamberson expressed his agreement with Wellford’s comments, and also stated that there has been a considerable amount of work accomplished in the past two (2) years of the Boards close oversight on the property, and stated that the work will continue to take place to the Board’s satisfaction. Lamberson requested that the Board make a statement on when and how the Board would like to receive reports on the property and the progress. Martin Edwards, Jr. stated that the Board will expect a report be provided two (2) times a month for the next two (2) months. Wellford stated that this would be satisfactory to him. Edwards also stated that he would like a meeting on site with the new engineer over the project and how this new lower cost plan will resolve the ongoing drainage issue on the property. Lastly, Carpenter requested a report from Bent Tree staff on occupancy. Chasity Blackburn stated that occupancy is currently at eighty-five percent (85%) and projected to be eighty-nine percent (89%). Blackburn explained that the month of December 2018 was a particularly difficult month for occupancy due to double the number of non-payers in that month compared to other months, which did not force those tenants in to court until January 2019. These units are being pre-leased in house with the anticipation that the non-payer tenants will continue to not pay and will be forced out by the court. This has caused a reduction in occupancy. Blackburn stated that December is historically a lower month each year, and is also the month with the highest number of evictions each year. Manoj Jain asked what the number of non-payers is, to which Blackburn answered that Bent Tree currently has thirty-two (32) tenants in court for non-payment, which is thirty-two (32) of the three hundred seventy nine (379) total units on the property.

There being no further questions,

Buckner Wellford moved to table the item for two (2) months for PILOT TERMINATION OF BENT TREE APARTMENTS pending the reports that have been requested being received. Cliff Henderson seconded and the motion passed unanimously.

Chasity Blackburn, Geoff Benson, Chris Lamberson, and Josh Kahane left the meeting.




Monice Hagler recused herself from the deliberations and vote. Thereafter, Martin Edwards, Jr. reported that the PILOT Committee met and recommends the approval of the MHA PILOT Application for the Renaissance at Steele property. This is a tax credit property being developed by The Works. This is a one hundred fifty-two (152) unit property with a total development cost of $16,623,314. This will be an MHA administered property. Charles Carpenter states that he and his firm have also reviewed the application, it is in compliance with all MHA guidelines and seems to be an excellent project. Carpenter specifically mentioned the exceptional tenant benefits proposed in this application and that this would be a great model of tenant benefits for future applications. There being no further questions or comment, 

James Jalenak moved to approve AFFORDABLE MULTIFAMILY MHA PILOT APPLICATION FOR RENAISSANCE AT STEELE APARTMENTS. Buckner Wellford seconded and the motion passed unanimously.


Martin Edwards reported that the PILOT Committee met and reviewed the financing and the amount of improvements that have been done to this property. The PILOT Committee recommends approval of the refinancing request of this property. There being no questions or comment,

Monice Hagler moved to approve PILOT REFINANCING FOR COUNTRY VIEW APARTMENTS. Manoj Jain seconded and the motion passed unanimously.



Martin Edwards reported that the PILOT Committee met and reviewed the financing and the amount of improvements that have been done to this property. The PILOT Committee recommends approval of the refinancing request of this property. There being no questions or comment,

Cliff Henderson moved to approve PILOT REFINANCING FOR RIDGEWAY CROSSING APARTMENTS. Manoj Jain seconded and the motion passed unanimously.



Charles Carpenter began by stating that prior to the meeting, he had distributed to the Board a revised draft (i) PILOT Program Application and (ii) Policies and Procedures that included the culmination of a lot of thought, hard work, and diligence that the Board members have applied to this revised delegation of authority from the City Council. Carpenter reported that there are still certain components that need to be addressed. The goal in this meeting is to approve an application that may be used by staff to move forward with the development community, with the understanding that there are still refinements that have to be made. Carpenter reported on one critical issue that needs clarity, is with the closing fees. Currently, when a ten (10) year PILOT is approved, there is a one percent (1%) fee assessed based on the total development cost, which represents a closing fee that is divided between the Board and the City of Memphis. Now that the PILOT terms have been extended, one question is whether the closing fee shall remain the same or if there will be a modification based on the longer term. Carpenter stated that there are certainly enhancements to the PILOT Lessee with the extended term. Carpenter requested that the Board provide guidance as to how it would like to address this issue. Aside from this issue, Carpenter stated the Board would have a sufficient, substantially completed application to approve today, which would give staff and his office an opportunity to move forward immediately with the developers who have been waiting. Carpenter also stated that his office, as well as staff, would be sure to advise that the application is preliminary and subject to change. Following his opening comments, Carpenter then turned the discussion over to the Board. After discussion, it was determined by the Board that the closing fee would remain at one percent (1%) for a ten (10) year term, and will increase by ten (10) basis points per each additional year extended beyond the initial ten (10) year term. It was also decided the basis for all closing fees shall be based on the original total development cost of the project at the time that the original PILOT was awarded and applied. The Board also discussed that the general guideline to qualify for a new PILOT shall retain the requirement of spending fifty percent (50%) of the acquisition cost; provided that the Board shall not establish a minimum number of units requirement, nor a minimum dollar amount of development costs requirement. Finally, the Board shall continue to review the draft application, polices and procedures documents for needed revisions. After further discussion,

Buckner Wellford moved to approve the PILOT PROGRAM APPLICATION and Policies and Procedures, as modified and updated with the revisions discussed and agreed upon in today’s meeting, and with such other modifications that are considered administrative insertions by Board Counsel and staff. Monice Hagler seconded, and the motion passed unanimously.


Executive Director Report

Martin Edwards stated there was no new information to report.

New Business

There was no new business.


Public Comment

There was no public comment.

It was announced that the next scheduled meeting of the Board will be held on Wednesday, March 6, 2019 @ Noon. There being no further business, the meeting was adjourned by the Chair at 1:24 p.m.