MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE

Wednesday, January 11, 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, January 11, 2017.  The published meeting time was 12:00 Noon.  The meeting was held at the Board office, 65 Union Avenue, Suite 1120, Memphis, TN  38103.

    The following Directors were present:
                        
        Daniel T. Reid, Chairman          Curtis Thomas
        Monice Hagler                                Buckner Wellford
        Carolyn Head                                  Nancy Willis
        James Jalenak
        
                                 
    The following Director was absent:

        Paige Walkup    
                    
    Also present were:

Staff members Martin Edwards, Jr. and Lauren Magallanes were in attendance. Charles E. Carpenter, General Counsel, and Cheryl Hearn, Assistant City Attorney, were also in attendance. 

Boris Drukker and Moshe Silberstein, principals and Frank Carney, Attorney, representing Thompson Court Apartments were also present. 

With a quorum present, the regular meeting of the Board was called to order at 12 Noon by the Chair, Daniel T. Reid. 

Daniel Reid introduced James Jalenak, a newly appointed Board member.

Approval of Minutes
Buckner Wellford moved for approval of the Minutes for December 7, 2016. Nancy Willis seconded and the motion passed unanimously. 

Cheryl Hearn entered the meeting 

Finance Committee Report
Carolyn Head reported on the Financial Statements for the period ending November 30, 2016. She provided summaries of the income statement and balance sheet for the period and year to date. 

Motion
Monice Hagler moved for acceptance of the Finance Committee Report for November 2016. Curtis Thomas seconded and the motion passed unanimously.

Attorney’s Report
Charles Carpenter stated no new claims or lawsuits since the previous Board meeting. Carpenter updated the Board on one PILOT closing for Glendale Apartments, now known as Accession Towers. Carpenter also reported the PILOT Transfer for Abington Apartments (f/k/a Parkview) had been completed. 

Carpenter reported that the Taxpayer Equity Financial Responsibility Act (TEFRA) hearings were held in December 2016 for Forum Flats Apartments and Mason Village Apartments, respectively. As it relates to Forum Flats Apartments, Carpenter detailed his interactions with Raymond James (RJ), the designated underwriter, and has approved the RJ (i) Letter of Intent for Underwriting Services and (ii) the Municipal Securities Rulemaking Board (MSRB) Rule G-17 Letter to be executed by the Board Chairman. Carpenter also detailed his interactions with Alco Tyson Partners and approval of its HUD Amendment to Rental Use Agreement to be executed by the Board Chairman.

Further, Carpenter updated the Board regarding the bond default status of Hilldale Apartments, adding the notice of non-judicial foreclosure sale for this property was scheduled for Friday, December 9, 2016; however, the sale did not take place because the Owner filed a voluntary petition for bankruptcy, which contained an automatic stay. Additionally, Carpenter reminded the Board that the issuance of its revenue bonds is on a non-recourse basis, with no legal or financial liability for the Board. Carpenter added the Hilldale matter would continue to be monitored, to ensure that the proceedings are in adherence to the law. 

PILOT Report
Curtis Thomas reported there have been no new recommendations or discussions since the December meeting regarding compliance. Thomas added the PILOT Committee had met regarding the pending PILOT application and he would hold those comments for the Action Items portion of the meeting.

Action Items

CONSIDERATION OF AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR THOMPSON COURT APARTMENTS
Curtis Thomas detailed discussions regarding the proposed tenant benefits relating to its pending application for street closures was a positive potential benefit of the application, but due to other established tenant benefits of the application that currently meet the underwriting guidelines for the PILOT program, the PILOT Committee recommended current approval. 

Boris Drukker, Moshe Silberstein and Frank Carney entered the meeting
 
Boris Drukker detailed to the Board the total scope of renovations being completed at the property and the intention for the property to be gated. Drukker stated his pursuit of property gates and subsequent street closures has been approved by all appropriate parties thus far and anticipates a favorable completion of the application moving forward. Drukker added should the plan for gate enclosures not be successful, additional investment for increased security would be a priority for an additional tenant benefit. Martin Edwards stated he had completed a site visit of the project and had been provided a copy of the site plan. He also congratulated the performance of the applicant for its work completed at Winbranch Apartments, which is currently a lessee under the Board’s PILOT program.  Charles Carpenter reminded the applicants that any PILOT approval would be subject to ongoing compliance monitoring for the duration of the PILOT agreement. After further discussion with Board members regarding the clarification of tenant benefit provisions and the importance therein, Frank Carney and Borris Drukker detailed the process for next steps in the approval process for the street closures with the Land Use Control Board and City Council. Martin Edwards stated his intention to be present at the public hearings with the Land Use Control Board and City Council but would not make any public statements concerning the project. 

Boris Drukker, Moshe Silberstein and Frank Carney left the meeting.

Daniel Reid and Curtis Thomas provided general comment to the mandatory nature of the Board’s approval, oversight and monitoring of tenant benefits. Each spoke in favor of the merits of the application of the Thompson Court project, citing the applicants’ commitment to provide substantial tenant benefits that meet the PILOT program guidelines, and the applicant’s level of commitment and success with another similar multifamily project. Carolyn Head asked about the reasonableness of post rehabilitation rents, to which Charles Carpenter responded that based on the area medium income (AMI), the amounts fall within acceptable rates. Daniel Reid and Martin Edwards added that the funding of the renovations and tenant benefits to the property are being paid on a cash basis. Buckner Wellford stated that as the application qualifies under the Board’s PILOT guidelines without the contingency of the pending street closure, that the application should be considered by the Board as such, to not set a precedent for the Board, or to add any outside considerations for the Land Use Control Board or the City Council in its deliberations on the approval of such applications moving forward.

Motion
Buckner Wellford moved for the approval of the Affordable Multifamily PILOT Application for Thompson Court Apartments. Monice Hagler seconded and the motion passed unanimously. 

CONSIDERATION OF PILOT EXTENSION FOR MASON VILLAGE APARTMENTS
Charles Carpenter stated the delay in closing this project is primarily a result of the lack of 2016 bond volume cap allocation from the Tennessee Housing Development Agency (THDA). Carpenter added the applicant has additionally asked that the Board’s bond extension fee be deferred and paid at closing. 

Motion
Buckner Wellford moved for the approval of the PILOT Extension for Mason Village Apartments and Deferral of the Board’s $5,000.00 Extension Fee to allow it to be paid at Closing. Carolyn Head seconded and the motion passed unanimously. 


New Business

Personnel Committee Report
Staff and those present other than Board members left the meeting room.

Monice Hagler, Chair of the Personnel Committee brought the Board up to date on the status of the ongoing search for an Executive Director for the Board, including information provided by the executive search firm that had been retained by the Board in 2016. Thereafter, the tenure of Martin Edwards, as Interim Executive Director, was discussed, including as assessment of his performance since his hire. After a full and complete discussion of the foregoing, on motion made by Monice Hagler and properly seconded by Carolyn Head, it was resolved that the title “Interim” for Martin Edwards be removed and he be elected as the fulltime Executive Director for a term of one year, with extensions to be mutually agreed thereafter. Said motion passed unanimously.

Thereupon the Board was advised of the need to hire another clerical person due to the pregnancy of Lauren Magallanes and her notice of separation from employment. As the Board’s current organizational structure allowed such a hiring, it was determined that Martin Edwards would pursue such action as a part of his day to day operations.

Finally, the Board discussed a one-time payment for extraordinary services performed by Lauren Magallanes provided during a ten (10) month period of 2016. Further, as a retention of employment incentive during such period, Lauren had been promised a merit increase at the time Board operations stabilized. After a full and complete discussion of the foregoing, on motion made by Monice Hagler and properly seconded by Curtis Thomas, it was resolved that Lauren Magallanes be granted a one-time additional compensation payment at the rate of $500 per month for a period of ten (10) months; and said compensation shall be funded in a lump sum, payable immediately, with all standard payroll withholdings. 


Staff re-entered the meeting room.


There being no further business, the meeting was adjourned by the Chair at 1:15 p.m.