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


Wednesday, July 13, 2016

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, July 13, 2016.  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:
                        
        Lee Patton                      Carolyn Head
        Monice Hagler              Buckner Wellford
        Daniel Reid                     Curtis Thomas
        Nancy Willis                   Paige Walkup
                            
    The following Director was absent:

        Carolyn Goodwin-Willett                
    
    Also present were:

Staff members Martin Edwards and Lauren Magallanes were in attendance. Charles Carpenter, General Counsel and legal intern, Corbin Carpenter were in attendance. Also present was Sheila Jordan-Cunningham of the Blight Authority of Memphis.   

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


Approval of Minutes
Paige Walkup moved for approval of the Minutes for June 8, 2016. Nancy Willis seconded and the motion passed unanimously. 


Finance Committee Report
Lee Patton reported on the Financial Statements for the period ending May 31, 2016. He provided summaries of the income statement and balance sheet for the period and year to date. Buckner Wellford inquired as to the specifics of PILOT -Other fees, to which Patton responded a variety of PILOT fees are grouped together. Charles Carpenter and Patton suggested sub-accounts be added to future financial statements to further breakdown the explanation of fees. 

Motion
Curtis Thomas moved for acceptance of the Finance Committee Report for May 2016. Paige Walkup seconded and the motion passed unanimously.

Monice Hagler entered the meeting.

Attorney’s Report
Charles Carpenter reported one new claim for Tanglewood Apartments involving a death from a fire on the property, which is a participant in the Board’s PILOT Program. Carpenter has advised the tenant’s legal counsel of the HEHF Board’s statutory immunity status under Tennessee law from any legal or financial liability to the Board while it is serving its public function as a nominee title holder for the PILOT property. Based on the preliminary discussions with the tenant’s counsel, Carpenter does not anticipate a lawsuit to be filed against the Board. Martin Edwards added there was a request to refrain from tampering with the referenced site, to which Carpenter added the tenant’s legal counsel has been informed of the management’s contact information for further handling. 

Carpenter reported financial restructuring of the Memphis Towers bond, as it is undergoing defeasance. Carpenter added that as the bond issuer, some paperwork is required in the acknowledgement of the process.  Carpenter reported work has been completed with the auditors as it relates to the 990 tax return and has provided them with all bond information requested. 

Carpenter reported his anticipation of a bond application to come before the Board as early as the next scheduled meeting from CME Church, for a property located in Union City, TN known as East Gate Village Apartments. 

Carpenter reported other routine matters, including a refinancing for Pinebrook Pointe Apartments. Carpenter reported the lender has given us proper notification and information for our records regarding this transaction. 

Buckner Wellford raised a question as to the Board’s involvement in the issuance of bonds outside Memphis City limits, to which Carpenter responded that several jurisdictions throughout Tennessee do not have Health, Educational and Housing Facility Boards and also added that CME headquarters are based in Memphis and have used the Memphis Health, Ed. Board for previous transactions. Carpenter disclosed CME Church is a current client of his and has served as both bond counsel and issuer counsel for previous transactions with the Board. Daniel Reid added there has been a previous occasion of a bond issuance by the Board in Union City, TN, although it has been some years past. Wellford raised the question of the Board’s influence over impacting a tax base outside City limits and added his thoughts are with the Board’s core mission to the City of Memphis. Paige Walkup added the bonds are chartered by the State, withdrawing the involvement of the tax base concerns. Wellford prompted discussion over the impact of another quasi-governmental revenue bond issuer being the Center City Commission, and the broadening of its reach in the issuance of bonds for multifamily housing to which Lee Patton added much of the focus for the Center City Commission is market rate developments, whereas HEHFB bond issuance is reserved for rent restricted developments. Carpenter also added that competition is possible, but not probable for future developments. Wellford stated a better understanding of Center City Commission’s long term mission and objective might be helpful in trying to determine various roles and how we might be overlapping. Paige Walkup added that in talking with Center City’s executive director, their expansion has specific projects in mind, including involvement with St. Jude Hospital. Charles Carpenter stated he would confer with the Center City Commission’s legal counsel, James McLaren, for clarification on those points. 

Action Items


CONSIDERATION OF BLIGHT AUTHORITY OF MEMPHIS REQUEST OF FUNDS
Martin Edwards introduced Sheila Jordan-Cunningham, executive director of the Blight Authority of Memphis. Jordan-Cunningham presented an overview of the scope of blight in Memphis, and detailed the Blight Authority of Memphis, or BAM, mission statement to convert vacant, abandoned, foreclosed or tax delinquent properties into productive use, to reduce blight, to increase property values, and to improve the quality of life in Memphis neighborhoods. Jordan-Cunningham also presented a partnership proposal, and added the similarities between the HEHFB mission statement and focus with that of the BAM mission statement and focus, as well as how both Boards share similar State and City authorizations. Jordan-Cunningham proposed a partnership to identify a list of top ten blighted multifamily complexes and work to demolish at least one of these properties with the goal to redevelop the site for multifamily use. Jordan-Cunningham presented detailed case examples of properties to consider for demolition. Lee Patton asked to how BAM came to request $200,000 for the grant, to which Jordan-Cunningham responded the amount was not quoted by any one specific demolition team, but that the City had quality equipment and experience to demolish complexes cost effectively. Patton added it is difficult to outline exactly what demolition for various complexes might cost, as various factors such as asbestos removal would impact the cost. Nancy Willis asked to the current situation of BAM funding, to which Jordan-Cunningham responded the Community Development Council has contributed some funds, with the executive director salary being paid through a grant from Neighborhood Preservation Inc. Jordan-Cunningham also added that through asking for grants from various entities, it was a quicker startup than asking for City funds. Paige Walkup asked to what plan might be in place for targeting funding sources, to which Jordan-Cunningham responded receiving a grant from HEHFB would be the first step in approaching other possible sources of funds. Curtis Thomas asked if an incentive package might be created and presented to a prospective developer for targeted sites, to tie closer in with the HEHFB mission statement. The Board responded positively to this suggestion. Jordan-Cunningham welcomed any suggestion from the Board that would fit into a partnership as it relates to use of funds and use of target sites for demolition and redevelopment. Paige Walkup and others suggested partnership parameters be discussed and firmly implemented as this funds grant would be a first of its kind the Board might award.  Daniel Reid concluded that there is interest from the HEHF Board for involvement, but still need a more clearly defined structure in place and details on what next steps would be in order to move forward. Reid asked the Board to consider sub-committee members who might work in helping add a strategic plan for a possible partnership.

Sheila Jordan-Cunningham left the meeting

After further discussion regarding the structural planning of a partnership and sources of funding difficulties therein, the Board expressed support for involvement but also expressed the need for more structure and parameters for a plan to be in place before moving forward for approval with support from the Mayor’s office. 


CONSIDERATION OF AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR GLENDALE PARK APARTMENTS
Curtis Thomas, PILOT Committee chair, reported the PILOT committee met and recommended approval contingent on staff’s approval of further information to be provided, including more information on the developer’s senior housing experience as well as the management group’s experience. 

Motion
Curtis Thomas moved for acceptance of the Affordable Multifamily PILOT Application for Glendale Park Apartments, contingent on staff approval of additional requested information. Monice Hagler seconded and the motion passed unanimously. 

 

CONSIDERATION OF AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR THOMPSON COURT
Curtis Thomas reported lengthy committee discussions regarding this consideration and recommended the application be tabled until staff could gather more information on requested items. Martin Edwards added the developer has done well renovations with a related property in Memphis.


Monice Hagler and Lee Patton recused themselves from Uptown Village and Mason Village consideration, due to the involvement of their firms in each project, and both left the meeting room prior to the discussion and deliberation of the projects. 

CONSIDERATION OF AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR UPTOWN VILLAGE APARTMENTS
Curtis Thomas reported the committee recommended approval pending the project’s approval from the Board of Adjustments with subsequent approval by City Council. Carolyn Head raised a question to the details of disclosure for members of the Board shown as recused as well as how details are disclosed to the HEHFB auditors, specifically as it related to IRS Form 990. Curtis Thomas added the details of the relationship are disclosed within the PILOT applications and are often discussed in both committee and board meetings. Charles Carpenter added that under Tennessee’s conflict of interest laws, project associated members are required to disclose openly and publically their related involvement and recuse themselves from consideration and motions. Carpenter also stated HEHF Board members also leave the room during deliberation and motion and is reflected in the meeting minutes. Carpenter stated City Council also reviews and signs an annual conflict of interest statement, detailing related disclosures. Carpenter stated he would review the specific requirements for IRS Form 990 and also reported no issues have arisen with past audit proceedings including Form 990. 

Motion
Curtis Thomas moved for acceptance of the Affordable Multifamily PILOT Application for Uptown Village Apartments, pending Board of Adjustments and subsequent City Council approval. Nancy Willis seconded and the motion passed unanimously.


CONSIDERATION OF PILOT APPLICATION FOR MASON VILLAGE APARTMENTS
Curtis Thomas detailed location and funding sources of this new construction project in the downtown Memphis area and recommended approval. 

Motion
Curtis Thomas moved for acceptance of the Affordable Multifamily PILOT Application for Mason Village Apartments. Paige Walkup seconded and the motion passed unanimously.

Monice Hagler and Lee Patton re-entered the meeting.


New Business

Committee Appointments – As Chairman, Daniel Reid appointed Carolyn Head to serve on the finance committee and Buckner Wellford to serve on the PILOT compliance committee. Reid also stated the need to establish a sub-committee to review the proposed involvement with BAM and asked for volunteers to serve. Also, Reid added encouragement for the new board members to review various other committees and report if there is interest to serve therein. 

There being no further business, the meeting was adjourned by the Chair at 1:26 p.m.