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

Wednesday, July 12, 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, July 12, 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
        Carolyn Head                                     James Maclin

         The following Directors were absent: 
        
        Buckner Wellford                             Ashley Foxx
        Nancy Willis                             
        
                                     
    Also present were:

Staff members Martin Edwards, Jr. and Amber Hayes were in attendance. Charles E. Carpenter, General Counsel, and Corbin I. Carpenter were also in attendance. Cheryl Hearn, Assistant City Attorney, was present as well. 

With a quorum present, the regular meeting of the Board was called to order at 12:00 Noon by the Chairman, Daniel T. Reid. 

Approval of Minutes
Monice Hagler moved for approval of the Minutes of June 14, 2017.  Carolyn Head seconded and the motion passed unanimously. 

Daniel T. Reid introduced new Board member James Maclin. 

Finance Committee Report

Carolyn Head reviewed the financial report for the month ending May 31, 2017.  

James Jalenak moved for acceptance of the Finance Committee Report for May 31, 2017.  Monice Hagler seconded and the motion passed unanimously. 

Attorney’s Report

Charles Carpenter stated there have been two new claims since the previous Board meeting. 

The first claim is regarding Wesley Housing Corporation PILOT property Wesley Highland Manor. The claim was filed by the Tennessee Human Rights Commission (THRC) on behalf of Clementine Collier, a property resident. Wesley Highland Manor is a senior housing facility. Ms. Collier claims to have reported items that needed to be repaired in her unit, and alleges Wesley Housing Corporation neglected and refused to complete the repairs – one of which was faulty flooring in the kitchen area that resulted in Ms. Collier sustaining injuries via a trip and fall. Afterwards, the flooring was repaired. The claim is currently being mediated through the THRC.  Ms. Collier’s injury wasn’t serious and she still resides at the property. Carpenter will continue to monitor the situation and the Board will be updated regarding the progress. As a side note, Wesley Housing Corporation has received claims from the Tennessee Human Rights Commission in the past; however, all claims have been successfully mediated and resolved. 

The second claim is regarding the ALCO Saints Court PILOT property. The Board received notice from Code Enforcement regarding various violations. These violations are the result of a fire that damaged four units. Robert Hyde advised Carpenter that ALCO is working to repair the damaged units and are cooperating with Code Enforcement. Carpenter will report the progress to the Board at the August meeting. 

Updates:

The memorandum of understanding between the Board and the Downtown Memphis Commission (DMC) regarding the Central Business Improvement District (CBID) taxes to Board PILOT properties located in the CBID has not been approved yet due to DMC scheduling. Carpenter does not believe there is any issue with the memorandum of understanding being approved but the DMC has not scheduled the matter for a vote.  The matter should be listed on the DMC Board agenda for approval at its next meeting. 

Carpenter met with Mollie Beard from Memphis Land Bank (MLB) and its legal counsel Marty Regan. Carpenter explained to MLB that the Board cannot simply rescind the PILOT agreements as if they never happened. Regan said he now understands the real issues at hand. Regan stated he will take over researching the options for rescinding the PILOT agreements as if they never happened and will contact the appropriate City officials to find out how to proceed. Carpenter will report back to the Board if we need to do anything further as this is primarily an MLB issue. 

Carpenter reported to the Board that TEFRA hearings for Keystone Landing and Pendleton Place were successfully conducted on June 29, 2017.

Finally, Carpenter stated he is currently in the process of working with the owners and HUD to close the new PILOT for Eastern Creek Apartments.  

Action Items:

CONSIDERATION OF MASON VILLAGE AMENDED BOND INDUCEMENT RESOLUTION

Monice Hagler is recused.

Carpenter gave a brief update on the status of the Mason Village bond transaction and reported that Mason Village requests an amendment to its bond inducement resolution to increase the not to exceed amount from $5 million to $6 million. Carpenter reminded the Board that the property has also been approved for a Memphis Housing Authority PILOT. As background, the Board was advised that the project is a joint venture with the Church of God in Christ (COGIC) and is new construction of 77 units on COGIC property located at the intersection of Fourth and E.H. Crump Blvd. THDA has granted volume cap and tax credit allocations for the project. However, after the final construction numbers came back, the numbers were higher than anticipated causing the project not to meet the Internal Revenue Code (IRS) 50% tax test. To cure the deficiency, the tax-exempt bond amount needs to be increased and the applicant is seeking an amended inducement resolution at this time. It was further explained that Mason Village had a hard closing for July 20 based THDA’s timetable; however, the bond financing team, along with Martin Edwards, Jr., worked with Ralph Perrey at THDA to extend the closing date to the end of August 2017, thereby allowing the amended bond inducement and required TEFRA hearing to be conducted. THDA has been very cooperative and will formalize the agreement at its board meeting on July 25, 2017.  Carpenter indicated that the Developer will present the final bond resolution for Mason Village at the August 2017 Board meeting.  

Carolyn Head moved for the approval of the MASON VILLAGE AMENDED BOND INDUCEMENT RESOLUTION. James Maclin seconded and the motion passed unanimously. 

PILOT REPORT & EXECUTIVE DIRECTOR REPORT

Martin Edwards, Jr. discussed and answered questions regarding the following matters:

Macon Manor
As discussed in the June Board meeting, corrections were expected to be made by the end of June including closing an alley and repaving. Ledford re-inspected the property, as well as, Martin Edwards, Jr. inspected the property and took pictures. Paving has been completed and looks good; however, the property still has some issues, but they are in the process of cleaning up the premises and it is anticipated that all deficiencies will be cured soon. Edwards stated that the property will be taken off the Watch List.

Eastwood Park
As discussed in the June Board meeting, this complex had a fire in December 2016 that destroyed 12 units. The owner has sought permission from the Board to modify its tenant benefit plan by demolishing the 12 fire units and not rebuilding. It has been determined that there is no lender on the property to direct the use of insurance proceeds and the Lessee is awaiting Board approval to proceed. Per consideration of the PILOT Committee, it is recommended to the Board that the approval of the Lessee’s request be granted.  Monice Hagler asked if there are specific tenant benefits they will use the funds toward. Edwards responded that the property came into the program before specific tenant benefits were requested. Dr. Manoj Jain wanted to know the time line. Edwards stated six months and everyone agreed that is too long. Edwards stated we will cut that back to three months. If approved, Carpenter will be directed to draft a letter to the Lessee’s approving the demolish with the conditions that the insurance proceeds will be used for rehabilitation of remaining units and approved tenant benefits. 

Monice Hagler moved for the approval of the EASTWOOD PARK PILOT DEMOLITION PLAN. James Jalenak seconded and the motion passed unanimously. 

New Horizon
This property has had more violent criminal issues. We will continue to request police reports and stay abreast of the matter. 

Graceland Farms
The property owner has not cured all of the deficiencies they said they would complete. The Board will send them a new letter requesting outstanding items to be cured. This will not be a default letter. 

Bent Tree
The night before the Board meeting, Bent Tree responded via Chris Lamberson they will start construction on the fire damaged units at the end of July. Daniel T. Reid and Martin Edwards, Jr. will have an in-person meeting with Rev. Richard Hamlet and Chris Lamberson. Reid commented this property has come a long way since it was purchased by GMF. It is currently 70% occupied. 

Highland Creek
As discussed in the June Board meeting, this property has occupancy issues as it is approximately 7% occupied. The property has been in the PILOT program since November 2012. The owner is based in Las Vegas and has continued to self-fund rehab of the property since 2012. There is no lender or bonds involved. The owner stated he was still waiting on 9% tax credits to be awarded, which is causing the construction delays. There are currently 29 occupied units out of 446 units. Martin had requested an in-person meeting with Barry Cohen (the owner) who did not attend the meeting. However, at the appointed time, Martin Edwards, Jr., David and Dub with Ledford did meet with the project manager for Highland Creek and the project manager contacted Cohen via cell phone for a conference call. Edwards voiced his displeasure to Cohen for not attending the meeting and requested he attend any future meetings in-person. Edwards and the other attendees spent two hours touring the property. Cohen has suggested he might refinance.  Edwards reminded him that would have to come before the Board. Dr. Manoj Jain asked if there was timeline for construction completion and lease-up when the PILOT agreement was signed. Edwards replied in the PILOT application it stated the lease up date was December 1, 2015. Monice Hagler stated we need to send a notice of default. Edwards reiterated that it’s unfortunate because the property is beautiful and the work that has been completed is impressive. Many units cannot be accessed because there are no sidewalks or driveways. Hagler stressed the importance of sending a default letter and not negotiating with the owner anymore. Dr. Jain wanted to know why it took so long to discover the low occupancy issue. Hagler and Charles Carpenter stated that the Board’s compliance policies have been improved. 

HEHF “Autopsy” Numbers
There are no new numbers to report this month. Amber Hayes will have the 2nd Quarter 2017 occupancy numbers and average tenant income for the next meeting. 

New Business
None

There being no public comment, it was announced that the next scheduled meeting of the Board will be Wednesday, August 9, 2017 @ Noon. There being no further business, the meeting was adjourned by the Chair at 12:53 p.m.