MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Wednesday, June 28, 2023
The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee (the “Board”) was held pursuant to public notice published in The Daily News on Wednesday, June 21, 2023, and posted on the Board’s website at: www.memphishehf.com. The published meeting time was 12:00 Noon. The meeting was held in the conference room in the offices of the Board, located at 65 Union Avenue, Suite 1120, Memphis, TN 38103.
The following Directors were present:
Daniel T. Reid, Chairman Monice Hagler, Secretary (Zoom)
James Jalenak (Zoom) Buckner Wellford (Zoom)
Cliff Henderson Katie Shotts (Zoom)
The following Directors were absent:
Dr. Manoj Jain
Staff and others attending: Martin Edwards, Jr. (Zoom), Stephanie Bryant, Bryce Miller (Zoom) and JP Townsend; Charles E. Carpenter and Corbin I. Carpenter, General Counsel; Lavanda Mayfield (Zoom), legal assistant to General Counsel; Cheryl Hearn, Deputy City Attorney accompanied by intern Deja Hughes, a third-year law student at Southern University in Louisiana.
Also participating via remote Zoom virtual platform and/or in person were Alex Ulhmann of the Memphis Tenants Union; Becky Scott, a resident of Memphis Towers; Renee Weiss, Stephanie Sinito, and Tom Mignogna of Millennia Housing Development, Ltd representing Memphis Towers, Cavelier Courts Apartments, and Gospel Gardens Apartments; Dexter Washington and Deborah Payne of The Memphis Housing Authority, Inc. (MHA) representing MH Strategies I, LP and MH Strategies II, LP; Carl Mabry representing Gardens of Forest Hill Irene; Archie Willis representing South City VI; Sheldon Liebb, David Shores of Multi-South Management Services, Mark Jobe of Glankler Brown, PLLC, and Hillel M. Kurzmann of Kurzmann Law representing The Boulevard Apartments; Phil Balderston, Rachel Stenger-Wiley, Brett Goldenhorn, Stephanie Reed, and Pauline Olden of Odin Properties and David Upton representing Creekside Meadows (Bent Tree) and Mill Creek Apartments; Brigid Welsh, staff attorney for the University of Memphis Neighborhood Preservation Clinic; Sheila Jordan Cunningham; and several members of the public were also present.
With a quorum present, the regular meeting of the Board was called to order at 12:00 Noon by Daniel T. Reid, Chairman.
Chairman Reid stated that in compliance with the Open Meetings Law codified in Section 8-44-101 to 8-44-108 inclusive of the Tennessee Code Annotated, as amended, The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee is holding its regular meeting on Wednesday, June 28, 2023 @ Noon as an open public meeting in its conference room located at 65 Union Avenue, Suite 1120, Memphis, Tennessee 38103.
Chairman Reid stated supplemental Board meeting materials could be accessed on the Board’s website: www.memphishehf.com and reminded all attendees participating via remote access to enter their name and affiliated entities into the Zoom platform for record keeping purposes.
Approval of Minutes
Cliff Henderson moved for approval of the Minutes of the June 7, 2023 Regular Meeting, which was seconded by James Jalenak, and the motion passed unanimously after proper roll call vote of the Board members.
Finance Committee Report
Cliff Henderson presented the financial results for the month ended May 31, 2023. After discussion,
Buckner Wellford moved for acceptance of the Finance Committee Report for the month ended May 31, 2023, properly seconded by Katie Shotts, and the motion passed unanimously after a proper roll call vote of the Board members.
Attorney’s Report
Charles Carpenter presented the legal report, as follows:
1. Carpenter reported that his firm has been served, due its capacity as registered agent for the Board, with a complaint from the Tennessee Human Rights Commission alleging a legal claim of discrimination based on race and gender in connection with one of the tenants residing at the Tanglewood Apartments. The tenant filed this complaint alleging that she had contacted the property management staff at Tanglewood Apartments for a service request and that the service request was unreasonably delayed. Carpenter stated that the individual is a black female. The complaint states that the tenant went to check on the service request at the Tanglewood Apartments on-sight property management office and discovered there was a white male tenant who had come in for a similar request and his request was addressed promptly whereas hers was not, therefore she filed the complaint, which is currently being investigated by the Tennessee Human Right Commission. Carpenter advised that his firm has made an initial response to the complaint and the applicable law firm and the attorney for Tanglewood Apartments has acknowledged this action and indicated that their firm is conducting their internal investigation on the claim. Carpenter will continue to monitor and keep the Board advised.
2. Carpenter reported that his office has also received a notice of lien for materials for repairs made at the PILOT property, Hillcrest Apartments. Carpenter stated that the lien is for approximately $4000, and reminded the Board, as stated in previous meetings, it seems to be a pattern now that suppliers that are not paid within a thirty (30) day period will immediately file a lien. Carpenter stated that his firm is reviewing the matter and will make sure the rights of the Board are protected and that if this is a legitimate lien, it is satisfied promptly.
3. Carpenter reported PILOT property activities for the month of June 2023, to wit:
a. Scenic Hills PILOT refinancing closed.
b. Watkins Manor PILOT Refinancing closed.
4. Carpenter reported that Tennessee Housing Development Agency (THDA) has announced the awardees of the Round One Low Income Housing Tax Credit (LIHTC) program. Carpenter stated that the Board has four (4) different applicants that were being considered for approval by THDA:
a. Greenbriar Apartments was approved without conditions and is scheduled to close on or before October 12, 2023. The developer for this project is Alco Properties.
b. Edgeview at Legends Park was approved with conditions. This is a public private partnership with the Memphis Housing Authority (MHA) and Pennrose Management Company.
c. Gardens of Forest Hill Irene was not approved by THDA due to certain issues with their pro-forma and cash flow analysis, projections and as further described below. If the development team can make the requisite changes to their application and associated materials, then their development group will be able to apply for THDA’s Round Two of allocation (assuming TDHA has one).
d. The Memphian was approved with conditions. The developer for this project is Millennia Housing.
Carpenter stated that the two (2) applications approved with conditions were each had sought a waiver of certain cost considerations and it exceeded the program and Housing and Urban Development (HUD) limitations. If those conditions are met, each project will receive full approval, if not, they would not be approved. The applicants have until July 21, 2023, to negotiate with THDA. Carpenter stated that he will provide a further report at the Board’s August 2, 2023, Board meeting. Carpenter stated that Gardens of Forest Hill Irene project was not approved, but THDA does anticipate a second round and this property would be eligible to reapply for Round Two. Carpenter reserved further comments on Gardens of Forest Hill Irene for Action Items.
5. Carpenter turned the meeting over to his partner, Corbin Carpenter, for comments on ongoing discussions with the Environmental Court and Code Enforcement. Corbin Carpenter advised the Board that his office, Attorney Brigid Welsh, Code Enforcement staff and Board staff had a brief meeting on June 27, 2023, to create a more comprehensive pipeline of communication through Carpenter Law and Board staff with Environmental Court and the City Attorney’s Office. Corbin Carpenter stated that there are currently around fifteen (15) PILOT properties in Environmental Court and his firm would like to streamline communications to ensure that what is being disclosed in Environmental Court is accurate from the Board’s standpoint and accurate from Code Enforcement. Corbin Carpenter advised that all parties will be working together in the coming weeks to see how best to streamline those communications moving forward.
Carpenter thanked Corbin Carpenter for the update and stated in addition to that, his firm and Board staff have been looking at safety for all the PILOT properties and have been engaged in ongoing discussions with the Memphis City Council, Safeways as well as with the different matrix and access to information that the City of Memphis has through their Code Enforcement Office in an effort to make this more comprehensive and more timely for all of the parties that provide the oversight and protection for the community.
6. Finally, for informational purposes, Carpenter stated that his firm has been working with the independent auditors of the Board to complete the audit for the period ending December 31, 2022. Carpenter stated that this has gone well and should be presented at the Board’s August 2, 2023, Board meeting for the Board’s consideration.
Dan Reid stated that he would like more information on the around fifteen (15) properties that are currently in the Environmental Court. Corbin Carpenter stated that his firm will get that information to the Board, which will include the status of why each property is in Environmental Court and upcoming court dates. Corbin Carpenter stated that his firm has been monitoring that for the previous months. Carpenter stated that one of the challenges is that due to the disconnect with the various entities, the Board and legal counsel would not even know that a PILOT property was in Environmental Court and there would be a period of time before the Board or legal counsel was notified. The approach being taken now would eliminate that delay and would be more efficient for the Environmental Court Judge, Code Enforcement, and for the prosecuting officers at the City and County that go forward to enforce these processes.
There being no further questions or comments, the Legal Report was concluded.
Public Comment
Chairman Daniel Reid advised that there were two (2) attendees that have requested to address the Board prior to Action Items being considered for approval. Chairman Reid opened the meeting for public comment. Alex Uhlmann and Becky Scott were invited to speak at this time. Ulhmann introduced himself as an organizer that works for the Memphis Tenants Union, that Memphis Towers is one of the properties they focus on assisting tenants with the rights and stated that he would like to make sure the Board is aware of some of the management practices that he has experienced while his group has been organizing there for better living conditions. Ulhmann stated that he is aware that security is a priority for the Board and that his group delivered a demand letter to Memphis Towers based on responses to a survey his group issued to tenants at Memphis Towers around security measures. Ulhmann stated that those demands included key cards for access to the building, that the building front doors are locked and that there is a person at the front desk 24 hours and that medical pull cords in apartment units actually work. Ulhmann stated that the demand letter was responded to by management with retaliation. Ulhmann stated that he and his colleague were forced off the property by an armed security guard, and a couple of weeks later, he was physically detained by another armed security guard. Ulhmann stated that organizers like himself are entitled to be on the property because it is Section 8 property and that is specifically in the federal code of regulations, and he was legally entitled to be there. Ulhmann stated that he was not only kicked off the property but was put in handcuffs for forty (40) minutes. Ulhmann stated that he was able to talk to District Attorney Steve Mulroy, who issued a letter to Memphis Towers confirming his right to be there as an organizer. Ulhmann stated that he has had no further issues since then at the property, but in terms of just being on the property, Ulhmann stated that he thinks this speaks to Millennia’s management practices where they are not interested in tenants’ feedback and working with tenants to make the building a more secure place, but are instead more interested in tamping down organizing efforts and going so far as to violate the law. Ulhmann stated that there are a number of other issues he can get into, but he wanted to make sure that the Board was aware of these issues and Millennia to account as they are receiving millions of dollars in tax subsidies and that should come with an extra level of standards that Millennia is not upholding. Ulhmann stated that he is unsure how the public comment portion of the Board meeting works, but he would like to know if the Board is aware of the previous times Millennia Housing, and specifically Memphis Towers has been on the news for the egregiousness of their actions. Ulhmann stated that there have also been false violations filed on tenants that are part of the organizing efforts and notices to vacate that were not in tenants legal right to have a 30-day notice. Ulhmann stated that he thinks it is incumbent upon the Board to hold Millennia accountable for such egregious actions that are against the public good because this Board uses public tax dollars, and with that Ulhmann concluded his statement. Charles Carpenter introduced himself to Ulhmann as legal counsel to the Board and asked Ulhmann to give the Board some perspective on who he represents, as he mentioned he is not a tenant at Memphis Towers, but an independent tenant activist group. Carpenter further clarified his request for Ulhmann to tell the Board more about who he represents and what the group is. Ulhmann stated that he is part of an organization called the Memphis Tenants Union and this group helps tenants at a number of properties throughout Memphis organize for better living conditions. Ulhmann stated that this group has been working at Memphis Towers for two (2) years and the organization is sponsored through the Black Clergy Collaborative. Carpenter thanked Ulhmann for his comments and asked if Becky Scott had any public comment at this time.
Becky Scott introduced herself as a tenant at Memphis Towers and part of the Memphis Tenants Union. Scott stated that there are security issues that the group has tried to address through the demand campaign at Memphis Towers and referenced 24-hour security and key card access to make tenants feel safe in their homes, which they do not. Scott stated that she has personally been sexually harassed many times by people who do not have authorization to be in the building. Scott stated that others have been robbed, sexually assaulted, and many thefts and acts of vandalism have taken place. Scott stated that when tenants with the Memphis Tenants Union demanded their rights to basic human safety and decency, they were viciously retaliated against. Scott stated she is one of the ones who was issued a fabricated lease violation, and many of her colleagues were issued baseless and illegal evictions and have been subjected to vicious verbal abuse. Scott stated that after every meeting lately, security has harassed the people from the Memphis Tenants Union for no reason and have spoken very disrespectfully to them and made very inappropriate comments. Scott stated that other people have been given false charges on their accounts for charges they do not owe. Scott stated that tenants are being subjected to mold, bed bugs, rats, roaches, mites, possums, and all manner of pests with no action thus far from management. Scott stated there has been no sort of extermination service on the property in approximately six (6) months and the pests are rampant in the building. Scott stated that she does not feel safe in her own home, she feels targeted, and like basic minimum standards of health and safety and human decency and dignity and respect are not being met. Scott stated that this is an issue across the country and part of the National Millennia Resistance Campaign, and that Millennia does this at all their properties. Scott stated that she would like to submit for the Board’s consideration that the funding that Millennia gets, and all the grands and tax breaks Millennia receives incentivize Millennia to commit these atrocities against vulnerable marginalized people and that should be considered by the Board when considering these incentives for Millennia. Scott stated that the Board is incentivizing abuse and neglect and mistreatment of older adults and disabled people. Chairman Daniel Reid thanked Scott for her comments. There were no further questions or comments.
Action Items-
1. Status Update on Memphis Towers PILOT property (Deferred from June 7, 2023 Board Meeting)
Carpenter introduced this agenda item stating that action items one, two and three are the same developer, Millennia Housing Development, and based on Board policy, if a developer has a property on the watchlist or in default, it is not eligible to receive consideration on other items in the portfolio without the consent of the Board. Carpenter reminded the Board of discussion from the June 7, 2023, Board meeting that the Board’s internal and external monitors visited the property, and there was interaction between the Board’s monitors and Millennia’s management regarding Memphis Towers. Carpenter turned the meeting over to Millennia’s representatives for further comment. Renee Weiss introduced herself (as Millenia’s general legal counsel), Stephanie Sinito, and Tom Mignogna, all in attendance for these three (3) agenda items with Millennia Housing. Weiss advised that there was a meeting at Memphis Towers with the Millennia Housing construction team and Bryce Miller, the Board’s Compliance Coordinator, to discuss security issues and additional external cameras, which have been installed. Weiss advised that Millennia is currently waiting for the router so that the cameras will be functioning soon. Carpenter asked to hear from the Millennia team as to the steps it has taken to move forward. Weiss stated that security is still at the property and there is someone at the front desk at all times and that person is supposed to be signing people in. Weiss stated that Millennia has responded to any complaint received promptly and no complaints have been received since the Board’s June 7, 2023, Board meeting. Weiss stated that construction at Memphis Towers continues and turned the meeting over to Tom Mignogna for further comment on construction. Mignogna stated that on the construction side, Millennia has been endeavoring to complete the physical transformation of this project, further stating that the property was in really poor condition when construction started in December 2020, amid COVID-19. Mignogna stated that Tower C has been completed, Tower A has been completed, and Tower B is under construction with upgrading all life safety issues with the fire safety as well as the pull cords. Mignogna explained that Millennia is working to overcome some vandalism issues, stating that just a few weeks ago, someone jammed a screwdriver into the fire safety panel because it was beeping due to residents removing their smoke alarms and smoke detectors. Mignogna stated that Millennia is working with operations to address those daily operational issues with residents and trying to do so in a sensitive but informative manner, and Tower B is expected to be completed with the rehabilitation in mid-August 2023 and then common area restoration shortly thereafter with everything substantially complete in September 2023. Mignogna stated that Millennia feels that stabilizing the property goes from the physical to the social and Millennia has been endeavoring to work with the residents and the population to appreciate their homes, appreciate the property, and do so in a manner that is not too heavy-handed. Mignogna stated that Millennia is working with the property management team, replacing leadership on site as needed, to find the right mix of leadership with the property manager who can relate and assist the residents while enforcing the rules of the property to stop the vandalism and stop the violence.
Carpenter stated that a lot of claims have been made earlier in today’s meeting during Public Comment and asked Bryce Miller to comment on his observations of the property since the June 7, 2023, Board meeting. Miller stated he was at the property approximately two (2) weeks ago and met with Arthur from Millennia properties and was shown blueprints of the property showing where cameras are going to be. Miller stated that he was informed that cameras have been installed but are not operational but will be very soon. Miller reported that he was advised that the front door is now being locked for additional hours in response to safety concerns and Millennia has extended the hours of the armed security as well as added personnel to the front desk 24 hours a day. Miller reported that Millennia has stated that they are implementing a new procedure because management has had issues with tenants leaving back doors open to let people in without having to go by the front desk and sign into the property. Miller reported that Millennia stated they will be installing cameras to monitor those doors and tenants that are in violation of the policies and using back doors to permit entry to individuals that have not properly signed in at the front door will be met with a notice for eviction. Miller reported observing several policy violations occur on the property regarding smoking policies on the property and Millennia is very lenient by allowing residents to walk to the edge of the property to smoke as opposed to walking to the smoking section on the back of the property. Miller stated that he has observed a give and take approach from Millennia. Miller reported that Millennia has assured him that cameras will be operational soon and new policies regarding individuals sneaking in the back door should alleviate a lot of the problems. Carpenter asked Miller what has been reported to him regarding timing of the installation of these cameras. Miller reported that he has been told by Millenia that many of the cameras have already been installed, with other existing cameras have been replaced and should be operational by August 2023. Mignogna explained that exterior cameras have been installed and placed around the property. Mignogna stated that the cameras required a router that was delivered to the property and left for the property manager and that router disappeared, so they have another router that has been sent to be installed. Mignogna stated that Millennia continues to move forward to get this done and it is just a matter of dealing with a lot of vandalism and theft that have been referenced and Millennia is experiencing that as well.
Buckner Wellford stated that he was not present for the June 7, 2023, Board meeting when there was a thorough discussion about the status of the property and the condition of the property, and that he has read the minutes form the June 7, 2023, Board meeting for his reference. Wellford stated that there seems to be some sort of dispute between Millennia and the Memphis Tenants Union, and he is not going to take sides on the matter, but a common theme has been the shocking lack of security. Wellford stated that was reflected in the June 7, 2023, Board meeting minutes and he has heard stated in today’s meeting that someone now staffs the front desk 24 hours a day, but that did not sound like it was active security. Wellford stated that Miller’s comments reflect that armed security on site has increased from the previously reported hours of 4:00 pm to 1:00 am, and he would like a more specific update as to how many hours are there active security guards patrolling the property and patrolling the back area to ensure that those doors are not propped open and does that compare to what it was last month. Weiss responded by stating that she nor Mignogna has that information, but that security has increased, and a close working relationship has developed with the Memphis Police Department, and Millennia does have property management team members there and that there have not been, to her knowledge, any significant security issues in the last month, but they can get that confirmed. Miller stated that it was approximately 1:00 pm when he was on the property and there was armed security present.
Carpenter stated that no vote is required on action item one, and if the Board is satisfied that this remedial action is trending in the right direction, then the Board would need to consider action items two and three and a vote would be required as to the extension for the reissuance of the funds for Cavelier Court and Gospel Gardens and both are six (6) month extensions. Carpenter asked Millennia representatives if there is an update on those items as far as for Cavelier Court or Gospel Gardens. Stephanie Sinito stated that Millennia recently received the final RCS rent comp study from the appraiser and it has been resubmitted to HUD for review. Sinito stated that Millennia is expecting approval of the increased rents within the next thirty to forty-five (30-45) days. Sinito stated that the study has also been sent to WNC and Redstone with the hope of starting calls again to discuss closing within the next sixty to ninety (60-90) days. Carpenter reminded the Board that last year, Hope Heights, Cavalier Courts, and Gospel Gardens were approved for reissuance of their bonds. Carpenter stated that Redstone is the purchaser for all three properties, and there have been different requirements that needed to be met to move forward. Carpenter reminded the Board that in December 2022, the Board approved and closed the reissuance of the bonds for Hope Heights and now there have been discussions and reports given by Millennia as to their ability to move forward with the other two reissuances. Carpenter advised the Board that it does not impose any liability or create any issues from the Board’s standpoints and advised the options would be for the Board to approve the closing extensions for the reissuances, which would be for a six (6) month period, or if the Board denied the closing extensions, then the developer would need to come back and reapply once all of their conditions and prerequisites are met. Carpenter stated that under the circumstances, but for the concerns with Memphis Towers, this would be a normal proforma that his firm would recommend approval, and if the Board if approving of the actions of what is taking place with Memphis Towers and is confident of that and would give another date for representatives to come back before the Board and the Board can continue monitoring the property and move forward and approve the closing extensions for a six (6) month period based on the statements the Board has had of record today. James Jalenak asked if there are any maintenance issues or security issues with Cavelier Court and Gospel Gardens at this time. Carpenter stated that to his knowledge and through the normal course of surveillance, nothing has come with these two properties that is out of order. Carpenter advised that there was a media story that covered Memphis Towers and Hope Heights and stated there were some plumbing and elevator issues there, but with the two properties on today’s agenda, they are in compliance.
Jalenak stated that from the discussion of Memphis Towers in today’s meeting, it sounds like there has been some movement to improve the security, but the Board has not received a report concerning the statements made earlier in the meeting regarding pest control, sanitary conditions, and other problems at Memphis Towers. Jalenak stated that there still seems to be a lot of problems at Memphis Towers that have been talked about at today’s meeting that would make the developer unqualified for any benefit or consideration by the Board. Carpenter stated that there is a threshold issue that the Board would need to be comfortable with to move forward. Jalenak stated that the as far as it had been reported to the Board, including from the Board’s internal and external monitors, is that there are a lot of habitation problems at Memphis Towers, in addition to security problems, and the security problems seem to be in the beginnings of being addressed, although not fully addressed. Jalenak stated that reports have stated there is someone at the front desk, but there is no clarity on who it is or what he or she does, and the Board has not received any information regarding issues about pest control, sanitation, and maintenance issues other than negative comments. Carpenter asked if there were any additional questions that he would like to ask the Millennia representatives. Jalenak stated that he would like to hear how they respond to Adam Ulhmann and Becky Scott who talked about the other problems at Memphis Towers in addition to what they have stated they are doing about security, because he has heard no comments from Millennia regarding the additional issues. Weiss stated that she met with Ulhmann approximately two (2) years ago with another resident at the time who threatened to shoot up the property, so he is no longer at the property. Weiss stated that she was at the property about six (6) months ago and she does not believe it is accurate that there is no pest control, and that Millennia was just treating for bed bugs, which is not unusual for a property like this to get bed bugs, that it is a mid-rise property, and Millennia does treat it. Weiss stated that regarding claims of retaliation, Millennia has responded to HUD on those claims and Millennia denies them just simply because a tenant is a member of a tenant's organization and violating a lease term does not mean that it is retaliation. Weiss stated that it was a matter of a congressional inquiry and Millennia responded, and she believes that they have been closed out at this point. Weiss stated that all of the residents are currently living in new units, so she does take issue with statements of mold, bed bugs, possums, etc., but if Millennia is made aware of those issues, they will address them, but she does not believe they exist today. Weiss stated that there has been huge progress at this property and tenants are living in rehabilitated units, so as it was, as new units were ready, residents would move from old units to new rehabilitated units. Mignogna stated that Tower C and Tower A have been completely updated through a gut rehabilitation with systems being completely repaired and replaced. Mignogna stated that the property has gone through several inspections with bank lenders and inspectors, as well as HUD inspectors, and all have come back with wonderful reports. Mignogna stated they Millennia is currently working to complete Tower B to get all 296 units completely rehabilitated. Weiss reported that code enforcement has also been to the property inspecting as many units as they could get in to and they found very few issues at the property.
Buckner Wellford asked what is involved in reapplying for bonds, in addition to a fee, and what that would do in terms of timing or other types of administrative action. Carpenter responded that it would be more administrative, there would be a fee payment, and it would take approximately a thirty (30) day period for the Board to go through the administrative process of vetting the new application. Wellford stated that if he were the property manager and owner of that property, and given the June 7, 2023 report, he would have had a more detailed presentation and documentation of efforts to step up the security, documentation of the code enforcement activity there to show that there really was not much to it and he really did not detect a great deal of urgency in the presentation today to respond to those issues. Wellford stated that he is uncomfortable with voting for an extension on Cavelier Court and Gospel Gardens because he is unsure that the Board has much leverage about what happens at Memphis Towers if the Board approves these extensions. Jalenak stated that he agreed with Wellford. Monice Hagler asked if the Board were to grant an extension, does it have to be for a six (6) month period, or could it be a shorter time. Carpenter stated that the normal closing extension term is six (6) months, but certainly the Board has, at its discretion, to approve it for a shorter period, and if the Board takes no action today, then the application ends by its terms at this meeting based on the six (6) month period. There being no further questions or comments,
No action from the Board is required for the Status Update on Memphis Towers PILOT property.
Katie Shotts left the meeting.
2. Status Update on Resolution authorizing the reissuance of Multifamily Housing Revenue Bonds, Series 2018 (Cavelier Courts Apartments) and approval of certain legal documentation required in connection with such reissuance (Deferred from June 7, 2023 Board Meeting)
Cliff Henderson asked if a motion for this agenda item is contingent upon additional actions with Memphis Towers. Carpenter advised that it is assuming the Board is satisfied with Memphis Towers. Henderson stated that he agrees with Buckner Wellford and James Jalenak and that he understands there is construction activity going on and other things, but he does not feel that Millennia has addressed the property management element of this, and he would like to see more detail of what is going on there. Henderson stated that he noticed there was a deferral to the Board’s Compliance Coordinator, Bryce Miller, to give an update and he thinks this is where Wellford commented that there should have been more detail provided proactively from Millennia to address these issues and he does not feel comfortable acting on these agenda items until more details are provided for Memphis Towers. James Jalenak asked if it would be possible to move for a closing extension for one (1) month from this meeting with the idea that the Board receives additional reporting from Miller and others that the problems at Memphis Towers are being addressed correctly. Wellford stated that he thinks the Board is dealing with a problem at one of the properties and the Board’s vote concerns what is going to happen with respect to the other two (2) properties and even though he understands what the intent is here, it sort of mixes these concepts in the Board’s vote, which makes it difficult, and Millennia will scramble and come back with something. Wellford stated he wanted to keep these as separate problems and it is a discretionary decision on the Board’s part as to whether to grant these extensions. Wellford stated that it will cost the applicant additional money and delay things for a short time, but it sends a strong message from the Board that applicants cannot receive a report like this and stating that things have turned around at a property, and the Board expects more detail and more effort from the applicant, owners, and management. Wellford stated that this vote will send the message that the Board is serious about this, and it is also not incumbent upon the Board to try to fix the problems at this stage. Wellford stated it is incumbent upon the applicant to fix the problems and other applicants in similar circumstances that are coming back before the Board with compliance reports will take notice of it. Wellford stated that though he understands the point of view, he still thinks it is the cleaner thing to not approve the extension, and he stated this is being said with no animosity toward Millennia and they seem to be doing a credible job on the other two properties, but this is maybe a little bit bigger issue than just Millennia. Weiss responded to Wellford’s comments stating that what the Board heard today from Mr. Ulhmann and Ms. Scott were two people, who Millennia has tried to work with, and she disagrees that Millennia has not done a lot and Millennia did not scramble earlier in the month and she did send a comprehensive letter to Carpenter about what has been done and what is being done concerning all of Memphis because Millennia does have a lot of investment in Memphis so she disagrees that Millennia is scrambling and doing things at the last minute. Weiss stated that Millennia has worked toward this and continues to work toward this, and the property has come a long way since she has been with the company the past five (5) years. Wellford clarified that comments he has made from the June 7, 2023, Board meeting are based of the meeting minutes which the Board is saying accurately reflected what happened at that meeting and that was an alarming summary of the events that apparently occurred or the description of events at the June 7, 2023 Board meeting and thanked Weiss for her comments. Mr. Ulhmann interrupted the meeting in an effort to comment on the statements made by the Board members and applicant presentations. Carpenter advised Mr. Uhlmann that this is not a public comment period and his comments have been duly noted, but this is not open discussion, but Board deliberations. There being no further questions or comments,
There was no motion to approve the Resolution authorizing the reissuance of Multifamily Housing Revenue Bonds, Series 2018 (Cavelier Courts Apartments) and approval of certain legal documentation required in connection with such reissuance. There being no motion, this action item failed.
3. Status Update on Resolution authorizing the reissuance of Multifamily Housing Revenue Bonds, Series 2018 (Gospel Gardens Apartments) and approval of certain legal documentation required in connection with such reissuance (Deferred from June 7, 2023 Board Meeting)
There being no further questions or comments,
There was no motion to approve the Resolution authorizing the reissuance of Multifamily Housing Revenue Bonds, Series 2018 (Gospel Gardens Apartments) and approval of certain legal documentation required in connection with such reissuance. There being no motion, this action item failed.
4. 7th PILOT Closing Extension for MH Strategies I, LP (Barry and Jefferson Towers)
Charles Carpenter introduced the agenda by stating that action items four and five are the same development team and may be considered together and voted on separately. Carpenter stated that these projects are a joint venture with Memphis Housing Authority (MHA) and the tax exempt bonds for these two properties were closed in December 2022 and since that time, his firm has been working with the teams for each of these two financings for the PILOT and for them to put together the other sources of income through tax credits and it has been going on for a period of time and has become a complex matter, however there have been many efforts made to move forward and progress has been made in that direction. Carpenter turned the meeting over to the MH Strategies representatives for additional comments. Dexter Washington introduced himself, stating that with the first-rate conversion project, Barry and Jefferson Towers project, his team has made significant progress toward closing and they have received a firm commitment from HUD and FHA. Washington stated his team has also received the rent conversion commitment and disposition approval from HUD. Washington explained that with these items in place, he believes the project is within forty-five to sixty (45-60) days to achieve closing. Washington stated on the Borda and Venson project, his team is still working with the FHA office to receive final commitment. Washington advised that FHA put their review on hold due to an environmental issue that was discovered on the Borda site that required a plan to move forward. Since that time, TDEC has issued a comfort letter and the FHA office has resumed their review of the project and the projected closing date for that project of November 2023. Carpenter added that one of the concerns was the actual tax credits and when the various properties would be actually put into use, which is important as to what tax year the credits would be available based on some of the construction of these properties. Carpenter advised that there were some issues with the substantial rehabilitation which would fall into when the properties could be put into use and that has been addressed and his firm has been in discussions with the City and County and his firm has gotten comfortable with that process as well as the construction office that has now agreed that the development team could give a use and occupancy certificate on the floor by floor basis which would facilitate the sale of the tax credits. Carpenter stated that though this is an unprecedented seventh closing extension, his firm is supportive of it and would encourage the Board to look upon this request for each of these developments favorably and each extension would be for a six (6) month period. There were being no further questions or comments,
Cliff Henderson moved to approve the 7th PILOT Closing Extension for MH Strategies I, LP (Barry and Jefferson Towers). James Jalenak seconded, and the motion passed unanimously after proper roll call vote of the Board members.
5. 7th PILOT Closing Extension for MH Strategies II, LP (Borda and Venson Towers)
There being no further questions or comments,
Monice Hagler moved to approve the 7th PILOT Closing Extension for MH Strategies II, LP (Borda and Venson Towers). James Jalenak seconded, and the motion passed unanimously after proper roll call vote of the Board members.
6. 2nd Bond Inducement Resolution Closing Extension for ACH Partners, LLC & Bluff City Community Development Corporation (d/b/a Gardens of Forest Hill Irene)
Carpenter presented this agenda item stating that in the legal report, Carpenter mentioned that in Round One this project was not approved by THDA for the reasons set forth hereinabove; however, in his firm’s discussions with THDA, there will be a Round Two for which this property can reapply if they satisfy the application eligibility criteria. Based on this being the second bond inducement resolution extension, Carpenter stated that his firm is supportive and would encourage the Board to look upon this agenda item favorably. Carpenter invited Carl Mabry, representative in attendance for this project, to provide any additional comment. Mabry stated that his team has scheduled a meeting with THDA to get further clarification as well as guidance on the issues with the projects proforma and his team is asking for the Board to approve this extension, as his team is comfortable about getting approved in the second round. There being no further questions or comments,
James Jalenak moved to approve the 2nd Bond Inducement Resolution Closing Extension for ACH Partners, LLC & Bluff City Community Development Corporation (d/b/a Gardens of Forest Hill Irene). Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
7. MHA Affordable Multifamily PILOT Application for South City VI, LP
Monice Hagler stated to Chairman Reid to let the record reflect she has recused herself from consideration of this agenda item. Carpenter introduced this agenda item as the sixth phase of global approvals that the Board made several years ago for the South City project, and the developers have done a tremendous job of restructuring the whole Foote Homes area. Carpenter introduced Archie Willis in attendance for this agenda item and turned the meeting over to him for further comment. Willis stated that this is the final phase of the South City project, which started in 2015, and by the end of this phase, the development team will have completed seven hundred twelve (712) units of mixed income housing, including one hundred twenty (120) units of senior housing. Willis stated that his team has had its challenges around security, just as everyone has, and there is one section the developer is working with Memphis Police Department to try and clean up some bad elements in the neighborhood, but overall things have gone well. Willis expressed his appreciation to the Board for the ongoing support and commitment in helping to make these projects happen and being pleased with the results and getting closer to the finish line. There being no further questions or comments,
Cliff Henderson moved to approve the MHA Affordable Multifamily PILOT Application for South City VI, LP. James Jalenak seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Monice Hagler was recused from the vote.
8. PILOT Refinancing Application for BLVD Partners, LLC (d/b/a The Boulevard Apartments)
Carpenter presented this agenda item stating that this is a refinancing application, and the developer is not seeking any return of investment on the refinancing. There was a delay in consideration of this application due to some deficiencies at the property and those deficiencies have been addressed. Carpenter turned the meeting over to Bryce Miller, the Board’s Compliance Coordinator, to provide an update on his observations of the property. Miller stated that the deficiencies have been satisfactorily addressed and progress has been made. Miller stated the only ongoing concern is with the erosion issues dealing with the drainage and ownership is addressing those issues and the property looks very well maintained. Carpenter invited Mark Jobe, legal counsel to the applicant, to provide any additional comments. Jobe stated that the owner, Sheldon Liebb is also in attendance on the Zoom platform and available for any questions from the Board, as well as management representatives Alex Shores and David Shores. Jobe stated that this is a refinancing request and is in the ordinary course of business. Jobe stated that the existing bridge financing that was originally approved when the property was acquired is coming to term and expiring at the beginning of August 2023, so this application is before the Board requesting to put more permanent financing or fixed rate financing on the property. This refinancing will support the erosion control project that is ongoing and is very important to the owners, and Jobe stated that property has made significant progress and will continue to do so with a portion of the proceeds of the refinancing and will complete the erosion control project. Jobe stated the property is approximately ninety-one (91%) occupied and is in good condition. Jobe stated that this is a necessary refinance rather than a discretionary refinance because of the terms of the existing loan and will help with continued reinvestment in the property and the delivery of the tenant benefits that have been included and continue to be delivered. Jobe expressed his appreciation for the Board’s consideration and requested approval of this application. There being no further questions or comments,
Monice Hagler moved to approve the PILOT Transfer and PILOT Refinancing Application for Bantam Airways Apartments, LLC. Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Dan Reid asked what the loan to value ratio is on the application, to which Jobe responded he believes it is sixty-five percent (65%) financing. Reid thanked Jobe and the applicant.
PILOT Default Status Updates:
1. Creekside Meadows (Bent Tree)
2. Mill Creek Apartments
Carpenter stated that Creekside Meadows (Bent Tree) and Mill Creek Apartments are the same owner and developer. Carpenter introduced representatives Phil Balderston, David Upton and Rachel Stenger-Wiley who were present in person with Brett Goldenhorn in attendance remotely for these two items. Carpenter advised that the original published Notice of Public Meeting indicated that the Board would be considering a PILOT Refinancing Application for Creekside Meadows (Bent Tree), and after discussions it was determined that the official action would be delayed until the August 2, 2023 Board meeting, and the development team is in attendance to provide an update on the property and to answer any questions the Board may have. Carpenter turned the meeting over to representatives in attendance for further comments.
Upton began by introducing Phil Balderston as the owner of both properties, stating that Balderston is attending today’s meeting in person so that he may speak to the Board directly. Upton stated that after the submittal conference held with Board legal counsel and staff to discuss the Creekside Meadows (Bent Tree) PILOT Refinancing Application, the development team determined it was proper to delay Board consideration of the application. Upton stated that he and the development team are putting together an extensive capital improvement plan and plan to provide the Board with a lot of information and will provide the information in plenty of time to be reviewed in order to ask questions, communicate, and digest it. Upton stated that the development team felt it was in the best interest of the applicant to postpone the PILOT Refinancing Application. Upton stated that the development team would be providing a regular monthly report today, and reports for each property have been submitted to the Board in writing prior to today’s meeting. Upton reported that Creekside Meadows (Bent Tree) provided an extensive list of approximately $63,000 of capital spending, $15,000 in replacement spending, and additional items in the listing to show what money has been spent on in the last month and some of those projects are ongoing. Upton referenced a comment made by Board Member Katie Shotts in the Board’s June 7, 2023, Board meeting regarding concerns that the property is barely livable. Upton stated that comment caused great concern and the development team wanted to provide some additional information to the Board. Representatives passed additional materials to the Board at this time. Upton stated the materials show James Williams of Faith Baptist Church, which occupies approximately seven thousand (7,000) square feet of two large outbuildings on the property. Upton stated that the church has a lot of programs for kids, and it is extensive. Upton stated the additional materials include pictures, and stated the Board would be receiving additional materials prior to the Creekside Meadows (Bent Tree) PILOT Refinancing Application due to be considered by the Board at the August 2, 2023, Board meeting. Upton stated that Mill Creek Apartments has a new partnership with Red Door, which is a charity non-profit organization with youth engagement, and Mill Creek has provided a two-bedroom unit to Red Door as an office. Upton stated that Red Door has a lot of programs and activities this summer and the development team is very excited about it. Upton stated that Odin properties manages over 10,000 units, with 1,500 units in Memphis and these two properties in the Board’s PILOT program represent a little over half of the Odin Properties portfolio and turned the meeting over to Balderston for further comment.
Balderston thanked the Board for his properties’ participation in the PILOT program and for allowing him to speak at today’s meeting. Balderston stated that Upton provided updates at the Board’s June 7, 2023, Board meeting concerning the properties being on the Board’s watchlist. Balderston stated that he participated in that meeting via the Board’s Zoom platform and heard some of the comments from Board members, but those were not the sentiments he has heard from the residents and from his on-sight property management staff. Balderston stated that his team has provided pictures that were taken since the last Board meeting and testimonials from residents about how they enjoy living there. Balderston stated that he has personally walked both properties and with Mill Creek, he understands the Board has some hesitation about generally the physical condition of the property. Balderston stated that he walked around the property the morning of June 28th and he believes the property is in good condition and a lot of progress has been made by having the Board bring these items to their attention, and there is more progress that needs to be made. Balderston stated that the development team will continue to update the Board on that progress until the property is off the watchlist and in compliance with the standards of the Board. Balderston stated that the expectation over the next few months at Mill Creek is that the property is going to get to a place where everyone is happy with it, not just his development team, but the surrounding community, residents, and the Board. Balderston stated that after walking around Creekside Meadows (Bent Tree) on June 27, 2023, there is certainly work that needs to be done and they are doing that now. Balderston stated that there is a comprehensive power washing of the entire site that is to begin the week of July 3, 2023, and he believes that over the next thirty (30) days, the development team will make a lot of progress. Balderston stated that the PILOT Refinancing Application for Creekside Meadows (Bent Tree) that will be brought before the Board at the August 2, 2023, Board meeting will support an extensive renovation with major capital items that he thinks need to be done. Balderston stated that he is aware the Board has properties that involve low-income housing tax credits and other tax credit and bond ventures with various federal support, and explained that Odin properties specializes in taking those assets after the initial fifteen (15) year period of which is the period of fifteen (15) years of initial compliance through the original developer, and Odin properties comes in at that point to maintain those housing quality standards. Balderston stated that his company has done this successfully for the last fifteen (15) years. Balderston provided the Board with additional materials showing examples of Odin Properties portfolio over the course of the last fifteen (15) years. Balderston stated that this is where Creekside Meadows (Bent Tree) is today. Balderston stated the work that the Board does in maintaining affordable housing is what makes the second fifteen (15) year period possible. Balderston stated that the progress that his team is making and needs to make at Creekside Meadows (Bent Tree) and Mill Creek Apartments require the PILOT and they produce the best results for the entire community. Balderston stated that the PILOT Refinancing Application that will be discussed at the Board’s August 2, 2023, Board meeting is a function of the construction bridge loan coming to term, and when that happens, his goal was to put long term fixed rate Freddie Mac financing, similar to the PILOT Refinancing Application the Board approved for The Boulevard Apartments in today’s meeting. Balderston stated that his team has received feedback concerning the original PILOT Refinancing Application for Creekside Meadows (Bent Tree) and his team has changed the request, he believes materially. Balderston stated he wanted to be clear that major capital items will be a part of the refinancing application request and that request will allow the property to maintain the community benefits that Upton talked about, as well as affordable rents that Creekside Meadows (Bent Tree) provides without the major additional bonds for the next fifteen to twenty (15-20) years. Balderston stated that he looks forward to making sure that all the information in the application is updated, finalized, and submitted to the Board in short order as well as continuing the renovations of the properties so that the Board’s Compliance Inspectors can report back in thirty (30) days and hopefully the Board, as well as the inspectors, feel good about what Odin Properties is doing.
Dan Reid shared with the development team pictures that were taken by the Board’s Compliance Coordinator, Bryce Miller on June 22, 2023, and provided to the Board prior to the Board meeting for their review. Reid asked Miller to provide any comments he may have on these two properties. Miller stated that he visited some of the other properties in Odin Properties’ portfolio in Memphis that do not participate in the Board’s PILOT program this week and one thing he noticed that seems to be indicative of Odin Properties was problems with siding, soffit, fascia, erosion, stairways, and just a basic kind of uncleanliness. Miller stated that possibly pressure washing would take care of a portion of these problems, but it was very indicative of all the properties he was able to view that are in Odin Properties’ Memphis portfolio. Miller stated that the pictures he took of the property on June 22, 2023, and provided to the Board for their review were taken the day following the submittal call for the PILOT Refinancing Application for Creekside Meadows (Bent Tree) and receipt of pictures submitted by Odin properties. Miller stated that the pictures provided by Odin Properties were not representative of the way the properties look today. Miller stated that in the pictures he took, there is ongoing construction on some of the property, but there are many items that are very concerning within the photos he took, in particular some flooding, which he reached out to Stenger-Wiley about to address on the day he observed it and two days later the flooding was still there and children were playing in it at that time, which was of great concern. Miller stated other items observed and pictured included raw sewage backup on part of the property, which was not far from where the flooding occurred. Miller stated that the pictures he has provided are a bit more representative of the way the property is viewed by anyone that was to go and see it today.
Balderston responded to Miller’s comments stating that when there is a property of this size, there is siding that needs to be done at both sites, and his team is starting pressure washing at Creekside Meadows the week of July 3, 2023, and Mill Creek was just power washed and there is siding work there to be done as well. Balderston stated that the pictures his team provided were taken following the Board’s June 7, 2023, Board meeting and today’s meeting and there are units under construction, they do not look great because they are under construction and include open junction boxes that need to be repaired. Balderston stated that the pictures his team provided were from two (2) weeks ago and the pictures provided by Miller, had they not been taken after a major rain, there probably wouldn’t be the little bit of flooding there. Balderston stated that his team needs to make sure that the issue is fixed and from his visit to the sites in the last two (2) days, he thinks that Mill Creek looks good and there are some minor details items to fix there, but the vast majority of those items will be done in the next thirty (30) days and at Creekside Meadows (Bent Tree), he believes what is needed there is a long term capital plan for the major capital items, but over the next thirty (30) days, he expects it to really look better than even it looks today. Balderston stated again that he has testimonials from residents that really appreciate living there and there are small items his team will have to get done in the next thirty (30) days and then put a long-term capital plan in place to make sure the property remains affordable and to make sure that Odin Properties can offer tenant benefits long into the future.
Upton stated that if the Board looks at the pictures provided by Miller and what they will see in the development team’s capital plan that will be finalized soon and be submitted to the Board long in advance of the August 2, 2023, Board meeting, he is unsure about the standing water, but does not believe that it is at the property now. Stenger-Wiley stated that the day Miller called her, it was after a rain and a plumber was on site for the sewage backup and the management team notified him of the standing water in the back of the property. Stenger-Wiley stated that the sewage back up was fixed, but the plumber did not have his flush truck at the time, so it was not the same day, but the plumber did return and had to flush the drain that leads out to the storm drain. Stenger-Wiley stated that drain has never backed up before, but it has since been flushed. Upton stated that what the Board will see in the capital plan is large items, specifically enumerated siding repairs and there will be a budget item for electrical. Upton stated that Odin Properties has a number of bids and some of the junction boxes and some extraneous wires discussed in prior meetings, and old wiring from cable companies will be removed and a lot of AT&T boxes that need to be removed as there are not being used anymore, and Odin Properties will reserve the amount that is suggested and it will be put in escrow to deal with those things. Upton stated that the property will undergo another pressure washing that will alleviate some things around the windows. Upton stated that Odin Properties has purchased a pressure washer in order to maintain that in terms of some graffiti that is a constant kind of activity and also the metal stairs. Upton stated that there is also a large budget in the capital improvements for the repainting and reconditioning of the metal stairs, as there is some rust present, and they need to be cleaned and repaired and that will be part of the capital improvements. Upton stated some of the items pointed out by Miller would be part of the future capital. Upton referenced Miller’s pictures of the property, stating that one of the properties being worked on and the door is open and that is one of the units under construction and out of the 379 units at Creekside Meadows (Bent Tree), there are these spots on the property that need attention Upton hopes to have a plan for the Board and he will reach out to Miller to go over the plan and if the Board feels good about it, it will be good for the whole property.
Upton stated that the pictures provided to the Board by Odin Properties are some tiers of units that have been fully renovated. Balderston stated that represents the majority of the units on the property. Balderston stated that these renovations were done with the PILOT and but for the PILOT, these renovations would not have been possible, but otherwise with private debt and equity financing that is able to invest in affordable housing in Memphis for the long term because of the PILOT. Balderston stated that it is incredibly important for him personally, and to all the people owning properties that owners get it right and Odin Properties is going to do that. Balderston stated that he will return to the Board meeting on August 2, 2023, and will attend all additional Board meetings as long as is necessary to make sure that these two properties are off the watchlist and that everyone is happy with the condition of the assets, the way they look, and the way they are being managed, and the way they are seen in the community.
Buckner Wellford stated he had some questions based upon the June 7, 2023, Board meeting minutes. Wellford stated that Upton does a great job of staying on top of these things, but he is not the property manager. Wellford stated that, according to the June 7, 2023, Board meeting minutes, Upton says there are many needs for the exterior of the property and the proposed escrow amounts would be used for those. Upton also states that he met with Bryce Miller on site as recently as June 5, 2023, and discussed some of the necessary improvements and Odin Properties plans to have a detailed cost analysis and proposal of these items needed by the Board’s June 28, 2023 meeting. Wellford stated that he is not viewing the tenant benefit breakdown summary or the capital expense summary as a detailed cost analysis and proposal and asked if there is something else that the Board has not seen. Balderston stated yes, and that Odin Properties is in the process of finalizing that now and that was one of the reasons why the applicant pushed the PILOT Refinancing Application request for Creekside Meadows (Bent Tree) to be considered at the Board’s August 2, 2023 Board meeting, and further stated that his team would have that information to the Board well in advance, or many weeks prior to the August 2, 2023 Board meeting. Wellford asked if Odin Properties has provided those to the Board today, to which Balderston stated no, they are not finalized yet. Wellford referenced the June 7, 2023, Board meeting minutes that stated all exterior doors have been painted and work will begin on stairwells, hand railings, lighting, and painting. Wellford asked if that work has begun, not on the renovated units, but just on the existing units, has work begun on those things. Balderston responded yes. Wellford referenced the June 7, 2023, Board meeting minutes that stated there is a proposal for concrete work on a back corner of the property to remediate ongoing drainage issues on the property. Wellford asked if there is a proposal and if it has been provided to the Board.
Upton stated that what he thought he said, and maybe it wasn’t clear, was that the proposal for refinance that the development team has been discussing with Board legal counsel and staff will have an extensive capital improvement plan that would have an escrow account set up for Creekside Meadows (Bent Tree) that will include these items and many other items, so the applicant is not asking for approval of the refinancing application today, but will be requesting approval at the Board’s August 2, 2023 Board meeting, with that capital improvement budget that will address these things. Upton stated that these items are the things management has been meeting with Miller about and he has been gracious to meet, and the development team hopes to have that to the Board. Upton stated that when those comments were made at the June 7, 2023 Board meeting, he thought the application would be on today’s agenda for Board consideration, but the development team thought in terms of getting the actual hard costs that are going to be accurate and wanting the Board members to be able to examine them and analyze, the development team thought it was the best interest of everyone to wait until the August 2, 2023 Board meeting. Upton stated that the development team had to have the Board consider the refinancing application but decided to wait until the August 2, 2023, Board meeting to make sure it is complete. Wellford stated that he thought the Board had a refinancing application to act on today and confirmed that the application is being moved to the August 2, 2023, Board meeting agenda. Upton confirmed. Wellford stated that makes him feel better because he was not comfortable moving forward with consideration of the refinancing application today.
Wellford stated that it is unfortunate that this team may be hearing some of this today, but he has concluded that the Board must do something to make firmer statements when properties are on the Board’s PILOT Default Status Update list for several months at a time. Wellford stated that the Board needs to move from a posture where they are getting explanations and Lessee’s stating they have fixed miscellaneous items, to sending the message that no one needs to want to be on the PILOT Default Status Update list because the Board will have a degree of scrutiny that they are going to apply when there is a refinancing request or a request for a new PILOT term, etcetera, the Board will be a lot harder on that applicant than it would other applicants and so when the Board has these discretionary things like refinancing that, ordinarily, the Board in a perfunctory way, approves, it will not be that way any longer with properties that remain on the PILOT Default Status Update list. Wellford stated that the Board should consider publishing this on the Board’s website that when a property has been on the PILOT Default Status Update list for at least two (2) or three (3) months, it ought to be more publicized. Wellford stated that this is not personal against this property manager or owner, that it is just the direction he believes the Board needs to be headed. Wellford expressed his appreciation for the explanation from Upton and stated that if the PILOT Refinancing Application for Creekside Meadows (Bent Tree) has been moved to the August 2, 2023, Board meeting he understands that this is just an update and appreciated that.
Brett Goldenhorn introduced himself, stating that he works for Odin Properties and was on site with Upton the week of June 19, 2023, and asked when Odin Properties presents the detail behind the PILOT Refinancing Application for Creekside Meadows (Bent Tree), not only will they have a detailed breakdown, but Odin Properties has built a binder of quotes to back up every single number on that list of quotes, some of which have been started, some of which will rely on these funds to make happen, but it will be comprehensive and significant. Upton stated that what the development team has been working on with the Board’s legal counsel and the Board Chairman, is that the development team will not only be bringing a capital improvement plan for Creekside Meadows (Bent Tree), but part of what the development team will bring in is a capital improvement plan for Mill Creek Apartments. Upton stated that after reading through some of the previous reports, Carpenter has mentioned that over the years, Mill Creek was always considered an exemplary property. Upton stated that Mill Creek Apartments has been on the Board’s watchlist, and it has been expressed by the Board that following a refinancing approved by the Board on July 14, 2021, that it has been on the Board’s watchlist since that time. Upton stated that the Board wants to make sure the developer is maintaining the property, so the development team will bring in a capital plan that they feel like the Board will feel comfortable with and will lead the property forward. Upton stated that Mill Creek Apartments for a Freddie Mac loan and the property has an escrow, but the development team is going to propose putting aside another reserve that it will work with the Board to do a number of significant things and it will be very detailed and he believes the Board will feel good about it. Upton stated that the pictures provided to the Board by Odin Properties of Creekside Meadows, in truth, show the good, and the Board has also received pictures from Miller showing the good, bad, and ugly and the Board must look at it all. Upton stated that these are the things his team has been meeting with Miller on and the things that Odin Properties has to address property wise. Upton stated that he thinks the Board will feel better than they do today and apologized for the confusion.
Balderston stated that part of the reason he is in attendance is to make sure it is clear to everyone that Odin Properties understands the seriousness and Odin Properties has an absolute commitment to making sure that all these issues are rectified, and they will do so.
Dan Reid stated that the Board is aware that there have been some issues with the Environmental Court and asked representatives if they would provide an update on that, stating that earlier in the meeting, it was stated that the Board will be working closely with Environmental Court to understand what is going on with some of these PILOT properties. Stenger-Wiley responded by stating that she believes that Creekside Meadows (Bent Tree) has only been in Environmental Court maybe once or twice in the past several months, maybe even a year, and actually their issue was resolved right before the court dates. Stenger-Wiley stated that one issue she believes was someone reported a rat in their apartment and Odin Properties presently has preventative rat base stations around the community. Stenger-Wiley stated that she does not know the details right now, but of course the property has pest control and went in and did some preventative maintenance, chasing down holes and filling those in, just general maintenance. Upton asked Stenger-Wiley how long ago this took place, and she could not recall how recently. Upton stated that the properties do not often end up in Environmental Court, but sometimes do get code complaints, and stated that his team would get a list of those for the Board, but usually they are resolved. Upton stated that oftentimes tenants will call Code Enforcement before they call for maintenance. Upton stated that his team will get a list of those items and compare it to what the Board finds out. Goldenhorn stated that there was one case that was just dismissed on Friday, June 16, 2023, and it was exactly as Stenger-Wiley suggested. Stenger-Wiley stated that Mill Creek Apartments has some issues from last summer 2022 from HVAC where it was just older units that Odin Properties had to get in line with the company to have these older units replaced and closets built out, those kinds of things. Stenger-Wiley stated that there may have been one where someone retorted, to which Goldenhorn added that case was dismissed on June 12, 2023, for a corrected HVAC related matter. Balderston stated that Odin Properties has none that are ongoing as of today. Stenger-Wiley stated that these issues are normally addressed, and as Upton stated, a lot of times residents at Mill Creek tend to call code enforcement before they contact the management office. Stenger-Wiley stated that sometimes Code Enforcement will come and there is not even a maintenance request for the resident at that time and management gets right on it and clears it up right away. Upton stated that the Board is asking for the records and is going to start tracking it, but the development team is going to ask for the records as well, as he thinks the development team can look back and shoe the Board that these two (2) properties have not had a lot of problems.
Upton stated that Mill Creek Apartments was a big tax credit deal, and it was a Ledic property from twenty (20) years ago so there are some older air conditioners, most of them work, but when Odin Properties replaces them, they have to build the closet out and Odin Properties had some issues last summer and they will get that together to share with the Board to show that there have not been a lot of code issues with these two (2) properties, and Odin Properties will help verify that.
Carpenter stated as a general comment so that the conversation can come to a close, and the Board does not want the developer to think it is picking on either of these properties because the mission of this Board is to provide affordable housing and that is what it is all about, but the Board does not was it to just be borderline housing, the Board wants it to be exemplary and that is why the Board is providing the incentives in order to facilitate that. Otherwise, the Board would not be here. Carpenter stated that credibility and our being able to talk and communicate is essential to the entire process. Carpenter stated that this Board is focused on the outside of the property, and the developer has provided some beautiful inside pictures, but when looking at the outside pictures, it looks like the Board is looking at two different properties and the pictures were taken just within one (1) week of each other, so that begs the question about what we are doing. Carpenter stated that the comments mentioned previously in the meeting about Mill Creek Apartments had been a great property until the refinancing, and after the refinancing, the property started trending in the other direction. Carpenter continued, stating that now that this Board has spent a lot of time and resources and oversight on Creekside and the occupancy is up over ninety percent (90%), which is very commendable, but the Board is now faced with the same sort of refinance where it looks like substantial dollars are going out of the property. Carpenter stated that the Board is looking for balance here in order to move things forward, so hopefully within the period between today’s meeting and the August 2, 2023, Board meeting, we can find that balance so that everyone is on the same page moving forward. Balderston stated that he and the Board see eye to eye on those issues.
Upton stated that as discussed with Miller in previous site visits, there is a contract to do pressure washing on all of Mill Creek and that has happened and when that happens with your siding sometimes it exposes some other issues, and sometimes you see some paint issues once pressure washing is complete, so Board inspectors will see that when they visit the property and some of this is a work in progress and hopefully Odin Properties will have something and thanked the Board. Reid thanked representatives for their attendance and stated the Board would see them at the next Board meeting on August 2, 2023.
New Business
There was no new business.
Chairman Reid stated that the next meeting of the Board is scheduled for Wednesday, August 2, 2023 @ Noon. There being no further business, the meeting was adjourned by the Chairman at 01:54 p.m.