MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Wednesday, June 4, 2025
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, May 28, 2025, and continuously 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 Board offices, located at 65 Union Avenue, Suite 1120, Memphis, TN 38103.
The following Directors were present:
Daniel T. Reid, Chairman Monice Hagler (Zoom)
Cliff Henderson Howard Eddings, Jr.
Vincent Sawyer Courtnee Melton-Fant
The following Director was absent:
Buckner Wellford
Staff and others attending: Trey McKnight, Stephanie Bryant, JP Townsend and Nikki Abraham; Charles E. Carpenter, General Counsel; Katrina Shephard (Zoom), legal assistant to General Counsel; Cheryl Hearn, Deputy City Attorney.
Also participating in person and/or via remote Zoom virtual platform were Matthew Mulqueen of Baker Donelson Law Firm, Melanie Wenk of WNC, and Carlissa Shaw, Esq., Special Counsel to the City of Memphis, Gabriel Pryor, Court Inspections Supervisor to City of Memphis Code Enforcement, Will Gibbons, Esq., City of Memphis Code Enforcement Prosecutor, all appearing in connection with Cavelier Court and Gospel Gardens; Frank Carney, Esq. of Evans Petree Law Firm, Mendel Fischer, Shrage Marasow and Neil Knopf all representing Bridgeport Manor Apartments and Coronado Manor Apartments; Chief Dexter Washington and Tomecia Brown of Memphis Housing Authority appearing in connection with Crockett Park Apartments; Michael Finch of MLK50; Simeon Ike of Greater Memphis Housing Justice Project; Shirley Bondon of the Black Clergy Collaborative of Memphis; Austin (A.T.) Harrison of Memphis Interfaith Coalition for Action & Hope (MICAH); Errin Woods of Community Alliance; Mike Humes; Jamila Batts; Aerial Ozuzu; 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 4, 2025 @ 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.
Public Comment
Chairman Daniel Reid opened the floor for public comment and advised that all comments should be limited to two (2) minutes per speaker.
Shirley Bondon stated her name and address for the record. Bondon began by stating that The Health, Educational and Housing Facility Board is responsible for holding accountable developers to whom the board issues tax-exempt revenue bonds. When the board is unable to call developers accountable and tenants of PILOT properties are harmed, she asks that the Board develop policies and practices that provide assistance to tenants. Assistance can include many options, including, when necessary, providing relocation assistance. For example, Bondon stated that when properties are uninhabitable due to a defective developer, temporarily relocating tenants should be an option that is funded by this Board. When a PILOT is terminated and a property is scheduled for closing, similar to the situation with Serenity Towers, Bondon stated the Board should work with HUD, City and other entities to ensure tenants are supported through relocation. Bondon stated that at the May Board meeting, the City returned compliance of Cavelier Court and Gospel Gardens to the Board. Bondon stated it was unclear if this was because the apartment complexes are in compliance, would shortly be, or if they could not be brought to compliance at all. Bondon stated that as the Board considers these PILOTs, to please consider this: there have been improvements since the City assumed compliance. Most of all, Bondon stated that most if not all drug dealing has stopped at the facility. Most of the sewage issues have been addressed, but tenants still live in an untenable situation. Bondon stated that tenants are no longer parking at the church across the street, however, some problems persist. Some of the units are vacant because they are not repaired. Cosmetic repairs are occurring on some of the vacant units, but vacant units are repaired first so the developer can move in new tenants and address the locks. This is unfair to the existing tenants, who continue to live in poor conditions while vacant units are prioritized. Bondon stated that the roof leaks, some units do not have working A/C, and some repairs are questionable. Bondon stated that security is not consistent and during a three-hour visit, she saw no security. Bondon stated that there was vacant security vehicles parked in several locations to provide an appearance of security. Bondon stated that female residents report that male security members make inappropriate remarks and propositions while continuing. Bondon stated there continues to be limited access to the laundry and mailrooms; most units do not have outside lighting, and tenants are prohibited from enjoying the outdoor courtyards, and many tenants are not receiving the tenant benefits.
There were no further questions or comments.
Approval of Minutes
Cliff Henderson moved for approval of the Minutes of the May 7, 2025 Regular Meeting, which was seconded by Vincent Sawyer and the motion passed unanimously after proper roll call vote of the Board members.
Attorney’s Report
Charles Carpenter presented the legal report, as follows:
1. Carpenter reported one (1) new lawsuit regarding PILOT property Scenic Hills (formerly Hightop Ridge/Hunters Ridge) regarding a resident, Donna Jones, who has filed a slip-and-fall case. Carpenter stated that it is unclear if Ms. Jones is a debtor in the US Bankruptcy Court, but she is joined as a plaintiff by the US Bankruptcy Court Trustee, which is unusual, but they're claiming an original complaint for slip and fall damages, seeking an amount of $73,000. Carpenter stated that the suit was served to him as the registered agent for the Board. Carpenter reminded the Board that under state law there is immunity from any civil financial or legal liability while the Board is serving in its capacity as a public function. Carpenter stated that his Firm will be responding to this lawsuit and keeping the board advised.
2. Secondly, Carpenter reported being served with a Notice of Foreclosure on Cedar Run Apartments, which is a PILOT property located at 5958 E. Pointe Drive, Memphis, TN 38115. Carpenter reported that Fannie Mae was the primary lender for this property and had filed this notice of non-judicial foreclosure sale, which is scheduled for sale on the courthouse steps on June 20, 2025 at 12 noon CT. Carpenter reminded the Board there is no liability on behalf of the Board and his Firm will monitor this matter to know who the successful bidder will be because the Board will have to make sure that the person or entity stays in compliance with the Board's policies and procedures.
3. Carpenter reported Bond activity for the month of May 2025 as follows:
a. MH Strategies Family RAD II, LP-College Park Projects reissuance has closed;
Carpenter reminded the Board that it approved a reissuance of this outstanding bond because there had been changes in the construction schedule that modified the placed-in-service date, and when that date was modified, it changed the yield on the bonds and created a reissuance for tax purposes.
b. Ashland Lakes II-all bonds have been redeemed. Carpenter stated that as a result of all bonds being redeemed, the Land Use Restriction Agreement (LURA) has now been terminated, and oversight activity has been completed.
4. Carpenter reported that internal and external compliance monitors have been very active with certain PILOT properties pursuant to the Board's four-step compliance program. Several properties have not been meeting the compliance requirements of the Board's policies and procedures. As a result, Carpenter reported that a number of properties that have been referred to his Firm for legal default, as follows:
a. Scenic Hills (formerly Hightop Ridge/ Hunters Ridge)
b. Grainge Hill
c. Timber Pines Apartments (formerly Gowan Pines)
d. Eden Pointe Apartments
e. Watkins Manor Apartments
f. Sunrise Villas Apartments
g. Hillcrest Apartments
Carpenter reported that all the properties have been formally noticed for legal default and will appear at the Board's July 9, 2025 Board meeting. Carpenter stated that each property has been requested to submit a written cure plan outlining how each property intends to address the cited deficiencies for the respective properties, and will appear before the Board for consideration as to if the proposed cure plan would be accepted or not.
5. Carpenter reported other PILOT activity for the month of May 2025 as follows:
a. New Horizon Apartments PILOT closing for a new 20-year term.
6. Carpenter reminded the Board that it has induced three (3) separate properties for bond financing and PILOTs that would be in conjunction with the low-income housing tax credits (LIHTC) issued through Tennessee Housing Development Agency (THDA). Carpenter reported that his Firm is awaiting Round One awards, which should be published at any time. THDA had indicated that Round One awardees would be released in the previous 30-day period, but that has not occurred. As soon as those awardees are made public, Carpenter’s Firm will start to work on each of the three transactions, as each must be closed no later than December 15, 2025. Carpenter stated that each of the three projects are acquisition-rehab projects versus new construction, and that each will preserve much needed inventory for the affordable housing community.
7. Finally, Carpenter reported that there have been different budget cuts being proposed at the federal and the state level that would have a direct impact on the availability of funding locally for affordable housing and for seniors and other disadvantaged residents in our community. Carpenter stated that his firm will keep the Board advised of final developments. Carpenter stated he would reserve any additional comments for action items later in the meeting.
There being no further questions or comments, the Legal Report was concluded.
Action Items-
Carlissa Shaw, Matt Mulqueen and Melanie Wenk entered the meeting.
1. PILOT Status Update for (i) Cavelier Courts Apartments and (ii) Gospel Gardens Apartments
Charles Carpenter introduced this agenda item reminding the Board that these two properties had been in legal default for most of the 2024 calendar year, and as the Board was preparing to take final action of the status of each PILOT, the City Administration came before the Board at the end of last year, indicating that the City had additional resources and wanted to assist the limited partner tax credit investors who had taken over management to stabilize each property. Carpenter also stated that at the Board’s May 7, 2025 regular meeting, Housing and Community Development (HCD) Director Ashley Cash came before the Board and indicated that based on HCD’s oversight and observation there have been certain improvements made but there were certain things that remained to be done. At this time, it was the determination of HCD and the City to turn the oversight and management of the properties back to the Board.
However, since the May 7, 2025 Board Meeting, Carpenter reported that his Firm has been in discussions with Special Counsel for Blight to the City Carlissa Shaw on behalf of the City Administration and based on new developments from the City Administration, Attorney Shaw is appearing before the Board today to provide an update to the Board and to make an additional request to return oversight of each property to the City. Carpenter introduced Matt Mulqueen of Baker Donelson Law Firm, who represents the Limited Tax Credit Partner, and stated that he was available to provide any additional context that the Board would need to hear today. Thereupon, Carpenter turned the meeting over to Shaw for an update. Shaw introduced herself as special counsel to the mayor's administration on blight-related issues. Shaw stated that she appeared before the Board in December 2024 when the Board and City Administration first started talking about Cavelier Court and Gospel Gardens. Shaw reported that following that, she was able to make site visits to the properties with Environmental Court Supervisor Gabriel Pryor, as the City Administration knew there were a lot of code violations outstanding on each property. But they were not aware of actually how bad the properties were. Shaw reported during her site visits that she was still able to see raw sewage coming from various units throughout the apartments, visible mold or moldlike substance, and several other outstanding issues at that time. The City Administration was amenable to seeing what the current or new ownership structure would be willing to bring, as the City Administration's priority to its citizens is healthy and safe communities and that is what the City Administration is looking to do. Shaw stated that after speaking with the Environmental Court Supervisor and Code Enforcement attorney, the City Administration recently learned that all outstanding Court Code Citations have been closed since April 2025. Shaw stated the full remediation of all sewage issues, moldlike substances, and major health and safety concerns that the City Administration had with the properties. Shaw stated that as the City Administration is trying to maintain affordable housing stock in the City, based on those considerations, the City Administration is requesting that this Board allow the City more time to oversee the development of these properties to make sure that the current and new owners are abiding to making a full rehab of this property and not just closing out the code citations, but also the additional rehab that is needed in order to make these properties a beacon of affordable housing that we hope to have in our communities.
Carpenter reminded the Board that this is a case of first impression, as the Board had not had a matter like this where the City Administration was willing to step up and provide the oversight and monitoring. As the Board goes through this process, Carpenter stated this is a learning process, and now the question must be determined that when a similarly situated property is returned to the Board, whether it must be in full compliance? Carpenter stated that what has been learned through this process is that it would be best for all parties involved that when a property is returned under Board oversight, it must be in full compliance. Carpenter stated that with these two properties, as there are still outstanding issues that need to be addressed, and the City is willing to resume its oversight of these two properties, the properties should be returned to the oversight of the City. As legal counsel to the Board, Carpenter stated he is in full support of that and would encourage the Board at this time to make a motion to return the oversight and surveillance of Cavelier Court and Gospel Gardens to the City Administration through the Housing and Community Development Department, under the oversight of attorney Carlissa Shaw.
Howard Eddings, Jr. asked if the City Administration has committed to a timeframe for how long they are willing to give supervision or oversight on their end. Shaw responded not necessarily yet. Shaw stated that when she talks about full compliance, this Board has a level of compliance that is separate from what the City Administration and Code Enforcement have for compliance, so what the City administration is willing to do is marry the two and she will work hand in hand with Carpenter’s Firm and Board staff to make sure that all those things are mirrored together and then anticipate a timeline. There were no further questions or comments.
Vincent Sawyer made a motion to return the oversight and surveillance of Cavelier Court and Gospel Gardens to the City Administration through the Housing and Community Development Department, under the oversight of attorney Carlissa Shaw. Howard Eddings, Jr. seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Carlissa Shaw, Matt Mulqueen and Melanie Wenk left the meeting.
Frank Carney, Mendel Fischer, and Neil Knopf entered the meeting.
2. Status of PILOTs in Legal Default:
a. Bridgeport Manor
b. Coronado Manor
Charles Carpenter introduced this agenda item, stating that both properties are owned by the same developer and can be discussed together. Carpenter reminded the Board that this developer previously appeared before the Board at the May 7, 2025 Board Meeting. Under the Board’s revised policies and procedures, the Board requires that a developer with multiple properties in the Board's PILOT portfolio, is out of compliance with one PILOT property then the developer’s entire portfolio is placed under scrutiny and examined by the Board's internal and external compliance monitors. As reported in the Legal Report, Carpenter stated that all properties in this developer's PILOT portfolio have been placed in legal default, but today the Board will only address Bridgeport Manor and Coronado Manor (formerly Willow Oaks). The remaining properties will be reviewed by the Board at a later Board meeting. Carpenter advised the Board that formal written responses to the legal default submitted by the PILOT Lessee are included in the Board's meeting materials, and they address how the PILOT Lessee intends to cure the deficiencies. Carpenter stated that the PILOT Lessee and representatives are in attendance today to present the plan and to answer any questions that the Board may have on these two (2) properties. Carpenter turned the meeting over to Frank Carney, legal counsel to the PILOT Lessee for presentation.
Carney introduced PILOT Lessee Mendel Fischer and representative Neil Knopf. Carney stated that Fischer is very dedicated to the PILOT program and meeting the goals of this Board. Carney stated that Fischer has invested over $90,000,000 into the PILOT properties he owns, and has paid over $1,400,000 in PILOT fees, which is to say that he has a financial interest in these properties and is not deserting the properties or his responsibilities to the Board. Carney stated that Fischer considers his involvement as a partnership with the Board, including a deep financial interest in these properties. Carney stated that the statute that creates this Board gives the ability to have incentives, is focused on safe and affordable housing and his client acknowledges that there are some problems on the properties in their portfolio, many of those are addressed in the report, and some of those could not be immediately fixed by this meeting but are in process, specifically the asphalt. Carney stated that asphalt was put on the property during the rehabilitation and has deteriorated over time, so there are some places that need to be fixed. Ownership is contracting to have those fixed, and that is expected to be completed today. Carney stated there were some trash problems on the property, and ownership has agreed to additional trash pickups to address those trash problems. Carney stated that this is a consistent problem with these and many other properties. and that tenants will drop trash on the property wherever they are, but those issues are being addressed as much as possible and will constantly have to be addressed. Carney stated that the local office for the management team is located at Bridgeport Manor, and they have the ability to monitor that. Carney stated that Bridgeport Manor is a property that is grandfathered into a program where it has two trash bins, one from MLGW that MLGW monitors the pickup, and the other from Waste Pro that the facility contracts to pick up, so Bridgeport Manor has had difficulty with MLGW pickups, but Carney stated ownership will do its best on these properties with trash pickup.
Carney stated that the importance of these properties to this Board and to the developer is that the statute that creates this Board wants safe and affordable housing, and the ownership has worked diligently to do that. Carney stated that there are problems that ownership continuously works on for each project, including completing some of the rehabilitation, but the security is very tight on these properties, and he knows of no crime, other than occasional vandalism, or any sort of issues that happen on these properties that indicates that they are anything other than completely safe. Carney stated he has traveled to these sites several times and always sees one security guard and sometimes two security guards. Carney stated that Coronado Manor had four security guards on site at one time due to being in a tough area. Carney stated that he was at Bridgeport Manor on June 3, 2025, and saw kids playing on the playground, laughing and having a good time. Carney stated the importance of this is that the children felt like they could do that, and they did not feel like they were in any danger and did not feel like they were not secure. Carney stated there was a security guard there, and that is a major contribution to safety, and the units are affordable, so those two major issues that are essential for purposes of this Board are being addressed.
Carney stated that when Fischer took over these properties, they were abandoned and totally dilapidated, so ownership had to start from the ground up in rehabilitating these properties. Carney stated that both PILOT terms for these properties are two and a half years old, so they have not been around for a long time. Carney stated that ownership has largely rehabilitated Bridgeport Manor with a little over 400 units out of the 636 units that have been rehabilitated. Carney stated the remaining 200+ units were included in the PILOT Refinancing Application submitted to the Board in recent months that the PILOT Lessee needs approval to complete the renovation of those remaining units so that those may be included in the occupancy rate. Carney stated that his client has included the efforts that they have been making to get occupancy rates up with charitable organizations and others to solicit for occupancy that would be proper tenants. Carney stated that as previously reported to the Board, ownership has qualifications for tenants because part of what destroyed these properties was the quality of tenants that were on these properties, and that has been experiences by other developers where the quality of tenants creates a problem for multi-family properties. Carney stated that ownership does have a due diligence process, which has had an impact on how fast ownership is able to get occupancy up, but they are working on that issue. Carney stated that an area the Board does not get to see is the inside of the units which was critical in the rehabilitation, to rehabilitate inside of the units for a habitable and nice unit, and he knows of no tenant that has complained. Carney stated that these are nice affordable habitable units on the interior. Carney stated that he wanted to report on the things that have been done because it is easy to focus on the things that need work, but wants the Board to know that ownership is not trying to avoid or neglect making the necessary repairs, but reposefully requests that the Board keep these properties in the PILOT program and he and his client will work with the Board to address the issues that it sees that the developer may not see, and will also address the issues that they see and work cooperatively with the Board.
Cliff Henderson asked to hear from the Board’s internal compliance monitor. JP Townsend began by reporting on the conditions observed for Bridgeport Manor and stated that the occupied areas of this property are well maintained. Townsend stated there are areas of decorative brick and other items that still need repair, but there have been some repairs made to other units. Townsend stated that concerns continue to be with the unoccupied areas of the property, which include areas of siding, fascia, soffit, and such that need repair. Townsend stated that repairs have been made to the playground equipment, with the only concern being that there are still exposed metal and hard plastic brackets where the slides were, presenting a safety concern. Townsend stated there are areas of the drive that will need resurfacing and are starting to crack. Townsend also stated that overall, the property’s drive and parking areas will likely need re-striping. Townsend stated that Bridgeport Manor is not in compliance when it comes to tenant benefit commitments. Townsend stated that the PILOT Lessee has provided timelines of getting these properties into full compliance, but in his experience with this developer's portfolio and the amount of work that has been done in that timeline, it seems it would be very difficult to get finished by the revised commitment of completion.
Carney stated that the developer experienced a lot of difficulties in getting the project completed within the original time period with rising interest rates, inflation, and the environment of financial markets. Carney stated he believes that most of the tenant benefits were originally done and have been damaged or no longer in place. Townsend stated that there are tenant benefit commitments that are non-functioning such as the security gate is nonfunctional, the pool area which has not been rehabilitated, and the drive surfaces have not been resurfaced or restriped. Townsend stated that security is very active on this property and security personnel stop him during each site visit, but not having a front gate that is secure is still going to be a safety concern. Carney stated that the PILOT Lessee addressed that item in the report to the Board, and the gate arm is being replaced and has been an ongoing issue. Carney also stated that parking and drive surfaces are being re-striped today, June 4, 2025. Neil Knopf stated that the metal and plastic brackets from the original slide removal from the playground equipment should have been removed already but if there is anything left that will be taken care of. Knopf stated that though the site does have safe, operational playground equipment, management has ordered an additional playground because they are always trying to do more for the tenants, and it will be installed as soon as it arrives. Knopf stated that re-striping is actively going on at the property and pavement repairs are being made as well. Knopf stated that the property was fully repaved, but it has been a number of years since that was done so that issue is actively being taken care of. Knopf stated that the pools are cause for concern because ownership and management does not want children to get hurt in the pools, and they are not trying to leave them as is, but the plan is to fill both of those in and use those areas for further tenant benefits, including placing the new playground there and providing a picnic area.
Henderson asked if the 62% occupancy rate reported in the Board meeting materials is current. Carney stated that the rate is based on all 636 units, and over 200 units are still unoccupied and in need of rehab before they can be occupied. Carney stated that occupancy of the completed units would be much higher than that. Stephanie Bryant advised that the Board determines occupancy based on the total number of units only. Henderson asked for confirmation that the property went from an occupancy rate of 38% in Quarter 4 2024 to an occupancy rate of 62% in Quarter 1 2025, to which Bryant responded yes. Bryant stated that one of the biggest challenges from a compliance standpoint is yes, there are things that are not in compliance, but this PILOT was approved in November 2021 and in the application, it clearly stated that the applicant had every intention of having the property completed and fully leased within two (2) years of approval. It took fourteen (14) months for the applicant to close this PILOT, which is not necessarily out of the ordinary as some PILOT transactions close quickly, whereas others take more time, but that is not the issue in this case. The issue for Board staff is that the original commitment to be completed was December 2023, and that commitment has changed three other times, with the commitment of completion now being March 2026, which is thirty-nine (39) months into the PILOT term. Bryant stated that when staff reviews compliance inspection reports back twelve to eighteen (12-18) months, although occupancy has changed, the conditions of the property have not changed much. Bryant stated that work may be taking place inside the units, but that is not what is being observed. Bryant stated that when looking at this property in the last twelve to eighteen (12-18) month cycle, HEHFB internal and external monitors are not seeing the progress that needs to be seen in order to accomplish completion, even now with another change in the completion date. Bryant stated that a typical construction completion timeline, particularly of a vacant property, would take approximately two (2) years in today's environment, give or take six (6) months. Bryant stated that delays can happen, and the Board is very aware of that and understands that, but the most recently submitted completion date for this project is thirty-nine (39) months into the PILOT term, and that is where HEHFB staff is having a challenge in getting where we need to be. Bryant stated that while staff believes the intentions are there, the Board has policies and procedures it must hold PILOT Lessees accountable to, and staff is unable to do that at this point.
Bryant reported to the Board that HEHFB staff has performed walkthroughs with this developer that took place over a year ago, and others as recently as six months ago to express concerns about completion and compliance issues. Bryant stated that this property was placed under observation six (6) months into the PILOT term after the original completion date was not accomplished. Bryant reported that HEHFB staff and legal counsel have also held two (2) virtual meetings, on in September 2024 and the other in February 2025, with ownership and management to discuss the properties in the developer’s portfolio and the serious concerns, and here we are today still in the same position and continuing to observe a lack of progress. Trey McKnight stated that he was at these walkthroughs and meetings and reiterated Bryant's comments that concerns have been expressed, but the progress is just not there.
Fischer stated that he submitted a PILOT Refinancing Application for Bridgeport Manor in early 2024 that was approved by the Board, but with everything that happened in 2024 it was just not feasible. Fischer stated there were several lenders interested, but ownership just could not get to the finish line with that refinancing. Fischer stated that Carney and Carpenter Law worked on that refinancing, and each time they were about to close, it was not able to happen, which caused a huge hurdle in the timeline. Fischer stated that he reported to the Board at each closing extension for that application that they were being shuffled between three (3) banks because it is a large property, and it is in Memphis. Fischer stated that security is number one at this property and throughout his entire PILOT portfolio, and there is no real crime on his properties such as shootings or killings, which is a major part of the property's tenant benefits. Fischer stated that the tenants know that when they move onto one of these properties, they are going to be extremely safe and affordable. Fischer stated that management reached out to Catholic Charities and Memphis Housing Authority (MHA) and gives everyone an opportunity to live in these properties in a safe environment. Fischer stated that he is negligent in not meeting the timeline of the Board but stated that the PILOT is an essential program because it does a lot to the investment and that is what drew him to Memphis and was a big calculation in the renovations. Fischer stated that while other developers make small changes, he has performed a complete renovation of the units at his properties, and he is looking long-term with things such as new HVACs and new roofs, and the PILOT helps a lot with that, in fact, it makes it happen. Fischer stated that there are tenant benefits that they have committed to and while he is not saying they are not major things, there is also a time that he can do it, for instance, re-striping cannot be done in the winter months as that is impossible. Fischer stated that weather is also a hurdle, and today is the first nice day in Memphis within the last two weeks, and the contractor is at the property performing the work on the pavement today. Fischer stated that his commitment to the Board and to the PILOT is the ultimate for security and affordability. Fischer stated that his management team is a local team that lives in Memphis, although Fischer does not live in Memphis, Knopf and his team does, and these local women and men really put forth a lot of effort and understand the pressures of security. Fischer stated that if a tenant has a complaint, it is addressed and does not have to go into some massive system but is handled with a system that his management team can track, which is a tenant benefit in that tenants know they can call anytime and offices are always open, even Saturdays and Sundays, to address all of their tenants.
Carpenter stated that Fischer referenced the pending refinancing application for this property, that the Board knows from experience that large properties of this size come with their own set of facts and circumstances, and right now there are still over two hundred (200) units that need renovation, updating, and so forth. Carpenter asked if Fischer would explain how refinancing would impact those two hundred (200+) plus units and how that should be something to be considered by the Board as it moves forward in determining how to handle the situation. Fischer stated that the refinancing is purely designed to finish the project. Fischer stated there are 432 units on one track, and he had to find a lender that was comfortable enough to do track one to finance track two to renovate it. His team has calculated the proceeds they would need exactly to complete the project. Fischer stated that all exterior and demolition work has been done, all new windows and doors are already in place, some new roofs, and the refinancing will enable his team to speed up and get it done right away. Fischer stated that when the Board did not approve the application in May 2025, he let the lender know that he would appear before the Board in June to request the authorization again to refinance because the lender is ready. Fischer stated that when he drags his feet or when he does not have the authorization to proceed, the bank catches cold feet, and he must go back to square one. Fischer stated that the lender is a large, very reputable bank, Santander, and the refinancing would take away a lot of his financial burden from a bridge loan to a regular conventional loan, as today he is paying a 12% interest rate, and this refinancing would reduce that rate to 7% and allow his team to get the proceeds to finish this project.
Carpenter reminded the Board that this developer appeared at the Board’s May 7, 2025 Board meeting to request a variance for the Board to consider the PILOT Refinancing Application for Bridgeport Manor because the property was in default. Because the property was in default, Carpenter reminded the Board that staff has not reviewed the application, but following the May 7, 2025 Board meeting, the Board requested that staff review the PILOT Refinancing Application for Bridgeport Manor and there were some questions as to the sources and uses funding and some additional questions. Carpenter asked Bryant to provide a report on what her review of the application revealed. Bryant stated that the summary provided in the Board meeting materials is a summary of the PILOT Refinancing Application for Bridgeport Manor that was submitted by the PILOT Lessee. Bryant stated that it appeared that the Debt Service Coverage Ratio in the cash-flow proforma submitted was not in line with the Santander Commitment letter requirement, but one item of clarity needed is that the commitment letter only references 432 units and Bryant asked Fischer to clarify that this refinancing only applies to the 432 renovated units for the purpose of completing the remaining 204 units. Bryant stated that these types of questions would typically be covered in an application submittal conference, but as the variance was not approved at the Board’s May 7, 2025 Board meeting, no submittal conference was held with the PILOT Lessee. Fischer confirmed that the refinancing will apply to the 432 renovated units for the purpose of completing the remaining 204 units. Fischer stated that made the lender more comfortable because one track is occupied and the other is not, and the 432 units gets them to where they need to be to meet their threshold, and his team will be able to get enough funds to finish up track two.
Bryant asked for Fischer to confirm the amount of the loan as the commitment letter stated, “up to $32.5 million”, to which Fischer stated that it is between $32 million and $32.5 million, and final determination of the amount will be determined by debt coverage and everything that goes with it. Bryant reported that the commitment letter, while it displays a signature, does not display the date of signature, and the commitment letter stated the loan must be closed within 90 days of acceptance. Bryant asked Fischer to confirm whether the commitment letter from Santander remains in place. Fischer stated that the document was electronically signed, and there was a glitch that placed that information in the middle of the page, but that the commitment is still in place. Bryant asked Fischer to clarify the $10,280,000 that is listed on the sources and uses table as “complete renovation of units, maintenance, continued maintenance and operation of the property over the life of the property and other costs”. Bryant stated that this was submitted as a bulk line item, and in review of the original PILOT application approved by the Board on November 3, 2021 for Bridgeport Manor, there was a statement in the original application that ownership has already invested $10 million in owners' equity, so that line item does give her pause, and asked if it is Fischer’s intention to repay the owners’ equity that was originally put into the project, or if the funds are going directly into the property. Fischer stated the funds will be going into the property because ownership will only make money when the property is fully occupied. Bryant asked for a breakdown of the $10,280,000 and how it is planned to be invested in the property. Fischer stated that approximately 200 units need to be renovated at approximately $30,000-$35,000 per unit, which is between $6 million and $7 million, and then there will be some exterior items that will be upgraded, and the remaining funds will be for day-to-day maintenance, increased marketing, and increased security. Bryant asked if a reserve account will be set up for these funds, to which Fischer stated yes. Fischer stated that he wants to see this property fully occupied because ownership’s benefit if it is fully occupied will be the best thing for them. Fischer stated that it is just really finishing the renovation, and all eyes are on it once the funds are received and everything is ready to go, including permits and demolition has been done and everything is prepared. Fischer stated he just did not realize that he would go through the past year and not get a bank to do it.
Bryant stated that a major issue that was discussed in the virtual meetings held with the PILOT Lessee was lack of communication from the onset of this PILOT. Bryant stated that there was never a phased approach discussed at the onset of any of these PILOTs, but it has turned out that a phased renovation approach is a commonality throughout this portfolio and the developer has taken a phased approach. Bryant stated that staff is not saying there is something wrong with that approach, but that staff must look at what was committed to at the onset of each PILOT, and while things can change and challenges arise, communication is so key. Bryant stated that with the PILOT Refinancing Application for Bridgeport Manor, has there been an application submittal conference, she would have requested a revised sources and uses table with a detailed breakdown of exactly where those funds are going, rather than the lump sum line item.
Carpenter stated that Fischer does have a big portfolio, and it is trending in the right direction, and the Board is always seeking to balance its mission with the needs of the community and the developers. Carpenter stated that the challenge is that 2.5 years may not seem like a long time to a developer, but from the way the Board’s PILOT program operates, 2.5 years is a long time. Carpenter stated that the Board started out with a ten (10) year PILOT and then received an additional delegation of authority to grant up to twenty (20) year terms, so with the ten (10) year PILOT, this PILOT would be 25% into the whole incentive, and without having the units completed, tenant benefits cannot be provided because the tenants are not there, so it is not helping anyone. Carpenter asked Fischer what he can outline to the Board, if allowed to go forward, and what is a realistic timeframe for him to be counted on to do to complete this segment of the process, because the Board wants it complete so that the tenants and the families can be there and enjoy the benefit, not spend half of the PILOT term getting to the point where the property is stabilized and occupied.
Fischer stated that he owns eight (8) properties in Memphis, of which seven (7) are in the PILOT program, and all are in opportunity areas. Fischer stated that some are located in the Frayser area and are more complicated and sophisticated but have finished being developed, and there are some small items left to be addressed from the Board’s perspective. Fischer stated that one major factor that changed the environment, not only in Memphis but countrywide, is occupancy. Fischer stated that his properties are suffering for various reasons with a lower need, and he has seen an adjustment from 2023-2025. Fischer stated that everything his team tackles are things that his team thinks will further benefit the community, and in the formal response to the Board, he included a response to each item because he wants the Board to be happy with what he is serving to the community. Fischer stated the eviction rate at his properties is extremely low because people love to live wherever his developments are and also the way management is placing tenants throughout his portfolio. Fischer stated there are second- and third-year people that live on his properties, and they are looking for more tenants to be able to have the tenant benefits and to secure the place. Fisher stated that he does not disagree that his team needs to put more into these properties and that issues or concerns brought to his attention by HEHFB staff is taken seriously and it is something he wants to continue, but he in the last few years as he has appeared before the Board with PILOT applications, PILOT Refinancing applications, and PILOT Closing Extensions, he felt like his team has always gotten approval and has the view that they are a preferred client because they are good people and are doing whatever they were saying. Fischer stated that these properties are in a variety of areas and are large properties with a total of close to 1,900 units in the PILOT program with occupancy close to 60% with approximately 1,200-1,300 tenants living in properties across his PILOT portfolio, and that is very important.
Knopf stated that when Fischer began with these properties, he had third-party management, as he is a developer first then manager second, and he saw that this was not working and developed an in-house property management company. Knopf stated that most individuals starting a management company would start it in their home state in order to micromanage because that's what you need to do to get it going, but Fischer decided to start this management company in Memphis. Knopf stated that Fischer has properties in a number of states in the US, but he chose to begin here in Memphis with the central office located at Bridgeport Manor instead of being located in an office building because that provides full access if anything needs to happen, management is aware of that quickly. Knopf stated that as previously mentioned the eviction rate is extremely low, not only because management has higher qualifications than some others, but also because there are local people who care who owns these properties and property managers take their time to try and help the tenants and guide them through whatever programs they can take advantage of, which helps to build unseen tenant benefits to the communities that management is putting their heart and soul into. Knopf stated this is not just an investment opportunity to finish construction and see what happens, this is a roll up your sleeves approach with local people helping local people.
Carpenter stated that his previous question was not answered as far as the timeframe is concerned. Carpenter stated that the Board understands that these are valuable incentives, and that's the reason the Board and staff takes the time to provide this level of oversight, and the Board has the opportunity to terminate these incentives or to give Fischer a timeframe to come into full compliance. As for the latter part, Carpenter asked Fischer again what the timeframe would be needed to get this Board to consider giving him an opportunity to come into compliance so that the Board can continue with these two properties in the PILOT program. Fischer stated that regarding the tenant benefits, he thinks he will be in compliance within the next month. Knopf stated that most tenant benefits will be completed within the next month, but there are some items that will take a bit longer. Fischer stated, with that being said, they will be in compliance with the specific items listed as tenant benefits within the next two months. As for occupancy, Fischer stated that once they are able to close the PILOT refinancing, they are taking the approach of completing two buildings at a time, with sixteen (16) units in each one which will take between two to four (2-4) weeks for each one, and they will be working on several buildings at the same time, and when things are fresh and new, it attracts a different clientele and people want to come and live there. Fischer stated that within a twelve (12) month timeframe, they will be able to have both levels back up.
Cliff Henderson asked if the PILOT Refinancing will cover both properties in question today or only Bridgeport Manor or his entire portfolio. Fischer stated that at the end of the day, the PILOT Refinancing does impact his other properties because when there is a problem with one, it tends to spread around, but it is very important to his team because they are sitting with this previous lender for three or four years and that was one of the things that took so long to close the PILOT initially was the lender is a bank out of California and it took them a long time to even understand the PILOT program, but Fischer stated he is used to that challenge now, but it is very new to out-of-state banks and they do not understand the process, so it takes time. With Santander, Fischer stated his team has a call and sent them all the literature from day one so that they could understand how the PILOT works instead of being all surprised. Fischer stated that today, many of his properties are already in stabilized loans, so whatever helps the portfolio, Bridgeport Manor is sitting in a very expensive loan, and it does hurt throughout the whole entire portfolio. Henderson asked again if this particular PILOT Refinancing Application applies only to Bridgeport, or to other properties, to which Fischer responded it only applies to Bridgeport Manor.
Bryant asked for confirmation that Fischer is committing to the Board that Bridgeport Manor would be completed within twelve (12) months, now changing the latest completion date from March 2026 to June 2026. Fischer stated the March 2026 completion date was as of two months ago when they thought the PILOT Refinancing Application for Bridgeport Manor was going to be approved. Fischer stated that the actual construction should not take more than six (6) months to complete, and achieving the minimum 75% occupancy rate should not be difficult following that, as the site is close to that today, so completion of the construction and occupancy really goes hand in hand, so once approval for the PILOT Refinancing Application for Bridgeport Manor is received and once that is closed, they will be able to complete construction. Fischer confirmed that construction completion and 75% occupancy should be achieved within the same six (6) month timeframe. Carney clarified that Fischer means the six (6) month timeframe would not begin until the PILOT Refinancing transaction for Bridgeport Manor is closed, because the loan has to be closed so that ownership can get the money to start the construction. Fischer confirmed. Bryant asked if construction would be completed without PILOT Refinancing application approval. Fischer stated that the PILOT Refinancing approval is a very big help and component. McKnight stated that he would like to remind the Board that this developer has multiple, multiple properties in the Board’s PILOT portfolio, and he would like to remind them of that so that they can make an informed decision. Carney stated that is true and is something to be considered because this developer’s portfolio includes over 1,800 units, with probably 1,200 occupied units and is a tremendous benefit notwithstanding the issues for repairs needed, and it is a tremendous benefit to the communities these units serve.
Vincent Sawyer stated that he was not a member of the Board at the time of the original approval of this PILOT, but he would like to know if the remaining construction was supposed to be completed with the original $21 million. Fischer stated that Bridgeport Manor was originally purchased for approximately $13 million and 432 units have been renovated. Fischer stated ownership is already out of pocket what the original proceeds were when ownership did this financing because he knew it was going to be a lot of work and a lot of money, with ownership putting in over $10 million out of their own pockets. In 2021-2022, Fischer stated that the financial market was much easier and the change would have gone faster, and this was before they had refinance qualifications with the Board, and the intention was everything was going good, they planned on occupying and being able to refinance fast enough, get the next trench down and be done, which is why ownership did that and started with the initial investment because they did not even think this would be an issue. Fischer stated that is why windows have already been put in the over 200+ units to be finished, and demolition work has been completed because he believed the new administration would come in and the interest rates would be fixed up and the market would be perfect, but here they are six (6) months later and it is getting harder and harder with public funding, especially with a refinancing.
McKnight stated to the Board that he has accompanied Townsend to each one of these sites and is happy to answer any questions the Board may have regarding that. Howard Eddings, Jr. asked McKnight if, based on his visits, there is anything he would like to share with the Board, as maybe Board Members may not know the right questions to ask. Henderson stated this is a tough situation because the Board is not seeing the entire portfolio at one time to McKnight’s earlier point, and he feels the Board is a little hamstrung right now because it is being asked to look at two (2) properties out of the portfolio, and because of the complications, he could vote either way. Henderson stated he would like to see the entire portfolio before the Board makes a decision. To ownership, Henderson stated to Bryant’s earlier point about communication is key, because if ownership had indicated sooner that they were doing the phased approach and had taken some things more seriously and done what they could with certain things, he does not think we would be here today where he feels like ownership is sprinting to try to keep the Board from closing the door. Henderson stated that he is unsure if he can trust ownership to remedy the issues, and not to fall back into a certain way, and there are certain things he is gathering from ownership that they underestimated what happened going into it, general economics blew in a different direction, and ownership could not keep up with it. At the same time, Henderson stated that communication and getting out in front of things to say that this is a key piece to making this work in the PILOT program, and what can be done to push things forward versus what is being heard from staff, which is staff has been knocking on this door and has not been getting the response needed. Henderson stated that as he reviews these things, this is what make is tough because ownership does have a significant critical mass of units, but from a return on investment (ROI) perspective with the PILOT, if the Board is seeing 25%-30% at some of these properties, he would not have voted to approve a PILOT if he know that would have been the return on it after over two years. Henderson stated that he does believe ownership is trying to get things done, but he is on the fence as to whether to terminate the PILOT and give the properties a chance for a reboot, or to give ownership a chance to move forward and that is what makes this really complicated.
Knopf stated that there are two parts of what the Board is looking for from his view, first is with compliance with what is being physically seen on the properties and second is occupancy. For the physical compliance, Knopf requested to meet with the Board’s internal compliance inspector that can walk the properties with him and provide ultimate clarity on the concerns of the Board, and he would be able to make an honest commitment of how long certain items will take to complete. As for occupancy, Knopf stated he is happy to share everything they are doing with the Board as far as the unique approaches they are taking, whether its marketing or putting themselves out there to programs that are available to prospective tenants in the area to make sure they are tracking in the right way. Knopf stated that while it is not as fast as either ownership or the Board would like, management is seeing steady increases in occupancy month over month, and he believes it is trending forward in a much better way.
Sawyer stated that he agrees he appears to be trending in the right direction, but he also agrees that it seems incomplete to try to address this without looking at the entire portfolio comprehensively. Sawyer asked if the Board has procedures in place to review the portfolio as a whole at the same time. Carney stated that ownership will be attending the Board’s upcoming meeting to address the remaining properties in the portfolio based on the legal defaults that were issued and will be issuing another report to the Board like the one issued for today’s meeting. Carney stated that his client's pressure is that without the PILOT Refinancing Application being approved, the ownership will have a hard time completing the remaining units at the property. Chairman Reid asked when the closing date would be for that. Carney stated that approval has not been granted by the Board, so a closing date has not been set. Corbin Carpenter stated that it has been made clear to the Board by ownership that improvements will not be able to be made without an approval of the PILOT Refinancing Application for Bridgeport Manor and asked how long the current commitment letter is valid for. Fischer stated it was originally ninety (90) days, and we are a little over sixty (60) days into that timeframe. Fischer stated that he is in discussions with the bank and did bring up the challenges from the May 7, 2025 Board meeting and indicated that he would be appearing before the Board today. Fischer stated the lender is willing to keep its commitment as they have already vested a large interest for appraisals, environmental, and third-party people, and once a bank agrees to lend to you, they do not want to walk away, but at some point, quarter three and quarter four come along and they must hit their numbers. Corbin Carpenter asked for confirmation that appraisals, schematic designs and renderings for the anticipated renovated units have been completed and construction contractors in place, to which Fischer confirmed everything is ready to roll. Corbin Carpenter asked Carney is he would like to propose to the Board to reconsider the variance for the PILOT Refinancing Application for Bridgeport Manor to be considered. Carney responded yes. Henderson stated he is willing to put forth a motion to allow the variance and stated his consideration is ensuring that the refinancing proceeds are not going to the owner, but going into the property and from that perspective, the Board considers refinancing based on whether an owner is taking funds out of the property, and as long as all Board members are on the same page with that, he is willing to put forth a motion to allow the variance to move forward on this particular property, and it would affect his perspective in any future decisions for this property.
After discussion on how motions should be considered from a procedural standpoint, Charles Carpenter stated that the Board desires a total resolution of all properties and the Board’s internal compliance inspector would schedule walkthroughs of each property to see exactly where things are because there is no question that these properties are on the bubble, and it is not because ownership is not well-intended, but there needs to be more urgency and things need to be completed as opposed to having them in progress. Carpenter stated that based on what the Board has indicated, it would be appropriate for the Board to reconsider the variance to the PILOT Refinancing Application for Bridgeport Manor to be considered while this property and others in the developer’s portfolio are in a status of legal default. Secondly, Carpenter stated, if the reconsideration for a variance is approved, the Board could then consider the PILOT Refinancing Application for Bridgeport Manor with the understanding that the proceeds of the refinancing would be injected into the 200+ units at Bridgeport Manor. Carpenter stated that the third item would be resetting action for Bridgeport Manor and Coronado Manor legal defaults to the Board’s July 9, 2025 Board meeting and allow the Board’s internal compliance inspector to meet with management at each property so the Board would have a clear status of where these properties are in comparison with the Board’s policies and procedures, and then each property would need to be considered individually.
Carpenter stated that while the Board can discuss the developer’s portfolio together, each property in the portfolio is unique, and from preliminary review, some are in better condition than others, so there may be specifically tailored remedies for each property, but that would move the Board forward and give the developer the incentive to meet these deadlines and to comply with the Board’s policies and procedures. McKnight stated that he will ensure that he and the Board’s compliance team conduct walkthroughs of each property to make sure of where they are with regards to making sure they are in compliance. Corbin Carpenter asked, as there was not a submittal conference held for the PILOT Refinancing Application for Bridgeport Manor, if staff is comfortable moving forward with the application being considered by the Board. Bryant requested that the Board. Bryant requested a detailed breakdown of what the $10,280,000 will be spent on and what reserve accounts will be set up for that as well for the applicant to resubmit the commitment letter from the lender. Bryant asked that these items be submitted no later than Friday, June 13, 2025.
Courtnee Melton-Fant asked for clarification that when the Board is considering a PILOT Refinancing Application, the Board is looking at if funds are being taken out of the property. Bryant confirmed, stating that the Board wants to ensure that equity is not being taken out of the property to the negative of the property. Bryant stated that there are instances when equity is taken out, but it is not a detriment to the property, and that is what the Board looks at as part of its consideration. Bryant stated that in this circumstance with Bridgeport Manor, the PILOT Lessee is stating that all refinancing proceeds will be directly reinvested back into the property, and there is no cash-out of equity. There being no further questions or comments,
Cliff Henderson made a motion to approve a variance to allow the PILOT Refinancing Application for Bridgeport Manor Apartments to be considered by the Board while certain properties in the developer’s portfolio are in non-compliance status. Howard Eddings, Jr. seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Cliff Henderson made a motion to approve the PILOT Refinancing Application for Bridgeport Manor Apartments and requirement of PILOT Lessee to provide a revised sources and uses table, a detailed breakdown of the $10,280,000, and resubmission of the lender commitment letter no later than Friday, June 13, 2025. Howard Eddings, Jr. seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Cliff Henderson recommended that in lieu of the Board’s July 9, 20205 regular meeting that the PILOT Lessee appear before the Board at the August 6, 2025 Board meeting to provide staff enough time to conduct a walkthrough of each property, coordinate with the Board’s external monitor, and review administrative compliance to provide a full and complete overview of the developer’s portfolio at the August 6, 2025 Board meeting. The staff agreed and Bryant recommended that staff and legal counsel conduct a virtual meeting to review the progress of the portfolio in thirty (30) days to ensure consistent communication with the PILOT Lessee during the interim period. There being no further question or comments,
Cliff Henderson made a motion to defer action on Bridgeport Manor and Coronado Manor, and for the PILOT Lessee to appear at the August 6, 2025 Board meeting for the Board to review the developer’s entire PILOT portfolio. Howard Eddings, Jr. seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Carpenter reminded the PILOT Lessee and Carney that a formal written response and cure plan will still be required to be submitted in accordance with the Notices of Legal Default issued for each PILOT property. Fischer asked if once those cure plans are submitted, will his team receive feedback as to whether the cure plans submitted are accepted. Carpenter advised that it will be discussed at the August 6, 2025 Board meeting, and each formal written response and cure plan will be considered individually by property. Carpenter stated that this is the Board’s spirit of cooperation so that the PILOT Lessee will have a full opportunity to make this work and bring these properties into compliance. Fischer asked that from a procedural standpoint, can he request that the Board’s legal counsel provide something to explain to each lender that there has been a continuance until the August 6, 2025 Board Meeting. Carpenter stated that procedurally, Fischer should be able to go back to the lender and close the refinancing loan for Bridgeport Manor and mobilize to get the remaining units done. Otherwise, Carpenter stated that everything is status quo until final decisions are made with the mandate from Chairman Reid that Fischer does not need to wait but needs to take care of his business. Carpenter stated that if the PILOT Lessee appears before the Board in August and things remain the same, the Board will not look favorably on that. Fischer requested that the Board’s legal counsel provide something to explain to each lender that there has been a continuance until the August 6, 2025 Board Meeting, to which Carpenter stated he would provide that. There were no other questions or comments.
Frank Carney, Mendel Fischer, and Neil Knopf left the meeting.
Executive Directors Report
a. Trey McKnight reported that he, Monice Halger, Howard Eddings, Jr. and Vincent Sawyer all attended the 2025 Annual NALHFA Conference in Minneapolis, MN. McKnight stated that he would be attending this conference regularly and will be submitting several of the Board’s projects to be considered and discussed nationally. McKnight stated that Tillman Cove should be submitted to be discussed nationally in regard to where we are and what we are doing. McKnight stated that there were several properties discussed at the conference that he felt like the Board is doing better than those properties that were presented there, and he feels that the Board’s successful projects should be discussed. McKnight stated that moving forward, he will be submitting Board projects for consideration at the national level. McKnight stated that the Board has several things going on that should be discussed nationally because they are operating really well.
b. McKnight stated that on June 30, 2025, Matt Wiltshire with Pathway Lending, who is the SVP of Affordable Housing, will be speaking. McKnight reminded the Board that he has been approved to be the first West Chairman for the Tennessee Affordable Housing Coalition (TNAHC), and this will be the first meeting in Memphis or Shelby County and this meeting will be held at The Wing Guru from 11:30-1:30. McKnight stated that Matt Wiltshire will be discussing the new things that have changed in Washington, D.C. and locally, and following that, the group will be touring a housing project put up by United Housing, Inc. McKnight stated he anticipated having thirty to forty (30-40) people there at the facility to discuss what is going on. McKnight stated that this is a new thing that is being done in Memphis and Shelby County, and McKnight stated as West Chairman for the TNAHC more of this type of activity will be held in the future. Chairman Reid asked if there will be information sent out to the Board and McKnight agreed that he will be sending out an invitation for all Board members to attend. McKnight stated that he and others of the TNAHC are trying to solicit people to pay for their lunch so that the Board does not have to pick up the tab, but actually the Board will not pay for it one way or the other. McKnight stated he is hoping that there will be some very important people there and the complete restaurant will be shut down at The Wing Guru in Whitehaven.
c. McKnight reported that he has also joined the Board in the Memphis Blueprint for Advancing Wealth, and he will advise when the next meeting for that will be. McKnight stated that Mayor Young has asked the Board’s input on this, so he hopes to be able to discuss this with him and answer any questions that he may have. McKnight stated that he hopes that the Board is the leadership organization for that.
McKnight thanked Hagler, Eddings, and Sawyer for their attendance of the 2025 NALHFA Conference in Minneapolis, MN with him and stated that moving forward, he will be attending Washington, D.C. to hopefully have a discussion with Congress regarding Memphis and Shelby County. There were no further questions or comments.
Operations Report
Stephanie Bryant presented the Operations Report as follows:
a. Review of Compliance Oversight for May 2025
Bryant began by reminding the Board of the four (4) levels of additional compliance oversight that were put into place by staff in 2024 and this report will review movement of certain properties within these four (4) levels: (i) Under Observation, (ii) Compliance Concerns, (iii) Non-Compliance, (iv) Legal Default. Bryant reported as follows:
1. Under Observation:
a. One (1) PILOT property moved UP from regular monitoring to “Under Observation”:
i. University Place Senior
2. Compliance Concerns:
a. Two (2) PILOT properties under “Compliance Concerns” had a walkthrough performed on May 28, 2025, and were given the deadline of Friday, June 6, 2025 at 3:00 pm CT to submit written construction plan and timeline for HEHFB Staff review to remedy compliance concerns for each property
i. Abington
ii. Mill Creek Apartments
3. Notice of Non-Compliance:
a. No properties were placed in “Notice of Non-Compliance” status for the month of May 2025.
4. Legal Default:
a. One (1) PILOT property was referred to Board’s general counsel to be placed in Legal Default and Notice of Legal Default was issued in the month of May 2025:
i. Hillcrest Apartments: issued 05.29.2025
b. Eight (8) PILOT properties previously reported as referred to Legal Default at the Board’s May 7, 2025 Board Meeting were issued Notices of Legal Default between April 2025 and May 2025 by the Board’s general counsel:
i. Sunrise Villas: issued 05.14.2025
ii. All seven (7) properties included in developer Mendel Fischer and Shrage Marasow PILOT Property Portfolio:
1. Bridgeport Manor: issued 04.17.2025
2. Coronado Manor (f/k/a Willow Oaks): issued 04.21.2025
3. Eden Pointe: issued 05.12.2025
4. Grainge Hill: issued 05.13.2025 (revision provided 05.23.2025)
5. Scenic Hills (f/k/a Hunters Ridge/Hightop Ridge): issued 05.13.2025
6. Timber Pines (f/k/s Gowan Pines): issued 05.14.2025
7. Watkins Manor: issued 05.12.2025
b. HEHFB Suite 1120 Preliminary Floor Plan Update
Bryant stated that she has communication with Henry Turley Company representatives concerning the Preliminary Floor Plan, and they have now initiated construction drawings based on those plans and Board guidance at the May 7, 2025 Board meeting. Bryant reported that Henry Turley Company representatives have advised that there will be no change to the current lease or rental rate, but that all renovation costs would be the responsibility of the Board if the Board desires to proceed with those renovations once the construction drawings are completed and presented to the Board. Bryant stated she does not have a definite timeline of the construction drawings, but she will keep the Board advised. Chairman Reid asked if any estimates have been provided, to which Bryant responded she has been advised that no estimates can be provided until construction drawings are completed and finishes are selected. Bryant stated that as soon as construction drawings are complete, she will be setting up a meeting with Henry Turley and The Crump Firm to discuss finishes moving forward in the estimate process. Chairman Reid asked if a contractor had been selected. Bryant stated no, but she would work with Henry Turley Company representatives on recommendations.
c. FYE December 31, 2024 Audit Update
Bryant reported that the Annual Audit for Fiscal Year Ending December 31, 2024 is coming to a close and independent auditors will be making a presentation to the Board at the July 9, 2025 Board Meeting.
d. Meridiam’s Blue Suede Networks Press Release
Bryant advised that Chairman Reid has asked that the Meridiam’s Blue Suede Networks Press Release be provided in today’s meeting materials for Board informational purposes only for the Board to review at their leisure. Chairman Reid stated that this is something going on in Memphis and there is a lot of discussion about what that looks like, how things play out in the future and the Board’s involvement. Chairman Reid stated that the Board will be educating themselves on this and several other things in the months to come. Trey McKnight stated that he made the deal to bring Blue Suede to Memphis, and if anyone has any questions, he can get the answers to them.
There were no other questions or comments.
Finance Committee Report
Cliff Henderson presented the financial results for the month ended April 30, 2025. After discussion,
Vincent Sawyer moved for acceptance of the Finance Committee Report for the month ended April 30, 2025, properly seconded by Courtnee Melton-Fant, and the motion passed unanimously after a proper roll call vote of the Board members.
New Business
Dexter Washington and Tomecia Brown entered the meeting.
Shirley Bondon left the meeting.
Carpenter introduced Chief Dexter Washington and Tomecia Brown with Memphis Housing Authority in attendance. Carpenter reminded the Board that it administers the PILOT program for the Memphis Housing Authority (MHA), a separate program from the HEHFB PILOT Program, from a delegation of authority from the Memphis City Council. Carpenter stated that the MHA PILOT Program structure is different from the HEHFB PILOT program, each one has a twenty (20) year term, but the MHA program typically takes property from the Memphis Land Bank and goes into a public-private partnership with a private developer, which is why there is a need for a PILOT. Carpenter stated that MHA is involved and sponsors the PILOT and may be involved in an equity position in some of the projects. Carpenter stated that Crockett Park is one of a few projects that will be coming to the end of their PILOT term, and in this case, Crockett Park is at the end of its term. Carpenter stated that what experience has taught, even with HEHFB PILOTs, is that at the end of the PILOT term and the property participating in the program for twenty (20) years, the property still needs assistance and there is still a need to have some sort of incentive to keep that property viable and to carry out the mission. Carpenter stated that this is a case of first impression as to how that can be determined. Carpenter reported that his Firm has engaged in preliminary discussions with MHA as to whether there will need to be a delegation, or some revised delegation of authority from the Memphis City Council, or how additional incentives can be provided. Carpenter stated the reason for this is because MHA deals with very low-income families and 100% of the residents are in that category. Carpenter advised that due to these circumstances, Washington has requested to appear before the Board to request from the Board to hold the PILOT termination in abeyance for a ninety (90) day period to allow further analysis and further discussions to take place. Carpenter turned the meeting over to Washington for further comment.
Trey McKnight stated that Mayor Young has also asked that the Board consider this request and go where it can with regard to assistance. Washington thanked Carpenter for providing a summary of this situation. Washington stated that Crockett Place is a 100% affordable development that was developed in 2005, hence, it being at the end of the PILOT period. Washington stated that the property is facing some challenges, some physical and some operational, but MHA believes they see a path forward for correcting these issues. Washington stated that MHA is actively moving to get out of the public housing space via the Rental Assistance Demonstration (RAD) Program, and he believes this property is a good candidate for that program. However, Washington stated he is requesting a ninety (90) day abeyance to get more concrete information and see what the pro forma looks like for a RAD conversion. Washington stated that MHA is in the process of completing a capital needs assessment for their sites that contain public housing units, and Crockett Park has twenty-six (26) public housing units. Washington reported that he has just gotten drafts this week and that will give MHA the opportunity to know what level of rehabilitation is needed for this property, which will also tell what the conversion looks like. Washington explained that the deeper rehabilitation investments made in a property under the RAD program, more traditional vouchers can be put at the property which will better support the operation expenses post conversion, but all these factors explain why MHA needs a little more time to figure those things our and would request this abeyance.
Chairman Reid asked Carpenter to describe the difference in the structure of an HEHFB PILOT versus an MHA PILOT, that an HEHFB PILOT is structured through a fee simple deed, whereas an MHA PILOT is a lease transaction, and that this will not be setting a precedent for other HEHFB PILOTs. Carpenter stated that is an excellent point, and whenever the Board addresses these issues of first impression, the Board always wants to be sure that it is careful not to establish a poor precedent that would do more harm than good. In this case, this is an MHA PILOT versus an HEHFB PILOT. Carpenter stated that with an HEHFB PILOT, there is a transfer of the deed, whether it is a Quit Claim Deed or a Special Warranty Deed, the actual legal title from the non-exempt entity or private entity to the Board, which is a tax exempt entity and that is why he reports that the Board receives notice of the various claims and defendants and lawsuits because Tennessee would be considered the Title State. Carpenter stated that the significance of the MHA PILOT is that the property is not transferred via a deed, it is transferred via a lease, so it is a contractual arrangement where the Board would have a lease as a ground lease, then a sub-lease, and then the property is sub-sub-leased back to the entity, and that is a completely different structure legally. Carpenter stated that his Firm is not recommending anything for the HEHFB PILOT, but during this exceptional circumstance, his Firm is recommending that the Board approve this ninety (90) day abeyance, and it is not to be used as a precedent, but is to be used to allow MHA to look at the various options to keep this project, a 100% affordable development, from being restored to the tax rolls immediately while MHA explores other options that could save this project and the families that currently reside there. There being no further questions or comments,
Vincent Sawyer moved to hold PILOT Termination Documents for MHA PILOT Crockett Park in abeyance for 90-days, properly seconded by Cliff Henderson, and the motion passed unanimously after a proper roll call vote of the Board members.
There was no other new business.
Chairman Reid stated that the next regular meeting of the Board is scheduled for Wednesday, July 9, 2025 @ Noon. There being no further business, the meeting was adjourned by the Chairman at 01:56 p.m.