MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Wednesday, March 1, 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, February 22, 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)
Buckner Wellford (Zoom) James Jalenak (Zoom)
Cliff Henderson Katie Shotts
The following Directors were absent:
Dr. Manoj Jain
Staff and others attending: Martin Edwards, Jr., Stephanie Bryant and Bryce Miller; Charles E. Carpenter and Corbin I. Carpenter, General Counsel; Samia Mackay (attending via Zoom), legal assistant to General Counsel; Cheryl Hearn, Deputy City Attorney.
Also participating via remote Zoom virtual platform and/or in person were Stephanie Sinito of Millennia Housing Development, LTD representing Cavalier Court Apartments and Gospel Gardens Apartments; Elizabeth Friary of Evans Petree, PC and Mendel Fischer and Shrange Marasow of MCF Capital Management, LLC representing Scenic Hills Apartments; Jay Mann and Moish Knopf of Capstone Realty and Management and Mark Jobe and Dakota Beasley of Glankler Brown, PLLC representing The Lakes at Ridgeway, The Reserve at Mount Moriah, and Stonegate Apartments; Rachel Stenger-Wiley, Brett Goldenhorn, and Pauline Olden of Odin Properties representing Creekside Meadows Apartments and Mill Creek Apartments; David Shores of Multi-South Management Services, LLC representing Macon Manor Apartments; Elizabeth Friary of Evans Petree, PC and Matty Wercberger representing Sunrise Villas Apartments; 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, March 1, 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
Monice Hagler moved for approval of the Minutes of the February 1, 2023 Regular Meeting, which was seconded by Cliff Henderson, 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 January 31, 2023. After discussion,
Katie Shotts moved for acceptance of the Finance Committee Report for the month ended January 31, 2023, properly seconded by James Jalenak, and the motion passed unanimously after a proper roll call vote of the Board members.
Staff Report
Stephanie Bryant reported 2022 Board Activity totals, stating that the Board approved and/or closed PILOT Transactions for 2022 totaling two thousand five hundred sixteen (2,516) units and over two hundred twenty-five million dollars ($225,000,000) in new capital investment into the City of Memphis. Bryant also reported that the Board approved and/or closed PILOT Term Extensions in 2022 preserving one thousand sixty-two (1,062) units and induced ninety-eight million dollars ($98,000,000) in bonds in 2022. Bryant congratulated the Board for the work accomplished in 2022 and thanked them for their service to the City of Memphis.
Bryant reported on compliance monitoring through the Board’s third-party compliance inspector will increase from the previous twice per year inspections to four inspections per property during the calendar year. Bryant also reported to the Board that an additional staff compliance inspector will begin work with the Board in the coming weeks to assist in internal compliance monitoring.
Dan Reid stated that the Board has done unbelievable work and expressed his appreciation on behalf of the Board to the Board staff for their work.
Attorney’s Report
Charles Carpenter presented the legal report, as follows:
1. Carpenter reported that at this point in the first quarter, there has been a lot of activity and preparatory work taking place in order to move things forward with the Board’s induced bonds as well as with various PILOT applications and modifications to existing PILOT properties. Carpenter reminded the Board that Tennessee Housing Development Agency (THDA) has opened its first round of activities and the Board has three (3) applications that have been made for round one for the Western Grand Division:
a. Greenbriar Apartments; induced not-to-exceed sixteen million ($16,000,000);
b. The Memphian; induced not-to-exceed seventy million ($70,000,000); and
c. The Gardens of Forest Hill Irene; induced not-to-exceed eighteen million ($18,000,000)
Carpenter stated that there is approximately eighty-one million ($81,000,000) in THDA bond allocation reserved for the Western Grand Division for Round One and those applications are being submitted and finalized. Carpenter stated that he anticipated the THDA announcement being made around May 1, 2023 as to the success of these applications.
2. Carpenter reported that his firm has been working with the development teams for MH Strategies I, LP (Barry Towers and Jefferson Square) and MH Strategies II, LP (Borda Towers and Venson Towers). Bonds for these projects were closed in the fourth quarter of 2022 and developers are now seeking permanent financing through the federal government, Fannie Mae and Housing and Urban Development (HUD). Carpenter stated that as a result, there would be additional activities coming for these projects and that PILOTs previously approved for the four (4) towers will be implemented during that process.
3. Carpenter reported that similarly, his firm is working with the development teams for Kimball Cabana Apartments and Oakshire Downs Apartments, of which both properties have bonds that have been closed and the developer is finalizing permanent financing.
4. Finally, Carpenter advised that his firm has continued to work with Environmental Court, as a part of the work of the PILOT portfolio for the Board. Carpenter stated that some of the properties that have entered the Board’s PILOT program are in the construction phase and during that time, some of the properties have been cited in the Environmental Court with code violations and other complaints. Carpenter’s firm is coordinating with the Environmental Court, City Attorney and Code Enforcement to make the process as efficient as possible. The process has taken quite a bit of time in coordinating with the management companies, Code Enforcement, the City of Memphis, and some of the other blight advocates. Carpenter advised that he will be reporting more to the Board as the process goes forward and utilizing internal and external monitors to coordinate with code enforcement so that his firm can have an efficient and informed presentation to the Environmental Court, and allowing all of the entities to work together, ultimately benefiting the Board’s PILOT program, all named entities, as well as, the families that are a part of the affordable housing sector in our community.
There being no further questions or comments, the Legal Report was concluded.
Action Items-
1. Status Update on Resolution authorizing the reissuance of Multifamily Housing Revenue Bonds, Series 2018 (Cavalier Courts Apartments) and approval of certain legal documentation required in connection with such reissuance
Charles Carpenter introduced the agenda by stating that action items one (1) and two (2) are owned by the same development team, Millennia Housing Development, Ltd. Carpenter stated the Board had issued tax-exempt bonds for each of these properties and approved the reissuance of the bonds for each (there were three (3) altogether, of which Hope Heights has closed). Stephanie Sinito had reported at the Board’s January 2023 meeting that Cavalier Court and Gospel Gardens would be closed by the end of February 2023, but they have not. Carpenter turned the meeting over to Sinito for further comment.
Sinito reported that the development team met with the limited equity partner and reviewed the equity requirements in order to close on the remaining two (2) reissuances, and it has been determined that both transactions will need to close at the same time. Sinito reported that the team is waiting for the mark to market update from HUD for Cavalier Court in order to maximize the rents and complete the underwriting for the new financing. Sinito reported that her team expects approval from HUD in early April.
James Jalenak asked for clarification on what the mark to market report is. Sinito explained that these properties are one hundred percent (100%) Section 8 and the current rents which are approved and monitored by HUD are under market values after the renovation of the property, so the mark to market analysis is based on a new rent comp study for the area where HUD will increase the rents, which in turn increases Net Operating Income (NOI) to support the refinancing.
Carpenter asked what time frame Sinito is requesting the Board to extend in order to keep this commitment in place. Sinito requested the Board extension until May 15, 2023 for closing of both transactions, which will allow additional time for any delays based on HUD. Carpenter stated that the properties are in compliance otherwise, and based on the fact that the third property, Hope Heights, did close, that May 15, 2023 is reasonable under the circumstances and the matters will be considered at the Board’s June 7, 2023 Board meeting. There were being no further questions or comments,
Cliff Henderson moved to approve an extension until May 15, 2023 for the Resolution authorizing the reissuance of Multifamily Housing Revenue Bonds, Series 2018 (Cavalier Courts Apartments) and approval of certain legal documentation required in connection with such reissuance. Katie Shotts seconded, and the motion passed unanimously after a proper roll call vote of the Board members.
2. 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.
There being no further questions or comments,
Cliff Henderson moved to approve an extension until May 15, 2023 for the Resolution authorizing the reissuance of Multifamily Housing Revenue Bonds, Series 2018 (Gospel Gardens) and approval of certain legal documentation required in connection with such reissuance. Katie Shotts seconded, and the motion passed unanimously after a proper roll call vote of the Board members.
Monice Hagler left the meeting.
3. PILOT Refinancing Application for Hightop Ridge apartments, LLC (d/b/a Scenic Hills Apartments
Carpenter presented this agenda item as a refinancing application, stating that Mendel Fischer is the contact for the Developer and legal counsel for the applicant is Frank Stockdale Carney and Elizabeth Friary of Evans Petree, PC. Carpenter turned the meeting over to Friary for additional comment. Friary stated that the applicant is seeking permanent financing for the property, which was purchased in 2019 and a PILOT was approved by the Board in December 2021. Friary stated that the developer has made significant progress with the rehabilitation of the property that was in poor condition at the time of purchase. Carpenter stated that according to the materials submitted, the refinancing appears to be a traditional refinancing paying off the first mortgage and related closing expenses, but there would be approximately five hundred thousand dollars ($500,000) that would be used to make improvements to the property. Carpenter asked Friary to confirm this information and asked what the scope of improvements would be for the stated funding, at which time Friary turned the meeting over to Mendel Fischer for specifics.
Fischer stated that the development team initially planned on a smaller security system, but due to the commitment to security for tenant improvements, the developer ended up installing approximately one hundred fifty (150) security cameras, so some of the refinancing proceeds will be used for that, as well as landscaping. Fischer explained that the complex is made up of many hilly areas, resulting in more intense landscaping versus a flat property. Fischer stated that there is a lot of tree work, water, and irrigation work that needs to be done as well. Fischer stated that the refinancing proceeds allocated to the property will cover the expenses still owed to the vendor for the additional upgrades to the security cameras, the landscaping, as well as completion of fencing, and completion of lighting upgrades on the property.
James Jalenak asked how much of the refinancing proceeds will be distributed in repayment to investors. Fischer responded that no funds will be distributed to investors at this time.
Carpenter asked Bryce Miller, the Board’s Compliance Coordinator, to make any further comments. Miller stated that most of the units appeared to have new windows and asked if there are plans to finish the windows. Fischer stated that the property is still under construction and is approximately eighty (80) percent occupied and they plan to continue to rehabilitate and upgrade the property and the remaining windows will be replaced once they are received. Miller asked for clarification regarding the landscaping upgrades mentioned. Fischer stated that improvements will be made to the retaining walls on the property because some of the large trees are causing the retaining walls to deteriorate, so the trees must be removed for the retaining walls to be repaired or replaced. Miller mentioned some areas of brick that are damaged on the property and asked what the plan is for correcting those areas. Fischer stated that the main goal was to renovate the interior of the apartments in order to get the property up and running in order to generate income out of the property, and now more work will begin on the exterior and landscaping. Miller stated that he observed paving equipment on site and asked if this is an ongoing project, Fischer stated that paving began in September or October 2022, and due to weather delays, the company performing the work stated that they would return to complete the project in March 2023. Miller asked what the renovation plans are concerning the swimming pool area.
Fischer stated that the swimming pool will be shut down and backfilled and made into a playground. Carpenter stated that the project has submitted the information and provided clarification necessary, and the application is in line with the Board’s policies and procedures. There being no further questions or comments,
Cliff Henderson moved to approve PILOT Refinancing Application for Hightop Ridge apartments, LLC (d/b/a Scenic Hills Apartments). Buckner Wellford seconded, and the motion passed unanimously after proper roll call vote of the Board members.
4. Affordable Multifamily PILOT Application for Capstone Ridgeway LLC (d/b/a The Lakes at Ridgeway)
Carpenter stated that the next three (3) agenda items are offered by the same applicant, Capstone Realty and Management, and their legal counsel is Mark Jobe of Glankler Brown, PLLC. Carpenter stated that each of these properties have unique circumstances and turned the meeting over to Mark Jobe for further comment. Jobe stated that these applications are in some ways one project, but three (3) separate apartment complexes. Jobe stated that all three (3) properties are being acquired under one purchase agreement with identical underlying investors. Jobe stated that Capstone Realty and Management has a long history and extensive experience in the multifamily arena, including Hillcrest Apartments, a property currently participating in the Board’s PILOT program. All three (3) properties were acquired together in an effort to capitalize on the investment opportunity to create synergies between the three (3) properties and streamline and maximize work with contractors to get these jobs done. Jobe stated that these applications represent over forty-million-dollar ($40,000,000) investment in Memphis.
Jobe stated that The Lakes at Ridgeway is a three hundred seventy-four (374) unit property that has a large lake in the middle of the property, which is a big part of the desirability of this complex and gives it great potential to be a great place to live for the tenants. Jobe stated that the purchase price allocated to this property is fifteen million three hundred thousand ($15,300,000) and the applicant if proposing eight million ($8,000,000) in capital expenditures. Jobe stated that the applicant is going to acquire the properties regardless of whether the PILOT is awarded, however, the investment plan and capital spend looks much different, particularly the investment in the common areas and tenant benefits that the applicant intends would certainly be diminished but for the PILOT and the support of the Board.
Jobe stated that the submittal conference was completed, and all additional supplemental materials requested regarding tenant benefits on all three (3) properties have been submitted. Jobe reported that the applicant has also met with SafeWays in order to bring all three (3) properties into the SafeWays program with hopes of becoming SafeWays certified. Jobe stated that the applicant is committed to leasing the properties in accordance with the rental guidelines of HUD for affordability and those figures have also been submitted to the Board. Jobe stated that The Lakes at Ridgeway is currently fifty percent (50%) occupied and has a great need for investment and is located near a school, making it a good asset to the community following renovations. This property will be financed using bridge debt and equity with the intent of refinancing with permanent financing following the completion of renovations.
Carpenter stated that during the submittal conference, there was a three (3) year lease up period stated for these projects and asked if a representative could walk the Board through the timetable and how this will work being as all the properties are going to be addressed at the same time. Jobe stated that the properties will be renovated with certain areas that need the most renovation being done first. For the occupied units, tenant staying in place trying to minimize disruption to the tenants. Jobe stated that the three (3) year timetable is conservative as all three (3) projects are intensive and the applicant proposed this timeline in order to meet and complete these renovations. Jobe stated that although things are better on the supply and worker front, there are still some delays and issues with getting materials and the applicant intends to complete all three (3) projects sooner than that, but they did not want to put in unrealistic timelines considering these factors. The applicant would prefer to over deliver and complete the projects sooner than proposed. Jobe turned the meeting over to Jay Mann for further comment.
Mann thanked the Board for the opportunity and expressed his excitement for these projects. Mann stated that part of Capstone Realty and Management’s vision is to bring affordable units online and they have been executed this successfully throughout the South. Mann stated that rents across the country are increasing, and affordable housing is almost going away, and to be able to service a segment of the economy needs it the most and bring down units and uninhabitable units and make them into affordable, beautiful units with amenities and tenant benefits is very exciting and he appreciates the opportunity the Board is providing. Mann continued by stating that the basic road map when performing renovations is taking a strong focus on the exterior first because they want to change the face of the property and then work on the interiors throughout. Mann stated that units are broken down into three (3) tiers, with tier 1 being the lightest turns that can be painted, refreshed, resurface countertops, resurface tubs, new flooring and energy efficient light fixtures and get those units to market. Then units that require full renovations including sheet rock repair, new kitchens, new bathrooms, etc., are bult out as brand-new units and brought to market. The third tier are the units that are currently occupied by tenants, or tenant leases expire, and those tenants are moved to renovated units and the previously inhabited units are renovated at that time. Mann seconded Jobe’s comments stating that prior to COVID, materials needed for renovations were easily delivered and kitchens would take approximately two (2) weeks to complete from the time of ordering the materials and appliances to completion. At the heights of the supply chain issues, a kitchen renovation was a minimum of four (4) months out. Currently, the kitchen renovation time has decreased to approximately fourteen (14) weeks, due to continued delays in supply chains. Mann stated that flooring can take approximately ninety (90) days to get. Mann stated that they know they will run into supply chain issues throughout these three (3) projects renovations and the team does not want to promise something they may not be able to deliver.
Mann stated that exterior repairs are going to happen very quickly. Roofs will take a little bit longer because shingles are being purchased in bulk and the team is currently working on a timeline for that. Landscaping will be completely different from all ends, all pools will be brought back online, fitness centers will be added, playgrounds and dog parks will be added, business centers with internet access will be added, and all three (3) properties will participate in the SafeWays program. Mann stated that good lighting, he finds throughout the portfolio, is one of the largest deterrents of crime and is one of the first things his team completes on each project, in addition to security cameras and gating systems.
Carpenter informed the applicant that properties that are in these conditions have blight advocates involved and the Environmental court has been increasingly involved with oversight. Carpenter stated that one of the things that the Board has been doing is to start to advocate on behalf of properties that are in a construction phase. Carpenter requested that the applicant provide construction schedules for each of the properties as to when the applicant intends to move forward based on the time frame outlines so that the Board can effectively assist in communicating this information. Mann agreed to provide this and stated that upon the applicant's research, these three (3) properties currently have no pending matters or unresolved citations with code enforcement or Environmental Court at this time.
Jobe continued by outlining the second property, which is completely vacant. Jobe stated that this property is The Reserve at Mount Moriah and consists of two hundred twenty (220) units. Jobe stated that the bridge loan that is being secured by the other two (2) properties that do have some residents and are in operation will not apply or encumber The Reserve at Mount Moriah. Jobe stated that the project will be completed with cash investment with the intent of refinancing thereafter. This project will include approximately five million dollars ($5,000,000) in renovations to the units and common areas to bring all units back online. Mann stated that this will be the most challenging property, as there is a burned down building that will be demolished. Mann stated that his team will secure the property immediately in order to keep out vagrants, and that they walked each unit to assess the needs of the property and were pleasantly surprised that many of the units are in decent condition. Mann stated that this property will be opened in phases. Mann stated the property will require major cleanup and lighting and security will be the top priority, followed by exterior renovations, and will include the same amenities and tenant benefits as the other two (2) properties. James Jalenak asked if all three projects will be improved simultaneously. Mann responded that they will all be improved simultaneously and that additional project managers have been hired for these projects in order to complete them as quickly as possible. Jalenak asked if the three (3) year timeline covers all three (3) projects, to which Mann responded yes.
Jobe commented that Stonegate Apartment’s purchase price allocation is eight million five hundred thousand dollars ($8,500,000) and approximately four million three hundred thousand dollars ($4,300,000) will be put into the project. Jobe stated that the tenant benefits will also be the same for this property. Jobe stated that the applicant looks forward to the support of the Board in completing a first-class renovation, full scale and then also capitalizing on the scale of the project to renovate these in unison and he appreciated the Board’s consideration. Jalenak asked if any of these projects were originally market rate projects that fell into a state of disrepair and are now being redeveloped as affordable housing or were they affordable housing prior to this application. Jobe stated that these were market rate complexes, but the rents charged would generally be considered affordable housing, but there is no government assistance being provided currently. Carpenter stated that the developer intends to comply with the 40/60 rule in effect with the Board, which reserves forty percent (40%) of the units to residents at sixty (60%) or below the area median income. Carpenter asked if the PILOTs are approved today, what would be the timetable moving forward for closing these transactions and commencing with the improvements. Jobe stated that the applicant intends to close the underlying transaction first, but if they could be done simultaneously, that would be great. Jobe stated that closing would take place as soon as possible. There being no further questions or comments,
Katie Shotts moved to approve the Affordable Multifamily PILOT Application for Capstone Ridgeway LLC (d/b/a The Lakes at Ridgeway). Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
5. Affordable Multifamily PILOT Application for Capstone Moriah LLC (d/b/a The Reserve at Mount Moriah)
There being no further questions or comments,
Cliff Henderson moved to approve the Affordable Multifamily PILOT Application for Capstone Moriah LLC (d/b/a The Reserve at Mount Moriah). Katie Shotts seconded, and the motion passed unanimously after proper roll call vote of the Board members.
6. Affordable Multifamily PILOT Application for Capstone Stonegate LLC (d/b/a Stonegate Apartments)
There being no further questions or comments,
Katie Shotts moved to approve the Affordable Multifamily PILOT Application for Capstone Stonegate LLC (d/b/a Stonegate Apartments). Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Buckner Wellford left the meeting.
James Jalenak stated that the minutes should clearly reflect in reference to the last three (3) projects just approved, that it is in reliance on the promises and plans for this to be affordable housing to the extent required, and that it is found to be very nice affordable housing because it started out as market rate, but the projects are being approved because it is affordable housing.
PILOT Default Status Updates:
1. Creekside Meadows (f/k/a Bent Tree) and
2. Mill Creek Apartments:
Carpenter stated that Creekside Meadows and Mill Creek Apartments are represented by the same development team. Carpenter stated that the Board has received the written update for both of these properties and they are included in the Board’s meeting packet and invited representatives in attendance to provide further comments and an update on this agenda item. Rachel Stenger-Wiley introduced herself and began by stating that all through last year, her and her team worked diligently to satisfy the requirements of the Board. Stenger-Wiley advised that the update provided is an update of what has been done since November 2022 through February 2023 for both Creekside Meadows (f/k/a Bent Tree) and Mill Creek Apartments. Stenger-Wiley began with Creekside Meadows, stated that her team continues to engage in Stealth Security Monitoring and the arm at the entrance gate is still in working order.
Aesthetically, her team continues monitoring blinds and windows and graffiti removal is ongoing. Stenger-Wiley advised that the PILOT Lessee has spent five thousand five hundred dollars ($5,500) on interior upgrades so far, nine thousand one hundred dollars ($9,100) in glass in window replacement and nine thousand five hundred dollars ($9,500) in electrical and plumbing upgrades on site. Stenger-Wiley notified the Board of sixteen thousand five hundred dollars ($16,500) of energy efficient appliances replaced that was not included in the written report submitted to the Board. Stenger-Wiley reported that one major asphalt repair has been completed on the property and her team is working to get estimates for additional asphalt repairs around the property, as needed.
One (1) stringer and landing has been replaced and Stenger-Wiley is also looking for estimates to do additional stringer landing repairs that are needed as general maintenance in 2023. Occupancy was reported to be at ninety-one percent (91%), with Stenger-Wiley stating the Creekside Meadows is moving in an upward, forward direction. Brett Goldenhorn stated that the default notice for these properties was received on he and Stenger-Wiley's second or third day with Odin Properties a little over one (1) year ago and the first seven to twelve (7-12) months they were really working on catching up. Since December 2022, Goldenhorn stated that management has been operating the property as they would if no default notice had been received. Goldenhorn stated that he and Stenger-Wiley, along with the support of Odin Properties, have taken pride in what they have been able to accomplish, along with the site team.
Carpenter asked Bryce Miller to provide any comments he has regarding his inspections of these properties. Miller stated that in his time with the Board, Creekside Meadows has come a long way and management seems to have gotten a better handle on items such as issues with windows being broken on the property. Miller stated that his inspection this week reflected a noticeably cleaner site, but it does seem they have issues with getting contractors to the property to complete some of the necessary work. Miller stated that everything Stenger-Wiley stated is in line with his observations. Miller stated that he has also become familiar with the in-house maintenance team, and he sees them every time he is on the property, and they do their best to keep the property maintained, but when problems arise that the in-house maintenance team cannot quite handle, that is where management seems to have trouble getting someone to the property to provide estimates and complete the necessary work, which is being experiences on other properties as well. Miller stated that he has observed additional repairs that were not mentioned in the update, stating that several staircases have been replaced that he has noticed on the property. Goldenhorn stated that on major emergent issues, such as staircases, management has been able to find folks to show up, and referenced staircase repairs were a same day service. Goldenhorn stated that other maintenance work that gets bid out, management receives three (3) bids, and the work takes a bit longer.
Goldenhorn stated that contractor issues also affect work that needs to be done at Mill Creek Apartments, but headway is being made there as well. Goldenhorn stated that once the PILOT default notice was received for this property, his team began mapping out the various repairs necessary, stating that many of those repairs would not be able to be completed within a three (3) month period from December 2022 to March 2022 purely from a cost standpoint and a logistical standpoint. Goldenhorn stated he will go through what has been done and what has been approved and will be addressed.
Goldenhorn stated that all pothole repairs have been completed, bulk item removal is happening on an ongoing weekly basis, as well as on demand. Goldenhorn reported that seventeen thousand dollars ($17,000) has been spent on HVAC upgrades and eighteen thousand dollars ($18,000) of work has been approved for gutter repairs and downspout repairs, but the work has not started. Goldenhorn reported forty-five thousand dollars ($45,000) of siding repairs have been approved, and three thousand two hundred dollars ($3,200) has been completed and the remainder is expected to be completed this calendar year. Goldenhorn stated from a budgetary standpoint, it is not feasible to do all repairs at once, but most repairs will be completed in the spring and summer months. Goldenhorn reported that all specialty exterior door repairs have been completed, at approximately eight thousand five hundred dollars ($8,500), seven thousand dollars ($7,000) in exterior walkway repairs, which includes handrails, and fourteen thousand dollars ($14,000) in window repairs have been completed, and ninety-one thousand ($91,000) worth of energy efficient appliances have been installed. Goldenhorn reported that for the spring, pressure washing of the entire property, totaling twenty-three thousand dollars ($23,000), is scheduled.
Carpenter stated that a refinancing application has been submitted to the Board for Creekside Meadows (f/k/a Bent Tree), and as previously reported, all properties of a developer must be in good standing prior to looking favorably upon the refinancing. Carpenter asked if representatives had any comment regarding the application at this time. Goldenhorn stated that he and Stenger-Wiley are not familiar enough with that process to comment, but if it is agreeable to the Board, he would like to provide Odin properties’ CEO and acquisitions head the chance to send a note with any comments. Carpenter stated that it would be acceptable.
Carpenter stated that after hearing these updates from the PILOT Lessee and Miller, improvements have been made and asked Miller for a recommendation on additional reporting for both properties. Miller stated that these properties would still need to be monitored closely and stated that information provided in the Board packet is a good example of why multiple monitoring services are necessary for the Board, because updates occur on properties even from the time of the photographs provided to the Board versus inspections performed and observations of the properties the day prior to the Board meeting. Miller stated during his inspection the day prior to this Board meeting, he observed the new exterior doors, HVAC units, and bulk trash removal at Mill Creek Apartments. Miller stated both properties are moving in the right direction, but he would like to see what progress can be made in the coming months to ensure the momentum continues. Carpenter stated that based on the report of the PILOT Lessee and compliance monitors, Creekside Meadows (f/k/a Bent Tree) and Mill Creek should report at the June 7, 2023 Board meeting and the Board will assess the progress at that time and take the necessary steps going forward.
3. Macon Manor Apartments:
Carpenter invited representative David Shores to provide a status update on the property. Shores stated that all wood repairs have been completed on all three (3) parcels. Shores reported that they have started replacing the mansards, which was a three-tab shingle that would slide off in the heat, with Hardie plank material on the two properties on the North and have started painting and repairing front doors. Shores stated that it has been a bit difficult with the wind and rain, but when weather allows, they are painting. Shores reported that new windows have been ordered to replace all the windows on the two properties on the North side and they are awaiting measurements to order windows for the South property. Shores reported that interior repairs have begun, and will continue on units that are available, stating that the property is currently ninety percent (90%) leased. Shores stated that asphalt work will begin after erosion control and tree removal is complete, exterior lighting begins next week, and dumpster enclosures will be done after the asphalt work is complete. Shores stated that they are making headway with this project and hope to be complete by the end of the third quarter 2023, stating the windows are taking a little more time to receive, but he expects to receive windows already ordered by June 2023 and installation will take approximately two (2) months. Carpenter asked Miller to report on his observations of the site. Miller stated that his observations are in line with what Shores has reported and stated that even the painting is coming along maybe a little more quickly than Shores reported because he was at the site yesterday, and stated he observed approximately seventy-five percent (75%) of the painting appeared to be complete. Miller stated that some siding on the South site had also been replaced, that only needed repair, but the PILOT Lessee proceeded with replacement rather than repair and it looks very nice. Carpenter recommended based on today’s report that Macon Manor representatives report back to the Board at the June 7, 2023 Board meeting and the Board will assess the progress at that time and take the necessary steps going forward.
4. Sunrise Villas:
Carpenter invited Elizabeth Friary to provide a status update on Sunrise Villas. Friary stated that since the last Board meeting, the developer has met with Bryce Miller on site and addressed a number of issues, particularly with broken windows that are in the process of being replaced, as well as replacing several blinds. Friary stated that work to repair the siding continues, but there are two buildings where siding has not been completed. Friary reported that machines for the laundry room are expected to be delivered the second week of March 2023. Friary stated that the roadway that was repaved in the fall of 2022 has been damaged by winter weather and is expected to be repaved again in the coming months.
Carpenter invited Miller to report his observations of the site to the Board. Miller stated that he was able to do an on-site walkthrough based on the last report that Matty Wercberger stated most of the work throughout the winter months has taken place on the interior of the units and the property, which was the reason for scheduling the walkthrough to see what progress has been made on the interior of the units. Miller stated he is happy to report that he was able to see one unit that was pre-renovation and then several units that were post-renovation and major improvements have been made, including energy efficient appliances, paint, flooring, etc. Miller reported he was able to look inside the laundry room that is brand new and updated, only waiting for washers and dryers to be delivered. Miller reported that the windows and blinds have been fixed and the only things lacking on the exterior aesthetically are the two buildings that the siding has not been completed. Miller stated that is appeared to be the same situation seen with many other contractors, that work would begin in the spring. Miller stated that although there are still some issues remaining, drastic improvements have been made in the last six (6) months. Carpenter recommended based on today’s report that Sunrise Villas representatives report back to the Board at the June 7, 2023 Board meeting and the Board will assess the progress at that time and take the necessary steps going forward.
New Business
There was no new business.
Public Comment
There was no public comment.
Chairman Reid stated that the next meeting of the Board is scheduled for Wednesday, April 5, 2023 @ Noon. There being no further business, the meeting was adjourned by the Chairman at 01:32 p.m.