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

Wednesday, March 1, 2017

The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee was held pursuant to public notice on Wednesday, March 1, 2017.  The published meeting time was 12:00 Noon.  The meeting was held at the Board office, 65 Union Avenue, Suite 1120, Memphis, TN  38103.

    The following Directors were present:
                        
        Daniel T. Reid, Chairman    Ashley Foxx    
        Monice Hagler        
        Carolyn Head        
        James Jalenak
        
                                 
    The following Directors were absent:

        Buckner Wellford       Nancy Willis
                    
    Also present were:

Staff members Martin Edwards, Jr. and Lauren Magallanes were in attendance. Charles E. Carpenter, General Counsel, and Cheryl Hearn, Assistant City Attorney, were also in attendance. 

Sean Norris with TKS Capital Advisors, representing Melrose Place apartments, was also in attendance 

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

Daniel Reid introduced Ashley Foxx, a newly appointed Board member. 

Ashley Foxx introduced herself. She currently serves as Manager for Regional Recruitment and Student Leadership at Teach for America.  Prior to her current position, she served as Principal at Memphis College Prep. She is also a former K-12 educator. 

Approval of Minutes
Monice Hagler moved for approval of the Minutes for January 11, 2017. James Jalenak seconded and the motion passed unanimously. 

Finance Committee Report
Carolyn Head reported on the Financial Statements for the period ending December 31, 2016 (year-end statement) and January 31, 2017. She reported and explained a correction on the December 31, 2016 statement. She provided summaries of the income statement and balance sheet for the period and year to date. 

Motions
James Jalenak moved for acceptance of the Finance Committee Report for December 31, 2016. Monice Hagler seconded and the motion passed unanimously. 

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

Attorney’s Report
Charles Carpenter stated there have been no new claims or lawsuits since the previous Board meeting. There was however, an Information Document Request (IDR) from the Internal Revenue Service (IRS) regarding Serenity Towers, Series 2014A Bonds (the “Bonds”). Carpenter explained that Serenity Towers is part of the Global Ministries Foundation (GMF) portfolio of its Memphis properties. In the IDR, the IRS stated this is a routine audit, but Carpenter shared with the Board that due to recent publicized history of GMF concerns the review may be more focused. In response to the IDR, Carpenter advised that he immediately notified the counsel of GMF and the working group members for the Bonds. Jones Walker, which served as the original Bond Counsel for the Bonds, has been hired by GMF to serve as tax counsel for response to the IRS. Carpenter will be working with Jones Walker and the IRS as well. Carpenter advised that he has requested Bank of New York, the bond trustee to provide all financial records from the inception of the Bond issuance to the current date. After a complete response to the IDR, the Board should receive notice from the IRS within 60-90 days, advising if the IRS is satisfied and will take no action, or if it needs additional information. Carpenter will keep the board advised. 

Carpenter has previously reported to the Board that the City of Memphis had entered into a middle income down payment assist program (MIDPAP) several years ago, wherein the Board served as issuer and facilitated the issuance of the funds. Under the structure, following the issuance of the funds, the Board had no ongoing responsibility or involvement.  Through working with the City of Memphis Housing and Community Development division, an agreement was entered into with City to set forth and document that the City will have clear administrative responsibility and authority going forward. The referenced agreement has been finalized and signed, and Carpenter will deliver a copy of the agreement to the Board for its records. There is nothing further for the Board to do at this time. 

Carpenter advised that the TEFRA hearing and City approval has been completed for Mason Village, whose bond inducement was approved at the Board’s December meeting.  Mason Village is moving forward with its application with Tennessee Housing Development Authority (THDA), seeking approval for volume cap and tax credit allocations. Orrick, Herrington & Sutcliffe of San Francisco, California will serve as Bond Counsel. As Bond Counsel is an out of state firm, Carpenter stated that his firm had been requested by Mason Village, and has agreed to serve as Co-Bond Counsel and Issuer Counsel on the transaction. Carpenter advised that there are no conflicts with Board policy or law to serving in the dual capacity. There were no objections or questions expressed by the Board. 

Carpenter advised that the TEFRA hearing and City approval has been completed for Forum Flats, whose bond inducement was approved at the Board’s December meeting. Forum Flats is moving forward with its application with Tennessee Housing Development Authority (THDA), 
seeking approval for volume cap and tax credit allocations.  Baker Donelson will serve as Bond Counsel. Raymond James has been hired by Forum Flats as the underwriter for the bonds. It is estimated that this transaction should be ready to come back to Board for its final bond resolution in approximately 90 days. 

Carpenter further advised that he has been working with representatives of New Horizon PILOT and Windsor Pointe PILOT on proposed refinancings. Martin Edwards interjected that the New Horizon PILOT and Windsor Pointe PILOT will be discussed later on the Agenda under action items. 

Carpenter reported that there was a request from Global Ministries Foundation (GMF) for change in the management companies for three of its properties, which are all pending sale. The ownership change will be for (i) Serenity Towers, (ii) Madison Towers and (iii) Goodwill Village. The Serenity Towers and Madison Towers properties are bond only transactions and the documents only require the Borrower to provide notification for a change in property management and an opinion of Bond Counsel that the change will not cause interest on the bonds to become taxable; however, Goodwill Village maintains a PILOT and will require the above items, as well as, Board approval for a change in management companies. Carpenter advised that he had received the requirements of the bond counsel opinion for all three properties but had not received information on the proposed new management company.

As a result, he recommended to Board to hold approval on Goodwill Village until information is received. Monice Hagler asked the identity of the proposed new management company and Martin Edwards responded that it is Millennia Housing Management. Martin Edwards also interjected that he received a letter from attorney Chris Lamberson advising of a shooting that had recently occurred at Goodwill Village, which he would discuss further under his Executive Directors report. The Goodwill Village matter was deferred to the Executive Director for finalization pending receipt of additional information on the management company.

On the Thompson Court PILOT approved at the January Board meeting, Carpenter reported that its application for street closure was approved. The City Council is required to provide final approval, which meeting should take place during the month of March 2017. Monice Hagler asked if it is to be gated. Martin Edwards responded positively and said he will attend the City Council meeting as an observer.  

Finally, Carpenter reported for the record that the Kirby Pointe applications have lapsed and will not go forward because it could not gain legal control of the land. The applications for bond and PILOT incentives have lapsed. The applications have ended after two years of working with the applicants, and if, in the future the project resurfaces, the applicants will have to start over from the beginning. 

There being no further concerns or questions, the meeting moved to action items. 

Action Items:

CONSIDERATION OF MACON POINTE TRANSFER

Martin Edwards reported that Macon Pointe Apartments are under new ownership. Edwards advised that he stated to the new owner the Board’s concerns regarding lack of tenant benefits being met under the prior ownership. The new owner said he wants to address this concern. Edwards asked for specifics, which were provided in writing. After discussion of comments made by Martin Edwards during the PILOT Report, Edwards recommended approval of transfer. 

Motion
Carolyn Head moved for the approval of the Macon Pointe Transfer. Monice Hagler seconded and the motion passed unanimously. 

CONSIDERATION OF MELROSE PLACE REFINANCING
Martin Edwards addressed the request for refinancing of Melrose Place. Edwards commented that the property is very nice and has excellent tenant benefits. Ledford’s inspection was very thorough and found the tenant benefits to be in compliance. 

Motion
Monice Hagler moved for the approval of Melrose Place Refinancing. Carolyn Head seconded and the motion passed unanimously. 

CONSIDERATION OF UNIVERSITY GARDENS REFINANCING
Martin Edwards addressed the request for refinancing of University Gardens. Ledford confirmed that tenant benefits have been fulfilled. The property is 95%, or more, occupied. 

Motion
James Jalenak moved for the approval of University Gardens Refinancing. Monice Hagler seconded and the motion passed unanimously. 

Carolyn Head had a question regarding the carbon monoxide detectors being spot-checked in units. Martin Edwards responded that Ledford does not enter the units. Edwards also commented that it is a well-kept complex. 

Cheryl Hearn enters the meeting. 

CONSIDERATION OF WINDSOR POINTE REFINANCING 
Martin Edward’s advised that the owners had sent a letter stating they were seeking refinancing of the PILOT property and were advised that it could not proceed with refinancing without the Board’s approval. After receiving requested information and further investigation, it appeared to Edwards that the current request was a bridge loan being requested by the current construction lender and not the proposed FHA permanent loan. The Board then considered the bridge loan and held a full and complete discussion. 

Motion
Monice Hagler moved for the approval of Windsor Pointe Bridge Loan. James Jalenak seconded and the motion passed unanimously. 

CONSIDERATION OF 2017 PILOT CALENDAR (ROUND 1)
Lauren stated Monday, April 17, 2017 is new due date for Round 1 applications. The original due date was Friday, April 14, 2017; however, since that is Good Friday, the date was changed. James Jalenak asked about carryover from 2016. 

Motion
Carolyn Head moved for the approval of 2017 Pilot Calendar (Round 1). Monice Hagler seconded and the motion passed unanimously. 


EXECUTIVE DIRECTOR REPORT

Martin Edward’s discussed and answered questions regarding the following matters:

1.)    Letter from Glankler Brown – this letter is in response to the shooting in Goodwill Village. The incident report was discussed and is on file if anyone requests it.
 
2.)    Letter from Safeway Corp – Policy and Code workshop – letter to Jamie Buchannan offering support. Edwards requested code enforcement to inform us of any issues that may arise with any properties affiliated with the Board.
 
3.)    Martin Edwards advised that he had been appointed by Ralph Perrey of THDA to its Housing Assistance Advisory Board, which will require Martin to travel to Nashville once a month.

4.)    Edwards advised that he met with a partner from a Denver group regarding Ridgemont and Pendleton Place apartments. The Denver Group is well experienced and are applying to purchase these properties for total rehab. The properties seem to be in decent shape. These will be Section 8 properties. The group has Section 8 properties in 45 locations. 


New Business

Chairman Reid discussed the four (4) Board committees and requested all board members join two committees. Lauren will contact each member to confirm which two committees each will volunteer to serve. Ashley Foxx had a question for Lauren regarding descriptions and responsibilities for each committee. Lauren said, she will get the information to each Board member, while Chairman Reid interjected and verbally described each committee for Foxx and the other members. 

Martin Edwards stated there is a new board member: Dr. Manoj Jain (infectious disease specialist). He was approved Tuesday, February 21, 2017 by the appropriate City Council Committee, which nomination must be approved by the full City Council.

It was announced that the next scheduled meeting of the Board will be Wednesday, April 5, 2017 @ Noon. There being no further business, the meeting was adjourned by the Chair at 1:02 p.m.