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

Tuesday, May 8, 2018

The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee was held pursuant to public notice on Tuesday, May 8, 2018.  The published meeting time was 12:00 Noon.  The meeting was held at the Board office, located at 65 Union Avenue, Suite 1120, Memphis, TN  38103.

    The following Directors were present:
                        
                Daniel T. Reid, Chairman                James Jalenak
                Monice Hagler                                     Dr. Manoj Jain                                             

               Buckner Wellford                                Nancy Willis                                 

               Cliff Henderson
                
                                        
    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. 

Richard Hamlet, Chasity Blackburn, Chris Lamberson and Tameca Parker, representing Bent Tree Apartments, John H. Hatcher and Stan Sawyer, representing Banks, Finley, White & Co., CPAs, and members of the public, James Stokes and Joseph L. Echols were also in attendance. 

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

Approval of Minutes
Manoj Jain moved for approval of the Minutes for April 11, 2018. James Jalenak seconded and the motion passed unanimously. 

James Stokes and Joseph Echols entered the meeting.


Review of Audit for the Year Ended December 31, 2017
Stan Sawyer of Banks, Finley, White & Co., CPAs, independent auditors for the corporation entered the meeting. Thereupon, the annual audit report for FY2017 was distributed to the members. Stan Sawyer presented the audit and the management report to the Board and confirmed that it was a clean audit with no findings cited. Thereafter, there was a brief question and answer session with members of the Board. 


Nancy Willis moved for acceptance of the Audit for the Year Ended December 31, 2017. Manoj Jain seconded and the motion passed unanimously. 

Stan Sawyer and John H. Hatcher exited the meeting.

Finance Committee Report
Daniel T. Reid presented the financial results for the month ended March 31, 2018.Thereafter, a discussion of the financials was completed. 

Monice Hagler moved for acceptance of the Finance Committee Report for March 31, 2018, and properly seconded by James Jalenak, the motion passed unanimously. 

Attorney’s Report

Charles Carpenter presented the legal report, as follows:

1.    For informational purposes, Carpenter reported one new materialmen’s lawsuit involving the Sunrise Terrace Apartments PILOT. Carpenter further reported that he has responded, in writing to legal counsel for the Plaintiff and advised of the Board’s immunity under State law and requested the Board’s dismissal from the lawsuit. Carpenter advised that this matter would be monitored, and he will report back to the Board. 

2.    Carpenter reported that the Dogwood Trace PILOT transfer has been closed, as well as the Millcreek PILOT Transfer.

3.    Carpenter reported the Keystone Landing Apartments PILOT and the Pendleton Place Apartments PILOT commitments previously approved by the Board are up for their 6 month status review. The developer has made an application for each PILOT to be extended, to allow closing contemporaneously with the tax-exempt bonds to be discussed later in the meeting. Carpenter reminded the Board members that in the past, when confronted with the similar circumstance of an imminent closing, the Board had approved an extension without requiring an extension fee to be paid, if the closing took place prior to the next meeting of the Board; if not, the commitment would be extended but the extension fee would be payable. Following a brief question and answer period, further discussion of the referenced PILOTs was reserved for consideration of the final bond resolution for each property, included under Action Items on the agenda.

4.    Carpenter reported two (2) PILOT properties with terms expiring from the Board’s PILOT Program were (i) Mendenhall Gardens Apartments and (ii) Blair House Apartments and the Memorandum of Termination and Quit Claim Deed for each would be executed and recorded, restoring each property to the tax rolls at current market value. 

5.    Carpenter provided an update on the status of the previously approved Bond Inducement for Eastgate Village, reporting that there is in fact a Health Educational and Housing Facility Board of Union City, Tennessee (the “Union City Board”) and that he had communicated with the Mayor and Chief Operating Officer of Union City. In communicating with the two officials it was discovered that the Union City Board had not held a meeting and was not experienced or interested in facilitating the tax-exempt bond financing for East Gate Village. Carpenter also informed the Board of the Union City Mayoral support and the date selected for the TEFRA hearing is scheduled in Union City on May 24th, as well as,  a meeting of the Union City Board for it to provide consent to the Health, Educational and Housing Facility Board of the City of Memphis to issue the bonds. Buckner Wellford requested that the Union City Board go on record requesting and recommending that the Health, Educational and Housing Facility Board of the City of Memphis move forward with the Bond Resolution. Mr. Wellford’s comments were acknowledged, and he was advised that the current legal requirements were consistent with his requests.

6.    Carpenter reported on the status of the refinancing of Lantern square PILOT as well as a PILOT Transfer of the Eden at Waters Edge PILOT that each matter was proceeding to closing.

7.    Carpenter briefly mentioned a status update on the Bent Tree Apartments PILOT listed on the Board agenda under Action Items and reserved comment for the subsequent discussion. 

8.    Finally, Carpenter reported that there was no movement on the Oakshire PILOT request for voluntary termination and the PILOT is still in effect.  

The above concluded the legal report and there was a brief question and answer session with members of the Board. 

PILOT Report

Martin Edwards, Jr. detailed the Action Items to be considered, including guests for the Bent Tree PILOT Termination consideration.

Action Items:

CONSIDERATION OF PILOT TERMINATION FOR BENT TREE APARTMENTS

Richard Hamlet, President of Global Ministries Foundation (GMF), and Chasity Blackburn, MMI Regional Manager, and Tameca Parker, MMI Assistant Regional Manager, along with Chris Lamberson, legal representative for GMF, entered the meeting.

Martin Edwards, Jr. cited the letter dated May 7, 2018 received from Chris Lamberson detailing site work completed, work in progress and work to be completed at Bent Tree Apartments. Edwards asked Lamberson to review outstanding items for the Board’s consideration. Lamberson reported work will be completed on the second fire damaged building by the end of July 2018. Lamberson reported that the 27 unit mini-rehab at the rear of the property had been completed and substantially leased. Lamberson further reported the entrance gates were operational and the security procedures concerning the entrance gates had been revised to minimize issues with the entrance gate. All uncapped boxes have now also been capped throughout the property. Damage to the building located at 2000 Fairfall Drive has been completed as well. Lamberson further reported that the property’s SkyCop application had been approved by Memphis City Council in April 2018. There has also been a request for a Power tap that has been approved and is waiting on MLGW. Lamberson referenced a one to two week waiting period for it to be completely operational. Lamberson then discussed the drainage issue reporting that surveys and other preliminary work has been completed and ETI Corporation, the engineering firm for the drainage project, is currently working on the construction documents which should be completed by the end of May 2018 to allow the full scope of work to be bid.  

Lamberson stated once the construction bids are received, GMF will decide how to proceed. After a brief question and answer session, Lamberson requested 30 days to report back to the board concerning the bids on the drainage issue, update on the SkyCop installation, as well as a report on the fire damaged building. Edwards requested that following the return of the construction bids, a written report to be submitted to the Board within 30 days outlining GMF’s decision on how it plans to proceed with correcting the drainage issue. 

James Jalenak made a motion to defer action of the PILOT termination for the BENT TREE APARTMENTS until the June 6, 2018 BOD meeting. Manoj Jain seconded and the motion passed unanimously.


Richard Hamlet, Chasity Blackburn, Chris Lamberson and Tameca Parker left the meeting

CONSIDERATION OF AFFORDABLE MULITFAMILY PILOT APPLICATION FOR GOSPEL GARDENS APARTMENTS


Martin Edwards, Jr. outlined a general overview of the three (3) Millennia Housing PILOT projects, (i) Gospel Gardens Apartments, (ii) Hope Heights Apartments, and (iii) Cavalier Court Apartments.  Edwards referenced the success of Millennia Housing and its experienced senior management, which own and manage over 8500 units in its portfolio of multifamily properties. The three (3) proposed PILOTS combined would aggregate total rehab dollars to be spent of approximately $34 million, which would be substantially rehabilitate 546 units, generating low income housing tax credits of almost $25 million. Edwards provided current pictures for the Board’s review of Gospel Gardens, which displayed the property having been cleaned up and secured from its previous condition in preparation for rehab. All three properties will have a new HUD commitment for a 20 year HAP contract. Charles Carpenter stated the Board has  provided an inducement resolution for each of the three properties for tax-exempt bonds, and the applicant has applied to the Tennessee Housing Development Agency for its volume cap and tax credit allocations. Following a complete discussion of the foregoing, including all three (3) properties, Martin Edwards, Jr. made a staff recommendation to approve the PILOT Application for Gospel Gardens Apartments. 

Monice Hagler moved for the approval of AFFORDABLE MULITFAMILY PILOT APPLICATION FOR GOSPEL GARDENS APARTMENTS. Nancy Willis seconded and the motion passed unanimously.


CONSIDERATION OF AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR HOPE HEIGHTS APARTMENTS

Martin Edwards, Jr. made a staff recommendation to approve the PILOT Application for Hope Heights Apartments. 

James Jalenak moved for the approval of AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR HOPE HEIGHTS APARTMENTS. Manoj Jain seconded and the motion passed unanimously.


CONSIDERATION OF AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR CAVALIER COURT APARTMENTS

Martin Edwards, Jr. made a staff recommendation to approve the PILOT for Cavalier Court Apartments.

Manoj Jain moved for the approval of AFFORDABLE MULTIFAMILY PILOT APPLICATION FOR CAVALIER COURT APARTMENTS. James Jalenak seconded and the motion passed unanimously.


CONSIDERATION OF PILOT EXTENSIONS FOR KEYSTONE LANDING APARTMENTS AND PENDLETON PLACE APARTMENTS

Charles Carpenter updated the Board on the status of the HUD delays with the bond financings with Keystone Landing and Pendleton Place bond financing and requested that the Board consider a six month extension for the Keystone Landing Apartments PILOT as well as the Pendleton Place Apartments PILOT. Daniel Reid stated that if the properties close within the next 30 days, there will be no extension fee assessed, however if they do not close within the next 30 days, an extension fee will be assessed. If approved, a six month extension will be granted for each property. 

James Jalenak moved for the approval of the SIX MONTH EXTENSION FOR KEYSTONE LANDING APARTMENTS PILOT. Nancy Willis seconded and the motion passed unanimously. 

With the same terms being applicable to Pendleton Place Apartments PILOT, 

James Jalenak moved for the approval of the SIX MONTH EXTENSION FOR PENDLETON PLACE APARTMENTS PILOT. Monice Hagler seconded and the motion passed unanimously. 


As additional clarification for the Board, Charles Carpenter stated that although Keystone Landing Apartments and Pendleton Place Apartments are two separate properties, requiring two separate PILOTS, the developer has elected to finance both properties utilizing one bond financing. Carpenter reported that the working group is fully engaged in the final stages with HUD legal, and THDA has issued final approval of its volume cap and tax credit allocations and the developer has funded all deposits. The Closing is awaiting HUD legal to grant final approval of all legal documents before a closing schedule can be finalized, which is projected to be early June 2018. Based on all of the above, Carpenter recommended that the Final Bond Resolution is ready for final approval by the Board.

Monice Hagler moved for the approval of the FINAL BOND RESOLUTION FOR KEYSTONE LANDING APARTMENTS AND PENDLETON PLACE APARTMENTS. Bucker Wellford seconded and the motion passed unanimously. 

AFFORDABLE MULTIFAMILY PILOT CALENDAR 2018 ROUND II

Martin Edwards, Jr. discussed Round II of the PILOT Calendar and the dates involved. He made a staff recommendation for approval of Round II of the PILOT Calendar. 


Buckner Wellford moved for the approval of the AFFORDABLE MULTIFAMILY PILOT CALENDAR 2018 ROUND II.  Nancy Willis seconded and the motion passed unanimously.

Executive Director Report

1.    Martin Edwards, Jr. reported that he has made a request to the owners of the property next to Bent Tree Apartments, known as Sunrise Terrace, to submit a construction schedule with a definite timeline on it, which will be monitored by the Board. 

New Business

There was no official new business; however, the Board engaged in general discussion of the following:

1.    There was mention of organizing a tour for all board members to tour selected PILOT properties. 

Joseph Echols left the meeting


Public Comment

James Stokes, an independent consultant, attended this BOD meeting in order to observe public government, public investment, and public procurement. Stokes made a request for the Board to consider providing a copy of its 2017 independent audit report. Daniel Reid stated that once the 2017 independent audit report had completed its administrative process, the Board would be pleased to provide a copy to Mr. Stokes, as the report will become public information. 
    
It was announced that the next scheduled meeting of the Board will be held on Wednesday, June 6, 2018 @ Noon. There being no further business, the meeting was adjourned by the Chair at 1:21 p.m.