MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS
Wednesday, November 9, 2016
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, November 9, 2016. 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:
Lee Patton Paige Walkup
Monice Hagler Buckner Wellford
Daniel Reid Curtis Thomas
The following Directors were absent:
Carolyn Head Nancy Willis
Also present were:
Staff members Martin Edwards and Lauren Magallanes were in attendance. Charles Carpenter, General Counsel, was also in attendance.
David Shores, representing Multi-South Management, and Daryl Lewis, Daniel Coates and Andre Hayes, representing Kirby Pointe Apartments, and Steve Stanley, representing South Main Artspace Lofts, were also present.
With a quorum present, the regular meeting of the Board was called to order at 12 Noon by the Chair, Daniel Reid.
Approval of Minutes
Buckner Wellford stated a revision should be made to the October 11 meeting minutes to properly reflect his comment under the Finance Report indicating future financial reports should include a column showing actual percentage to budgeted amounts, to be made reflected beginning in January, 2017.
Monice Hagler moved for approval of the revised Minutes for October 11, 2016. Paige Walkup seconded and the motion passed unanimously.
Finance Committee Report
Lee Patton reported on the Financial Statements for the period ending September 30, 2016. He provided summaries of the income statement and balance sheet for the period and year to date.
Paige Walkup moved for acceptance of the Finance Committee Report for September 2016. Curtis Thomas seconded and the motion passed unanimously.
Charles Carpenter stated no new claims or lawsuits since the previous Board meeting. Carpenter updated the Board regarding the PILOT projects located within the Central Business Improvement District and stated discussions with the Downtown Memphis Commission were moving forward.
Carpenter detailed his ongoing discussions with the Shelby County Assessor’s office regarding Memphis Land Bank properties as they relate to PILOTs. Carpenter stated the prior City Administration had approved a memorandum of understanding with the Memphis Land Bank providing that properties deeded in its name be taken off the tax rolls. Carpenter stated that two (2) properties associated with the Memphis Land Bank that PILOTS are being applied are currently showing a $0 assessed value. For purposes of determining the assessed value for applying the PILOT the Assessor’s office is considering whether it would require the PILOT property(s) to be based on the current $0 assessment or the pre-Memphis Land Bank assessed values. Carpenter asked for Board input, if any, on this matter. Buckner Wellford expressed concern over a PILOT being taxed based on a $0 value for a set amount of time. Carpenter also added that in the past a property, when sold to a private buyer, was re-assessed at the time of purchase and the tax was based on that new assessment. Curtis Thomas raised a similar issue on properties that might be associated with the Blight Authority of Memphis. Carpenter stated he would share these concerns with the Assessor’s office as they deliberate this issue. Thomas added discussions between Martin Edwards and Sheila Jordan Cunningham, Executive Director of BAM, would be prudent regarding this issue.
Carpenter stated there are upcoming PILOTs expiring from the program as they are reaching their 10 year term. Carpenter added Tanglewood Apartments has now expired and has the proper documentation for the Board’s record. Carpenter also stated movement towards two (2) PILOT closings for Artspace Lofts and Uptown Flats.
Carpenter stated the trustee for Hilldale Apartments has taken over management of the complex, in an attempt to stabilize the property, as it is currently in default. Carpenter also stated confirmation that the bonds for Ridgecrest were redeemed and the Board will need to correct account receivable records, as the issuer and administrative fees cease upon redemption.
Curtis Thomas reported three (3) outstanding letters of non-compliance for Chambliss Village, Macon Manor and Macon Point and stated the recommendation from the Committee is a 30-day extension to cure for Macon Manor and Macon Point, and a recommendation to place Chambliss Village in default. Martin Edwards provided detail on the three (3) properties in question, including observation that Macon Manor and Macon Pointe have completed work towards property compliance and Chambliss Village remains non-compliant with stated tenant benefits with no significant property repair(s).
David Shores, property manager of all three (3) properties in question, was invited to speak to provide explanation and update to the status of non-compliance. Shores detailed work progress
at each property and asked the Board for additional time consideration for Chambliss Village repairs. Shores stated installation of a secure access gate is in violation of Memphis City and Fire Department codes, and therefore cannot be implemented to satisfy the tenant benefit statement in the PILOT application. Shores added the roof has been replaced at Chambliss Village, with repair to the mansard siding still needed. Martin Edwards stated his request for documentation from City Code Enforcement be provided prior to this meeting, to which Shores responded that he brought only a copy of the section of the Code with him and had no other documentation from any City agency. Lee Patton asked about different options for installing the access gate, to which Shores responded it could not be done without violation of Fire code. Buckner Wellford added that as the security access gate is stated in the PILOT application as a tenant benefit, written documentation should be provided indicating that said benefit was not possible to implement. Daniel Reid added the Chambliss Village PILOT was approved partly based on the stated tenant benefits. Shores asked the Board for additional time to provide adequate documentation and complete other property repairs due to the fact that the Board’s original notice was mailed to an outdated address. Carpenter added that it is the Lessee’s responsibility to notify the Board of any address changes, including management changes, owner contact information changes, etc. Edwards supported the recommendation from the Committee.
Curtis Thomas moved for the acceptance of the Cure Period Extension for Macon Point Apartments until the Next Scheduled Board Meeting. Buckner Wellford seconded and the motion passed unanimously.
Curtis Thomas moved for the acceptance of the Cure Period Extension for Macon Manor Apartments until the Next Scheduled Board Meeting. Buckner Wellford seconded and the motion passed unanimously.
Buckner Wellford stated although he would support the Board’s decision for a cure extension for Chambliss Village, he stands by the recommendation of the Interim Executive Director on this matter.
Curtis Thomas moved for the default of the PILOT for Chambliss Village Apartments. Buckner Wellford seconded and the motion passed unanimously.
Monice Hagler recused herself from consideration and motion for Kirby Pointe Apartments. Hagler advised that she had no direct involvement with the Kirby Pointe project; however, she advised that her recusal stemmed from a potential indirect involvement of having seen or heard information about project details through other members of her offices.
CONSIDERAION OF BOND INDUCEMENT RESOLUTION FOR KIRBY POINTE APARTMENTS
Daryl Lewis, Andre Hayes and Daniel Coates entered the meeting. Charles Carpenter provided background on the new construction multifamily development and factual and procedural developments since the project first appeared before the Board in August 2015. Carpenter stated consideration might be given for the August 2015 approved inducement resolution to be reinstated, so the applicants might move forward with their THDA tax credit reservation, volume cap and TEFRA approvals. Buckner Wellford asked for clarification on the reinstatement timeline, to which Carpenter responded the reinstatement would be retroactive from August 10, 2016. Daryl Lewis added his anticipation of having to apply for THDA 2017 tax credits, as time has lapsed since the reservation letter was issued. Lee Patton asked to the involvement of Preston Byrd, to which Lewis responded Byrd was involved in the property variance obtained, but has since not be involved in the project proceedings. Carpenter detailed the Board’s past negative experiences with Preston Byrd and requirement of proceeding with a full understanding of all parties involved. Carpenter also detailed the Board’s concerns moving forward, including the applicant’s inexperience with new development in the area and lack of financial resources along with substantial non-refundable fees. Lewis stated he was unaware of Byrd’s questionable record in the area. Lewis added his commitment to this project for the benefit of the area. Daniel Coates detailed the applicant structure as it has progressed over time. Patton asked if any applicant has been involved with Preston Byrd outside of this development, to which Coates responded he has previously been hired by Byrd as a consultant years prior. Martin Edwards recommended reinstatement of the Bond Inducement Resolution with the added statement it is the applicant’s responsibility to communicate with staff on any developments and key dates moving forward.
Curtis Thomas moved for the acceptance of the Reinstatement of the Bond Inducement Resolution for Kirby Pointe Apartments effective August 2016 for a six-month period ending February 1, 2017. Buckner Wellford seconded and the motion passed unanimously.
Daryl Lewis, Daniel Coates and Andre Hayes left the meeting
Monice Hagler re-entered the meeting
CONSIDERAION OF WAIVER REQUEST AND PILOT EXTENSION FOR SOUTH MAIN ARTSPACE LOFTS
Steve Stanley, representing Artspace, stated the project is moving towards closing both the PILOT and Bond by early December. Stanley added that although costs have gone up for the project, Artspace is not asking for any additional PILOT fee waivers than what has been previously granted.
Paige Walkup moved for the acceptance of the PILOT Extension for South Main Artspace Lofts. Curtis Thomas seconded and the motion passed unanimously.
Steve Stanley left the meeting
CONSIDERAION OF PILOT EXTENSION FOR CAMELOT MANOR APARTMENTS
Charles Carpenter stated the project is requesting a second extension and is represented by Frank Carney and Gene Thornton. Martin Edwards recommended approval.
Paige Walkup moved for the acceptance of a six (6) month PILOT Extension for Camelot Manor Apartments. Buckner Wellford seconded and the motion passed unanimously.
CONSIDERAION OF PILOT EXTENSION FOR WASHINGTON MANOR APARTMENTS
Charles Carpenter again stated the project is requesting a second extension and is represented by Frank Carney and Gene Thornton. Martin Edwards recommended approval.
Monice Hagler moved for the acceptance of a six (6) month PILOT Extension for Washington Manor Apartments. Paige Walkup seconded and the motion passed unanimously.
There being no further business, the meeting was adjourned by the Chair at 1:23 p.m.