MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Wednesday, November 30, 2022
The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee was held pursuant to public notice published in The Daily News on Wednesday, November 23, 2022, 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
Buckner Wellford James Jalenak
Cliff Henderson Katie Shotts
The following Directors were absent:
Dr. Manoj Jain Sheleah Harris
Staff and others attending: Martin Edwards, Jr., Stephanie Bryant and Bryce Miller; Charles E. Carpenter and Corbin I. Carpenter, General Counsel; Samia Mackay (attending remotely), legal assistant to General Counsel; Cheryl Hearn, Deputy City Attorney.
Also participating via remote Zoom virtual platform and/or in person were Clifford Causey representing Covenant Gardens Senior Apartments; Thomas Robinson and Chamberly Martin of Alco Management Inc representing Greenbriar Apartments; Luke Loveland of Prospera and Mark Bunch of Bunch Development Services representing Kimball Cabana Apartments and Oakshire Downs Apartments and Townhomes; Mendel Fischer and Shrage Marasow of MFC Capital LLC and Frank Stockdale Carney and Elizabeth Friary of Evans Petree, PC representing Willow Oaks Apartments and Grainge Hill Apartments; Menachem Gansburg of Landmark Funding Group and Frank Stockdale Carney and Elizabeth Friary of Evans Petree, PC representing The Villages at Harrison Creek; David Shores of Multi-South Management Services, LLC representing Sutton at Shelby; Rachel Stenger-Wiley and Stephanie Reed of Odin Properties representing Creekside Meadows Apartments and Mill Creek Apartments; David Shores of Multi-South Management Services, LLC representing Macon Manor Apartments; Mark Jobe of Glankler Brown, PLLC and Ashley Lowe of EVU Residential representing New Horizon Apartments; Brandt Blanken, Rose Eaton and Brandt Blanken of Fallbrook Financial Services Company representing Winchester Grove 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 (the “Board”) is holding its regular meeting on Wednesday, November 30, 2022 @ 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 November 2, 2022 Regular Meeting, which was seconded by James Jalenak, 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 October 31, 2022. After discussion,
James Jalenak moved for acceptance of the Finance Committee Report for the month ended October 31, 2022, properly seconded by Katie Shotts, and the motion passed unanimously after a proper roll call vote of the Board members.
Attorney’s Report
Charles Carpenter presented the legal report, as follows:
1. Carpenter reported on one (1) new claim filed against the Board, as title holder and PILOT Lessor in connection with one of the Board’s PILOT properties, being a Notice of Non-Payment, re: The Sherwin-Williams Company v. CIRCULO Clearbrook, et al. Carpenter reported that this claim is thirty (30) days old or less and his firm has communicated with legal counsel for the PILOT Lessee to obtain the necessary background and information and coordinate the prompt adjudication of the claim, will continue to monitor the claim and keep the Board advised.
2. Carpenter reported on one (1) new notice of lapse of the casualty insurance policy for South City Phase V. Carpenter reported that his firm has communicated with the PILOT Lessee, the premium has been paid, and his office is currently awaiting payment confirmation and recession of the termination notice from the insurance carrier.
3. Carpenter reported PILOT property activities in the month of November 2022, to wit:
a. Hillcrest Apartments Refinancing closed.
b. Summer Trace Apartments PILOT expired by its terms, and the PILOT was terminated. This property will return to the tax rolls at its current market value.
4. Finally, Carpenter briefly advised on the status of upcoming bond closings for the month of December relating to Tillman Cove Apartments, Memphis Towers Apartments and MH Strategies I and MH Strategies II.
There being no further questions or comments, the Legal Report was concluded.
Action Items-
1. Status update of Bond Inducement for Christian Church Homes d/b/a Covenant Gardens Senior Apartments
Charles Carpenter introduced this agenda stating that the property was induced in February 2022, there was an amendment to the inducement and extension granted in July 2022, and since all supplemental funding had been issued by the Tennessee Housing Development Agency (THDA) for 2022 the Board is looking for a status update as to this project. Pastor Clifford Causey introduced himself as the representative for this agenda item. Carpenter thanked Pastor Causey and for the record, explained for the benefit of all attendees that there were some technical difficulties with the Board’s Zoom platform prior to the start of the meeting today and thanked all representatives for their patience. Carpenter then invited Pastor Causey to provide a status update on the project. Causey stated that the project was not awarded the tax credit this year 2022 and representatives are preparing to go back to THDA in the first round of 2023. Causey asked the Board to consider extending the bond inducement resolution until the project can be resubmitted to THDA. Carpenter thanked Causey and stated that according to Board records, the project will not need to be considered for a bond inducement closing extension until February 1, 2023, because that each commitment is for a six (6) month period. Carpenter explained that project representatives would receive notice to appear before the Board at its February 1, 2023 Board meeting in order to request a bond inducement closing extension at that time. There were no further questions or comments and the update was accepted by consensus.
2. Bond Inducement Resolution for APP Greenbriar Partners, LLLP (d/b/a Greenbriar Apartments)
Carpenter advised the Board that this is an Alco Management Inc property, and it is seeking inducement for new bonds for the acquisition and rehabilitation of Greenbriar Apartments. Carpenter invited representatives in attendance to speak on this agenda item. Thomas Robinson with Alco Management Inc. introduced himself and expressed his appreciation in working with the Board. Robinson explained that Alco Management Inc. has closed two (2) bond transactions with the Board for Rolling Hills Apartments and Breezy Pointe Apartments this year and the team is excited about the Greenbriar Apartments project. Robinson stated that construction is underway at this site and his team appreciates the assistance and the long-term partnership in working with the Board. Robinson stated that the Greenbriar Apartments project is the next step in preserving affordable housing in the Frayser area. The complex is two hundred and eight (208) units and will undergo substantial rehabilitation that will benefit the residents and will be a continuation of the good work Alco Management Inc. has been doing in the North Memphis community and the team appreciates the support of the Board. Carpenter thanked Robinson for his comments and stated that Alco Management Inc. has been a valuable partner in the community and has done quality work and provided some significant tenant benefits. Carpenter stated that his firm has reviewed the application and Alco has assembled a very professional finance and development team and the application complies with the Board’s policies and procedures and would recommend approval. There being no further questions or comments,
Cliff Henderson moved to approve Bond Inducement Resolution for APP Greenbriar Partners, LLLP (d/b/a Greenbriar Apartments). Monice Hagler seconded, and the motion passed unanimously after a proper roll call vote of the Board members.
3. 2nd PILOT Closing Extension for Kimball Cabana, LP (d/b/a Kimball Cabana Apartments)
Carpenter advised the Board that action items three (3) and four (4) are the same development team and this is the 2nd PILOT Closing Extension for Kimball Cabana Apartments and 2nd PILOT Closing Extension for d/b/a Oakshire Downs Apartments and Townhomes. Carpenter advised the Board that both the internal and external compliance monitors have visited the sites and reports are included in the Board’s meeting materials, including photographs. Carpenter reminded the Board that each extension is for a six (6) month period. Carpenter invited representatives in attendance to speak on this agenda item. Mark Bunch introduced himself as a consultant for the projects and invited Luke Loveland to make any further comment. Loveland thanked the Board for the opportunity to be considered for these additional extensions, stating that his team is excited to get these combined five hundred forty-five (545) units back online. Carpenter asked if there is active construction going on at Kimball Cabana. Loveland responded that as of now, there is no new construction. Loveland stated that his team has been working with the Environmental Court to keep things maintained, keeping things boarded up, and keeping the property presentable and safe for the few tenants on the properties as the team moves forward to close on the construction loan. Carpenter asked what the occupancy rate is for Kimball Cabana Apartments? Loveland responded that there are roughly thirty-five (35) tenants on the two hundred forty-five (245) unit property, and all tenants are gathered in a few separate buildings, and the rest of the property is boarded up and shut off from tenants. Loveland also stated that the property has twenty-four (24) hour armed security working in five (5) shifts on the property, which is expected to stay in place during the rehabilitation and following completion of the project. Carpenter asked what the proposed timetable for the commencement of the rehabilitation and financing and actively moving forward with Kimball Cabana Apartments? Loveland stated that the team wants to have the construction funds closed, equity syndicators in line, and begin construction toward the end of the 1st Quarter 2023. Carpenter thanked Loveland and asked that he provide the same information for Oakshire Downs Apartments and Townhomes. Loveland stated that this project is in the same category in that the team is maintaining the site right now, and there are roughly thirty-seven (37) tenants at Oakshire Downs Apartments and Townhomes, which is a three hundred (300) unit complex in the Whitehaven area. Loveland stated that his team is working with the same syndicates and on the same debt financing schedule. Loveland stated that when rates recently increased, the team had to switch gears and get more creative with financing, but both projects are in the same category with expectations to begin construction toward the end of the 1st Quarter 2023. Carpenter asked for clarification for the Board, stating that Loveland mentioned Environmental Court, and asked if each of these projects are currently before Environmental Court. Loveland responded that both projects are, but that the team has maintained compliance, there are no liens or lis pendens suits in effect right now, and the team has complied with everything the Environmental Court has asked and both projects are in good standing with the Environmental Court. Carpenter reminded the Board for the record that each project has been induced for bond financing and asked Loveland if it is still his intention to move forward with the four percent (4%) tax-exempt financing through THDA. Loveland stated that it is their intention to utilize the tax credits and move forward with the bond financing for both projects. Carpenter stated that both projects are very difficult projects, and his firm has worked with this development team for several years now and there is a tremendous need with the location of both projects and the team has been actively working on it. Carpenter stated that typically, when there are bonds and PILOTs involved, the PILOTs are closed at the time that the bond financing is closed, and given the circumstances of this, Carpenter encouraged the Board to look favorably on the PILOT closing extensions for Kimball Cabana Apartments and Oakshire Downs Apartments and Townhomes. Carpenter stated that he would like to bring to the attention of the applicants that the whole purpose of the PILOT program is to provide additional benefits to the tenant and if the renovations and updates are not made then it does not provide any benefit to the tenants. Also, Carpenter reminded the applicants that there are minimum occupancy levels required for the application of the PILOT and moving forward time is of the essence. Carpenter reiterated to the Board that if approved, each extension would be for a six (6) month period, so if the applicant has not closed within that time, it must come back to before the Board and will be reviewed with a higher level of scrutiny on whether to move forward. Carpenter offered to answer any additional questions the Board may have and advised that action items number three (3) and four (4) should be voted on separately. There being no further questions or comments,
Monice Hagler moved to approve 2nd PILOT Closing Extension for Kimball Cabana, LP (d/b/a Kimball Cabana Apartments). Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
4. 2nd PILOT Closing Extension for Oakshire Apartments, LP (d/b/a Oakshire Downs Apartments and Townhomes)
There being no further questions or comments,
Cliff Henderson moved to approve the 2nd PILOT Closing Extension for Oakshire Apartments, LP (d/b/a Oakshire Downs Apartments and Townhomes). Monice Hagler seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Following the proper roll call of the Board members, Katie Shotts commented that the external monitors report indicated that Oakshire Downs Apartments and Townhomes management refused to allow the external inspector on the property in order to inspect the condition of the property. Carpenter stated to the applicant that periodically, with monitoring of the PILOT applications, the Board does have an outside monitoring firm as well as internal monitoring to inspection the exterior of the property. Therefore, management and security on the property should be advised that the individual representative of the Board will identify themselves and should be allowed to come in and do a visual inspection of the outside of the premises. Carpenter stated the property inspections do not include inspections of inside the apartment units. On this occasion with Oakshire Downs Apartment and Townhomes, as the external monitor did identify himself, the security went to the office and the site manager there did not allow the external monitor to complete their duties and complete an outside visual inspection, which should not be the case going forward, not only for this particular project, but for all of the PILOT properties. Carpenter stated that this is an admonishment for this particular property, but just a note to all of the PILOT Lessees that are in attendance at today’s meeting. Buckner Wellford asked for confirmation that this instance took place at the Oakshire Downs Apartments and Townhomes. Wellford also stated that if he had been notified of this information prior to the vote, he would have voted against the extension, just to demonstrate the seriousness that the Board takes with this issue, but he will not change his vote today on this agenda item.
5. 2nd PILOT Closing Extension for Mazel Willow Oaks, LLC (d/b/a Willow Oaks Apartments)
Carpenter presented this agenda item, stating that the project is seeking a 2nd PILOT closing extension. Carpenter stated that this developer has existing PILOTs that are ongoing and are in good standing and invited representatives in attendance to speak on this agenda item. Frank Stockdale Carney introduced himself, Mendel Fischer, and Shrage Marasow in attendance representing Willow Oaks Apartments. Carney stated that he has been working with Carpenter’s firm and this project is scheduled to close the week following today’s Board meeting. Carney stated that documents have been exchanged and discussed as recently as this morning and is confident that this transaction will be closing very rapidly. There being no further questions or comments,
James Jalenak moved to approve the 2nd PILOT Closing Extension for Mazel Willow Oaks, LLC (d/b/a Willow Oaks Apartments). Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
6. PILOT Refinancing Application for The Villages TN LLC (d/b/a The Villages at Harrison Creek) (Deferred from the Board’s November 2, 2022 Board meeting)
Carpenter presented this agenda item, stating that the project is doing business as The Villages at Harrison Creek, and reminded the Board that this refinancing application was deferred from the Board’s November 2, 2022 Regular Board meeting due to questions regarding the level of occupancy. Carpenter stated that since that time, the Board has received additional information providing clarification on the occupancy at the property. Carpenter stated that there is a minimum seventy-five percent (75%) occupancy required. Carpenter invited representatives in attendance for this agenda item to make any further comments. Frank Stockdale Carney introduced himself, as well as Menachem Gansburg in attendance. Carney stated that his firm provided the Board with an executive summary and an update on the status. Carney stated that this property is on three separate parcels and the units on two of those parcels are substantially complete and are ninety-seven percent (97%) occupied. Carney stated that the refinancing will include a mortgage on those two parcels. Carney stated that the third parcel is under rehabilitation, further stating that the developer took this property in April 2021 and closed the PILOT in November 2021, so he is still in the process of rehabilitation and is on schedule to complete the property in the summer 2023, bringing ten to twelve (10-12) units online a month. Carney stated that the property currently has twenty (20) units waiting for Memphis Light, Gas, and Water (MLGW) and code enforcement approval, and once that is completed, those units are ready to be rented. Carney stated that this property is progressing very well and does have a substantial amount of the tenant benefit improvements in place on the property, including a soccer field, a playground, armed security guards on the property, and improved gates and fencing. Carney stated that the developer is committed to getting all tenant improvements in place. Carpenter thanked Carney for his comments and advised the Board of the monitoring reports included in the Board materials and invited Bryce Miller, Compliance Coordinator for the Board, to make any additional comments. Miller stated that all comments made by Carney are what he has observed at the property. Miller stated it appears that construction is moving along at a consistent pace, and he has observed the playground, soccer field, and dog park, in addition to a working laundromat on the property. Carpenter thanked everyone for their comments and stated based on the statements made by representatives of the PILOT Lessee, as well as the Board’s internal monitoring, his firm would recommend approval of the refinancing. Carpenter stated that based on the application, a portion of the refinancing proceeds will be used to continue the rehabilitation of the property and it is in compliance with the Board’s policies and procedures. There being no further questions or comments,
Monice Hagler moved to approve the PILOT Refinancing Application for The Villages TN LLC (d/b/a The Villages at Harrison Creek). Katie Shotts seconded, and the motion passed unanimously after proper roll call vote of the Board members.
7. Affordable Multifamily PILOT Application for Mazal in Grainge Hill, LLC (d/b/a Grainge Hill Apartments)
Carpenter presented this agenda item, stating that the project is doing business as Grainge Hill Apartments and the developer is currently a participant in the Board’s PILOT program. Carpenter invited representatives in attendance for this agenda item to provide additional comments. Frank Stockdale Carney introduced himself as legal counsel to the developer and stated that the developers Mendel Fischer and Shrage Marasow are also in attendance and can provide additional comments on the project. Carney stated that this project is a ninety (90) unit complex located on Ketchum Road. Carney stated that this project is a substantially dilapidated property with only ten percent (10%) of the units currently occupied. Carney stated that the developer is committed to completely rehabilitating the property and bringing it back online to provide good affordable housing plus tenant benefits that will be put on the property. Carney went on to state that this developer is the same developer that has planned PILOT closings on Willow Oaks Apartments, Eden Pointe Apartments, and Bridgeport Manor Apartments. Carpenter asked what the timing of this will be for the commencement of the rehab and closing of the PILOT? Mendel Fischer stated that he plans on closing the PILOT by the end of the year 2022 and estimated commencement of construction within six to nine (6-9) months. Carpenter thanked the representatives for their comments and stated that his firm has reviewed the application and is does comply with the Board’s policies and procedures and recommended approval. There being no further questions or comments,
Katie Shotts moved to approve the Affordable Multifamily PILOT Application for Mazal in Grainge Hill, LLC (d/b/a Grainge Hill Apartments). Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
8. PILOT Refinancing Application for Shelby Pines Renovations, LLC (d/b/a Sutton at Shelby)
Carpenter presented this agenda item as a refinancing application for Sutton at Shelby Apartments. Carpenter advised the Board that materials pertaining to this application are in the
Board’s meeting materials, including an outline of the sources and uses of the refinancing application, and photographs and compliance report of the property. Carpenter invited representatives in attendance for this agenda item to provide additional comments. David Shores introduced himself and stated that this property was sold by a partnership in September 2022 and the purchaser was not able to close their financing at the time of the sale but needed to get the transaction closed due to a 1031 exchange issue. Shores stated that ownership now has financing lined up and ready to close the first week of January 2023, subject to the Board’s approval. Carpenter stated that his firm has reviewed the application and it is in line with the Board’s policies and procedures and asked about the portion of the refinancing proceeds that will be used to return equity to the property owners. Shores stated that when the sale transaction was closed, ownership has a certain amount of equity from their 1031 exchange that they had to invest and the number was somewhat fluid based on closing costs and other items, so they invested that amount and left a note payable. Shores stated that this is the amount of the loan ownership originally anticipated getting at the onset and there is not a large amount being distributed relative to their investment in the project. Carpenter asked Shores to confirm that the disbursement of those returned equity funds would not have any adverse impact on the operations of the property. Shores confirmed that it would not, stating that the property rehabilitation is complete, and the property is producing cash flow. Carpenter had no further questions and recommended approval. There being no further questions or comments,
Monice Hagler moved to approve the PILOT Refinancing Application for Shelby Pines Renovations, LLC (d/b/a Sutton at Shelby). Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
9. 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
Carpenter advised that action items nine (9), ten (10), and eleven (11) are all by the developer, Millennia Housing and these three (3) properties had bonds issued in 2018 and substantial rehabilitated has been completed but there are supplemental scopes of work remaining to be completed. In addition, with the original financing, there were certain covenants required that the developer is unable to meet due to supply chain issues and the changing interest rate environment, and under those circumstances, the developer came to the Board for a reissuance of the bonds. Carpenter stated that the reissuance was initially on an accelerated track to be closed in June 2022, but because of various concerns and the changing interest rate environment, it has been delayed. Carpenter stated that the developer has been asked to appear before the Board to provide an update on each of these projects so that the Board could understand where things are and how it is envisioned that the developer will proceed. Charles invited representatives in attendance to provide an update to the Board. There being no representatives in attendance, Carpenter recommended that this agenda item and agenda item ten (10) and eleven (11) be deferred to the Board’s January 4, 2023 regular Board meeting. There were no further questions or comments. Without objection, this agenda item has been deferred to the Board’s January 4, 2023 regular meeting.
10. 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
Without objection, this agenda item has been deferred to the Board’s January 4, 2023 regular meeting. This agenda item has been deferred to the Board’s January 4, 2023 regular meeting.
11. Status update on Resolution authorizing the reissuance of Multifamily Housing Revenue Bonds, Series2018 (Hope Heights Apartments) and approval of certain legal documentation required in connection with such reissuance
Without objection, this agenda item has been deferred to the Board’s January 4, 2023 regular meeting. This agenda item has been deferred to the Board’s January 4, 2023 regular meeting.
12. Such other business as may properly come before the Board.
Corbin Carpenter advised the Board that the Tillman Cove $3 Million Supplemental Bond Issuance has been successfully priced as of today and the transaction will close on December 7, 2022. There were no further questions or comments.
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 been monitoring these properties for several months, and for Creekside Meadows, formerly known as Bent Tree Apartments, it has been much longer period than that. Carpenter advised the Board that photographs of the property and compliance reports are included in the Board meeting materials, as well as recent visits from the Board’s internal compliance monitor. Carpenter invited representatives in attendance to provide further comments and an update on this agenda item. Rachel Stenger-Wiley introduced herself and Carpenter asked that Stenger-Wiley provide a status of where the property is now and what the current occupancy is at both Creekside Meadows and Mill Creek Apartments. Stenger-Wiley stated that she did have a recent site visit with Bryce Miller, the Board’s Compliance Coordinator at Creekside Meadows and occupancy continues to stay steady at a rate of eighty-nine percent (89%) occupied, and ninety-two percent (92%) leased. Stenger-Wiley stated that traffic to Creekside Meadows remains strong, bringing in new leases. Stenger-Wiley reported that the window glass has finally come in and is being installed, and management has continued along the same path of providing service and maintaining grounds and maintaining the property. Stenger-Wiley reported that several days prior to the Thanksgiving holiday, management was able to feed many families on the property, stating that it was a nice outreach opportunity.
Stenger Wiley continued stating that Mill Creek Apartments occupancy is currently at eighty-eight percent (88%) and staying steady, with strong traffic flow and phone calls on leasing. Stenger-Wiley stated that she received a referral for a good contractor that has done some work with other PILOT properties and was able to meet with the contractor on November 29, 2022 at Mill Creek Apartments to discuss gutter and downspout repairs. The contractor is due to return in the next two (2) weeks to assess the needs of the property and provide a bid. Stenger-Wiley stated that the delay with these repairs at Mill Creek Apartments has been the inability to get bids from additional contractors, so this meeting was encouraging, and she expects the bid to be returned within the next two (2) weeks as well. Carpenter thanked Stenger-Wiley and asked Miller for any further comments on these properties.
Miller thanked Stenger-Wiley for her transparency shown while on the site visit to Creekside Meadows and for driving the entirety of the grounds with him to discuss the property improvements. Miller stated that this site visit provided a much better idea of everything going on with the property in respect to timelines and the challenges the property faces. Miller stated that Stenger-Wiley's report is on par with what he has observed on both sites, and the window issue at Creekside Meadows seems to be getting under control. Miller stated that he observed signs of renovations being completed, such as new appliances on site, and from his observations, would expect completion to take place by the end of the first quarter of 2023. Carpenter thanked everyone for their comments and based on these updates, recommended that both properties return to the Board’s March 1, 2023 Board meeting agenda for an update by representatives at that time. Carpenter stated that a recommendation could be made to take these properties off the troubled list, but until then, he asked that Stenger-Wiley provide periodic reports to the Board throughout the time period prior to the update to be given to the Board at the March 1, 2023 Board meeting. Carpenter stated that Stenger-Wiley and her team have done a good job and monitoring will continue in the coming months, and the Board looks forward to the formal update in March 2023 and looks forward to continuing the good work to move this forward and off the Board’s troubled list.
3. Macon Manor Apartments:
Carpenter stated that this property is a new entry on the Board’s troubled list and advised the Board of photographs and compliance inspection reports included in the Board meeting materials. Carpenter invited representatives in attendance to provide an update on this property. David Shores introduced himself, stating that Macon Manor Apartments has three (3) distinct sections. Shores stated that all the exterior repairs have been completed for the largest North side section, including replacement of a lot of old plywood between window sections and all the trim around windows. Shores stated that painting should commence within the next few weeks. Shores stated that the next step is to complete the same type of repairs to the smaller North section of the property, including rotten wood repair, improvements to lighting, and paint. Shores stated that the delay in repairs has been caused by labor shortages, but management believes that has now been resolved and they are making headway. Shores stated that he expects all three (3) sections of the property to be completed by the end of the first quarter 2023. Miller stated that he has visited the property several times and has observed the progress, further stating that if the remaining two (2) buildings undergo repairs and are made to look like the completed building, the property will be in good shape. Carpenter stated that based on this report and the observations of the Board’s internal staff, he recommended that the PILOT Lessee appear before the Board for a formal update at the March 1, 2023 Board meeting, the Board will assess the progress at that time, and take the necessary steps going forward.
4. New Horizon Apartments:
Carpenter stated New Horizon Apartments is a large property located in Whitehaven with eight hundred ninety-eight (898) units, and the Board has worked with this property over a long period of time through changes in management and ownership. The PILOT Lessee is represented by Mark Jobe, who submitted a written update, which Carpenter advised the Board, is included in the Board meeting materials. Thereupon, Carpenter invited Jobe to provide any further update or comments to the Board. Jobe introduced himself, as well as Ashley Lowe, property manager of New Horizon Apartments. Jobe stated that renovations have continued, and thirty-six (36) additional units have been completed and an additional two hundred sixty-five thousand dollars ($265,000) has been reported to have been spent. Jobe stated there are one hundred twenty (120) units under renovation and not including the down units, occupancy is at seventy percent (70%) and with down units included, occupancy is at sixty-five percent (65%). Jobe stated there is continual turnover and releasing of units, the approved tenant benefits and work with nonprofits continues, onsite security continues, and an onsite walkthrough with the Board’s Compliance Coordinator, Bryce Miller, is scheduled for December 6, 2022.
Jobe responded to the request of Carpenter about the status of outstanding Code Enforcement issues. Jobe stated that one of the partners, Randy Womack, who is an expert in the environmental field, is handling that matter and he attended a show cause hearing with the Health Department related to the asbestos issue, but no ruling or judgement has been received, so the matter remains pending but is being addressed. Jobe advised that Lowe recently attended a workshop that was recommended related to compliance with handling of asbestos and other construction materials. Jobe stated that the issue is being addressed and attended to with due care, but there is no final resolution at this time.
Miller stated that he is looking forward to the scheduled walkthrough of the property and getting a better understanding of the construction and timeline and reported that although this is a very large property, he has observed progress, but it is spread out, and he would like to see more construction taking place because it appears that the property is in a maintaining phase rather than a completion phase. Miller also stated that he would like to focus on tenant benefits during the site visit, as well as the construction timeline. Miller further stated that a property of this size presents its own challenges in managing and maintaining, and he looks forward to the site visit and stated it will provide a firsthand understanding of each of the various areas that are under construction and renovation and understand the timeline for completion of the project moving forward. Lowe stated that the property has added another nonprofit group onsite that began two (2) months ago, and they have been visiting the property frequently and will be stationed on the property in a unit, once the unit is completed.
Miller asked if there are separate crews responding to maintenance requests and a different construction crew working on down units. Jobe responded that the maintenance team takes care of the maintenance tickets that the tenant put in the online system, and there is a separate crew completing the painting and flooring, but the maintenance team does assist with those items as well. Carpenter thanked everyone for their comments and based on this update, Carpenter recommended that the representatives appear before the Board for a formal update at the Board’s February 1, 2023 Board meeting.
5. Winchester Grove:
Carpenter stated that Winchester Grove is a property the Board is well familiar with, as the property has been on the troubled list for a substantial period of time, Board representatives have made site visits there, and the project has made progress. Carpenter stated that there is a great report that was submitted by the PILOT Lessee included in the Board meeting materials and invited representatives of the property in attendance to speak on this agenda item. Rose Eaton introduced herself and began by stating that her team has been working on getting involved with the Memphis Police Department Blue Crush program and would like to install a substation in the Community Center on the property, but her team is having difficulty finding the correct contact to move forward with this and asked that if the Board had any recommendations as to how to proceed with this, they would be welcomed. Carpenter stated that his firm would follow up on this request and provide contact information and stated that there are several properties seeking the same thing and the city administration through the division of police services is looking at how they can accommodate some of those requests, but his firm would help to facilitate that process.
Miller stated that the written update provided to the Board is consistent with what he has observed on his site visits to the property and is happy to report that this property has definitely made a turn around and construction is moving at a strong pace, and he observed occupied units in areas that were completely vacant and under construction just a few months ago. Eaton thanked Miller for his comments and stated that her team has worked really hard between the construction company and the property management company and coordinating with management to get units leased as soon as they become available. Monice Hagler asked if this is the property that stayed vacant for so long, but now they are making progress and moving forward? Carpenter responded yes, and that they have a related civil litigation in federal court dealing with change in management and governance and his firm has been monitoring that as well. Hagler asked if ownership has changed? Eaton stated that representatives are in the final stages of a settlement with the previous general partner/ general contractor. Carpenter stated that is excellent news and asked what the projected timetable to finalize everything with the property. Eaton stated the remaining forty-three (43) units will be brought back online by the end of January 2023 and that they have experienced delays with Memphis Light, Gas and Water (MLGW) and transformers that are in need of replacement. Eaton stated that the last repairs will be to the Community Center, and work has already started on that as well, and it is anticipated that the Community Center will also be completed by the end of January 2023. Eaton stated that this timeline is contingent upon MLGW and supplies, but the construction company, Adirondack Construction, has done an amazing job at bringing subs back to the property even though the property previously had a terrible reputation, as well as getting the construction completed.
Carpenter asked what the current occupancy rate is on the property. Eaton responded that is now at three hundred ninety-seven (397) occupied units, which is eighty-nine percent (89%) of the four hundred forty-six (446) total number of units, and the property is over ninety-eight percent (98%) occupied based on units available. Carpenter stated that this is a property that has always had tremendous potential and it is now realizing its potential and it seems like we are getting to the finish line. Carpenter recommended that the property appear before the Board to provide a formal update at the February 1, 2023 Board meeting.
Martin Edwards, Jr commented that the progress that has been made is due to the dedication on these representatives to the property in getting the project completed and it is encouraging to see this progress after so much time had passed with the property in a bad situation.
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, January 4, 2023 @ Noon. There being no further business, the meeting was adjourned by the Chairman at 01:28 p.m.