Wednesday, September 18, 2019


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, September 18, 2019. 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, Chair                                        James Jalenak

                        Monice Hagler                                                   Dr. Manoj Jain                                

                        Buckner Wellford


            The following Directors were absent:

                        Nancy Willis                                                       Cliff Henderson

                        Brittney Rowe                                                                                                                                                     

            Also present were:

Staff members Martin Edwards, Jr., and Stephanie Wright; Charles E. Carpenter and Corbin I. Carpenter, General Counsel, and Cheryl Hearn, Assistant City Attorney.

Also, in attendance were Luretha Phillips with Memphis Housing Authority and JoAnn Rodriguez with BGC Advantage representing MH Strategies, LP and MH Strategies Montgomery RAD, LP; David Johnson with Burj World and Carl Mabry with Results Management representing New Washington Square Apartments; Berkeley Burbank, Sarah Jemison, and Dana Patterson with Alco Management representing Rolling Hills Apartments.

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


Approval of Minutes

Monice Hagler moved for approval of the Minutes of the August 7, 2019 Regular Meeting. James Jalenak seconded, and the motion passed unanimously.


Attorney’s Report

Charles Carpenter presented the legal report, as follows:

1.    For the Board’s information, Carpenter reported one new lawsuit filed against Bent Tree Apartments, a PILOT property Lessee. Notice of this lawsuit was just received this week and it appears to be a slip and fall injury claim. Carpenter stated that his firm is preparing its letter of representation of the Board and request to dismiss the Board as a party defendant in the lawsuit to counsel of the Plaintiff. Carpenter reminded the Board that since the Board is listed on the deed as the owner of record that it will always be included as a party defendant in such claims and lawsuits; however, pursuant to Tennessee law, the Board is provided immunity from all liability, so long as it is serving its public purpose. Carpenter also provided an update on the lawsuit discussed at the last Board meeting, of Pro’s Painting vs Chapel Place Homes. Carpenter reported that he has been in communication with the counsel for the Plaintiff and the process has begun to dismiss the Board as a party defendant to this lawsuit. The Plaintiff’s notice of voluntary dismissal has already been filed and the formal order dismissing the Board will follow shortly. Carpenter reported that Cedar Run Apartments PILOT also had a materialman’s lien filed against it, and that lien has been dismissed. 

2.    For informational purposes, Carpenter reported three closings. The Cedar Run Apartments PILOT refinancing has been closed, New Horizon Apartments PILOT Term Extension has been formally closed, and the Clearbrook Village Apartments PILOT has been closed. Carpenter also reported that the PILOT Committee has met and discussed Renaissance at Steele Apartments, which is part of today’s action items. Carpenter stated that his firm has been in communications with counsel for Renaissance at Steele Apartments and that the closing of this transaction is eminent. Carpenter stated that the PILOT Committee, as well as his firm, would recommend approval of the closing extension on today’s agenda.

3.    Carpenter reported that the Elmington Capital project known as ECG Patterson-Uptown 2 LP has a new name for both of its pending Bond and PILOT applications; and the applicant will be known going forward as ECG North Main, LP and the project is now being called Burkle & Main Apartments. Both the Bond and PILOT will be coming before the Board at its October 2, 2019 Board meeting for final bond resolution and/or to request closing extensions for both matters. Buckner Wellford stated for the record that he will be recusing himself from any action involving these two matters, as they are represented by an attorney of his employer, Baker Donelson.

4.    Corbin Carpenter provided an update on the Jehl Cooperage property stating that the next court date set for this project will be Thursday, September 26, 2019 at 10:00 am. Ensafe has completed the second round of field testing and are in the process of preparing its report to provide to Corbin Carpenter and the Downtown Memphis Commission (DMC). Corbin Carpenter stated that he will prepare an update via email following this court date and will provide a formal update to the Board at the October 2, 2019 Board meeting. Dan Reid asked if there had been any preliminary determinations concerning these reports. Corbin replied that there have not been any determinations, other than the first two rounds of field testing have been completed. Charles Carpenter explained that the typical protocol for field testing includes an “incubation” period where the samples are sent out for further testing before receiving any results. DMC has advised that one invoice has been received from Ensafe for approximately forty thousand dollars ($40,000), so it is still very early in the process.

5.    Charles Carpenter reported that he had received information from David Upton that he and Barry Cohen are preparing to come before the Board seeking a ten (10) year PILOT Term extension for Highland Creek Apartments. Carpenter reminded the Board that it approved a new ten (10) year PILOT for this project. During that time, the Board was still working through the refinements and final provisions for policies and procedures. Carpenter reported that they intend to come before the Board with the PILOT Term Extension Application for Highland Creek at the November 2019 Board meeting.

6.    For informational purposes, Carpenter reported that Rolling Hills Apartments is going through a restructuring of ownership. This is due to the retirement of current ownership. Carpenter also reported another request for restructuring of ownership that will come before the Board in the next meeting regarding Corning Village Apartments.

7.    Carpenter reported to the Board that his firm has been asked to serve as Bond counsel on two bond financings recently approved for bond inducements by the Board: (i) Kimball Cabana Apartments and (ii) Oakshire Downs Apartments. Carpenter reported that these two transactions have not had Bond counsel, and the ownership is based out of California. Carpenter’s firm was recommended as bond counsel because it is currently working with the California counsel of the applicant’s on bond financings in the state of Arkansas. Carpenter also reported that his firm has been asked to serve as Bond counsel for the New Washington Square Apartments bond financing. Carpenter was asked by Buckner Wellford whether there was any issue with his firm serving as bind counsel and counsel to the Board in the same transaction. In response, Carpenter advised that this is not an adversarial situation and created no conflict. To provide additional background information for the Board on the roles of bond counsel and counsel to the issuer, Carpenter reported that he had returned from the National Association of Bond Lawyers (NABL) Workshop held in Chicago, Illinois. This workshop was attended by over one thousand one hundred (1,100) Bond lawyers from across the country. This is one of three annual educational seminars that NABL provides on an annual basis. Representatives from the U.S. Securities and Exchange Commission (SEC) and the Internal Revenue Service (IRS) and the Municipal Securities Rulemaking Board were in attendance. Carpenter stated that attending these educational seminars is important because of the constant changes that occur in the rules and regulations with financing tax advantaged securities. Carpenter then explained that bond counsel was typically counsel to the transaction, and it did not have a real client. Because of the changes in the ethics rules, risk management and other regulations, now the industry recognizes bond counsel as counsel to the Issuer. Hence, issuer counsel and bond counsel will each serve as counsel to the Issuer in governmental and conduit bond financings. Carpenter stated that the current view clarifies any potential conflict. Carpenter stated that the specific designation of who the client is provides clarity from an ethical and risk management standpoint. Buckner Wellford stated that he had no qualms with Carpenter providing objective advice to the Board, but Wellford is concerned with the appearance of a potential conflict, especially how it would look if anyone were to be scrutinizing the transaction closely. Wellford stated that it would seem cleaner that if Carpenter is involved in the transaction on behalf of any interested party, that the Board would be provided the legal summary and have the opportunity to ask any questions that would involve legal issues to someone else on an isolated basis so that Carpenter would not be serving in dual roles. Carpenter responded to Wellford’s concerns by stating that he would be happy to meet in an additional session to discuss this issue further so that Wellford would be more comfortable, and Carpenter also stated that bond financings do not place bond counsel and issuer counsel in adversarial positions. From the standpoint of the Board, as issuer, issuer counsel and bond counsel are opining on the issue of compliance with validity of the bonds being issued under federal, state and tax law. In addition, bond counsel will opine on the compliance of the bonds under federal tax law and that such bonds will be exempt form federal income taxes so long as certain covenants are maintained. Therefore, as far as the opinions are concerned, bond counsel and issuer counsel provide the same opinion as to validity and bond counsel alone provides the opinion as to tax treatment of the bonds.  James Jalenak commented that he also had the same concerns as Wellford, until Carpenter stated that the client represented in such transaction is the Issuer. Following this statement, Wellford expressed an understanding of the situation in regard to the current guidelines and asked that Carpenter provide a copy of the forms of opinions and guidelines for informational purposes.

8.    Lastly, Carpenter reported the Council of Development Finance Agencies (CDFA) did a nationwide study surveying the practices of issuers and compiled a report of issuer fees for conduit issuers. CDFA wanted to see how conduit issuers assessed various issuer fees. Carpenter provided a copy of the CDFA report to the Board, reviewed Board’s policies on issuer fees charged compared to the CDFA report and determined that the fees charged by the Board are in line with other conduit issuers around the country.

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


Finance Committee Report

Daniel T. Reid presented the financial results for the month ended July 31, 2019. A discussion of the financials was completed and

Buckner Wellford moved for acceptance of the Finance Committee Report for July 31, 2019, and properly seconded by Monice Hagler, the motion passed unanimously.

Dr. Manoj Jain left the meeting.



Martin Edwards, Jr. reserved his report for all PILOT matters to be considered under action items on the Agenda

Action Items:


Luretha Phillips and JoAnn Rodriguez entered the meeting.

Luretha Phillips of the Memphis Housing Authority (MHA) Development Department introduced herself, as well as, JoAnn Rodriguez of BGC Advantage. In addition to the previously filed applications, project packet handouts for MH Strategies, LP, considered Project 2, and for MH Strategies Montgomery RAD, LP, considered Project 3, were supplied to the Board. Phillips began by stating Project 1, MH Strategies Family RAD, LP, was presented and approved by the Board at its July 10, 2019 Board meeting, and these projects are the next two phases in the series. MH Strategies, LP (Project 2) includes a total of eight hundred twenty-six (826) units in four (4) separate high-rise developments and MH Strategies Montgomery RAD, LP (Project 3) includes a total of one hundred forty (140) units in two separate developments. Martin Edwards, Jr. asked the Board to look in the packets provided to them by Board staff so see the individual properties associated with each project listed on the project application summaries. Phillips stated that the primary reason for doing these projects is to preserve public housing. The RAD conversion process (a new financing tool provided by the federal government) allows MHA a financial structure to fund the necessary repairs to units that MHA owns but does not currently have the capacity or resources to fund at this time. The bonds will allow MHA to use additional private and public funds combined with what HUD appropriates to MHA, which are undergoing reductions each year. The RAD conversion process allows MHA to engage a new financing structure providing for the conversion of current units to allow for project-based voucher assistance rather than public housing assistance. Rodriguez seconded Phillips comments, reviewing the change in the financing structure and number of units for each project. Rodriguez also explained that the MH Strategies Montgomery RAD, LP project includes single-family homes as well as garden style townhome apartments. Charles Carpenter explained that this is a continuation the of project that was outlined to the Board at the August 7, 2019 Board meeting by Marcia Lewis with MHA and Holly Knight with BGC Advantage. Carpenter explained that on MHA’s current platform, it is unable to borrow money on the properties, or any other assets, while using the existing property as collateral. Carpenter further explained that due to the number of properties included in each project, TEFRA Hearing public notices will need to be very specific in the descriptions of the sites and locations. Carpenter also suggested to the representatives that MHA take a close look at the names of the projects moving forward. Currently, each project has been similarly named and each will need to be clearly distinguished moving forward, not only for the public, but also for the working groups so as not to confuse the projects being referenced. Carpenter stated that from a Board standpoint, these are great projects and in line with the Board’s purpose, and Carpenter stated that his firm would recommend approval of both projects. Buckner Wellford asked how the TEFRA process will work when there are multiple properties subject to one inducement. Carpenter explained that for purposes of the public notice, as all the properties are in one jurisdiction, it is the specific descriptions for each property which must be clearly identified, the location, and the not to exceed amount of the bonds, in order to fully comply with the Tax Payer Equity Fiscal Responsibility Act. There being no further questions or comments,

James Jalenak moved to approve the BOND INDUCEMENT RESOLUTION FOR MH STRATEGIES, LP. Buckner Wellford seconded, and the motion passes unanimously.


Thereupon, the Board considered the MH Strategies Montgomery RAD, LP bond application, as it is being represented by the same principals and professionals sponsoring the MH Strategies, LP bond application. There being no further questions or comment,

Monice Hagler moved to approve the BOND INDUCEMENT RESOLUTION FOR MH STRATEGIES MONTGOMERY RAD, LP. James Jalenak seconded, and the motion passed unanimously.

Luretha Phillips and JoAnn Rodriguez left the meeting


David Johnson and Carl Mabry entered the meeting.

Carl Mabry introduced himself as well as David Johnson with Burj World, who is the owner of New Washington Square Apartments. Mabry stated that they are before the Board seeking bond inducement for this project, which will be a new construction project. Currently, the buildings on site will be demolished and a new one hundred thirty-five (135) unit multifamily housing project composed of nine buildings will be built. Mabry explained that the goal is to provide affordable housing to people that want to live in this area of the community, which is why ownership is seeking bonds, in order to move forward with the project. Martin Edwards, Jr. explained that there is another PILOT property in the area, Pendleton Place, that is under construction as well. Edwards seconded the need for demolition and new construction and the positive movement that this new construction would provide in this area.  There being no further questions or comments,

Monice Hagler moved to approve the BOND INDUCEMENT RESOLUTION FOR NEW WASHINGTON SQUARE APARTMENTS. James Jalenak seconded, and the motion passed unanimously.

David Johnson and Carl Mabry left the meeting.


Berkeley Burbank, Sarah Jemison, and Dana Patterson entered the meeting.

Martin Edwards, Jr. began by passing around pictures of the property taken by him from his recent property visit. Edwards stated that he has been very impressed with the condition of the property. As stated, the in the PILOT Committee meeting, Dr. Manoj Jain described this property as a role model for other PILOT properties. Each representative with Alco Management present introduced themselves. Sarah Jemison began by describing the property as a one hundred thirty-eight (138) unit property located in Frayser. Jemison provided background on the property, including a tax credit rehab performed in the property in 2006. This rehabilitation included updated kitchens, bathrooms, exterior work, structural work, as well as participation in the Safeways Certification program.  The focus has been to provide quality and safe housing. Also, the focus has been to add some community programs as well, including a summer lunch program to children who would normally be provided meals through school during the school year. The PILOT Term Extension would extend the ability to continue to provide safe, quality, affordable housing, while also being able to take care of the necessary capital improvements that arise. Edwards mentioned that the property is one hundred percent (100%) occupied, and also has a waiting list with very capable on-site management. James Jalenak stated that this application was very favorably received by the PILOT Committee and seconded that the property was coined with the term “role model” by Dr. Manoj Jain. Buckner Wellford stated that under the PILOT term extension, there is an increase in annual PILOT payments following a PILOT lessee’s initial ten (10) year term. Wellford also stated that he had come to terms with the guidelines for the term extensions, which do not necessarily require anything new or improved, but does require that a PILOT lessee continues to stay in compliance with the Board’s current guidelines for the duration of the PILOT and through any term extension that may be granted. Charles Carpenter added that this particular property has already rolled off of the Board’s current PILOT program and has been returned to the tax rolls, however, the Resolution provided a two-year window to allow properties that expired within that period to take advantage of the PILOT term extension. There being no further questions or comments,

James Jalenak moved to approve the AFFORDABLE MULTIFAMILY PILOT TERM EXTENSION APPLICATION FOR ROLLING HILLS APARTMENTS for a ten (10) year extended PILOT term. Buckner Wellford seconded, and the motion passed unanimously.

Berkeley Burbank, Sarah Jemison, and Dana Patterson left the meeting.



Monice Hagler left the meeting.

Martin Edwards, Jr. began by stating that this is a refinancing request. The PILOT lessee is in the process of removing burned out units on the property, which explanation was provided per Board staff’s request. The property is eighty-eight percent (88%) occupied. Edwards stated that a copy of the most recent appraisal was provided and reviewed and that he has made several on-site visits to the property. Edwards stated that the PILOT Committee recommended approval. There being no further questions or comments,

James Jalenak moved to approve the PILOT REFINANCING FOR MILL BRANCH CROSSING APARTMENTS (F/K/A WINBRANCH APARTMENTS). Buckner Wellford seconded, and the motion passed unanimously.



Martin Edwards, Jr. and Charles Carpenter both stated that this is a short-term closing extension. The applicant has paid all fees due to the Board at this time and Carpenter anticipates the closing to be completed prior to the next Board meeting on October 2, 2019, but if approved, this extension would be valid for a six (6) month period. If the transaction is closed prior to the next Board meeting, the applicant could apply for a refund of the closing extension fee based on the Board’s established policy. Carpenter stated that his firm would recommend approval of this closing extension, as it is not uncommon for these types of transactions to take longer than the original six (6) month period granted following the initial approval of the project. Monice Hagler recused herself from the consideration and vote on this matter. There being no further questions or comments,

Buckner Wellford moved to approve the MHA PILOT CLOSING EXTENSION FOR RENAISSANCE AT STEELE APARTMENTS. James Jalenak seconded, and the motion passed unanimously.

Executive Director Report

Martin Edwards, Jr. stated that he had provided updated information in the packet provided to the Board in regard to 2019 activity and number of units approved and amount of new capital invested in the City of Memphis for the year 2019.

New Business

There was no new business.


Public Comment

There was no public comment.


It was announced that the next scheduled meeting of the Board will be held on Wednesday, October 2, 2019 @ Noon. There being no further business, the meeting was adjourned by the Chair at 1:01 p.m.