Snapshot of the 2019 PILOT Application Process
(Payment In Lieu Of Taxes)
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD OF
THE CITY OF MEMPHIS, TENNESSEE
(hereinafter HEHFB or Board)
The PILOT (Payment In Lieu Of Taxes) Program is a financial incentive designed to encourage new construction and substantial rehabilitation of affordable multi-family housing through significant property tax relief for qualifying properties located within the limits of the City of Memphis, Tennessee (the “City”).
Types of PILOT Categories/Initial and Maximum Terms
1. New Construction: 15yr/20yr maximum
2. Acquisition Rehab: 15yr/20yr maximum
3. Tax Credit: 15yr/20yr maximum
4. High Impact: 25yr maximum
5. Expired/Re-established: Up to 10yr/Aggregate 20yr maximum
The PILOT Program is offered for new construction and substantial rehabilitation projects (as defined herein) throughout the City.
Basic Eligibility Requirements
Investment: To be eligible for an original PILOT, substantial rehabilitation shall mean financial investment in construction costs equal to or greater than fifty (50%) percent of the value of the land, property acquisition costs, building improvements, site improvements or new construction, excluding all soft costs. To be eligible for an extended PILOT, please see PILOT Term Extension Qualifications on Page 9 herein.
Site Control: The applicant (“Applicant”) must have site control which shall be the equivalent of a fee simple title, 99-year lease, or an option to purchase with no contingencies except financing.
Financial Commitment: Applicant must provide evidence of financing commitment for the total project costs.
Target Market: 20% of the Applicant’s units must be occupied by individuals whose income is 50% or less of the area median income or 40% or more of the units must be occupied by individuals whose income is 60% or less of the area median income.
Tenant Benefits: Tenant Benefits are a central component of the PILOT Program and full compliance shall be maintained at all times throughout the duration of the PILOT in order for the PILOT to be considered in good standing. At the outset, the Applicant must provide a written narrative and projection of how the PILOT savings will directly benefit tenants through one or more of the following amenities, including, but not limited to, (i) additional property improvements, (ii) rental payment reduction or stabilization, and (iii) additional tenant amenities and/or services, to include any specific social services delivered directly or in conjunction with established nonprofit/community agencies.
“High Impact” Projects: As defined by the Memphis City Council Resolution, adopted August 28, 2018 (the “Resolution”) are projects which, among other things, shall (i) represent a total investment of $15,000,000.00 ($15 million), and must provide 40% or more of their units to families at or below 60% of the area median income, (ii) have an active Crime Prevention program incorporating the principals of “Crime Prevention through Environmental Design” (C.P.T.E.D.) provided by a local vendor that holds a current certification in C.P.T.E.D. provided by the National Institute of Crime Prevention, (iii) provide 24 hour security personnel on site, (iv) offering a substantial number of 2 and 3 bedroom units, (v) accept section 8 vouchers and veteran’s vouchers, (vi) provide common space for tenant activities, (vii) provide after school activities and playground equipment, (viii) provide computer learning center and public designated WI-FI hotspot area(s) accessible to residents and (ix) have handicapped adaptable units in compliance with guidelines of the Americans with Disabilities Act of 1990 (“ADA”).
1. Pre-Submittal Conference - A mandatory meeting with the HEHFB Executive Director, or designated representative, shall be held prior to submission of a PILOT application. This meeting is to acquaint all parties with the scope of the Project application process, tenant benefit compliance requirements and any related issues. This meeting also serves to familiarize the Applicant with the overall submittal and review process as well as overall PILOT policies and basic eligibility requirements. The Board reserves the right to reject applications when this requirement has not been met.
2. Submittal of Application - An outline of the PILOT application follows in this package. The application must be submitted in conformity with the Board’s guidelines. There will be one (i) original hard copy in a 3-ring tabbed binder and an electronic copy. Neither application draft nor final applications will be accepted after 3:00 PM Central Time. If the format of the submitted application does not comply with the format or policies of the Board, the application will not be reviewed.
All applications should be delivered to:
The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee
65 Union Avenue, Suite 1120
Memphis, Tennessee 38103
3. Board Review and Approval - The Health, Educational and Housing Facility Board of Directors (“the Board”) generally meets on the first Wednesday of each month at 12 Noon. Meetings are held at the Office of the Board located at 65 Union Avenue, Suite 1120, Memphis, Tennessee 38103. Per resolution of the Board, a Board PILOT Review Committee (the “PILOT Committee”) has been established to review, with the staff, and make recommendation to the Board for PILOT application approvals and ongoing monitoring and compliance. Applicants may be permitted to present to the Board after staff evaluation and review and based on recommendation by the PILOT Committee. The Board will deliberate on all applications and render its decision(s) on all applications at a later time.
4. Board Review of PILOT Term Extension Requests - PILOT Term Extension Requests will be reviewed by the Board PILOT Review Committee (the “PILOT Committee”) with staff, and make recommendation to the Board for PILOT Term Extension approval and ongoing monitoring and compliance. The Board will consider the request when proper materials have been submitted in a timely fashion and all applicable fees have been paid. Applicants may be permitted to present to the Board after staff evaluation and review and based on recommendation by the PILOT Committee. The Board will deliberate on all applications and render its decision(s) on all applications at a later time.
5. Closing - If the Project is approved by the Board, the Board’s General Counsel will prepare and distribute required PILOT documentation and upon receipt of all required documents will arrange a PILOT closing at which time regulatory and compliance agreements will be executed, all required legal documents will be duly recorded with the Shelby County Register’s Office, and all required recorded documents will be filed with the Shelby County Assessor and the City and Shelby County taxing authorities and removed from the tax rolls for the complete term of the PILOT.