MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Wednesday, February 5, 2025
The regular meeting of The Health, Educational and Housing Facility Board of the City of Memphis, Tennessee (the “Board”) was held pursuant to public notice published in The Daily News on Wednesday, January 29, 2025, 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 Board offices, located at 65 Union Avenue, Suite 1120, Memphis, TN 38103.
The following Directors were present:
Daniel T. Reid, Chairman Monice Hagler
Buckner Wellford Cliff Henderson
Howard Eddings, Jr. Vincent Sawyer
Courtnee Melton-Fant
Staff and others attending: Trey McKnight, Stephanie Bryant, JP Townsend and Nikki Abraham; Charles E. Carpenter and Corbin I. Carpenter, General Counsel; Katrina Shephard (Zoom), legal assistant to General Counsel; Cheryl Hearn, Deputy City Attorney; Janika White, Memphis City Council Liaison (Zoom).
Also participating in person and/or via remote Zoom virtual platform were Alex Uhlmann and Caroline Francisco of the Memphis Tenants Union; Joyce Warren, Andrea Smith, Johnnie Mae Lee, and Jimmyrico Pigram of the Memphis Towers Tenants Union; Brian Myers of Richman Asset Management representing Memphis Towers; Jevon Allen, Cynthia Alvarez, Tony Weng, and Clifford Causey of Christian Church Homes representing Covenant Gardens Senior Apartments; Thomas Robinson and Mallory Key of Alco Management, Inc. representing Hilldale Apartments, Ridgecrest Apartments, and Surrey Apartments; Brad Reedy of Reedy and Company representing Getwell Pointe Apartments; Shirley Bondon of the Black Clergy Collaborative of Memphis; Kate Bieri of Fox 13 News; Mike Finch of MLK50; Austin (A.T.) Harrison of Memphis Interfaith Coalition for Action & Hope (MICAH); Amin Zaki; Jan Kidder; Mike Humes; 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 introduced new Board Member Courtnee Melton-Fant and expressed welcoming remarks and invited Melton-Fant to share a few things about herself. Melton-Fant stated she is a professor in the School of Public Health at the University of Memphis and performs a lot of research on the connections between housing and the health and well-being of individuals and communities. Reid thanked Melton-Fant for her comments, stating that she will be an asset to this Board.
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 is holding its regular meeting on Wednesday, February 5, 2025 @ 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.
Public Comment
Chairman Daniel Reid opened the floor for public comment and advised that all comments should be limited to two (2) minutes per speaker.
1. Alex Uhlmann of the Memphis Tenants Union stated he is present today to comment about Memphis Towers and that he has been working with the new ownership and management group. Uhlmann stated that ownership has changed over the last year and there has been some progress in the building for sure, but there are still major things that are big issues with seniors and people with disabilities that live at Memphis Towers. Uhlmann stated that there has only been one elevator operating for the last three (3) months and this is a major concern especially now that there are more folks living in the building. Uhlmann stated that only having one elevator for over two hundred (200) people is a real health hazard, and if the other elevator goes out, people are going to be in a real crisis mode where people cannot go to their appointments or get out of their apartments. Uhlmann stated that he needs to see some movement on these things from management in a way that was seen in the beginning when they first took over and started to invest in the building and were worried about losing these tax breaks.
Uhlmann stated that now that more time has passed, the Board has relaxed a little on some of the restrictions that have been put on the Memphis Towers management group. Chairman Reid asked what the Board has relaxed. Uhlmann stated that it is his understanding that Memphis Towers ownership is closer to reinstating the tax breaks than they were when these restrictions were first put into place. Uhlmann asked if there is going to be a back and forth, requesting if the Board could clarify exactly where things stand, as this is a bit confusing for lay people that are observing. Chairman Reid stated that Memphis Towers will be discussed in the Board’s Action Items today. Uhlmann stated he would continue with his comments, as he was interrupted during his time. Uhlmann stated all this is to say that Memphis Tenants Union thinks that this ownership group has not put enough investment in the building as of yet, where the elevator issue has been going on for months and they have seen no action on it. Uhlmann stated that there were statements made about how new ownership and management would work with residents. Uhlmann stated the Memphis Tenants Union is working with some residents to get on a payment plan because they got behind on rent, and what was offered was $100 extra on a payment plan and they had to accept it because there was no other offer on the table. Uhlmann stated that is almost half of what they are already paying in rent and does not seem like a reasonable process. Uhlmann stated that Richman Group has left the same managers that were in the building, and they felt they could act the same way, and they were acting when Millennia was there, and that is just not right.
2. Joyce Warren introduced herself as a resident of Memphis Towers and stated that there has only been one elevator for three (3) months, and it is going out and almost killed someone last night. Warren stated that the management company and new ownership are not doing their job or what they promised residents.
3. Andrea Smith introduced herself as a resident of Memphis Towers and stated that she has lived at Memphis Towers for five (5) years and is here to talk about her concerns about the elevator too. Smith stated that one of the elevators will not go up and if the ambulance has to come help someone upstairs that is sick or dying, they have to get there, and everyone piling up on one elevator is not going to get them there to get them to the hospital and they need the elevator fixed.
There being no further public comment, Chairman Reid thanked everyone for their comments, stating the Board appreciated these participants and tenants being here and speaking.
Approval of Minutes
Cliff Henderson moved for approval of the Minutes of the December 4, 2024 Regular Meeting, which was seconded by Vincent Sawyer and the motion passed unanimously after proper roll call vote of the Board members.
Attorney’s Report
Charles Carpenter presented the legal report, as follows:
1. Carpenter reported Bond Closings for December 2024:
a. MH Strategies RAD I, LP-Askew/Uptown Projects Reissuance Bond Closing;
Carpenter stated that there has been a delay in the implementation of the various covenants dealing with the conversion requiring a modification of certain legal documents. The modification of the legal documents calls for a reissuance under the Internal Revenue Code of 1986, as amended (the “Code”), which among other things, requires conducting a new TEFRA Hearing, signing of new tax certifications and approval of an updated IRS Form 8038, which will extend the “placed-in-service" date for one (1) year to December 2025.
Carpenter reported that MH Strategies Family RAD II, LP- College Park Project, which is a public-private partnership with Memphis Housing Authority (MHA) will have to go through a similar reissuance for tax purposes to extend the “placed-in-service" date, and that is anticipated to come before the Board at the upcoming April Board meeting.
2. Carpenter further stated that he was pleased to report that there was a successful closing of the Pershing Park Apartments bond closing in December 2024 in the principal amount of $13,700,000 collateralized multifamily housing bond.
3. Carpenter reported PILOT Activities for December 2024:
a. Pershing Park Apartments PILOT Closing for a 20-year term was completed in conjunction with the bond closing.
b. Termination of the Whispering Pines Apartments PILOT was completed.
c. University Gardens Manor 10-year PILOT Term Extension Closing was completed.
d. Uptown Manor Senior 10-year PILOT Term Extension Closing was completed.
e. Place of Grace PILOT Closing for a 20-year term was completed.
f. Eden Pointe PILOT Refinancing Closing was completed.
4. Carpenter reported receipt of various claims on PILOT properties in the Board’s program:
a. Final Demand for Payment filed against Cedarwood Apartments PILOT by InterSolutions, LLC in the amount of $33,131.16 plus $1,800.00 in legal fees;
b. Notice of Lien filed against Charter Oaks PILOT by Artisent Floors in the amount of $934.36
Carpenter reminded the Board that there is no direct liability or exposure to the Board in these matters, but the Board does receive notice because it holds legal title in its role of providing a public function to the PILOT properties, and his firm provides oversight and ensures these types of claims are adjudicated properly.
5. Carpenter reported receiving a Notice of Determination from the Tennessee Human Rights Commission regarding a human rights claim that was filed against New Horizon Apartments. Carpenter stated that New Horizon Apartments is no longer an active PILOT project in the Board’s portfolio, but it was at the time this claim was filed. Carpenter reported that the determination indicates that the examination of evidence indicates that there was no reasonable cause to believe that the PILOT Lessees have engaged in discriminatory practices, therefore the complaint has been dismissed.
6. Finally, Carpenter reported that his office has been in communication with the City of Memphis Legal Department, as one of the regular attendees of HEHF Board Meetings, Shirley Bondon, has filed a housing discrimination complaint alleging that the HEHF Board meeting room is not ADA compliant. Carpenter stated that his firm has responded on behalf of the Board to several complaints that Bondon has filed in that regard and Bondon has now filed against the City of Memphis Mayor Paul Young, past Memphis City Council Chairman JB Smiley, and De Keishia Tunstall, ADA Coordinator of the City of Memphis-Division of General Services. Carpenter reported that his firm has been working with the City of Memphis Legal Department to respond to that complaint, further stating that all other complaints filed by Bondon pertaining to this matter have been reviewed and found to be without merit with the other entities.
Buckner Wellford stated that he would like to raise the question again about where the Board meets. Wellford stated that he does not view this as an ADA violation, and he will let that take its course in court, but the Board has discussed whether it should be considering alternative locations when necessary. Wellford stated that there have been meetings where many people are in the Board meeting room and standing along the walls and there is overflow attendees as often as there is not and he would like this explored. Chairman Reid stated that staff is exploring other options. Wellford stated he would like a report on this at the Board’s March 5, 2025 Board meeting of meeting options, with the understanding that the Board’s current location would be the default location while it explores other locations.
Executive Director Trey McKnight advised the Board that staff has been working on plans with building management for a complete renovation of the Board’s current Board room so that the Board does not continue to have these issues of crowding. Chairman Reid stated that there have already been preliminary drawings and staff is working to get a final rendition. Charles Carpenter stated that this office has been the principal office of the Board for over twenty-five (25) years, and during that entire period, only in the last twelve (12) months has there been any indication of crowding. Carpenter reported that the Board’s office and meeting room is ADA compliant, and alternative plans are being looked at, as reported by McKnight. McKnight provided a brief overview of renovation concepts discussed. Stephanie Bryant stated that staff has been working with Councilwoman Janika White, the Board’s liaison, and she has provided staff with a list of alternative meeting locations for review. Bryant stated that staff is reviewing those now in the event that a Board meeting requires a larger meeting space than the regular meeting location would accommodate following renovations. Bryant advised that planned renovations as discussed will more than double the Board room size. Wellford stated that if the Board thinks back to before the COVID-19 pandemic, there were a couple of years when there were few attendees, and he does not view previous preceding COVID as setting up a precedent for what is likely to happen in the coming years. Wellford stated he is happy to hear that the Board is considering a renovation, and he knows staff is doing the best they can, but he wants McKnight to give additional details on renovation plans discussed, including potential additional seating areas, stating that the Board and staff want to be as accommodating as possible to Board Meeting attendees.
There being no further questions or comments, the Legal Report was concluded.
Executive Director’s Report
Trey McKnight advised that he has met with Housing and Community Development (HCD) Director Ashley Cash regarding oversight of Cavelier Court and Gospel Gardens, and Cash is expected to provide an official status update of both projects to the Board at the March 5, 2025 Board meeting. McKnight also reported that he has been meeting with elected officials regarding the Board and how its programs differ from other organizations that issue PILOTs. McKnight turned the meeting over to Stephanie Bryant for a Compliance Review.
Bryant stated that the Board has requested to hear an overview of the PILOT portfolio as a whole and staff will be implementing this starting with this first meeting in 2025. Bryant reminded the Board of the four (4) levels of additional compliance oversight that were put into place by staff in 2024 and this report will review movement of certain properties within these four (4) levels: (i) Under Observation, (ii) Compliance Concerns, (iii) Non-Compliance, (iv) Legal Default.
1. Bryant reported that in January 2025, staff has moved three (3) PILOT properties from “Under Observation” into regular monitoring:
a. Charter Oaks
b. Memphis Towers
c. Tanglewood Apartments
Bryant noted that movement of Memphis Towers into regular monitoring would require Board approval and would be considered in the action items.
2. Bryant reported that in January 2025, staff has moved two (2) PILOT properties down one level from “Compliance Concerns” to “Under Observation”:
a. Abington Apartments
b. Cedar Run
3. Bryant reported that in January 2025, staff has moved three (3) PILOT properties up from “Under Observation” to “Compliance Concerns” and property walkthroughs would be scheduled promptly as part of this movement:
a. Grahamwood Place
b. Pinebrook Pointe
c. Sunrise Villas
4. Lastly, Bryant reported that the Board has seven (7) properties included in one developer’s portfolio, Mendel Fischer and Shrage Marasow, that are all included in the “Compliance Concerns” level of oversight:
a. Bridgeport Manor Apartments
b. Eden Pointe Apartments
c. Grainge Hill Apartments
d. Scenic Hills Apartments (formerly Hunters Ridge Apartments)
e. Timber Pines Apartments (formerly Gowan Pines Apartments)
f. Watkins Manor Apartments
g. Coronado Manor Apartments (formerly Willow Oaks Apartments)
Bryant stated that these properties included in the Mendel Fischer and Shrage Marasow PILOT portfolio were in Environmental Court at the time of purchase and approval of PILOTs. Bryant stated that while the developers had construction plans in place to rehabilitate these projects, these plans have not proceeded according to the construction schedules that were submitted as part of the original PILOT applications and approved by this Board. Bryant reported to the Board that staff and legal counsel met with the developers in September 2024, and the developer provided some additional plans and reasons for the delays in construction completion and updates on status with the Environmental Court, but since that time, sufficient progress has not been made to come into compliance with the Board’s standards. Bryant advised that all properties have been placed under “Compliance Concerns” level of oversight, and staff and legal counsel are due to hold another meeting this month with the developers to address these ongoing compliance issues, but movement to “Non-Compliance” status is expected.
Bryant stated that with this compliance review update, it demonstrates to the Board that the levels of compliance are working with movement in both directions, but staff has seen multiple successes with this new system in place. McKnight reviewed basic overall compliance oversight of the Board’s PILOT portfolio with new Board member Courtnee Melton-Fant, with Bryant adding that the Board’s oversight only includes jurisdiction of the exterior conditions and common areas of each property. Bryant stated that Board staff does not enter occupied units, and that oversight is under the jurisdiction of Code Enforcement and Environmental Court. Bryant reminded the Board that staff continues to foster those newly formed relationships with Code Enforcement and Environmental Court to better inform Board members of conditions of certain properties under additional oversight of these entities so that Board members can have a more complete review and make the most informed decisions. McKnight stated that with the staff relationship that has formed with Code Enforcement, that Code Enforcement notifies staff when there is a report concerning a PILOT property in the Board’s portfolio so that Board staff is able to assist Code Enforcement and assist the tenants of these properties in any way it can within the Board’s guidelines.
Howard Eddings, Jr. asked JP Townsend if staff uses a checklist or form when performing inspections or walkthroughs of PILOT properties, and if during these inspections, certain things are being checked other than obvious issues the property may have. Townsend responded that he does complete a report form, and he goes through and fills that out and it is shared with staff only and includes photo evidence of the inspection and any issue or issues that are observed. Townsend stated that following each inspection, her sends s “Progress Report” email to the PILOT Lessee ownership and management that lists any compliance issues observed with the exterior or the property to provide them the opportunity to address the issue timely. Townsend stated that photos are not provided with progress reports, as it is expected that ownership and/or management can walk around the property and observe the issues being brought to their attention.
Townsend stated that each PILOT property is inspected once every two (2) to three (3) months in normal compliance oversight, but all PILOT properties included in additional compliance oversight are inspected no less than once each month, receiving an extra layer of inspections compared to routine inspections. Vincent Sawyer stated that he has accompanied Townsend on some of these inspections and will attest to the thoroughness of these inspections with regard to structure of the properties, the appearance, and any tenant benefits that were promised. Bryant reminded the Board that PILOT properties are also inspected by a neutral, third-party compliance inspection team and staff are able to review those inspections with what is observed by internal compliance staff, and these external inspections are performed four (4) times per year for each PILOT property in the Board’s portfolio, in addition to external inspections performed of PILOT properties that are due to be considered at any upcoming Board meeting. Bryant stated this provides the Board with two separate perspectives to compare and get a full and complete review of the conditions of each property. There were no other questions or comments.
Action Items-
Cliff Henderson asked that the agenda be modified so that the Status Update for Memphis Towers can be heard and considered first. The Board members agreed, and the meeting proceeded with this modification to the order of Action Items.
1. PILOT Status Update for Memphis Towers
Brian Myers entered the meeting.
Charles Carpenter introduced this agenda item, stating that Memphis Towers has been an active participant in the Board’s PILOT program since 2020 and has gone through may challenges with Millennia, a corporation out of Ohio that had come to Memphis and had purchased several different multifamily properties and qualified for the award of PILOTs with Memphis Towers being one of them. Carpenter reminded the Board that with Memphis Towers, the limited partner came before the Board, went through the legal procedure of taking control as the general partner, and completed the process with HUD to gain approval for change in the management company. Carpenter stated the limited partner also funded additional resources into the property to complete the construction, complete the tenant benefits, and to bring the property into good standing in compliance with the policies and procedures of the Board. Carpenter reminded the Board that representatives from Richman Group provided a status update to the Board at its November 6, 2024 Board meeting, and all requirements seemed to be trending in a favorable direction at that time. Carpenter reminded the Board that tenants also attended that meeting and indicated that things had been improving, and they were working with Richman Group and the new management company, and the Board asked representatives to appear before the Board to provide a status update at today’s meeting. Carpenter introduced Brian Myers, representative of Memphis Towers, in attendance, and turned the meeting over to him for further comment.
Myers stated that occupancy has now improved to ninety-eight percent (98%) occupied and management has done a good job of identifying new tenants. Myers stated that reports concerning the elevator by tenants today during the public comment portion of today’s meeting are correct in that one elevator is broken. Myers stated that the elevator has been broken for approximately six (6) weeks, but that even two days is too long, and he was not notified about this until yesterday, which is an obvious failure in the communication loop between management and ownership. Myers stated that he has now addressed the communication issue and hopes not to encounter that again. Myers stated he has also threatened to terminate the elevator maintenance company, but he does not think they are completely to blame, as they had to order a part, which took time. Myers stated that his sense is that if there was a better communication loop, he could have applied more pressure to shorten the timeline, but he has now been assured that elevator will be back in service today. Myers apologized to the residents because it has been out of order longer than it should have been and he agrees with the residents’ complaints on that front but does not look for the issue to repeat itself. Myers stated that all elevators were renovated with brand new mechanical systems, so they should not have gone out of service, but residents are correct in their complaints.
Myers stated that aside from the elevator issue, all other items are pretty much completed, and he has also authorized the purchase of an additional television for the residents to be able to watch during the Superbowl party gathering that is planned. Myers stated ownership has also authorized other improvements to the lobby and the offices that are more aesthetic in nature, including additional lighting in the lobby, but otherwise, Myers believes everything is where it should be. Vincent Sawyer asked for a status update on the other elevator. Myers stated that with almost three hundred tenants, even two working elevators is probably not enough, but one certainly is not, and though the other elevator was working, tenants had to wait, but he has been assured the second elevator will be operational by the end of today. Carpenter asked what the status of the reception area is, that was one of the last items to be completed, as discussed during the last status update. Myers stated that the contract has been signed, and work is to begin on February 17, 2025 and will take approximately two to three (2-3) months to complete.
Trey McKnight stated that staff has been pleased with the progress of Memphis Towers, including accomplishing an occupancy rate of ninety-eight percent (98%). Buckner Wellford asked if this occupancy rate included all the towers, specifically the last one that was under construction. Myers stated that the last tower construction was completed approximately six (6) months ago and this occupancy rate includes all two hundred ninety-six (296) units. Myers stated that all units have been renovated, the community space was placed into service at the beginning of December 2024, and ownership is trying to do some additional things to improve it as well. Carpenter asked internal compliance staff for an update. JP Townsend stated that new ownership and management have done an outstanding job, construction is complete, all promises of common areas have been completed, and in inspecting the exterior conditions and common areas under the Board’s jurisdiction, he stated that he has no outstanding issues with this property. McKnight stated that this is an example of what the Board and its power can do with regard to moving things forward and making things better for the community. Carpenter thanked the residents for coming in, as they have been vigilant with this project, and hopefully, going forward, residents will not have an issue.
Carpenter reminded the Board and residents in attendance that as has been previously shared, that elevator issue and other internal issues are not part of the oversight of this Board, but Code Enforcement for the City of Memphis would be for other health and safety issues of that type. Carpenter stated to residents in attendance that the Board wants to help to air those issues and make sure that they are addressed, and based on the owner representative, the elevator is being addressed, and the Board would like to thank residents for being vigilant and staying on top of this throughout this period of time. Carpenter stated this has been a particularly difficult period for everyone, but this limited partner has taken the legal and procedural steps necessary to take control and reestablish this project and the Board is thankful and would view this as a success story for everyone involved.
Carpenter stated that the PILOT Lessee is here today to discuss how to proceed, given the various steps that have been taken. Carpenter advised that Memphis Towers was in Legal Default Status but was previously moved down to a lower level of additional compliance oversight. The “Under Observation” level Memphis Towers is now under following removal from Legal Default Status continues to require the PILOT Lessee to appear before the Board to provide status updates as directed by the Board, and we are here today to determine if Memphis Towers is to remain in that level of oversight or be moved back to a regular basis of oversight and maintenance. McKnight stated that staff recommends moving this property back into regular compliance oversight. Chairman Reid stated that this recommendation would be based on occupancy and other criteria that the Board monitors. McKnight confirmed that. Stephanie Bryant stated that all commitments made to this Board by the limited partner that are under the Board’s oversight have been completed and complied with, while also going above and beyond those commitments that were made as part of the original PILOT Application for this project that was approved by the Board. Chairman Reid stated that this is a success, thanked ownership for what they have done, stating both the tenants and the Board appreciate it, and that there has been a lot of time and effort put into this and without ownership’s leadership and feet on the ground and jumping in, we would not be where we are today.
Buckner Wellford stated that he will vote to move the property down to normal compliance oversight, and he agrees that this ownership group has gone above and beyond, and he appreciates the candor, but he does not agree that a non-functioning elevator cannot be a relevant fact for the Board to be considering if it is some kind of chronic problem and are part of the common areas, but have not been operating for two (2) months. Wellford stated he also understands that it is not in the interest of the owners or the management company to have that scenario occur when they are trying to drive up occupancy rates, so they are motivated to try to fix it. Wellford stated that he appreciated Myer’s candor in that the management company fell short, but ownership is trying to make it right. Myers stated that management certainly did not make ownership aware. Wellford stated he understands ownership is trying to make it right, but it is a legitimate issue, and it is an aberration based on everything else that has been done. Wellford stated that there may be some other property where that type of issue is among some others that he believes would be within the Board’s purview when it comes to basic common area safety and functioning of the facility. Wellford stated that he intends to vote this property back into normal compliance oversight and believes they have done a great job trying to make things right and the comments that were made. There being no further questions or comments,
Vincent Sawyer moved to step down additional compliance oversight of Memphis Towers and place the property under regular compliance monitoring and oversight. Monice Hagler seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Brian Myers left the meeting.
Alex Uhlmann and Caroline Francisco left the meeting.
Joyce Warren, Andrea Smith, Johnnie Mae Lee, and Jimmyrico Pigram left the meeting.
Kate Bieri left the meeting.
Austin (A.T.) Harrison left the meeting
2. Bond Inducement Resolution for Covenant Gardens Senior LP
Jevon Allen, Cynthia Alvarez, Tony Weng, and Clifford Causey entered the meeting.
Charles Carpenter introduced this agenda item and asked representatives to introduce themselves to the Board. Pastor Clifford Causey introduced himself as one of the local partners in Memphis with Christian Church Homes. Causey introduced Cynthia Alvarez, the CEO of Christian Church Homes, Tony Weng, Vice President of Real Estate Development for this project, and Jevon Allen, the project manager for this project. Causey stated this is a one hundred three (103) unit new construction project in the Hickory Hill area, and this project has been in the process of developing since 2021. Causey stated that this team is excited about this project, and it has made tremendous progress. Causey stated this project has been before the Board before and this will be one hundred three (103) units of affordable senior housing. Causey stated the project was recently awarded from Memphis Housing Authority (MHA) an additional fifty-one (51) project-based vouchers, and has federal, congressional, and city support of the project.
Carpenter stated that as indicated by Causey, this project has been before the Board before and the project was induced for bonds in 2022 and went through the process, the project was modified and Board legal counsel and staff held two separate public hearings. Carpenter stated that with bond financing, there is a parallel application with the Tennessee Housing Development Agency (THDA), and at that point in 2022 with this project, there were some questions from THDA, the project did not receive allocation for low-income housing tax credits, the project was then reduced to the now one hundred three (103) units. Carpenter stated this is planned new construction senior facility and this is the first venture for this team together with housing and low-income housing tax credits, which is difficult to do. Carpenter stated that his firm has been in constant communication, and there are different consultants for the project that are out of state and in Nashville. Carpenter stated that there was a chance when THDA had a second round of tax allocations in 2024 with some supplemental allocation, and the project team tried to pursue that round, but the application pending for 2024 had been voluntarily withdrawn by the applicant and was not in a position to move forward. Carpenter reminded the Board that each year, THDA has a new round of credits, and it approves a Qualified Allocation Plan (QAP) for those credits, and it is state-wide, so all the credits are administered through THDA. Carpenter reminded the Board that THDA has divided the state into three (3) Grand Divisions and part of the allocation goes to single-family, while the other part goes to multi-family. Carpenter advised that THDA has not opened their Thomas System for the application process yet, but the Board has already induced three (3) projects, which are acquisition-rehabilitation projects and this will be the first new-construction project with the 2025 allocation, but acquisition-rehabilitation projects get priority under the 2025 QAP, and it has not been announced how much credit will be allocated to the Western Grand Division.
Further, Carpenter stated that based on the amount of services his firm has done in working with this developer over the past three years, including when this developer came in 2024 and tried to do an application for the supplement and was told they would have to start the process over. Carpenter stated there were outstanding fees with the Board at that time that were paid, but Carpenter’s firm fees as general counsel for the Board is separate for the legal work on behalf of the developer and has not been paid even though an invoice was submitted to this developer last year. Carpenter stated that as this is a new year with new allocations, his firm would recommend approval as the application as it does comply with the Board’s policies and procedures, but Carpenter would request that the Board make this approval contingent upon the outstanding legal fees being paid prior to moving forward. Chairman Reid asked when the allocation is expected, to which Carpenter responded that an announcement has not been made public yet, but typically it comes during the first Quarter of each year. Chairman Reid asked representatives if they have the ability to pay these outstanding fees. Tony Weng stated to the Board that he would ensure that the outstanding fees are paid timely, within the month of February 2025.
Monice Hagler asked what the timing on the project is. Jevon Allen stated that with the emphasis of the Memphis Housing Authority project-based vouchers and the soft commitments that the project has received from the Housing Trust Fund of the City of Memphis, the team is looking for tax credit equity coming up in the spring and that should be enough to close on the bonds by the end of this year 2025 and begin construction. Buckner Wellford asked how, with an out-of-state California based management company, the development team anticipates having local management services, as the Board has sometimes encountered issues with out-of-town management companies. Cynthis Alvarez stated that this management company operates in six (6) different states and works closely with local organizations as well to ensure that the quality of and delivery of services is up to their standards, and they have developed a good relationship with various management companies in multiple cities in different states. Alvarez stated that the Christian Church Homes also regularly tours sites, as well as people that are local to the community that live in them, and there will be a manager’s unit in this development so the staff will be living there.
Alvarez stated there are also regional managers with the Christian Church Homes that visit each site a minimum of four (4) times a year, but usually six (6) times a year. Corbin Carpenter asked if this will be the first property in Memphis, TN for this management company, to which Alvarez stated yes. Wellford stated this appears to be a great project and the Board does not see this type of new construction in that part of the city, and it should revitalize a lot of things. Vincent Sawyer asked if this project will be seen from Mt. Moriah. Causey stated that it is, and the site is between Park and Hickory Hill, and there are several offices there, but this project will be three (3) stories and will have a great view. Howard Eddings, Jr. asked for confirmation that this project is all one-bedroom units, to which Causey confirmed, and Weng stated each unit is approximately six hundred (600) square feet. Corbin Carpenter asked about the mention of federal funding and the source of that. Causey stated that it is an appropriation from Congressman Cohen’s office as well as HUD 202 funding from the federal government. Corbin Carpenter asked if the structure of the financing has been determined whether the bonds will be public offering versus private placement, and if there is any underwriter replacement agent in place. Allen stated that they are waiting for THDA’s Thomas system to open, and the development team wants to have that updated, then it will start soliciting bids for that. Corbin Carpenter also confirmed bond counsel remains the same, to which Allen confirmed. McKnight stated that staff have had several meetings with this group and feel confident about this possible project. There being no other questions or comments,
Buckner Wellford moved to approve the Bond Inducement Resolution for Covenant Gardens Senior LP. Cliff Henderson seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Jevon Allen, Cynthia Alvarez, Tony Weng, and Clifford Causey left the meeting.
3. Affordable Multifamily Housing PILOT Application for APP Hilldale Partners, L.L.L.P. (d/b/a Hilldale Apartments)
Thomas Robinson and Mallory Key entered the meeting.
Charles Capenter introduced this agenda item stating that the next three (3) agenda items will be discussed together but voted on individually. Carpenter reminded that Board that at its December 4, 2024 Board Meeting, the Board induced bond applications for each of these projects, and it was indicated at that time that the developer would come back before the Board for the consideration of PILOTs. Carpenter stated that normally the PILOT transactions would be on track to close at the same time that the bonds are closed. As previously discussed, Carpenter stated that there will be parallel applications filed with THDA and once those are approved, the transactions will move forward to financial closings for the bonds and PILOTs at that time. Carpenter advised the Board that Alco Management, Inc. is one of the Board’s premier developers and they have successfully closed bond financings, with Pershing Park being the latest of those transactions, and they have been a stellar performer and a consistent performer in the Board’s PILOT program. Carpenter introduced Thomas Robinson and Mallory Key in attendance for these agenda items. Thomas Robinson, Vice President of Development and Operations for Alco Management, Inc., thanked the Board for the partnership, stating that the Alco team is excited about the work planned for this year.
Robinson stated that Hilldale Apartments was just purchased by Alco Management, Inc. from an owner that had it for a number of years and Alco is currently working on renovations while also applying to THDA for bonds and tax credits so that Alco is able to turn a $5 million renovation and turn it into a $10 million renovation project. Robinson stated this property has been underserved for a long time and there is an opportunity for Alco to increase the amenities, improve the units, and bring resident services to the community, which will be very transformative.
Robinson stated that Ridgecrest is an existing tax credit property that Alco stepped into within the last seven (7) years to stabilize, as it had been struggling significantly. Robinson stated that Alco is bringing a major rehabilitation to that property, costing approximately $80,000 per unit, which is overdue, but will really bring the property forward and have a big impact. Robinson stated that Alco has a great relationship with the Neighborhood Christian Center working on that property, and Alco intends to add some other amenities there.
Robinson stated that Surrey Apartments is new to Alco and Alco is under a contingent contract to purchase that property. Robinson stated that if Alco is successful in receiving bond and tax credit allocation for this project, there is a large-scale rehabilitation plan for this property, as it has never been rehabilitated and really needs it.
Carpenter asked Robinson to talk about tenant benefits that Alco anticipates for these projects. Robinson stated that Alco is looking to increase security, which is access control, security cameras, and plans to build a new community building and bring in a resident services partner, likely the Neighborhood Christian Center, but there are other options and Alco is interviewing those now. Additionally, Robinson stated there will be upgrades to all units, which is typical in a large tax credit rehabilitation. Robinson stated Alco plans to build a new office at Ridgecrest and convert what is currently a large office space into a resident service center. Robinson stated that Alco has pulled forward a lot of the tenant benefits in terms of Alco does have a relationship with Neighborhood Christian Center there that is active, security cameras and access control, so Alco is looking to expand those partnerships to improve all the units. With Surrey Apartments, Robinson stated that Alco plans to pay for laundry service for the residents, internet for the residents, and bring in a partnership with Neighborhood Christian Center.
Buckner Wellford asked Robinson to share more about the Neighborhood Christian Center and the services that they offer. Robinson state that Alco and Neighborhood Christian Center (NCC) have enjoyed a long-time partnership, and they have offices for their programs on a number of Alco sites, where Alco will turn some units into offices for them, and they provide a variety of programs for residents. Robinson stated that during the summer that would include the NCC facilitating meals for the school children and having activities, they have a computer lab where residents can use. Robinson stated that NCC does some case management for residents to help link with different services throughout the community. Robinson stated that Alco often describes NCC is that Alco recognizes that with a deeply assisted property, asking residents to go to services is often too big of an ask, and so Alco tries to bring those in-house and make those links and connections. Wellford asked if this is mainly in North Memphis. Robinson stated that NCC is a Memphis nonprofit company that has been operating for a long time, and they work with Alco in North Memphis, Binghampton, and at a few other properties, while also having their own operation, which is outside of the work they do at apartments. Chairman Reid asked who the Executive Director for NCC is, to which Robinson replied Ephie Johnson. Reid stated that during his service on other Boards, the NCC has been granted funds throughout the years and the organization does a fantastic job.
Carpenter asked Robinson to speak to the management of these projects. Robinson stated that Alco is a local company that manages its own properties, including these three (3) projects. Robinson stated Alco has a great property management apparatus that includes full time staff at each of the properties, typically one person to the office and one person to maintenance for every fifty (50) units. Robinson stated that with large properties, this can result in seven or eight full time staff members plus the resident services coordinator who are not employees of Alco, but in partnership. Robinson stated that Alco also has regional property managers that live in Memphis and oversee typically four or five properties in the community. Robinson stated that Alco’s Vice President of property management is local, and the entire apparatus is local to Memphis, as Alco really takes a hands-on approach, and Alco does not manage many properties for anyone else, as Alco believes the owner and manager working together is the easiest way to get things done. Robinson also stated that Alco has a relationship with Safeways on all of these projects.
Carpenter stated that based on legal counsel and staff review of the applications and the submittal conferences, these applications comply with the Board’s policies and procedures and would recommend approval. Stephanie Bryant stated the staff’s appreciation for the professionally authored applications put together by the Alco team and the thorough detail provided for each project. There being no further questions or comments,
Buckner Wellford moved to approve the Affordable Multifamily Housing PILOT Application for APP Hilldale Partners, L.L.L.P. (d/b/a Hilldale Apartments). Monice Hagler seconded, and the motion passed unanimously after proper roll call vote of the Board members.
4. Affordable Multifamily Housing PILOT Application for APP Ridgecrest Apartments, L.L.L.P. (d/b/a Ridgecrest Apartments)
There being no further questions or comments,
Cliff Henderson moved to approve the Affordable Multifamily Housing PILOT Application for APP Ridgecrest Apartments, L.L.L.P. (d/b/a Ridgecrest Apartments). Buckner Wellford seconded, and the motion passed unanimously after proper roll call vote of the Board members.
5. Affordable Multifamily Housing PILOT Application for APP Surrey Partners, L.L.L.P. (d/b/a Surrey Apartments)
There being no further questions or comments,
Howard Eddings, Jr. moved to approve the Affordable Multifamily Housing PILOT Application for APP Surrey Partners, L.L.L.P. (d/b/a Surrey Apartments). Vincent Sawyer seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Thomas Robinson and Mallory Key left the meeting.
6. PILOT Refinancing Application for Getwell Pointe Apartments, LLC
Brad Reedy entered the meeting.
Charles Capenter introduced this agenda item stating that this is a refinancing application for Getwell Pointe Apartments, a current active PILOT of the Reedy Group portfolio, and the group is seeking to do a permanent refinancing of this project. Carpenter stated that construction has been completed, staff and legal counsel have completed the submittal conference, and turned the meeting over to the Board’s internal compliance inspector for further comment. JP Townsend stated that the developer has done a great job with renovations and those renovations have been completed in a timely manner. Townsend stated that it was mentioned during the submittal call about significant damage sustained by the property from storms last year and those damages were quickly addressed following those storms. Carpenter turned the meeting over to the representative in attendance for further comment. Brad Reedy introduced himself, stating he appreciated the opportunity to appear before the Board in person, and advised that the property’s construction and development loan is coming up for maturity and this will be a permanent financing of the debt. Reedy stated ownership has a loan commitment signed with Fannie Mae via PGIM Real Estate Agency Financing, LLC, of which Reedy Company has done three (3) loans with them in the past, and his team looks forward to continuing its participation in the PILOT program.
Corbin Carpenter asked for confirmation that the lender commitment letter expires in early March 2025, to which Reedy confirmed, stating ownership requested this extension. Charles Carpenter stated that with refinancings, the Board is always concerned about equity and whether the developer is going to take significant or extraordinary amount of equity out to repay other things, but in this case, that is not the case. Carpenter stated that there will be some equity that is returned, but it is at the minimum compared to the overall financing and the bulk of this would be to take out the construction lender and everything is within the parameters of the policies and procedures of the Board and his firm would recommend approval of the refinancing. There being no further questions or comments,
Cliff Henderson moved to approve the PILOT Refinancing Application for Getwell Pointe Apartments, LLC. Vincent Sawyer seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Brad Reedy left the meeting.
Finance Committee Report
Cliff Henderson presented the financial results for the month ended November 30, 2024. After discussion,
Howard Eddings, Jr. moved for acceptance of the Finance Committee Report for the month ended November 30, 2024, properly seconded by Buckner Wellford, and the motion passed unanimously after a proper roll call vote of the Board members.
Cliff Henderson presented the financial results for the month ended December 31, 2024. After discussion,
Monice Hagler moved for acceptance of the Finance Committee Report for the month ended December 31, 2024, properly seconded by Vincent., and the motion passed unanimously after a proper roll call vote of the Board members.
New Business
Stephanie Bryant advised the Board that a date of March 24, 2025 has been set for the PILOT Lessee Meeting, and the event will be held at the Holiday Inn - University of Memphis. Bryant stated this will be a meeting for all PILOT Lessees to come and allow the Board and staff the opportunity to review the Board’s policies and procedures, expectations, and Board standards. Bryant advised that staff anticipates inviting other City of Memphis personnel and guest speakers to discuss how each of their entities fits with the Board’s PILOT program and PILOT Lessees. Corbin Carpenter added that staff and legal counsel are planning to introduce updated Bond program and PILOT program policies and procedures to the Board for its consideration at the March 5, 2025 Board meeting, and those would be debuted at this PILOT Lessee Meeting.
Corbin Carpenter advised the Board that his office has also been working with the Board’s Executive Director Trey McKnight as well as monitoring the Shelby County PILOT Ad Hoc Committee extremely closely. Corbin Carpenter advised that they have been working closely with several Commissioners as well as Mayor Paul Young, to assist in preventing a 180-day moratorium on housing PILOTs. McKnight stated that there was a planned presentation to Shelby County Commissioners, but that has been postponed to a later date.
Buckner Wellford stated that he would like to raise the point again concerning the Board’s strategic use of funds. Wellford referenced the Board’s current annual burn rate of $1.1 million, and encouraged Chairman Reid to consider appointing a strategic planning committee, which he is happy to be a part of, to try and develop some guidelines in considering a specific amount of allocation by the Board that would go directly to demonstrated blight improvement or local nonprofits, such as Neighborhood Christian Center, as discussed in today’s meeting, and what a grant would do for groups like that. Wellford stated he would like to consider organizations that currently work with PILOT properties and management companies. Wellford stated he understands this is a slippery slope, but the Board needs to consider a responsible way to start spending some of the fund balance. Monice Hagler stated she would like to see an emphasis on security in these conversations. Hagler stated she would like to see the consideration of a program where the Board offers that to applicants once they are approved. Howard Eddings asked for clarity on why there is a consideration of a moratorium on the work the Board is doing. Corbin Carpenter stated that the reason is not clear, but whatever is forthcoming, his firm and staff will be prepared to take care of that and will continue to monitor the situation.
Chairman Reid asked all Board Members to mark their calendars for March 24, 2025 for the PILOT Lessee Meeting, stating the meeting is anticipated to be held from 9:00 am-2:00 pm CT.
Chairman Reid stated that the next regular meeting of the Board is scheduled for Wednesday, March 5, 2024 @ Noon. There being no further business, the meeting was adjourned by the Chairman at 01:21 p.m.