MINUTES OF REGULAR MEETING OF
THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD
OF THE CITY OF MEMPHIS, TENNESSEE
Wednesday, March 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
Cliff Henderson Howard Eddings, Jr. (Zoom)
Vincent Sawyer Courtnee Melton-Fant (Zoom)
Staff and others attending: Stephanie Bryant, JP Townsend and Nikki Abraham; Charles E. Carpenter and Corbin I. Carpenter, General Counsel; Katrina Shephard (Zoom), legal assistant to General Counsel.
Also participating in person and/or via remote Zoom virtual platform were Director Ashley Cash of City of Memphis Housing and Community Development (HCD) representing Cavelier Court and Gospel Gardens; Tie Lasater of KeyCity Capital representing Grahamwood Place and Pinebrook Pointe; Mike Finch of MLK50; Simeon Ike of Greater Memphis Housing Justice Project; Jan Kidder; Kiara Moore; 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 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, March 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.
There was no public comment.
Approval of Minutes
Vincent Sawyer moved for approval of the Minutes of the February 5, 2024 Regular Meeting, which was seconded by Cliff Henderson 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 receipt of a new lawsuit on a PILOT property in the Board’s program:
a. Monita Kyles + Anthony Kyles, Next of Kin to Aaliyaha Kyles, deceased, v. The BLVD Apartments, et al; Complaint for Wrongful Death that occurred in July 2024 at The Boulevard Apartments.
Carpenter reminded the Board that there is no legal liability or exposure to the Board in these matters, but the Board does receive formal notice and service of process 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 monitored and adjudicated properly.
2. Carpenter reported PILOT Activities for February 2025:
a. Abington Apartments PILOT Refinancing Closing was completed.
3. Carpenter reported during the month of February that the Board had been given Notice of a Substitute Trustee Sale for Grahamwood Place and Pinebrook Pointe PILOT properties. Carpenter advised that these trustee sales are commonly known as non-judicial foreclosures. The sale was originally scheduled for March 6, 2025, but those two (2) sales have been postponed and removed from the proposed sale on the Courthouse steps. Carpenter stated he has confirmed this with Spencer Clift of Baker Donelson Law Firm, as he is the attorney that has been handling these matters. Clift has confirmed to Carpenter that there are ongoing discussions with this PILOT Lessee, but Clift does not know the status of discussions between the PILOT Lessee and the primary lender, but was informed that the sale scheduled for March 6, 2025 had been cancelled. Clift advised Carpenter that he will be following up with the lender for more detail and keep Carpenter advised on behalf of the Board.
Carpenter reported that Board staff received notice from Tie Lasater, representative for Grahamwood Place and Pinebrook Pointe, who was scheduled to attend today’s meeting, will not be able to appear in person today due to weather and travel conditions. Carpenter advised that it is the Board’s policy that individuals participating via the Zoom platform are not permitted to provide updates to the Board or participate in material matters. Carpenter asked the Board’s Internal Compliance Inspector to provide an update to the Board for these two (2) properties.
JP Townsend began with reporting on Grahamwood Place, stating that in December 2024, he noted an active sewer leak on-site. Townsend reported that most shingles previously noted are still loose and present, and fencing toward the rear of the property is a safety concern due to erosion and fencing falling in, which is now causing parking and drive surface issues. Townsend stated that he reported in December 2024 concerning the fencing that it was beginning to fall in, and in January 2025, the fencing did fall into the hole, and the sewer leak was still present. In February 2025, repairs were made to the sewer leak, but now a hole remains from the repair, and the fencing was brought back up and retaped. Townsend stated that based on recent observations, the property would fall into a non-compliance status due to lack of progress on the property and no repairs having been made to the erosion and safety concerns that deal with the erosion and drive surfaces.
Townsend reported on Pinebrook Pointe, stating that the property has several fire-damaged units, as well as several fire-damaged buildings. While he has observed maintenance and construction around the property, Townsend stated he has not observed any major changes to the fire-damaged buildings. Townsend stated that he has noted a decline in occupancy, and the property still does not have the outdoor kitchen or grill that was committed to as part of the property’s tenant benefits. Townsend stated that he would also state that this property is not in compliance due to lack of progress, as well as not having the tenant benefits that were committed to in place.
Carpenter stated that both PILOT properties have been under additional compliance oversight for some time and asked for additional background. Stephanie Bryant stated that the Board voted to move both PILOT properties out of legal default status at the Board’s October 2, 2024 Board meeting and place them into under observation status. Bryant stated that Board staff has continued additional observation of both PILOT properties, and due to the lack of progress, Board staff moved both Grahamwood Place and Pinebrook Pointe to a compliance concerns status in January 2025, which was reported to the Board at the February 5, 2025 Board meeting. Bryant stated that Board staff continued to see no progress, occupancy continued to be in non-compliance with Board minimum occupancy standards, and Board staff has been advised of outstanding Code Enforcement violations with at least one active violation listed for Grahamwood Place and seven active violations listed for Pinebrook Pointe. Code Enforcement is scheduled to check on these active violations and will provide a status update to Board staff following their review.
Carpenter advised that the Board has made very clear that it is necessary for PILOT Lessees to be in attendance in-person but referred to Chairman Reid on how to proceed at this time. Chairman Reid stated that these status updates on today’s agenda for Grahamwood Place and Pinebrook Pointe will be deferred to the Board’s April 2, 2025 Board meeting but also stated that given how these properties have moved from compliance to non-compliance, back down, and now under compliance concern status, that the Board will manage this aggressively. Carpenter asked Tie Lasater, who was in attendance via the Board’s Zoom platform, to confirm he understands that these status updates are being deferred to the Board’s April 2, 2025 Board meeting and in-person attendance is required. Lasater confirmed.
There being no further questions or comments, the Legal Report was concluded.
Action Items-
1. PILOT Status Update from Director Ashley Cash of Housing and Community Development (HCD) for (i) Cavelier Court Apartments and (ii) Gospel Gardens Apartments
Director Ashley Cash began by thanking the Board for the opportunity to attend today’s meeting and share an update on these two (2) properties. Cash began by reporting a status update on Cavelier Court Apartments, stating that all health and safety code violations have been cleared. Cash stated that these included violations as it relates to raw sewage, mold, and HVAC issues, and the property is no longer in Environmental Court.
Concerning repairs and renovations, Cash reported that there are four (4) existing sewer line replacement repairs scheduled to start in late March 2025. Cash reported that two (2) additional leaks have been identified since the contractor completed his work order. Cash provided clarity, stating that when she is reporting sewer line repairs, this is related to the raw sewage issues that the property experienced before. Cash reported that currently, no plumbing issues or repairs interfere with any occupied units and there are no health and safety concerns for residents, and no individuals have reported to be compromised based on this schedule, but her team will keep notice and keep watching to make sure of that. Cash reported that occupancy is low, but it expected to increase as applications are approved and units are turned. Cash reported eleven (11) units are ready and available for lease and there are sixteen (16) applications that are being reviewed, which can take anywhere from two (2) weeks to forty-five (45) days. Cash stated she spoke with ownership, and they anticipate increases in occupancy this month. As for expenses, Cash reported ownership has spent approximately $118,000 on direct services and costs for improvements, not including security.
Cash reported that Gospel Gardens has had one (1) code violation cleared but still have four (4) violations that are due to go before Environmental Court on March 17, 2025. Cash stated these violations include mold, raw sewage, some cosmetic issues, HVAC issues relating to not having air conditioning. Cash stated that the raw sewage issues have been cleaned, obstructions have been cleared and there are no current health issues for the tenants that are in occupied units right now. Cash stated that as an update to that, one (1) tenant has been relocated from one (1) of the four (4) affected units, and work is scheduled to begin on March 7, 2025 on one (1) unit. Cash reported that another unit, management has encountered a back-and-forth between the resident and staff trying to schedule and get the work done, but those are mostly cosmetic repairs from HVAC issues. Cash stated that the intent is to have all those issues resolved by March 10, 2025, and HCD will have its compliance inspector go out and check that in advance of the court hearing.
Cash advised that code enforcement goes to the property without notice, and they will be out there between now and March 17, 2025, which is the next Environmental Court date. Cash reported on repairs, stating that work has been done to the sewer lines. Cash stated that there are both 4-inch sewer lines and 6-inch sewer lines, which take more time to repair, but the last 4-inch sewer line repair should be happening this week, with 6-inch sewer line repairs beginning next week, and the repairs will take approximately two (2) weeks to complete, depending on the severity, whereas the 4-inhc sewer lines only take a day or two. Cash stated that all sewer line repairs should be completed by the end of March 2025. Cash reported occupancy is also low at Gospel Gardens, but there are twenty-one (21) applications under review. Cash stated that documentation has been submitted to Housing and Urban Development (HUD) for some of those same situations and ownership is hoping to see an increase in leasing this month at this property as well.
Cash stated that at Gospel Gardens, there is a particular safety concern regarding some residents parking across the street and walking through a gap in the temporary fencing so that they do not have to go through security checks. Cash stated that the temporary fencing has been erected and re-erected, but residents continue to rearrange it. Cash reported that ownership is looking into pricing for permanent fencing so that there is at least some difficulty for people walking through who are parking across the street. Cash stated that the City of Memphis is going to cite the owner of the parcel across the street, though she does not know the exact citation, but for essentially cars in their grass. Cash reported that the owner of the parcel is working on getting a fence, but unfortunately, HCD has no control of what they do or the timing on that. Chairman Reid asked who the owner of the parcel is, to which Cash responded that it is a church that owns this additional land, but they are having trouble trying to keep people off the land, but HCD expects to have some conversations with them on that. As for expenses, Cash reported ownership has spent approximately $221,000 on direct costs, not including security.
Cash stated the HCD’s compliance inspector has been to Gospel Gardens on multiple occasions to confirm work and has provided photos to Cash in that past two (2) days of some of the sewer line replacement. Cash stated that inspectors are trying to get to the property to view the work before it is covered up to ensure the work has been done properly and is working appropriately.
Cahs reported in terms of renter’s rights, there is signage at both facilities around HUD, rights and responsibilities for tenants, equal opportunity notices as it relates to fair housing are all posted in the leasing office in both English and Spanish.
Carpenter stated that this is a case of first impression for the Board for this type of hybrid oversight and management in conjunction with the City of Memphis. Carpenter asked Cash if the City or HCD had any thoughts about the duration of this arrangement and how the Board can plan to bring these properties either back into compliance with the Board’s policies and procedures or not. Cash stated what HCD is envisioning is a six (6) month time window, which would be between May 2025 and June 2025, when all code violations should be taken care of and significant progress made. Cash stated she anticipates a ramp-down process where instead of the monthly review that is being done now, HCD would begin reporting to the Board possibly every other month, and by year end 2025, the properties would be turned back over to the HEHFB. Cash stated both the City and HCD are open to conversations and noted that HCD looks for certain things in terms of compliance and reported that she has had recent conversations with Board staff about making sure HCD is looking for some alignment and having monthly check-ins to help everyone stay on the same page. Carpenter stated that sounds like a reasonable approach and asked with these monthly check-ins, would it be reasonable to have a member of HCD report to the Board on a monthly basis. Cash stated that would work perfectly.
Chairman Reid thanked Cash for her attendance and status updates provided and expressed the Board’s appreciation for the assistance in working with HCD. Monice Hagler stated it is good to see that there is progress being made, considering the struggle that the Board has had with the compliance of these two properties. There were no further questions or comments.
2. Review and approval of proposed changes to the Board’s Bond and PILOT Program Policies and Procedures
Corbin Carpenter introduced this agenda item, stating that staff and legal counsel have been working on the proposed revisions and refinements to the Board’s Bond and PILOT policies and procedures, being the first substantive update since 2022. Corbin Carpenter stated that his firm has been working the Board staff over the last several months to incorporate various feedback from experience, Board staff and PILOT Lessees, and taking into account different nuances that Board staff and legal counsel have determined would strengthen and streamline the policies to provide better guidance to the PILOT Lessees, applicants, and the general public. Corbin Carpenter stated that the request, following the review of the changes and any dialogue that the Board has, is for the Board to consider and approve these policies in substantially final form, subject to any minor materials edits, grammatical edits, and formatting changes that may be necessary. Carpenter stated that Board staff and legal counsel would like to provide these revised policies and procedures at the Board’s annual 2025 PILOT Lessee Training Workshop taking place on March 24, 2025. Corbin Carpenter stated that both the Bond and PILOT applications will also be updated to reflect these amendments, if approved. Corbin Carpenter stated that included in the Board meeting materials is a two (2) page overview of the high-level changes:
1. Introduction
· Added and/or expanded the language under the following subsections: General, Board of Directors, Statutory Authority, Board’s Statutory and Public Purpose
· Corbin Carpenter emphasized the high-level change made in the section to note that the HEHFB is a self-funding entity and does not receive any funding or financial assistance from the City of Memphis or Shelby County Government.
2. Multifamily Housing PILOT Program Section (Previously the PILOT Program Section)
· Edited the General subsection to provide a brief statement regarding the Board’s
implementation of its Multifamily Housing PILOT Program.
· Added subsections to generally discuss the Legislative Authority of the Board, the Board’s Purpose and Function, the Board's Purpose, Function, Focus, Priorities, PILOT Lessee Expectations, Ongoing Responsibilities, Tenant Benefits, Affordability and Target Markets, Safety and Security on PILOT Properties, PILOT Payments, PILOT Compliance and Monitoring, Administrative Compliance and Required Reporting, Annual PILOT Lessee Training, Multifamily Housing PILOT Program Policies and Procedures, City of Memphis Division of Housing and Community Development and the Memphis Housing Authority.
· Corbin Carpenter stated that a new proposal is that the Board’s Compliance Team will begin performing annual Tenant Benefit Reviews and Safety and Security Reviews of all tenant benefits and security measures committed to by the Lessee at the time of application for PILOT properties to ensure overall compliance. The Tenant Benefit review will be scheduled with property management and will include review of a rent-ready or model unit. Carpenter stated that Tenant Benefit Commitments will now also be included in the PILOT Agreement to assist with better tracking for the Board, as well as assist the Assessor’s office and taxing authorities.
· Corbin Carpenter advised that this separation of Safety and Security measures from Tenant Benefits reflects discussions among the Board at Board meetings over the last two (2) years and safety and security will now stand on its own rather than be under the umbrella of tenant benefits.
· Corbin Carpenter stated that these policies also reflect changes in compliance and monitoring through including the four-step compliance oversight process implemented by Board staff in the past year.
· Corbin Carpenter stated the approval of these policy revisions would include the reinstatement of annual PILOT Lessee Training in the form of a mandatory annual meeting or in such other form as the Board may determine, but there would be annual contact with all PILOT Lessees.
3. PILOT Application Submission and Approval Process
· Expanded on the language set forth in the Basic Eligibility Requirements subsection from the PILOT Program Section here and expanded the language for the majority of topics falling under this subsection specifically the Tenant Benefit topic, and the topic of Safety Measures and Security Commitments was also added to this in this subsection.
· The PILOT Application Submission requirements for each applicable PILOT’s qualifications were individually broken out for clarity.
· The contact representatives designated to receive the application submittals were updated to reflect the new Executive Director, Trey McKnight and to reflect Stephanie Bryant’ s new title, Director of Operations.
· The PILOT Application Fee subsection was updated to provide clarification on all PILOT Application Fees.
· The Submittal Conference subsection was updated with language listing several items for discussion during the mandatory telephonic conference with the HEHFB staff and the HEHFB’s General Counsel. This subsection was also updated to list the HEHFB’s Representatives’ options at the conclusion of the telephonic conference.
· The Board of Directors Review and Approval Considerations subsection was updated to include language that instructs the Applicant of the method in which the Applicant will receive notification as to the Board’s PILOT Approval.
· The PILOT Closing Extension Fees subsection was updated with expanded language regarding the required process and procedure for an Applicant’s request for a PILOT closing extension with approved applications for new PILOTs, High Impact PILOTs, PILOT term extensions, PILOT transfers or PILOT refinancings.
· Corbin Carpenter described three (3) fee change proposals: (i) PILOT Transfer Application fee will now be equal to the original application fee, rather than 50% of the original application fee; (ii) PILOT Refinancing Application fee will now be equal to the original application fee, rather than 50% of the original application fee; and (iii) all PILOT Closing Extension Requests will require a fee equal to the original application fee.
· Corbin Carpenter stated that the amendments include the caveat that all transactions not closed within one (1) year are subject to withdrawal by the Board at their sole discretion.
4. Types of PILOT Applications; Required Documentation
· PILOT Closing Extension Fees was added as a subheading to each type of PILOT Application for better clarity. This subheading provides language that explains the requirements for paying the extension fees.
5. Closing Requirements
· The subsection Recordation of PILOT and Financing Documentation was added.
6. PILOT Payments
· Tables were added to this section to assist the Lessees with a clearer understanding of the methodology for calculating the New PILOT and High Impact PILOT payments.
· Tax Assessment Appeals and Consolidation of Tax Parcels were added with language that stresses the requirement that the Lessees provide the HEHFB staff and General Counsel with Notice of any successful Tax Appeals and Consolidation of Tax Parcels during the term of the PILOT.
7. Events of Default
· The Levels of Compliance Monitoring Process was added to highlight the HEHFB Compliance Team’s new four (4) step PILOT Compliance and Monitoring Process being implemented to help with the assessment of Defaults by Lessees and the steps leading to the termination of the PILOT.
· Notice of Non-Compliance and Notice of Legal Default subsections were added to discuss the allotted 30 day time period the Lessee has to cure an Event of Default after being notified of Non-Compliance by the Board, and the Notice of Legal Default after 30 days and the Board’s determination that the failure to cure is a material default that triggers an official Event of Default.
· Subsections covering Lack of Compliance with PILOT Documents Policies and Procedures, Non-payment of Required PILOT Payments and Failure to Maintain Safety and Security Commitments were added. The language for Occupancy Levels and Property Vacancies was expanded.
· A Shelby County Environmental Court; Memphis and Shelby County Code Enforcement subsection was added.
· Subcategories regarding Tax Appeals and Consolidation of Tax Parcels were added to the Performing Certain Actions Without Providing Prior Written Notice subsection; this is a third fee proposal of $2,000 for no prior notice of Successful Tax Appeal or consolidation of Tax Parcels to cover administrative and legal expenses associated with the additional administrative work of the Board staff and legal counsel for revising internal documentation and all PILOT Documents.
8. PILOT Termination
· This section was added to highlight the Board’s PILOT Termination Process, to discuss Voluntary and Involuntary Termination and the HEHFB’s Obligation to Convey Title to the Project following termination of the PILOT.
9. PILOT Compliance and Monitoring
· This section was added to discuss the HEHFB’s Compliance Team/Staff; what their roles are, and how they are discharged.
· This section provides a more specific breakdown of the Levels of Compliance and Monitoring Process, including the PILOT Compliance Deficiency Fee, which is a newly proposed fee that can only be assessed by the Board through majority vote.
· Added subsection discussing the annual evaluations and administrative reviews: the Annual PILOT Lease File Audit, the Annual Tenant Benefits Review, The Annual PILOT Lessee Training and The Annual Safety and Security Review.
· This section also provides an additional discussion regarding the relationship between the HEHFB and the Shelby County Environmental Court; Memphis and Shelby County Code Enforcement.
10. Administrative Compliance and Required Reporting
· This section expanded the previous Required Reporting section to discuss the HEHFB’s Property Inspection Rights and its associated obligations.
· Expounded on language for Annual Reporting and Quarterly Occupancy Reporting.
11. Contacts
· This section was edited to Add the new staff members and to update Titles.
12. Tenant Benefits Supplement
· Edited certain language to provide better clarity.
There being no further questions or comments, Corbin Carpenter then reviewed the high-level changes to the Bond Policies and Procedures as follows:
1. Introduction
· Added and/or expanded the language under the following subsections: General, Board of Directors, Statutory Authority, Board’s Statutory and Public Purpose.
2. Bond Program
· The General subsection identifies the types of Bond Applications: (i) New Bond Issuance; (ii) Refunding of a prior bond issuance and/or (3) Reissuance of a prior bond issuance.
· The Issuer and Bond Trustee subsection was added to discuss the Issuers requirement that all Applicants utilize the services of a Bond Trustee.
· The Limited Liability of the Issuer and the City of Memphis subsection was added to discuss the fact that the City is not liable for the payment of the principal of interest on any bond, notes or other obligations of the Issuer. This subsection also provides that the bonds and notes issued by the Issuer are not general obligations of the Issuer but are limited obligations of the Issuer payable solely from the revenues and receipts derived from the applicable revenues of the projects.
· The Methods of Sales for Financing Transactions subsection was added to identify and to provide a general description of the methods of sales that include: Public Sale, Private Placement and Direct Purchase.
· The Health Financing subsection was added to discuss the statutory authority of the Board, as the issuer, to issue bonds pertaining to clinics, and hospitals in connection with a structure.
· The Educational Financing subsection was added to discuss the statutory authority of the Board, as the issuer to issue bonds pertaining to institutions for higher education and educational facilities for individuals with physical and/or intellectual disability in connection with a structure.
· The Multifamily Housing subsection was added to discuss the statutory authority of the Board, as the issuer, to issue bonds pertaining to multifamily housing facilities to be occupied by persons of low and/or moderate income, elderly persons, and/or persons with disabilities.
· The Bond Program Policies and Procedures subsection was added to provide an overall notification that these Bond Policies and Procedures have been approved and adopted by the Board as a Bond Issuer and that these policies and procedures may be amended from time to time to give the appropriate guidance to Applicants, borrowers, bondholders, noteholders, any third party lenders and beneficiaries to ensure ongoing conformity and compliance with federal and state laws.
· The Tennessee Housing Development Agency subsection was moved to this section, and the language remains unchanged.
· The United States Department of Housing and Urban Development (“HUD”) subsection was added to discuss and/or highlight the affordable housing subsidies and programs administered by HUD.
· The Memphis Housing Authority (“MHA”) subsection was added to provide an overall description of the partnership between MHA and the Board.
· The City of Memphis Division of Housing and Community Development (“HCD”) subsection was added to provide an overall description of the partnership between HCD and the Board.
3. Bond Application Submission and Approval Process
· The Bond Application Submission subsection was edited to ensure that the language clearly and specifically describes the Bond application submission process. The staff and title information was updated, and the language concerning the Bond application fees was expanded to ensure that all Applicants are aware that all Bond application fees paid to the Issuer are final and non-refundable.
· The Bond Application Fee subsection was changed to incorporate all Bond Application Fees, particularly including Applicants applying for reissuance of Bonds.
· The Submittal Conference subsection was added to advise all Applicants that upon submission of any Bond application, the Applicant is required to attend a mandatory telephonic conference with the HEHFB staff and the HEHFB’s General Counsel. This subsection was also added provided the Applicants with the topics to be discussed during the telephonic conference. This subsection also lists the HEHFB’s Representatives’ options at the conclusion of the telephonic conference.
· The Board of Directors Review and Approval Considerations subsection was primarily unchanged. There were only a few word and phrase minor changes made.
· The Approval of Bond Application and the Inducement Resolution was added to discuss next steps to be taken following the Board of Director’s majority approval of a Bond application.
· The Final Bond Resolution Approval and Bond Closing Extension Fees subsection was added to expand on the Final Bond Resolution discussion to clearly describe the Board of Directors’ expectations regarding the closing of the transaction following the Board’s approval of the Final Bond Resolution.
4. Issuer and Bond Financing Documentation
· This section remains primarily unchanged with the expansion of some language related to the Inducement Resolution and the “TEFRA” requirements.
· A subcategory regarding a Private Placement Memorandum was added to the Bond Documentation subsection.
· This section contains summaries of documentation that may be executed in connection with the Bond Financing.
5. Project Requirements
· This section sets forth all of the federal and state requirements, and the Issuer’s right of entry to the project.
6. Issuer Closing Costs, Annual Issuer Fees; Other Matters
· This section was edited to advise any Bond Applicant more specifically as to the Issuer closing costs, Issuer Counsel Fees, Annual Issuer and Administration Fees and how these fees are calculated and assessed.
· The Internal Revenue Service Form 8038 and Form 8038-G along with the State Form CT-0253 subsections were added to section to highlight the requirement that these forms be filed after the closing of bond transactions to remain in compliance with federal and state requirements.
7. Miscellaneous Matters
· There were no significant changes made to this section.
8. Contacts
· This section was edited to Add the new Executive Director information and to update Sephanie Bryant’s title from Office Manager to Director of Operations
There being no further questions or comments,
3. Cliff Henderson moved to approve the Proposed changes to the Board’s Bond and PILOT Program Policies and Procedures, subject to any minor materials edits, grammatical edits, and formatting changes that may be necessary. Monice Hagler seconded, and the motion passed unanimously after proper roll call vote of the Board members.
Executive Director’s Report
Stephanie Bryant began by stating in the absence of the Board’s Executive Director Trey McKnight, she would be presenting the materials on the agenda for the Executive Director’s Report:
a. Review of proposed New Logo for HEHFB
Bryant stated that the Executive Director has been working on a proposed new logo, which is included in the Board’s meeting materials for their review. Bryant stated that the Board does not have an official logo at this time. Corbin Carpenter stated that statutorily, the Board is authorized to create and adopt whatever logo it sees fit but stated that any logo that is approved by the Board must also be provided to the City of Memphis Mayor for consideration and final approval. There was further discussion on how the proposed new logo would be used and whether the new logo would be a replacement for the City of Memphis Seal or would be in addition to that seal. There was also discussion of whether other entities have adopted a logo in addition to use of the City of Memphis Seal, what those logos look like, and how those other logos appear on company letterhead and other places. After discussion, the Board came to a consensus that it prefers the City of Memphis Seal to remain prominent on all Board materials, including the Board policies and procedures and letterhead. The Board also agreed that it would like to see other logo options and receive a review of how a new logo would be applied and where it would be applied, citing examples such as the Board’s website or marketing materials. Bryant stated that she will defer this agenda item, and staff would continue to work on this item based on the feedback from the Board and present the information at the Board’s April 2, 2025 Board meeting, or other Board meeting shortly thereafter. Bryant thanked the Board for its feedback.
b. Economic Impact Report
Bryant began her report to the Board on this agenda item stating that the Economic Impact Report being presented to the Board today is only a draft version for its review and discussion. Bryant stated that this draft information has been provided to the Board at its November 4, 2024 Special Board Meeting, but Executive Director McKnight was also unable to attend that meeting and properly present the methodology for the report and information, and there was no action taken at that time. Bryant stated that in order for the draft Economic Impact Report materials to be properly considered by the Board and put into use, the draft Economic Impact Report must be presented and considered by the Board at a regular Board meeting, which brings us to where we are today.
After reviewing the materials, Cliff Henderson stated that he would not stand behind the numbers because the way the information is presented in the report, particularly with the capital investment figures, makes it appear as though the information was audited and presents the actual capital investment, to which it was not. Henderson also cited a wage contributions figure that was included in this report. Henderson stated that this Board does not focus on job creation as part of its programs and this information appears to have been estimated and should not be included in an Economic Impact Report for the Board. Bryant stated that this information was put together by Younger and Associates, but as Executive Director McKnight commissioned this work, she cannot report to the Board what methodology was used to get to these draft figures.
Henderson stated that some of the information included in the Board materials shows that Younger and Associates was using different factors to get into these figures and there are assumptions, and he would like to note to the Board that he would be very careful on how this information is quoted or used because he does not support all the information. Corbin Carpenter reminded that Board that at its November 4, 2024 Special Board Meeting, his firm advised the Board at that time that because the Board does not focus on wage contributions or job creation as other entities do, and that his firm recommended removing that information entirely. Corbin Carpenter stated that wage contribution and job creation is not part of any of the Board’s considerations. Monice Hagler asked if this information is requested as part of the Board’s application or consideration process, to which Bryant stated it is not included in any underwriting or Board consideration. The Board members agreed that this information should be removed from the draft Economic Impact Report. Henderson stated that the Board has factual information that can be backed up that is great information, but he would not be supportive of using this draft information presented today.
Charles Carpenter stated that given the comments made today, the Board is presented with two options. Carpenter stated the Board would have the option of approving this draft Economic Impact Report today in substantially final form, subject to change, or the Board could defer consideration until further research and discussion before the Board is performed. Monice Hagler stated her recommendation would be to defer consideration. Hagler stated that the Board used to provide the Memphis City Council with a report annually, but she was unsure if this draft report had anything to do with that or if this was something different. Hagler stated that she believes the information is important, but the Board would need to decide what information is relevant to the Board. Bryant stated that this information is not part of the information that is provided to the City Administration on an annual basis and the information was not requested by Executive Director McKnight for this draft Economic Report.
Bryant stated that she does prepare the annual information based on Annual Board Activity and will be preparing that this month for Board review and submission to the City Mayor but is still seeking clarity from the new administration on how they would want that information provided. Henderson stated that once the research is completed and this information is presented to the Board at a future meeting, there also needs to be clear parameters on how the information is used and how others may use it. There being no further questions or comments, this agenda item was deferred to a future Board meeting, pending additional research.
Staff Report and Compliance Review
a. Review of Proposed 2025 PILOT Lessee Meeting Outline
Bryant began by stating that the information being presented is a draft agenda and outline for the Board’s upcoming 2025 PILOT Lessee event scheduled for March 24, 2025. Bryant reminded the Board that this will be the first event of its kind hosted by the Board in many years, and staff wants to make every effort to make this event successful for both the Board and all PILOT Lessees. There was a review and discussion of the proposed 2025 PILOT Lessee Meeting Outline and upcoming event details. There was also discussion on the setup of the event, guest speakers, expected guest count, and materials that would be provided to PILOT Lessees.
b. Review of Compliance Oversight for February 2025
Bryant began by reminding 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. Bryant reported as follows:
1. Bryant reported that in February 2025, staff has moved one (1) PILOT property up to “Under Observation” from regular monitoring:
a. Mill Creek Apartments.
2. Bryant reported that one (1) property that is currently under “Compliance Concerns” has had a walkthrough performed on February 27, 2025:
a. Sunrise Villas; Following this walkthrough, HEHFB Staff has determined to place this property in “Non-Compliance”
3. Lastly, Bryant reported that all seven (7) properties included in developer Mendel Fischer and Shrage Marasow PILOT Property Portfolio have been issued a Notice of Non-Compliance on February 17, 2025 due to serious delays in construction, pending Environmental Court issues, and other compliance issues. These properties include seven (7) active PILOT Properties owned by this development team:
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)
There were no other questions or comments.
Finance Committee Report
Cliff Henderson presented the financial results for the month ended January 31, 2025. After discussion,
Vincent Sawyer moved for acceptance of the Finance Committee Report for the month ended January 31, 2025, properly seconded by Monice Hagler, and the motion passed unanimously after a proper roll call vote of the Board members.
Board Office Nominations Review & Vote
Stephanie Bryant presented the Board Office Nominations on behalf of the Nominating Committee. The Nominations below were selected per the recommendation of the HEHFB Nominating Committee:
These offices are to be held for a one (1) year term:
Current Board Officers: Board Office Nominees:
Current Chairman: Daniel T. Reid Chairman Nominee: Daniel T. Reid
Current Vice Chair: Monice Hagler Vice Chair Nominee: Cliff Henderson
Current Secretary: Monice Hagler Secretary Nominee: Howard Eddings, Jr.
Current Vice Secretary: Katie Shotts (resigned) Vice Secretary Nominee: Monice Hagler
Current Treasurer: Cliff Henderson Treasurer Nominee: Cliff Henderson
Charles Carpenter advised that the Board should open the nominations to see if there are any nominations from the floor. Chairman Reid opened the floor for nominations. Hearing none, each nominee confirmed that they were willing to serve in the role, as nominated. There being no further questions or comments,
Vincent Sawyer moved for acceptance of the Board Office Nominations submitted by the Nominating Committee, properly seconded by Cliff Henderson, and the motion passed unanimously after a proper roll call vote of the Board members.
New Business
There was no new business.
Chairman Reid stated that the next regular meeting of the Board is scheduled for Wednesday, April 2, 2024 @ Noon. There being no further business, the meeting was adjourned by the Chairman at 01:50 p.m.