October 2 2024 — The Health, Educational and Housing Facility Board

MINUTES OF REGULAR MEETING OF

THE HEALTH, EDUCATIONAL AND HOUSING FACILITY BOARD

OF THE CITY OF MEMPHIS, TENNESSEE

Wednesday, October 2, 2024

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 Friday, September 27, 2024, and posted on the Board’s website on Wednesday, September 25, 2024, 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

The following Directors were absent:

Katie Shotts

Staff and others attending: Trey McKnight, Stephanie Bryant, Bryce Miller, 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.

Also participating in person and/or via remote Zoom virtual platform were Albert Richardson of CAAP, Inc. representing Place of Grace; Laura Carlisle of Baker Donelson Law Firm, Geoff Gaia of McWhirter, Gaia & Sadler, PC, Kent Mehring of WNC, Inc., Tony Petropolis of Ithaka Advisory, Michelle Cook of Winn Companies, and Michael Pico of Millennia Housing Management, all appearing in connection with Cavalier Court and Gospel Gardens; Meliea Ware of Key City Capital representing Grahamwood Place and Pinebrook Pointe; Randy Truong and Aerial Ozuzu of Community Foundation of Greater Memphis (CFGM); Shirley Bondon of the Black Clergy Collaborative of Memphis; Simeon Ike of Greater Memphis Housing Justice Project; Kate Bieri, Cynthia Perkins and Stephanie Watkins of WHBQ-TV; Geoff Hanson; Austin Harrison; Memphis Tenants Union; 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, October 2, 2024 @ Noon as an open public meeting in its conference room located at 65 Union Avenue, Suite 1120, Memphis, Tennessee 38103.

Chairman Reid stated supplemental Board meeting materials could be accessed on the Board’s website: www.memphishehf.com and reminded all attendees participating via remote access to enter their name and affiliated entities into the Zoom platform for record keeping purposes.

Approval of Minutes

Buckner Wellford stated that he advised the Board and Board legal counsel prior to the September 11, 2024 Board meeting that he would be recused from all discussions and voting involving Cavalier Court and Gospel Gardens. Wellford stated that his employer, Baker Donelson, now represents ownership for those two projects. Wellford stated that although he was not present at the September 11, 2024 Board meeting, he does see that Charles Carpenter advised the Board on record of this, and Wellford wanted to also state the same for the record today. There being no other questions or comments,

Cliff Henderson moved for approval of the Minutes of the September 11, 2024 Regular Meeting, which was seconded by Vincent Sawyer and the motion passed unanimously after proper roll call vote of the Board members.

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.

Attorney’s Report

Charles Carpenter presented the legal report, as follows:

Carpenter stated that he would reserve all comments regarding PILOTs in legal default and Environmental Court matters for the Action Items section of the agenda.

1. Carpenter reported no PILOT Closings for September 2024.

2. Carpenter reminded the Board of the Annual Report due to the Tennessee Board of Equalization by all PILOT Lessees, as well as an annual report to the Shelby County Assessor’s Office. Carpenter reported that notice has been posted on the Board’s website previously and all PILOT Lessees have been notified of this obligation, as it is included in the PILOT documents along with the electronic link that is provided to all PILOT Lessees. Carpenter advised that the submission deadline for these reports is October 1st of each year and there is a fifty-dollar ($50) fine for non-compliance.

3. Carpenter reported his firm is in the process of completing a bond redemption for Ashland Lakes, Series 2006A. Carpenter reported the tax compliance period has been completed and that all outstanding Series 2006A Bonds are being redeemed in full. Carpenter reported that this transaction is anticipated to be completed this week.

4. Carpenter reported one (1) PILOT property – Whispering Pines Apartments has been placed in legal default and is within the thirty (30) day period in which to file a written response as to how the PILOT Lessee plans to cure the default. Carpenter advised that October 10, 2024 is the deadline for a written response to be submitted by the PILOT Lessee and this property will be included on the Board’s November 6, 2024 Board Meeting agenda.

5. Finally, Carpenter reported receiving a few notices of non-payment for some PILOT properties and is in the process of reviewing those now. Carpenter advised that there is no recourse and no liability to the Board, but his firm monitors these matters to be sure they are being handled in an orderly manner.

There being no further questions or comments, the Legal Report was concluded.

Executive Director’s Report

Trey McKnight began his report by introducing Councilwoman Janika White to the Board and staff and welcomed White into her new role as the Memphis City Council Liaison to the Board.

McKnight reported that staff has made a presentation to the Public Works Division of the City of Memphis and going forward McKnight will be attending their monthly meetings. McKnight stated this presentation was to provide a better understanding of the PILOT properties and forge a relationship with the Public Works staff and Code Enforcement Inspectors, which will assist HEHF staff moving forward with a more comprehensive oversite of the PILOT properties. The Public Works staff and Code Enforcement Inspectors agreed to reach out to HEHF staff whenever there is an issue with a PILOT property. McKnight stated this relationship has already proven fruitful, as an inspector has already reached out to HEHF staff concerning a fire damaged unit at a PILOT property. This relationship will allow issues to be reviewed more efficiently and HEHF staff to be notified prior to Environmental Court appearances, rather than after the fact, as has been previously done.

McKnight advised that Board that he will be reporting to Mayor Young monthly, and has a meeting set for later this month, as well as setting up monthly meeting with Ashley Cash, Director for the Division of Housing and Community Development for the City of Memphis.

Chairman Reid thanked McKnight for his report and welcomed Janika White on behalf of the Board and staff.

Action Items-

1. 1st PILOT Closing Extension for Cocaine and Alcohol Awareness Program, Inc. (CAAP, Inc.) (d/b/a Place of Grace)

Albert Richardson entered the meeting.

Charles Carpenter introduced this agenda item, stating that CAAP, Inc. is an organization that has done tremendous work in the community and part of its mission is to provide housing for seniors. Carpenter reminded the Board that it approved a PILOT Term Extension for Uptown Manor Senior at the Board’s September 11, 2024 Board meeting, which is also owned and operated by CAAP, Inc. Carpenter stated this request is for a first PILOT Closing extension, stating that each commitment is for a six (6) month period in order to keep observation on the status of the project, and if the transaction is not closed within the six (6) month period, the applicant comes back before the Board to give an update. Carpenter stated this project is moving forward and there are attorneys working through the various documentation for the transaction. Carpenter advised that the transaction is anticipated to close within the next thirty to sixty (30-60) days, well within the six (6) month period. Thereupon, Carpenter introduced Albert Richardson, representative in attendance for this agenda item, and turned the meeting over to him for any additional comment.

Richardson thanked the Board for considering this request today and stated that as Carpenter advised, the transaction is expected to close within thirty to sixty (30-60) days. Carpenter thanked Richardson for his comments and stated his firm recommends approval.

Chairman Reid stated that he was reviewing the tenant benefits submitted to the Board as part of the PILOT application for this property, as that is what the Board is most concerned with, and the list is very impressive. Reid stated the list includes seasonal flu shots, testing for sexually transmitted diseases, health and wellness mental health screenings, dental examinations, among others. Reid asked if these tenant benefits are being incorporated from the developer’s other properties and being administered in one place or if there would be a facility onsite at this property. Richardson stated that tenant benefits are specifically focused to each development and anytime CAAP, Inc. comes before the Board, it will be bringing those services with them to provide to those residents at that development. Reid asked if tenants would be provided these services onsite or if they would have to go somewhere else. Richardson stated that services will be provided onsite via a mobile medical vehicle. Richardson stated that if a tenant needs to seek further services at an on offsite clinic, transportation will be provided for them to and from their appointments. Reid thanked Richardson for his comments and commended him for the services to be provided.

Further, Chairman Reid stated for the record that Monice Hagler is recused from the deliberation and vote.

There being no further questions or comments,

Buckner Wellford moved to approve the 1st PILOT Closing Extension for Cocaine and Alcohol Awareness Program, Inc. (CAAP, Inc.) (d/b/a Place of Grace). Howard Eddings, Jr. seconded, and the motion passed unanimously after proper roll call vote of the Board members.

Albert Richardson left the meeting.

2. Status updates for PILOTs in Legal Default

a. Cavelier Court

Laura Carlisle, Esq., Geoff Gaia, Esq., Michelle Cook, Tony Petropolis and Kent Mehring entered the meeting.

Charles Carpenter introduced Kent Mehring in attendance, stating Mehring is with WNC, one of the limited partners for Cavelier Court and Gospel Gardens. Mehring passed out supplemental information to the Board for its review. Carpenter reminded the Board that a response from WNC representatives was distributed to the Board prior to today’s meeting, and the response has also been included in today’s Board Meeting Materials. Carpenter advised that the compiles responses outline the anticipated action plan proposed by WNC moving forward for Cavelier Court and Gospel Gardens. Carpenter continued by providing a brief background of these two projects, stating that each PILOT property, Cavelier Court and Gospel Gardens were issued a LEGAL NOTICE OF PILOT DEFAULT on March 15, 2024. Carpenter reminded the Board that a LEGAL NOTICE TO SHOW CAUSE WHY THE PILOT FOR CAVELIER COURT APARTMENTS SHOULD NOT BE TERMINATED AT THE JULY 10, 2024 REGULAR MEETING was filed on June 25, 2024 and a LEGAL NOTICE TO SHOW CAUSE WHY THE PILOT FOR GOSPEL GARDENS APARTMENTS SHOULD NOT BE TERMINATED AT THE JULY 10, 2024 REGULAR MEETING on June 25, 2024. Carpenter reminded the Board that there were other properties in the Board’s portfolio that are owned and managed by Millennia, who is the general partner for Cavelier Court and Gospel Gardens, and Millennia ran into difficulty, causing the limited partners, like WNC, to step up and address the legal deficiencies in an effort to keep the PILOTs in place.

Carpenter noted that during the time of the pendency of the legal default, other deficiencies from the lender’s standpoint have occurred, in addition to the deficiencies that had been outlined by the Board. Moreover, during the past several months, Carpenter stated that WNC, the limited partner involved with Cavelier Court and Gospel Gardens, has stepped up and had appeared before the Board at prior Board meetings. Carpenter stated that WNC has been given additional time until today to come back with a plan of action for the Board, but not what it proposes to do, but what it has done and is planning to do to address the legal deficiencies before the Board, which brings each matter to today’s meeting. Carpenter advised that a written plan was provided to HEHF Staff and has been shared with the Board for Cavelier Court and Gospel Gardens, and thereupon Carpenter introduced Kent Mehring, the representative for the limited partner and invited Mehring to introduce other representatives in attendance today with him.

Mehring introduced representative Laura Carlisle as outside counsel with Baker Donelson Law Firm, and stated she is handling litigation WNC filed on September 11, 2024, against the guarantors, Millennia Housing and Frank Sinito, personally. Mehring introduced Michelle Cook of Winn Residential, stating she has been spearheading WNC’s action plan with Winn Residential to take over site management of each asset. Mehring stated he will go through the progress made so far but stated that Winn Residential has not been officially engaged for Cavelier or Gospel Gardens Apartments but is a management company that WNC has engaged on a number of their assets, stating they are a very strong company and very strong in the Low-Income Housing Tax Credit (LIHTC) space.

Mehring continued, introducing Tony Petropolis of Ithaka Advisory. Mehring stated he and Petropolis have worked on similar challenging assets like this, historically, and he is a consultant, and they have had favorable outcomes on those executions, so he has been brought in and WNC is happy that he was able to join on this as well. Mehring introduced Jeff Gaia in attendance representing Millennia.

Carpenter reminded the Board that at its September 11, 2024 Board Meeting, Code Enforcement and Environmental Court representatives were invited and made a presentation to the Board regarding these two properties, Cavelier Court and Gospel Gardens. Carpenter stated that the Board is going to consider each property individually, but at times, the discussions may overlap. Carpenter stated that the presented information by Code Enforcement and Environmental Court representatives at the September 11, 2024 Board meeting showed that both Cavelier Court and Gospel Gardens are not only in violation of multiple municipal codes, and each property remains in Environmental Court currently.

For the record, Carpenter reiterated that Board member Buckner Wellford, who is a member of Baker Donelson Law Firm, has stated for the record that he is recused from the deliberations and voting on Cavelier Court and Gospel Gardens.

Carpenter turned the meeting back to Mehring for any further comment. Mehring stated that the action plan was sent to the Board prior to today’s meeting, and it identifies the historical issues that WNC has had with Millennia, but also WNC’s overall plan of action and what that entails, but also a specific action plan and ongoing action plan. Mehring stated there are a lot of moving pieces here, and the action plan overall is consistent with both properties, but there are nuances with each, such as costs associated with remedying fire units, the number of units that need to be made ready. Mehring stated there are a number of things that overlap, but others that do not. Mehring stated he is here today to answer any questions the Board may have on that action plan, but he is also here today to share a list of things that WNC has addressed since the Board’s September 11, 2024 Board meeting.

Mehring stated he wanted to be transparent as possible and let the Board know that these are the things being worked on and based on the most recent tracking sheet, which was relied on from Millennia, and for Gospel Gardens, it shows that the majority of the violations were addressed by Millennia, but WNC has not necessarily verified all of those. Mehring also stated that there were certain violations for Cavalier Court that were addressed and closed, based on the tracking sheet WNC has been using from Millennia. Mehring stated that, as previously mentioned, WNC has engaged Tony Petropolis with twenty (20) years of experience in the workout space, and they have worked together on similar type challenges with positive results and will be working together again on these projects.

Mehring stated that WNC has been in negotiations with an extension for the default with the lender for each property and has received a verbal commitment on extension, but nothing written with KeyBank. Mehring stated WNC is also in negotiation on terms for a permanent loan conversion that is still being discussed and a proposal has been presented to KeyBank based on WNC’s discussions to the Key Bank credit committee, but no feedback has been received yet. Mehring stated WNC has also engaged Winn Residential, and they have conducted site visits over the last month, including bringing in their Director of Security, identifying ways to enhance security to better protect the residents, including onsite security. Mehring reported meeting with Jimmy Johnson of the Group Violence Intervention Program on October 1, 2024, and stated the meeting was very productive and the group is interested in working with WNC collaboratively to produce solutions with respect to the takeover execution and producing solutions beyond that. Mehring reported WNC is meeting with representatives of the Memphis Police Department (MPD), which has been sourced by staff within Mayor Young’s office, and the meeting will include Majors from both the Raines Police Station and the Crump Police Station. Mehring stated the director of the grant program will also be involved in trying to source and identify options of how WNC can work collaboratively with the MPD, what their expectations are and how WNC can accommodate those and have an effective execution. Mehring stated WNC has identified third party contractors, not entirely, but with the big-ticket items that WNC should tackle as soon as investor approval is received.

Mehring stated the big question is the timing of investor approval. Mehring stated there are four (4) investors in both funds and a similar request for each property is being made to the same investor pool and WNC only needs sixty-seven percent (67%) approval, so approval from all is not necessary, but the timing is unknown. Mehring stated he hopes to receive approval by mid-October 2024. Mehring stated WNC and Winn Residential have been collaborating on timing, and Winn Residential will need some lead time, but they are trying to tee up as much as they can in advance. Mehring stated an outside date is December 1, 2024, but WNC is hopeful for mid-November 2024 takeover, but again stated that all plans are subject to investor approval.

Mehring stated as far as numbers go, it is anticipated that Cavelier Court will require $2.75 million in additional investment to address capital needs to turn units, address funding deficits, among other things, which will needed to cover the next 18-24 months. Mehring stated of that amount WNC needs investor approval of $1.7 million of that, further stating that a portion of the monies are in a fund reserve, but WNC may not utilize those funds without investor approval. Mehring stated it is anticipated that Gospel Gardens will require $1.76 million in additional investment to address capital needs there, and investor approval will be required for $1 million of that total and approval of the balance from fund reserves.

Mehring stated that is where things stand today and that is the timeline and expectations, and WNC obviously wants to move forward sooner rather than later, but it all hinges on how quickly the investors turn around approvals. Mehring stated that WNC is back and forth with some investors with questions, so WNC is trying to do a comprehensive presentation in order to minimize that. Mehring stated that is where things are today and WNC is actively pursuing the takeover.

Charles Carpenter asked the Board’s internal monitors to provide a status update of their most recent observations, beginning with Cavalier Court. JP Townsend, Internal PILOT Compliance Inspector, stated that there are still all the same windows boarded up on the property and overall, there has been no change to Cavalier Court since that Board’s September 11, 20024 Board Meeting. Bryce Miller, PILOT Compliance Coordinator, stated there has been no change to the status of the tenant benefits. Executive Director Trey McKnight asked Stephanie Bryant, Operations Director, what is the current occupancy for Cavelier Court. Bryant stated occupancy has decreased based on rent rolls submitted by the PILOT Lessee from 77% occupied based on a September 2, 2024 rent roll to now 75% based on a September 27, 2024 rent roll. McKnight stated 75% occupancy is the Board’s minimum occupancy requirement to be within the Board’s policies and procedures.

Corbin Carpenter reported to the Board an update on the Code Enforcement and Environmental Court violations. Corbin Carpenter started by reiterating that his Firm and HEHF Staff have strengthened their relationships with Code Enforcement and Environmental Court, and Corbin Carpenter now holds regular meetings with Environmental Court attorney Will Gibbons, in which updates are provided for court docket properties in the Board’s PILOT program. Corbin Carpenter advised the Board that there are more than sixty-one (61) lawsuits on the docket in Environmental Court pending between Cavelier Court and Gospel Gardens Apartments, and as earlier stated in the meeting that over eighty violations have been addressed could be misleading for the Board. Corbin Carpenter continued, stating that the more than sixty-one (61) lawsuits still pending between these two properties include multiple violations within each lawsuit.

Corbin Carpenter asked Attorney Geoff Gaia, who represents Millennia, for an update on the Environmental Court matters for the benefit of the Board. Gaia stated that the citations with Environmental Court have been addressed on a monthly basis with Gospel Gardens and on a weekly basis with Cavelier Court. Gaia reported attending Environmental Court this morning, October 2, 2024, and stated that two citations were dismissed, with one more citation left in dealing with Cavelier Court. Gaia reported that Gospel Gardens has several more to deal with, but there have been thirteen (13) dismissals since that last hearing, but there are still citations remaining that Code Enforcement could not confirm had been rectified, but Millennia shows them rectified. Gaia stated he is hopeful that by the next Environmental Court hearing, those issues will be recognized so those dismissals can occur, and there were some dismissals prior to the previous Board meeting, but there are numerous Gospel Gardens issues that still need to be addressed and are being addressed. Corbin Carpenter asked for the total number of pending citations form the last Board meeting and how many had been closed. Gaia stated he is unaware of which citations Corbin Carpenter is referencing, but of the few dozen Gospel Gardens citations, thirteen (13) have been dismissed since the last Environmental Court hearing, with only one (1) remaining of which he is aware. Corbin Carpenter asked if Gaia has an estimate of the remaining citations for Gospel Gardens, to which Gaia responded he did not.

Charles Carpenter stated the challenge that the Board has had and has attempted to make perfectly clear to Millennia and WNC as it has gone through these months of legal default, then the show cause proceedings, is that the Board’s interest is with the tenants and the tenant benefits. Notwithstanding the financial proposals that WNC has made, Carpenter stated the Board has not seen specifically what steps are being taken to improve the conditions for the tenants that will remain there at the property. Carpenter stated there have been a number of plans and proposals, but none have addressed the conditions that the tenants are residing in that were shown by Code Enforcement and is being dealt with in Environmental Court currently.

Carpenter asked if there are any further comments, statements, or assurances WNC can give the Board regarding these conditions and concerns. Mehring stated that all he can say regarding that specifically is the WNC’s action plan is comprehensive once they are able to get started, and between now and that time, WNC will remind Millennia of its obligations and identify issues that have to be addressed. Mehring stated he drove the properties last night and not all the lights are working, so WNC must remind Millennia of the things they should be doing and are not. Mehring stated to the Board that Millennia has made it clear that they are not going to be continue funding anymore, which is why WNC needs to get in the driver seat and stabilize.

Carpenter stated that WNC representatives had indicated at the Board’s September 11, 2024 Board meeting that investor approval was anticipated within two (2) weeks, and it is beyond those two (2) weeks, and now Mehring is indicating hopes that the investor approvals will be obtained in two (2) weeks from today’s meeting, but it could be much longer than that. Carpenter asked if the Board is to understand that until investor approval is completed, there is nothing WNC, as the limited partner, can do as far as financing the proposals that are being discussed. Mehring responded to Carpenter, stating that is correct and that WNC would be prevented from doing that by investors and WNC requires investor approval to utilize the funds to execute. Mehring stated yes, the two (2) week window is an accurate statement as well and that is from the time the recommendation is presented, and assuming WNC can get all investors on board, and go to through the process. Mehring advised that there are a lot more issues here that WNC is going to have to address with investors, so it may take longer, as there are going to be a number of questions from investors, versus something with less challenges.

Laura Carlisle stated she would like to address some dollars that have gone in with the Limited Partners and what they have done in the process. Carlisle stated in the meantime, as was mentioned at the Board’s September 11, 2024 Board Meeting, WNC has paid the insurance premiums on the assets because those were lapsing, so there is now three months of that under the belt. Carlisle stated WNC has continued to pay that, and General Counsel has negotiated the lien that a contractor had placed on one of the property's and that has now been taken care of and a resolution has been reached. Carlisle stated WNC will do what they can, but the bigger asks are subject to investor approval, and though this is not satisfactory, the reality of it is the ability to get the investor approval is contingent on the PILOT staying in place. Carlisle stated that tenants are WNC’s primary focus, and if WNC does not have investor approval and the PILOT does not stay in place, these two deals take the risk of becoming far worse.

Carpenter stated that in order to keep the PILOT in place, each PILOT property must be in line with the policies and procedures of the Board and make sure that the tenants are being treated properly and fairly and humanely. From the evidence that has been shown that it is not taking place. The Board understands and appreciates the business considerations, but that is not the Board’s primary focus. Carpenter stated that the Board’s vote for additional time was a close vote at the September 11, 2024 Board meeting, and passed only by majority vote, and the issue before the Board today is whether or not there is sufficient cause to extend additional time, and if not, the PILOT could be terminated at the meeting today. Carpenter stated this is a significant decision that impacts not only the tenants, but the lenders and investors and so forth, and the Board has not taken this matter lightly.

Thereupon, Carpenter turned the meeting over to the Board members for any additional questions and comment. Cliff Henderson stated that he understands that everything is dependent upon investor approval, and if the Board does not vote to extend additional time, he agrees that it does get worse. Henderson stated he does not know what the investors timing may be, whether it is two weeks or two months, but he is hopeful it would not be long, as he assumes that due to the fund’s performance and other factors, the investors will be questioning what is going on and investors would have some incentive to come and vote on this quickly and get resolution. Mehring stated the timeline is critical, and that has already been shared with investors. Henderson stated there is skin in the game for the investors to act, so he wants to recognize that piece. Henderson stated this puts the Board in an awkward position as a result, but he would be in favor of extending additional time. Henderson stated that the Board is looking at two (2) PILOTs that are at minimum standards, as far as rent roll, and the Board should consider the implications of that. Henderson stated that he appreciates the comprehensive nature of the proposed plan, and he does not like the position. Henderson stated the Board is in a position of weighing two bad outcomes today and he would like to see if there is something that could be better in the next two or three months as a result of this.

Councilwoman Janika White asked how many tenants are in each complex. Stephanie Bryant stated that each complex has two hundred (200) units, but Cavelier Court is currently seventy-five percent (75%) occupied, and Gospel Gardens is currently 84% occupied, based on end of September 2024 rent rolls submitted by the PILOT Lessee. Mehring stated, consistent with Bryant’s numbers, there are two hundred (200) units in each complex and there are approximately one hundred fifty (150) occupied units at Cavelier Court and one hundred sixty-seven (167) occupied units at Gospel Gardens. Mehring stated that of the two hundred (200) units at Gospel Gardens, two (2) buildings were impacted by a fire, which is included in WNC’s sources and uses to address immediately. White asked for confirmation that WNC is looking for investor approval of $1.7 million. Mehring clarified that it is depending on the property, and that Cavelier Court will require investor approval of $1.7 million, and Gospel Gardens will require investor approval of $1 million. White stated she has received the Code Enforcement and Environmental Court presentation that was presented at the Board’s last meeting, and in reviewing the photos, asked Mehring if corrections with the sewage and mold would be addressed with those funds, and if the repairs would be done as part of the money WNC is seeking for investor approval. Mehring stated yes, that WNC has identified everything through consultants and vendors, as well as conducted site visits to identify which units need to be turned. Mehring stated WNC never saw any of the issues shown in the pictures in the past two months and he does not know where Code Enforcement got those photos. Mehring stated WNC saw the down units, and maybe the photos were dated, but that WNC has all the numbers applicable to all the capital needs and unit turns, and security systems. Mehring stated that on site security is going to require deficit funding of over $400,000 for Cavelier Court to get stabilized within the next twenty-four (24) months. Mehring stated Gospel Gardens stabilization will be a shorter timeline, but WNC is trying to be realistic, but also is committing dollars to right the ship.

McKnight stated the photos described were brought to the Board by Code Enforcement and Environmental Court Representatives as part of their presentation to the Board on September 11, 2024, and it is his understanding that the photos are recent. Carpenter advised that the way Code Enforcement and Environmental Court Representatives explained to the Board, the photos were taken in June 2024 but verified that conditions remained the same and were still ongoing, and the dwellings are still occupied, which is why the matters are still in Environmental Court. Carpenter stated Millennia representatives and WNC have said some of the families have been moved to other units, but some are still in those units, which is again, why the cases remain in Environmental Court. White asked if there are ongoing efforts, for tenants who have these conditions where there is raw sewage coming up in their sinks and bathtubs, to move these tenants to a more habitable unit. Geoff Gaia stated it is his understanding that those tenants with the sewage issues have been relocated. Mehring stated that all sewer lines were jetted and scoped, and part of WNC’s action plan is a sizable some to repair sewer lines throughout the property. Mehring stated that units that were affected by backups have been gutted and are not sitting in that same state, and this happened at the direction of WNC, as well as relocation of tenants from these units took place at WNC’s direction to discontinue that type of exposure.

White asked if WNC has someone that is going out to the properties on a regular basis to monitor the conditions to see how people may need to be moved around, or what conditions are more urgent, for people to be able to remain in place, pending investor approval. White stated she understands Mehring stated he was at the property yesterday, October 1, 2024, but is there something ongoing and what does that look like outside of Code Enforcement. Mehring stated that WNC is at the properties at least monthly, and has had direct involvement with Millennia’s regional manager, who has been transparent with WNC and very beneficial as the regional manager for Millennia. McKnight stated the action plan is requesting the Board allow up to eighteen months to stabilize the properties and asked staff how long the properties have been in legal default. Bryant stated that both properties have been in Legal Default status since March 2024, and then placed in a Show Cause status in June 2024. Bryce Miller stated that the properties were under close observation by compliance staff for a year prior to being placed in Legal Default status.

Henderson stated that the Board has had successful recoveries with other properties and property owners that have spanned over a couple of years, and the Board has been hopeful that with Millennia, this would happen. Henderson stated that if this were Millennia coming to the Board with this proposed plan, he believes the Board would unanimously deny the request and vote to terminate the PILOT, but he believes the Board is seeing a similar situation as was seen with Millennia and Memphis Towers, where the Limited Partner group came in and took over. Henderson stated it is a road that is messy to deal with, but that is what the Board must weigh, including does the Board trust what has been done and has seen so far to continue to go forward with this plan. Henderson stated he would be suspicious if the stabilization period requested was a three-to-six-month timeline, and a twelve to eighteen-month timeline kind of gets it, but at the same time, there should be pressure applied. Henderson stated should the Board continue the PILOT when it has someone that is trying to reclaim it, laid out a plan, done the research, and received estimates, or terminate the PILOT, of which Millennia has proven it is not going to move forward, they become blighted, and hundreds of families will have to relocate, or do we give this a chance. Henderson stated that is the question he is looking to vote on.

At this point in the meeting, a member of the public, Shirley Bondon, spoke out, stating that she knew she was out of order, but that she thinks Board members should go live in those apartments for twelve (12) months. Bondon stated that although she is out of order, this is getting to be too much, and she has been attending Board meetings since February and she hears the same thing every month over and over again. Chairman Reid advised Bondon that she was in fact out of line but thanked her for her comment and proceeded with the Board Meeting.

Councilwoman Janika White asked Board legal counsel if the idea is allowable, and if the Board is inclined to allow an extension of time to the PILOT Lessee, is there a way to set up some type of hotline to the regional manager or directly to WNC of urgent issues. White stated she understands all the issues here are pressing and at the latest point, but with the already terrible conditions tenants are living in, is there a way to set up some type of hotline when these urgent matters come up for something that is unlivable like sewage being in a bathtub or sink, to provide a direct contact for those tenants so that those can be addressed.

Carpenter stated in response to White’s question, that the Board has been dealing with these matters for a long time and there has not been responsibility at the site level from the management company to address these issues, and that has spurred a lot of frustration for residents. Carpenter stated it has not been an issue of residents reaching out and sharing this information, or that management has not received it, management just has not done anything about it. To provide background, Carpenter advised that Millennia is the actual entity that the Board has its contractual relations with the PILOT Contract. Now, Carpenter stated Millennia is throwing its hands up and saying they are not doing anything else. As a matter of fact, the principal for Millennia, Frank Sinito, was in attendance, in-person, at the Board’s September 11, 2024 Board Meeting and did not even introduce himself, which is very troubling. Sinito has not attended any Board meeting in the past in person. Carpenter stated that with Millennia, there is nothing else they are going to do, and that is why in their financial structure, WNC the limited partner, who is interested in the tax credits and interested in preserving their investment and so forth, are the ones who are stepping up in order to protect their investment, who are the representatives are here today.

Kate Bieri, Cynthia Perkins and Stephanie Watkins left the meeting.

Carpenter stated that with Cavelier Court and Gospel Gardens, what the Board has heard is how WNC proposes to protect their investment in Cavalier Court and Gospel Gardens Apartments, if given additional time and with investor approved additional resources at their disposal, they can right the ship, and it is going to take a period of time to do that. As to the tenants, Carpenter stated that the Board does not have responsibility for relocation of tenants, but there is Housing and Urban Development (HUD) involvement through the Housing Assistance Program (HAP) Contract on each of these properties. Carpenter explained that if there is further default, HUD would have an obligation to step in and assist the tenants.

Carpenter stated for contrast, the situation with a separate Millennia property, Memphis Towers, which was in a similar situation, and Millennia threw its hands up with that property as well, the limited partner was more aggressive and came in and took over. Carpenter stated the limited partner in that situation went to HUD, got the assignment on the contracts, brought in their own management company, and so forth. That was the situation, referred to earlier, that there was a turnaround and there were a lot of positives that can be taken from that example. Carpenter stated the current approach with Cavelier Court and Gospel Gardens is different. Carpenter stated that WNC has not been able to go in with the legal authority because WNC has not taken that approach and have pursued a different legal approach that will take more time to go through, and WNC will still need to engage the management and get approvals for funding, which is going to cause further delay. Carpenter stated that the concern the Board has expressed is what happens to the tenants in the meantime, and WNC has not been clearly able to identify what will happen, the timing of such and what those probable outcomes will be.

Carpenter stated today the Board is faced with the determination of whether or not to continue to give more time, with the PILOT in place, which certainly with an in place PILOT it should be more advantageous to getting the approval from the investors to get a better position, and with the potential management companies and so forth, than if the PILOT is not in place. The practical effect of terminating the PILOT today would be that the property would go back on the tax rolls at Fair Market Value and must pay full taxes, and all other issues and concerns will remain with Millennia and with its financial partners to figure out, but it would have to be determined without the incentive of the PILOT being in place.

Mehring stated that WNC has done the analysis of the market rate scenario if everything blows up and the properties are just not financially feasible and finding a buyer would be unlikely. Mehring stated WNC’s action plan is comprehensive and WNC has been very conservative with the numbers, projections, and timelines, and capital numbers too, just to ensure that there is cushion. Mehring stated WNC is not currently in the driver seat, but would like to get into the driver seat, and WNC is not seeking HUD approval because that would take too much time. WNC is awaiting investor approval, and Mehring stated he has no reason to believe they will not receive investor approvals based on WNC’s track record with other investments they have. McKnight stated to the Board that in other cases like these, there has been progress, but unfortunately, staff has not observed that same progress for these two PILOT properties.

Laura Carlisle stated that there are two paths happening simultaneously, one being the issues with Millennia, which is a partnership issue that will be worked out in court and WNC has sued the guarantors and the principles and there is a straightforward line of real dollars from them and WNC does plan on removing Millennia. Carlisle stated the approach being taken here is the same as the one with Memphis Towers, it is just not moving as fast as the Board would like, nor is it moving as fast as WNC would like, but it is in motion and at the end of the day, the limited partner will be in control and will be in the driver seat. Carlisle stated the reason Michelle Cook is present today is because WNC is replacing the management company so there will be new management on site as early as next month. Carlisle stated that WNC has taken comments made by Carpenter at the Board’s last meeting to heart, that there is a perception that when Millennia came in, it did not truly understand the needs of these communities, so it never brought the resources to bear and was never realistic, so Millennia was never able to connect like it should have. Carlisle stated WNC has been very careful to identify a management company that does have the resources and understands what it is getting into, so that in six months, the properties are not in the same position with respect to this Board that Millennia was in and that lost lack of credibility.

Carpenter stated that the Board understands the dilemma and it is a balancing act, but what the Board needs to hear more of is what is going to be done to assist the tenants in the meantime, in the next thirty (30) days or the next forty-five (45) days with the conditions continuing to deteriorate. Carpenter stated that is what is missing from WNC and its representatives, of how to stop the hemorrhaging for the tenants. Meantime, while all these other legalities and financial considerations work themselves out, that part needs to be addressed more thoroughly, and it would give the Board more balance in making a determination of what is in the best interest, because right now, Cavelier Court and Gospel Gardens are not in compliance with the Board’s PILOT policies and procedures, so legally, this is a mess, and although that is not a legal term, that is where we find ourselves. Carpenter stated the redeeming value would be equitable considerations of the tenants and how they can be maintained and their suffering mitigated, and that is the part the Board is not hearing and that is where things are. Mehring stated that if he is being honest with the Board, WNC’s focus is how to make the biggest impact when it steps in with better management and in conjunction with MPD and working with the Neighborhood Christian Center, which comes highly recommended, and working on that impact stepping in because as the limited partner, WNC has limited rights and cannot oversee operations, which is the issue with the partnership structure, so WNC cannot act as owner with Millennia is the shoes. Mehring stated that as soon as WNC received investor approval, Millennia is removed, and WNC is in the driver seat and can take control and execute the action plan.

Tony Petropolis stated that he has worked with WNC since 2010 and was brought in to work with them in similar situations where WNC has stepped up and taken control of difficult properties in similar situations. Petropolis stated he has also worked on difficult properties in Memphis, and once WNC takes control as general partner, they have a track record of performing and turning around the properties and investing significant monies. Petropolis stated that WNC does care about the residents, as we all do.

Corbin Carpenter stated that to put it simply and compare this situation, although a different approach legally, but with Memphis Towers, what gave the Board solace is that representatives would come before the Board monthly and update the Board on what they had done for the tenants each month, and what they were going to do for the tenants the next month. Corbin Carpenter stated that although this team is still in the diligence process, he would pose the same questions that he asked of representatives last meeting, which is, is there anything WNC can commit to do for the tenants as a unilateral kind of investment to the property, in addition to what has been done, for the benefit of the tenants to remediate the sewage issues, mold issues, or anything else. Mehring stated that regarding the sewage issues that all lines have been jetted. Mehring stated that one line had a clog that needs to be dug up and only affects one (1) building, and all others have been jetted. Mehring stated that WNC has a report from the plumber and the estimates, and all repairs are included in the sources and uses. Mehring stated a number of these things have been occurring, but the Board does not see the obvious benefit because it is underground, or drywall is being taken out four feet up in the units that were affected just to make sure they are remediated. Mehring stated there is a line item for all the remediation too, and work has been ongoing, but Millennia is not investing, which is why the occupancy is dropping, and Millennia is not making a huge effort in marketing units or turning units.

Mehring stated that WNC has witnessed improvements, all though not to the degree that anyone would like. Mehring stated the lighting situation at Cavelier Court needs to be addressed immediately, and WNC met with Millennia this morning and they are sending someone out to address that now. WNC is identifying things as they see them and trying to push Millennia in the right direction until WNC can step in and has the funding dollars to make sure that there is adequate insurance coverage in place. Mehring stated WNC has also been making advances for outstanding items, such as PILOT payments, to the tune of $500,000, but WNC is not in control of operations and is limited partner. Once WNC gets investor approval, WNC will execute, and step in, but as to the diligence period, as mentioned by Corbin Carpenter, Mehring stated WNC is done with due diligence and is ready to go and is just awaiting those investor approvals.

Carlisle stated that she thinks it is perfectly reasonable that representatives report to the Board, whether it is on a monthly basis or every other month. Carlisle stated that monthly reporting would be appropriate right now and that progress is shown each month and WNC is willing to do that. Carlisle stated that representatives are happy to do that as hopefully the Board will extend additional time for these PILOTs. Mehring stated that WNC has a vendor account payable of over $400,000 where vendors have not been paid. Mehring stated Millennia cannot get vendors to properties, which is half the battle, so WNC will step in, make the vendors current, then WNC will have access to vendors, which is a critical part of takeover.

Michelle Cook stated on behalf of Winn Companies that Winn is a nationwide company with a footprint in Tennessee, and Winn is known for coming into distressed properties and turning them around. Cook stated that this will not be an overnight fix, but what Winn will be focused on is the resident experience, as Winn wants residents to feel comfortable in their homes and be happy to be home. Cook stated that Winn Companies manages over 50,000 tax credit units across the country, which does not include the HUD properties that Winn manages, which would bring the total in a full account to over 100,000 units. Cook stated then when asked to come in, Winn understands that there is much to be done but does not think it is something that cannot be done, as WNC has guaranteed that they will provide the funds and resources Winn would need to do the job the way that it needs to be done. Cook stated that Winn Companies looks forward to helping residents not only build a community for their property, but a community in the neighborhood as well. Mehring stated that resident outreach is critical and something that Millennia just has not done.

Stephanie Bryant asked Cook if Winn Companies manages any properties in Memphis. Cook stated that Winn does not manage any units in Memphis but does manage some properties in the state of Tennessee. Bryant asked Mehring for clarity on comments made at the Board’s September 11, 2024 Board meeting, when Mehring stated to the Board that WNC had received a commitment from the lender through March 2025, but today, Mehring reported to the Board that WNC is still in negotiations with the lender. Mehring stated that WNC had received a verbal commitment, as it has in the past with some extensions, and then followed with documentation and sign off. Mehring stated that because WNC wanted to extend the permanent loan execution instead of ongoing extensions under the bridge loan base, WNC wants a permanent loan execution. Mehring stated that KeyBank has agreed and presented to the KeyBank Credit Committee a plan that will give WNC a permanent loan scenario, and KeyBank is waiting to provide the extension, although they have verbally agreed and said the extension fees would likely be waived. Mehring stated WNC’s contact at KeyBank is out of the office this week, so WNC does not anticipate any update until the week of October 7, 2024. Mehring stated WNC is waiting for the KeyBank Credit Committee to approve the proposed plan and WNC received verbal communications yesterday that the extension is coming, but they are waiting to get another piece on the permanent loan approved. Bryant stated that the Board was told on record that there was a commitment through March 2025 at the September 11, 2024 Board Meeting, but it has been reported today that the commitment received is only a verbal commitment, but she appreciated the clarity for the Board so that there is understanding of where things stand today. Mehring stated he apologized, as there have been so many extensions and WNC was relying on verbal commitments which were in fact executed in the past, but stated Bryant was correct. There being no further questions or comments,

Cliff Henderson moved to defer Board action on Cavelier Court PILOT Legal Default Status until the Board’s November 6, 2024 Board Meeting, seconded by Howard Eddings, Jr., and the motion failed after a proper roll call vote of the Board members.

For the record, Chairman Reid, Monice Hagler and Vincent Sawyer voted not to defer action until the Board’s November 6, 2024 Board Meeting and Buckner Wellford is recused.

Based on the vote of the Board with the LEGAL NOTICE TO SHOW CAUSE WHY THE PILOT FOR: CAVELIER COURT APARTMENTS SHOULD NOT BE TERMINATED AT THE JULY 10, 2024 BOARD MEETING in effect and motion to defer action not extended, the PILOT for Cavelier Court Apartments is terminated.

b. Gospel Gardens

Cliff Henderson moved to defer Board action on Gospel Gardens PILOT Legal Default Status until the Board’s November 6, 2024 Board Meeting, seconded by Howard Eddings, Jr., and the motion failed after a proper roll call vote of the Board members.

For the record, Chairman Reid, Monice Hagler and Vincent Sawyer voted not to defer action until the Board’s November 6, 2024 Board Meeting and Buckner Wellford is recused.

Based on the vote of the Board with the LEGAL NOTICE TO SHOW CAUSE WHY THE PILOT FOR: GOSPEL GARDENS APARTMENTS SHOULD NOT BE TERMINATED AT THE JULY 10, 2024 BOARD MEETING in effect and motion to defer action not extended, the PILOT for Gospel Gardens Apartments is terminated.

Laura Carlisle, Geoff Gaia, Kent Mehring, Tony Petropolis, and Michelle Cook left the meeting.

c. Grahamwood Place

Meliea Ware entered the meeting.

Charles Carpenter introduced this agenda item, stating that Grahamwood Place and Pinebrook Pointe are owned by the same ownership group and have been on the Board’s agenda for most of the 2024 year, but are trending in the right direction. Carpenter stated that at the Board’s September 11, 2024 Board Meeting, there were some questions regarding conditions of the properties, and action was deferred to today’s meeting for the Board’s internal monitors and the Executive Director to perform a walkthrough of the property and update any questions regarding the physical conditions as well as tenant benefits. Carpenter turned the meeting over to the Board’s internal compliance monitors for their comments. JP Townsend stated for the record that the issues he specified in the Board’s September 11, 2024 Board Meeting have been remedied, sinkholes have been filled and windows have been fixed, and the pool has been cleaned and closed for the year. Townsend confirmed his comments are for conditions at both Grahamwood Place and Pinebrook Pointe.

Trey McKnight stated that he also attended both onsite walkthroughs with the Board’s compliance team to ensure that all items that inspectors have observed in previous visits have been corrected. McKnight stated that moving forward, he will be present at most walkthroughs being performed for troubled properties before they appear before the Board. Further, McKnight stated he would like to say that the Board’s compliance team has done a really good job. Bryce Miller stated he would like to note that there is still one minor deficiency at Pinebrook Pointe, as there was confusion about the “Outdoor Kitchens” Tenant Benefit and whether it should be included as a stated tenant benefit for the property. Miller stated he double-checked, and it is included in the tenant benefits committed to by current Pinebrook Pointe ownership. Miller asked if there would just be a grill bought. Meleia Ware stated she was sent an update on what the commitments were, and an outdoor grill has been included as an item that is pending. Ware agreed there was miscommunication of that item for Pinebrook, but it will be resolved. Ware stated that the construction manager for KeyCity Capital, Brent, is in town with Ware and is working on this item today. Miller stated he would like to commend Brent, who was the representative for KeyCity Capital at the onsite walkthrough that took place, as there were items that have been pointed out for about a year that he remedied within hours. McKnight advised the Board that Director Vincent Sawyer was also present on these two (2) onsite walkthroughs, and thanked Sawyer for his participation. McKnight stated that during the walkthroughs, compliance staff observed the construction manager taking care of issues on his own and that is appreciated. McKnight stated that compliance staff also observed some items that he believed the Board could assist with, and McKnight has contacted the appropriate department at the City of Memphis and anticipated those items will be remedied soon. Ware stated that she included photos in her report that show the area has been secured, and clarified the area being discussed is a retaining wall that backs up to property owned by the City of Memphis.

Carpenter stated that based on this report to the Board and based on comments from the Board’s September 11, 2024 Board Meeting, there is a lesser category of additional compliance oversight from Legal Default. Carpenter stated this lesser category would still provide increased oversight but would take the properties out of Legal Default status. Carpenter recommended removing Grahamwood Place and Pinebrook Pointe from Legal Default and stepping both properties down to the reduced category of the “Under Observation” level of compliance oversight.

Buckner Wellford stated that he had previously asked for and appreciated staff for providing the requested information on legal expenses as well as the external monitor expenses that are applicable for PILOT properties in Legal Default status. Wellford stated that Grahamwood Place and Pinebrook Pointe are included in the information, stating that Grahamwood Place has accumulated approximately $7,000 in expenses to this Board and Pinebrook has accumulated approximately $8,000 in expenses to this Board. Wellford stated that at the Board’s August 7, 2024 Board Meeting, he was discussing some of the remedies the Board has for situations like this, and he stated he pointed out that the Board has the authority to condition withdrawals from Legal Default status and to assess costs and penalties. Wellford stated that unless advised differently by Board legal counsel, he assumes the Board still has that authority. Wellford stated that he is glad these properties have taken steps to remedy the deficiencies at each property, but in looking at the number of occasions that Board Compliance inspectors have has to call these deficiencies’ out, including things that were expressly defined as tenant benefits. Wellford stated that he believes the Board needs to assert is that being put in Legal Default comes with a cost, and he is going to be in favor of, moving forward, and starting with these two properties, removal from Legal Default on repayment of expenses incurred by the Board. Wellford stated that there does not need to be an attitude from the PILOT Lessee to cure deficiencies, but only on absolute threat of the PILOT being terminated. Chairman Reid stated that the amount of fees provided by the Board are estimates, and not firm figures, and firm figures could vary. Wellford stated he understands that these are estimated, and there is no guarantee that those expenses will not increase, especially if a PILOT goes back into Legal Default status. Wellford asked Carpenter if the Board is empowered to assess fees, even if it does not have a precise dollar figure, based on what the Board can reasonably consider to be costs associated, direct and indirect, with monitoring the property while in Legal Default status. Carpenter stated yes.

Buckner Wellford proposed making a motion to remove Grahamwood Place and Pinebrook Pointe from Legal Default Status to “Under Observation” on condition of paying $7,000 to the Board to reimburse the Board for the expenses incurred by the Board associated with additional oversight while in Legal Default status and reimbursement expenses to be made within a 30-day period. Wellford stated that he wants the Board to consider this motion, whether it passes today or not, as something the Board begins to think about and to create awareness in the property management and ownership community that there are consequences to a PILOT Lessee when a PILOT property is placed in Legal Default Status. Howard Eddings, Jr. asked how the Board would enforce the collection of the reimbursed funds. Wellford stated that the PILOT Lessee would have to report to the Board at the following Board meeting, and if the fees had not been paid, the property would be placed back into Legal Default status. Wellford stated that he admits that if the property is placed back in Legal Default status and remains there for two or three months and continues to show progress, the Board would need to figure out some way to resolve that situation, but he would think this approach would cause a PILOT Lessee not to want the PILOT property to be in Legal Default Status.

Trey McKnight stated that this is a very good idea and recommended that this idea be discussed at the upcoming Board Training Session. Vincent Sawyer stated that he would agree and has felt since the beginning of his time on this Board that there needs to be something short of the nuclear option of PILOT termination and is all ears for ideas on how to incentivize compliance. Buckner Wellford stated he would modify his proposed earlier motion from $7,000 in reimbursement fees to $5,000 for Grahamwood Place and Pinebrook Pointe as a symbolic point that the Board is simply trying to arrive at a figure that approximates the actual expense that the Board is incurring to deal with this problem. Chairman Reid reminded the Board that whatever is decided in this meeting will set precedent for other meetings and should be vetted and discussed at the Board’s upcoming Board Training Session. After discussion,

Buckner Wellford made a motion to remove Grahamwood Place Apartments from Legal Default Status to “Under Observation” on condition of paying $5,000 to the Board to reimburse the Board for the expenses incurred by the Board associated with additional oversight while in Legal Default status and reimbursement expenses to be made within a 30-day period in order to be removed from Legal Default Status, seconded by Howard Eddings, Jr., and the motion failed after a proper roll call vote of the Board members.

For the record, Chairman Reid, Monice Hagler, Cliff Henderson and Vincent Sawyer voted no on the motion.

Wellford stated that, although the motion did not pass at this time, he has made his point and will vote in favor of moving Grahamwood Place out of Legal Default status, and he will not make the motion for Pinebrook Pointe, because the point has been made. Wellford stated he appreciated the second of his motion and now it is of record and will be reflected in the Board Meeting Minutes, the Board has made a commitment to discuss this topic at the upcoming Board Training session, and he has advanced the objective to symbolically make a point on this. Wellford stated he will continue and vote yes on the forthcoming motions to remove both properties form Legal Default status to a lesser level of compliance oversight. There being no further questions or comments,

Vincent Sawyer moved to remove Grahamwood Place from a “Legal Default” status and for there to be a step-down of Grahamwood Place PILOT status to the “Under Observation” level of compliance and for representatives to appear before the Board at the December 4, 2024 Board meeting, seconded by Monice Hagler, and the motion passed unanimously after a proper roll call vote of the Board members.

d. Pinebrook Pointe

There being no further questions or comments,

Vincent Sawyer moved to remove Pinebrook Pointe from a “Legal Default” status and for there to be a step-down of Pinebrook Pointe PILOT status to the “Under Observation” level of compliance and for representatives to appear before the Board at the December 4, 2024 Board meeting, seconded by Cliff Henderson, and the motion passed unanimously after a proper roll call vote of the Board members.

Meliea Ware left the meeting.

Finance Committee Report

Cliff Henderson presented the financial results for the month ended August 31, 2024. After discussion, Henderson stated he is aware of a recent resolution that was passed by Memphis City Council that appropriated $1.5 million from the Board, which will be something the Board will have to take into consideration as part of its financials as we go forward. Corbin Carpenter clarified that this resolution is for money already being appropriated to the City Council from the Board’s funds. Corbin Carpenter stated that funds are allocated to Housing and Community Development (HCD) at the time of each PILOT closing transaction of the Board, as part of the Board’s current PILOT Closing policies and procedures. The funds that are being referenced in the recent resolution refer to the funds that are already being allocated to HCD and monies will come directly from the HCD fund to City Council. Corbin Carpenter reminded the Board that at the time of a PILOT Closing, for the HEHFB PILOTs the Board retains 70% of the closing fee, and 30% is allocated to HCD for each regular and for MHA PILOTs administered by the Board the Board retains 30% of the closing fee, and 70% is allocated to HCD. Chairman Reid stated that the money is coming from HCD’s funds, not directly from the Board’s funds. Corbin Carpenter confirmed. There being no further questions or comments,

Howard Eddings, Jr. moved for acceptance of the Finance Committee Report for the month ended August 31, 2024, properly seconded by Vincent Sawyer, and the motion passed unanimously after a proper roll call vote of the Board members.

New Business

There was no new business.

Chairman Reid drew the meeting to a close by thanking Councilwoman Janika White for her attendance and new commitment as the Memphis City Council Liaison to the Board. Chairman Reid stated that this commitment helps the Board tremendously as White will be able to carry back the happenings of the Board’s business activities with the City Council. This information will be able to assist the City Council in its understanding and work and also shares with the Council on the mission of the Board and how the Council can be of support. Chairman Reid stated the Board is happy to answer any questions she may have and thanked White for her service.

Chairman Reid stated that the next meeting of the Board is scheduled for Wednesday, November 6, 2024 @ Noon. There being no further business, the meeting was adjourned by the Chairman at 01:35 p.m.