Archive for the ‘PILOTS’ Category
April 13, 2016
Further Info On The Memphis HEHFB Controversy
I recently reported on the two Health Education & Housing Facility Boards, one from the City of Memphis and one from Shelby County. One is apparently well run and the other has had its’ authority temporarily suspended by the Tennessee Housing and Development Agency because of problem with properties run by Global Ministries.
I have attended two meeting of the Memphis board. The first one was not a regular monthly board meeting, but a reading of a proposed bond issue by Charles Carpenter, the board attorney. After the formal reading, I asked a few questions concerning transparency and open records and did not get a lot of information.
The second meeting, which was a regular monthly meeting, was attended by Channel 3, the Commercial Appeal, several business interests and myself. The only person, other than the business interests, to ask questions was myself. Before the start of the meeting, I asked the secretary for an agenda and she refused to give me one until the actual meeting started. At the end of the meeting I asked why the agendas and all attachments were not published at least two days before the meetings and I received no answer. I asked about the difference between the County ordinance that limits the amount that the Board Counsel can make. Mr. Carpenter said that he was not aware of the County ordinance. I pointed out that for just five Memphis bonds, the overpayment for the Memphis board Counsel was $59,000. Then I asked about a possible conflict of interest on the bonds for the Uptown Manor Senior Project by a board member and they said that they would have to consult the minutes of that meeting to see if the member recused herself. I asked for the minutes but received no reply. After the regular public meeting, they had an executive meeting and I asked if I could attend. They said that it was a closed meeting and the public was not able to attend.
Then several days later I, in fact, received the minutes from the two past board meetings concerning possible conflict of interests. I have attached those minutes and they are interesting.
Lee Patton and Monice Moore-Hagler recused themselves from the Inducement Resolution for the Uptown Manor Senior motion. Under Discussion Items, John Baker brought to the Board’s attention for further consideration a revised short term bond fee structure. Under New Business, Nancy Willis brought to attention a request for an annual ethics statement to be signed by members of the board and provided an example copy for the Council’s review.
Under action items, Dan Reid recused himself from consideration of inducement bond resolution for Global Ministries Foundation Bent Tree Apartments. Renasant Bank was to provide a private placement loan for the property.
Then Dan Reid re-entered the meeting and Monice Moore-Hagler and Lee Patton recused themselves before consideration of final bond resolution for Uptown Manor Senior Development LLC. Mr. Carpenter recommended approval.
Finally, Paige Walkup asked for an update regarding GMF Warren-Tulane property. Mr. Carpenter reported on his positive contact with Chris Lamberson and the ongoing response to correct issues and bring it up to standard.
This just goes to show that all these boards need to publish their agendas in advance along with all accompanied data and the public should see the same information that the board members get. I will look forward to your comments as you get ready to pay your federal taxes that funds all these projects.
March 29, 2016
This is a story of our two Health Education and Housing Facility Boards, one is a Shelby County HEHFB and one is a City of Memphis, HEHFB. I have asked for copies of bond information including Bond Counsel fees and other bond Issuance and Professional fees. As usual, it was fairly easy to get the information from the County Board and impossible to get it from the City board. I finally got some information about 5 bond issues (MemphisHEHFB) from the State of Tennessee Comptroller after no response from the City of Memphis board. I am still waiting for additional information from the State of Tennessee that generally has been very forthcoming. I have previously published the information about the 5 bonds issued by the Memphis board and here is a recap of the information from the Shelby County Board followed by the City of Memphis Board’s 5 bond issues that we have. Please note that the Shelby County HEHFB has a written policy limiting the Board Counsel fee. There is no such policy for the Memphis HEHFB and therefore they paid $59,000 more on just 5 bond issues on which we have information.
|Name of Project from the Shelby County HEHFB||Bond Amount||Bond Counsel Fee||Board Counsel Fee||Maximum Board Counsel Fee Allowed per County Policy||Total of All Fees for Bond Issue|
|Southern College of Optometry||$9.8M||$25,000 for Bond Counsel, Purchaser and Trustee Counsel||$12,500||$19,800||$29,000|
|Eastwood Apts 2012||$1.1M||$36,000||$3,400||$3,300||$114,528.37
|St. Agnes, 2012||$5.5M||$30,733||$13,155||$14,000||$50,388|
|Grace St. Luke’s Episcopal School 2012||$5.875M||$30,000||$14,970||$14,750||$70,533|
|The Village of Germantown 2012||$39.96M||$160,000||$48,160||$49,960||$1,418,414|
|Trezevant Manor 2013||$66.475M||$120,000||$49,805||$76,475||$1,578,135.50|
|St Benedict 2013||$10M||$15,000||$7,500||$20,000||$33,000|
|Countryside North Apartment 2013||$5M||$42,000||$18,122.50||$13,000||$191,446.45|
|Name of Project from the Shelby County HEHFB||Bond Amount||Bond Counsel Fee||Board Counsel Fee||Maximum Board Counsel Fee Allowed per County Policy||Total of All Fees for Bond Issue|
|Southern College of Optometry 2014||$9.8M||$25,000||$12,500||$12,500||$43,500|
|Presbyterian Day School 2014||$10M||$10,000||$5,000||$5,000||$15,000|
|The Village of Germantown 2014||$21.94M||$142,000||$30,140||$71,000||$1,020,587|
|St. George Independent School 2015||$32.585M||$40,000||$20,000||$50,585||$106,936|
|Rhodes College 2015||$21.35M||$55,000||$27,500||$27,500||$294,646|
|Name of Project from the Memphis HEHFB||Bond Amount||Bond Counsel Fee||Board Counsel Fee||Maximum Board Counsel Fee Allowed per County Policy||Total of All Fees for Bond Issue|
|Uptown Senior Housing Project 2006||$4M||$40,000||$25,000||$11,000||$222,550|
|Arbors of Hickory Ridge||$11.45M||$26,000||$30,500||$21,450||$235,767|
|John Madison Exum Towers||$19M||$85,000||$40,000||$29,000||$159,600|
|Uptown Manor Senior Project 2015||$2,825M||$21,000||$21,350||$8,475||$278,687|
|Total of actual Board Counsel Fee versus fee per County limitation fee||$140,350||$81,047
The savings here would have been $59,303 if county policy applied
As you will see most of the above County bond issues were for educational, medical and retirement facilities. Only two (Countryside and Eastwood) were similar to what has been financed by bonds from the Memphis HEHFB.
My investigation of these two boards was instigated by the Global Ministry story and the bond downgrade. There is a real question of transparency and adequate ethics rules, conflict of interest rules and rules concerning competition for front end bond expenses. I have not yet, in response to my open records request, received past bond information from the Memphis HEHFB. I have received past bond information from the State of Tennessee (Steve Osborne, Senior Analyst, Comptroller of the Treasury ǀ State and Local Finance). Here is some of the information that he sent showing past bond expenses and who participated.
Here is a list of past bond work done by Charles Carpenter (board counsel for the Memphis board). While Mr. Carpenter is a competent bond counsel lawyer, there needs to be more transparency in the issuance of these bonds, written conflict of interest rules, limitation of front end bond costs and competition for the various issuance costs. There is also a need for a public discussion of the best and most cost efficient method to provide adequate housing for those unable to work and provide needed housing for themselves.
March 15, 2016
The Hidden Cost of Health Education and Housing Board Bonds
The Commercial Appeal recently published a story about a downgrade of a local bond issue as follows. “On Feb. 12, the Bank of New York Mellon Trust Company, which oversees the$11.8 million bond, sent a notice of default to bondholders notifying them the U.S. Department of Housing and Urban Development had ended its contract with the borrower, Global Ministries Foundation.”
I have been researching the whole issue of City and County boards and commissions and particularly the Memphis Health Education and Housing Facility Board. I asked that board for a list of bonds issued by the Board for the last five years with cost data and information of the parties receiving payment upon the issuance of the bonds. The board has failed to respond to that request for open records. Therefore I went to the State of Tennessee and received five reports on local bond issues from Steve Osborne, Senior Analyst, Comptroller of the Treasury, State and Local Finance. Here are the five issues I received.
The five reports are very revealing but first I have to tell you about my request to the Shelby County Health, Education and Housing Facility Board (same name as the similar City HEHFB) but a completely different board. I asked for their documents on ethics and conflict of interest policy and I received it as shown. I particularly call your interest to page 6 wherein is shown a maximum fee calculation for the legal fee of Bond Counsel.
I have shown below the fee paid to the bond counsel of the Memphis HEHFB board on the five recent bond issues versus what would be the fee from the Shelby County Board HEHFB.
|Name of Project||Bond Amount||Actual Bond Counsel Fee City of Memphis HEHFB||Maximum Bond Counsel Fee of County HEHFB|
|Arbors of Hickory Ridge Project||$11,450.000||$26,000||$21,450|
|Housing and Social Services||$4,061,000||$25,255.08||$11,122|
|John Madison Exum Towers and Apartment I and II||$19,000.000||$85,000||$29,000|
|Uptown Housing Senior Project 2006||$4,000,000||$40,000||$11,000|
|Uptown Manor Senior Project||$2,825,000||$21,000||$13,062.50|
|Total Bond Counsel Fee||$197,255.08||$85,634.50|
On these five bond issues, this is $111,621 more than the County maximum amount in their ordinance. But this is just the beginning of the cost of the bond issuance. The total for these five bond issues just for the Memphis HEHFB is $967,304.03.
Then there is the question of a possible conflict of interest although apparently there is no provision that I have been able to obtain concerning a City of Memphis conflict of interest policy although I have been told that the Strickland Administration is working on such a policy.
I think that it is high time that we get a discussion going on this high cost of bond issuance and is this approach to adequate housing for low income citizens the best and most efficient method. Also there needs to be a clear and open policy on bond issuance fees, conflict of interest and ethics.
March 3, 2016
Boards and Commissions in Memphis and Shelby County
Recently I became interested in Memphis and Shelby County Boards and Commissions. My interest was piqued by all the news concerning Serenity Towers and Global Ministries. Here is a news article on the bond issue for this property.
The Health, Educational and Housing Facility Board of Memphis, Tennessee facilitated the GMF acquisition through the issuance of tax exempt 501(c)3 housing revenue bonds on behalf of the purchaser. Merchant Capital served as the bond underwriter in the placement of the bonds with investors, as the bonds were rated investment grade by Standard and Poor’s rating agency. Jones Walker served as Bond Counsel. Kristin Neun, Esquire, served as FHA counsel. Charles Carpenter, Esquire, served as counsel to the Issuer. The Bank of New York Mellon serves as Trustee. Glanker Brown serves as GMF’s corporate and owner counsel within its expanding national affordable multifamily housing portfolio.
A recent article in the Commercial Appeal stated the following.
About a third of all the units inside Serenity Towers have bedbugs, according to a Memphis Code Enforcement report released Friday.
The report says 134 units have bedbugs inside the senior high rise apartment complex. Other code enforcement violations included cockroaches, broken or damaged windows, leaks in the ceiling, broken thermostats, damaged toilet and faucets among other things.
City code enforcement officers inspected the 396 units in the property on Feb. 11, 2015. The inspection came after several tenants complained of bedbugs and other problems.
Rev. Richard Hamlet, founder of Global Ministries Foundation, said in a statement he was aware of the bedbug problem since his nonprofit bought the property. His staff is working to eradicate the infestation. GMF bought the senior property in 2014 using a $14.5 million bond issued by the Health, Educational and Housing Facilities board of Memphis.
With that background, I started investigating the various boards and commissions. What I found was 46 City Boards and Commissions and 36 County ones. Some are joint boards but many are stand alone ones. It was interesting that the City Health, Education and Housing Facility Board and the County Health, Education and Housing Facility Board have the same names but are completely different and separate
The City HEHF Board states its purpose as follows.
Function & Authority:
The Health, Education and Housing Facility Board a public nonprofit corporation issues tax exempt revenue bonds for the development or rehabilitation of multi-family housing facilities to be occupied, according to the state statute ?by persons of low and/or moderated income, and/or elderly and/or handicapped persons.
The County HEHF Board states its purpose as follows.
Functions & Authority
The function of the Health, Education, and Housing Facility Board is to assist in the financing of health facilities, educational facilities, and housing facilities for low and moderate income families, disabled individuals and the elderly. The financings are accomplished through the issuance of revenue bonds payable solely from the revenues of the project. The taxpayers and the County of Shelby are never liable for the repayment of the bonds.
I asked both boards for their ethics documents and conflict of interest policies. From the County Board I received a prompt answer with the statement of policies and procedures revised 11/4/15 and By-Laws revised 2007.
I attended a meeting of the Memphis HEHF on February 29th for a required hearing concerning a request that the board issue its Multifamily Housing Revenue Bonds (Patterson Flats Project), Series 2016 in an aggregate amount not to exceed $12 million dollars. After the required reading I asked some questions concerning fees related to recent bond issues. Mr. Carpenter did not know but referred me to the State of Tennessee for this information. I asked him who was paid the $110,000 in legal and professional fees shown in the 2014 financial statement and he said that he was paid those fees. I asked about the details of the recent resignation of John L. Baker, 17 years as director of the Memphis HEHF board, and was told that that could be discussed only at a regular monthly meeting of the board and that the March meeting on the first Wednesday was cancelled as there was no business to discuss.
This whole matter of this housing for low and moderate income individuals and families, the cost and effectiveness of this approach needs a public discussion and possible alternatives to this expensive program. What do you think?
November 24, 2015
Oh No, A Water Rate Increase
As a former MLGW board member, I have a history of praising and criticizing the Division. I follow and read the Division’s annual financial reports. The latest report is for the calendar year 2014 which ended December 31, 2014. The 2015 year report will not be out until well into 2016. However I am sure the Division knows what will be in the report.
Division President Jerry Collins went before the City Council to ask for a 22% water rate increase. He said that the rate increase is necessary to keep the water division from recording its second straight year of negative net income at the end of 2016. A state board is required by state law to step in and set rates after two straight years of negative net income. He said the board has consistently favored higher rates, including a 42 percent increase in Bartlett’s rates.
I have looked at the past financial reports and the Water Division has had a very slim margin (changes to net assets) in 2013 and 2014. Apparently they know that 2015 they are going to show a decrease in net assets (a loss) and without an increase they will lose more in 2016 due to losing a large customer, Cargill Corn Mill. Two years of losses would bring in the state board to dictate an increase in water rates according to state law.
The usual suspects on the City Council refuse to study the facts as they demonize the Division as heartless and cruel. Facts do not make any difference to them as they play to their voting base. Another fact is that the Water Division has been paying $2.5 million dollars per year due to the City Council agreement to finance the FedEx arena. The agreement is effective through the year 2028. During 2014 the Water Division was authorized and directed by City Council, per City resolutions, to make an additional annual $1.9 million transfer payment each year through fiscal year 2017. Transfer payments to the City for 2013 as compared to 2012 increased due to a City resolution authorizing and directing an additional payment of $1.8 million in exchange for the release of any rights the City may have had to receive water from the Water Division free of charge during 2013 under the MLGW Charter.
The MLGW has a history of being fiscally responsible and being run mostly by professional management. Their employees are well trained and do a tough job. However the City Council would be well advised to look in to areas such as MLGW’s OPEB program. They should bring their rules concerning the cost and availability of retirees and their spouces health care to match the same rules as Shelby County Government retirees. Shelby County has these rules in effect since 2007. The MLGW pension and OPEB funds are in good shape due to funds paid for by MLGW’s customers’ utility rates. Compare their pension and OPEB funds to those at the City paid for by property, sales and other taxes.
As a final note I have been informed by President Collins concerning Sewer Rate Fees. “Sewer fees are governed by Public Works. To the best of my knowledge Public Works is not planning a sewer fee increase.” MLGW is just used as a collection agency for 1) Sewer Charge, 2)Solid Waste Fee, 3)Mosquito/Rodent Control Fee and 4) Storm Water Fee.
August 17, 2015
Pilot Promises! Are They True?
There was an editorial in the CA August 16th about Pilots and attached tax breaks. This is a subject that is up for discussion and debate. On one side is EDGE (economic development growth engine) led by Reid Dulberger. On the other side is many of the local unions and other groups who wonder where is the promised benefits of EDGE’s website.
If you look at EDGE’s website you will see $711 million dollars in projected new tax revenue. WOW!! Boy do we need that. No future pension and retiree health care problems. We are on easy street.
But looking back on City and County revenues for many years I don’t see any such massive flow. Revenue just seems flat but with some inflation increases.
What we have here is a lack of facts. Here are some problems and suggestions that I would suggest could shine some light on the PILOT discussion.
If you look at Shelby County Trustee website (currently under David Lenoir) you will see a list of annual County Pilot reports. In those reports is a section entitled Contracts Aged by Expiration Date. This section shows how much the property should pay in Shelby County property taxes and how much they are in fact paying under the Pilot reduction.
In order for the public to have some basis for confidence in the pilot program, some entity should look back at the expiration date of each pilot and determine if after the pilot expired, did the property pay the full amount in the future or did they get an extension, a reduction, or did they leave town or whatever. This does not sound too hard but it is beyond my resources.
Another problem is that the City Treasurer (the City equivalent of the County Trustee) does not publish a similar report. We are talking millions and millions of dollars in abated taxes. Once the pilot expires, are we getting the full amount or not? I say Prove it.
Joe Saino 901-7540699
July 20, 2015
FEW (family/education/work) IS THE SOLUTION
There have been lots of articles last week, both locally and nationally, about income inequality, middle class wages, poverty percentages and solutions. It must be the upcoming elections, locally this year and nationally next year, that has politicians spouting out their solutions.
One local article cited a study that pegged Memphis as a national leader in both income gap and economic distress. The four local leading candidates for mayor were asked the question “How do we fix that?”
Here is a recap of what the four said.
Collins, a City Council member, said the city needs better-paying jobs before it can reverse poverty trends and close the income gap, and took incumbent A C Wharton to task for not doing more to get those jobs. Collins said he also plans to “force” the Greater Memphis Chamber to recruit businesses in technology, engineering, finance and other industries with higher average salaries. For instance, he said, the city should be targeting companies fleeing California because of the drought there.
Strickland, also a council member, said wage gap and poverty issues “run hand-in-hand” with population loss. Keeping people and jobs in Memphis is the best way, he said, and the city needs a mayor who “has the strength to fix things.”
Getting into the specifics of his plan, Strickland said he would focus on the “basics of government,” which he said are “not being done.” That includes “drastically” reducing crime and cleaning up the city, he said. “We must have a city government that is run effectively to create a safe and clean community where businesses and people want to be,” he said.
A C WHARTON
Wharton, the incumbent, said his administration has worked on reducing unemployment and income inequality in a number of ways as part of his Blueprint for Prosperity plan and with the recently announced Jobs Plus grant.
“If we are successful in getting Choice Neighborhood Implementation grants, this will provide significant support for my strategic priority of prosperity and economic opportunity for all citizens,” he said.
Wharton said the city already has some of the best workforce-readiness programs in the country at the Workforce Investment Network and through the Greater Memphis Alliance for a Competitive Workforce, which equip people with the skills needed for current and future jobs so they can “become more marketable and command higher salaries as businesses compete for top talent.”
“The Choice Neighborhood grant funds would help us leverage and maximize all of these efforts to address poverty, unemployment, income inequality and depressed neighborhoods,” he said.
Williams, the president of the Memphis Police Association, said the key was to invest in quality of life and public services instead of giving property-tax breaks to businesses.
“The profits are not being shared,” he said. “That’s why you have the (Greater Memphis Chamber) raping the city coffers. And that has to stop. Until it stops, we’re going to continue to generate poverty in this city.”
Drawing a distinction between himself and Wharton, Williams said he is opposed to “putting a clamp on excessive spending” — which, under Wharton, has translated into health care and pension changes that resulted in city retirees protesting at City Hall.
Instead, Williams said, the government should increase spending on services to make Memphis more attractive to both employers and employees.
So here is what I get out of these answers.
Collins-Get high tech companies from California but we do not have a skilled high tech workforce.
Strickland- Reduce crime, clean the city and reduce taxes.
Wharton– Get federal grant money for short term training programs and neighborhood programs.
Williams– Stop Pilots, stop cutting expenses and employee benefits which translates into higher taxes and more people leaving Memphis.
The truth is that there is no immediate solution to the problems in Memphis. The only answer is FEW, (FAMILY, EDUCATION, WORK) and it is a long term solution. Since the end of the Second World War we have been digging this hole (family breakdown, poor education and welfare dependency). Look at Detroit, Baltimore and unfortunately Memphis. Raising the minimum wage, income redistribution, unsustainable pensions and health care benefits will not solve the problem. Politicians will tell you otherwise but there is no one year or even four year solution. Restore your family, educate your children and take any job to start up the hard economic ladder. Any other solution is a lie. What is your opinion of the candidates and their solutions?
June 22, 2015
Why OPEN RECORDS Is SO Important
You may have read a front page article last Saturday in the Commercial Appeal by education reporter Jane Roberts. The article announced the creation of an open records reading room (Room 121) in the SCS Coe building at 160 S. Hollywood St. here in Memphis.
I have been working to open local public records since 2004 and have been greatly aided by many local citizens, particularly John Malmo, Eddie and Eve Settles (backinrivercity.com) and Ken Welch. I want to thank these people and many others who have contributed to this effort.
As Ken Welch has said many times, all public records are technically open to the public unless specifically named and restricted by state law. Then why can’t we get all this information easily? The answer is that public bodies and the leaders (Presidents, appointees, Governors, Mayors, Superintendents, etc) can make life difficult and expensive if they want to. The Tennessee open records law clearly states the following. However the particular public organization can drag their feet, threaten big charges paid in advance, refuse you entrances to offices without an appointment and then refuse to make an appointment. What has happened at the SCS system offices is different and significant.
Therefore this is why our agreement with Supt. Hopson and Chris Caldwell is so important. They have shown that they are open to making all legally open records actually open to the public. After all, we (the taxpayers) paid for all this bureaucracy and we are the employers. We recognize that we need good education, good fire and police services, good roads, efficient water, gas and electric services and many other public facilities. However we paid for them and we expect answers to all our reasonable and legally available questions.
Open Records is so important because without transparency there is often corruption, favoritism, waste and inefficiency. The sunshine of OPEN RECORDS and vigilant citizen can prevent this. There are many details to work out and our open records group is willing to work with the Shelby County System to make access easy and convenient. If we can make this work efficiently, we would look forward to using this as a template for other public bodies. Any suggestions from the you, the public, would be welcomed. We need to join together for full open records access.
May 12, 2015
More Money Sources For Government
The question on my mind during these budget days for the City, County and the School System is where can we go to find more money other than just cutting expenses and raising property taxes on homeowners and businesses that are already paying their full mandated share. I am not against cutting unnecessary public expenses and there are plenty examples I could point out. (Excessive sick days and vacations, line of duty disability approval at the City, dumb capital projects, etc). But let me point out two major questions that I have concerning pilots (payment in lieu of taxes).
???? When a Pilot expires does the named property actually pay the full tax load that was abated (reduced) for the following years after the expiration date ????
???? Why are pilots given for abated personalty taxes for some companies but not others? What is the policy on personalty taxes ????
I have attached a pilot file from 2007 when Bob Patterson was trustee. Part of that file shows pilots with expiration dates (pages 71 to 109). I have been asking Reid Dulberger (EDGE-Economic Development Growth Engine) for some time to show a report on those pilots that have expired and to show the pre-expiration abated tax and the post expiration tax actually paid. He has done nothing. This is not easy to do and remember that this report by the Trustee is only for County taxes and if the property is in the City, there is a similar but somewhat lesser amount owed the City. As an example I checked just recently on Hershey at 975 Kansas St. I found that their abated real estate tax was $294,065.74 and was due to expire on 12/19/2009. I looked at what they paid in 2011 and it was about $72,000. But then I looked at their personalty tax and they paid a very large tax even during the period of their real estate tax abatement. Then I look at other abated taxes in the 2014 Lenoir report and there are companies listed with personalty tax abatements. What are personalty taxes? Personalty taxes are levied on business furnishings and equipment that you report to the Shelby County Assessor each year. My question is what is the policy concerning real estate tax abatements and personalty tax abatements? Why do some get an abatement and some do not? What is the policy difference concerning real estate taxes and personalty tax abatement?
The public needs to know if when a pilot expires does the property pay the full abatement tax or do they get some kind of reduction or get a further extension of the deadline or do they just leave town? There needs to be an audit of the before and after numbers of the Pilot expiration subject and let the public see the numbers.
April 28, 2015
Memphis Urban Development In Action
Memphis Bass Pro is set to open tomorrow and I for one hope that it is successful and pays off the millions that the City of Memphis has put into it. But I would like to point out a past example of big government and their programs for downtown. Take a look at the Peabody Place Project.
Peabody Place was a 300,000-square-foot shopping and entertainment mall intended to aid Downtown’s revival. The mall opened with a Muvico cinema complex, retail and restaurants in June 2001 but started to empty as the recession deepened in 2008. When the theater closed in July 2008, the Belzes announced plans to renovate part of the mall into a suites hotel, but lack of financing kept the project from going forward. Now look at the funding sources and amounts that financed the original project. UDAG, CDBG, Section 108 and City CIP to the tune of $41.8 million. What are UDAG, CDBG, Section108 and City CIP?
UDAG (Urban Development Action Grant)
The Secretary is authorized to make urban development action grants to cities and urban counties which are experiencing severe economic distress to help stimulate economic development activity needed to aid in economic recovery.
CDBG (Community Development Block Grants)
The Community Development Block Grant (CDBG) program was enacted in 1974 by president Gerald Ford through the Housing and Community Development Act of 1974 and took effect in January 1975. It had the goal of extinguishing poverty and urban blight.
Section 108 is a loan guarantee program administered by the Department of Housing and Urban Development (HUD), which, since 1978, has committed more than $6 billion to almost 1,500 capital projects aimed at ameliorating housing conditions and creating economic opportunities, particularly for the benefit of low- and moderate-income persons.
City CIP (City of Memphis Capital Improvement Program)
This is City of Memphis capital money.
Now I ask the question, does any of this investment of our federal tax money or our City of Memphis tax money fit these definitions or objectives?
Then more recently there was this information in a Commercial Appeal article from 2014. The Belz family plans to refinance Peabody Place in a move that Downtown officials say is unrelated to talk of converting the vacant complex into a convention-related facility.
The Center City Revenue Finance Corp. on Tuesday approved a refinancing request from Hotel Peabody L.P., the Belz unit that owns The Peabody hotel and adjoining retail and entertainment site.
Refinancing required the board’s approval as a condition of a 25-year property tax abatement that was granted to the project in 1997.
This and other projects and questionable financing and use of federal tax money need a public discussion and open record information on how this money is to be repaid and who benefits.