MEMPHIS, Tenn. — There’s a chance some Memphians have never heard the name.
However, members of the Memphis Health, Educational and Housing Facility Board give away millions of taxpayer dollars every year.
It’s a small group with a long name, and lots of power.
Global Ministries has properties in eight states, and in many cases the non-profit went through groups similar to the Memphis Health Ed Board to get financing through tax exempt bonds.
Now that the spotlight is on GMF, it’s also turned on groups like the Health Ed Board and raised even more questions about who’s handing out taxpayer dollars.
GMF bought several Memphis properties the same way, with help from, the Memphis Health Educational and Housing Facility Board.
The board has a non-profit status. Members are appointed by the Memphis Mayor.
It quietly waives thousands of tax dollars every year in the form of PILOTS (Payments in lieu of taxes), and issues millions in tax-free bonds to developers focused on low income, multi-family housing.
Ralph Perrey is the Executive Director of the Tennessee Housing Development Agency.
THDA recently asked the Memphis Health Ed Board to temporarily stop issuing bonds.
Perrey told WREG by phone, “They’re clearly in a transitional mode, they’re dealing with some issues that we frankly hadn’t heard much about other than what we read in the newspaper or see on television. We wanted to give them time to work through both of those situations.”
One of those “situations” Perrey referred to is the fact that the Board hasn’t had an Executive Director in several months.
The other “situation” is GMF.
After HUD abated the rental subsidies at Warren and Tulane, the bonds went into default.
Ratings service Standard and Poor’s put all of GMF’s issues on CreditWatch Negative and says it’s conducting a review of all of its bond issues.
The HEHFB has facilitated more than $53 million in bond deals for GMF properties in Memphis.
Two properties, Bent Tree and Goodwill Village, also got PILOTS.
While there is some required compliance for companies that get PILOTS, according to the Board’s own rules, once bond deals are done, it has no more responsibility.
Board Chair Daniel Reid wouldn’t speak with WREG on camera.
The Board’s counsel, Charles Carpenter, reiterated that fact at a recent meeting WREG attended.
He said, “As a conduit issuer, we do not have the authority to go forward and really oversee those properties.”
County Commissioner Eddie Jones has been outspoken on the GMF issue from the beginning.
The county has its own Health Ed board, but his worry is the bigger picture, especially with PILOTS.
“My biggest concern is we don’t see it until they decide to bring it to us and then, it becomes a matter of fact…matter of fact commissioner, this is what we approved,” said Jones.
According to data from the Shelby County Trustee’s Office, the Memphis Health Ed Board hands out the third highest number of PILOTS in the area, only behind EDGE and the Downtown Memphis Commission.
City leaders have previously toyed with the idea of reigning in quasi-governmental boards that provide PILOTS.
A decade old study even recommended groups like EDGE and Health Ed advise elected officials, but not make final decisions.
Jones added, “Essentially you give them the power to do what we could do, and with no oversight, there needs to be oversight.
Jones told the News Channel 3 Investigators he’s hoping the County Commission Chair and City Council Chair will get together to speak about the issue.
Memphis Mayor Jim Strickland agreed there should be more oversight and said his administration is committed to making it happen.
Strickland said, “These boards need to report directly to our administration on these proposed deals before they’re approved and then after their approval monitor them.”
Approval Jones believes could have been key in helping to avoid the trickle down disaster with GMF.
WREG asked, “Would the situation have turned out any different though?
Jones replied, “Yes…because there would have been some demands put up front.”
After refusing to speak on camera, citing a standard policy, HEHFB Chair Daniel Reid asked the News Channel 3 Investigators to submit questions in writing.
WREG did, and then received an email from a Board employee which stated in part the Board, “…has no additional information to add at this time.”
The email went on and reads as follows:
“The Board has hired Martin Edwards, as Interim Executive Director and is working closely with the administration of the City of Memphis and THDA to seek a mutually beneficial approach to resolve all matters. At the time that all parties have had an opportunity to meet and confer on the various matters, the Board is confident that appropriate public statements will be made thereafter.”
