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VOL. 133 | NO. 173 | Friday, August 31, 2018

Health, Educational and Housing Facility Board Moves to 20-Year PILOTs

By Bill Dries

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Developers of affordable housing say they hope to step up the pace of renovating and building new housing with affordable rents now that the city Health, Educational and Housing Facility Board can grant 20-year tax abatements instead of the maximum 10-year incentives it has been awarding since 2002.

The Memphis City Council approved the changes Tuesday, Aug. 28, including the longer period for PILOTs – payments in lieu of taxes.

The changes also eliminate a requirement that developers coming to the board for the incentives must have projects that include at least 20 units.

“The board feels it’s unreasonable to say just because you are under 20 units you can’t apply to us for a PILOT,” said Martin Edwards Jr., executive director of the board.

“We feel strongly that we should be able to take applications and address advantages to those that own smaller complexes. I can drive down Tillman and I can show you three or four complexes that could meet that criteria.”

Memphis Mayor Jim Strickland’s administration initially had a “different view” on the changes, city chief operating officer Doug McGowen told the council Tuesday, Aug. 28. But with accountability measures added, the administration backed the changes.

Those measures include the Safeways program, a local program that awards certification for specific safety and architectural standards. Safeways inspects the developments that get the PILOTs to certify the conditions.

Council members had some concerns about Safeways being the only provider of such services. McGowen and Alan Crone, special adviser to the mayor, said the administration is open to using other providers as well.

“If you are going to get a PILOT from the city … then you should have to provide a safe place for people to live,” Crone said. That includes evaluating the layouts of apartment complexes to ensure there aren’t features that contribute to unsafe environments, including limited sightlines and numerous entrance and exit points.

There also are rent caps that are tied to federal rent guidelines for such developments.

Crone also defended the tax abatements and the longer term of the incentives.

“You have a piece of property that someone wants to develop, but they can’t pencil it out because of the taxes. Without the PILOT it wouldn’t be developed,” he said. “The only thing that the city is foregoing is the increment that is created because of the project, which wouldn’t have been created if the PILOT wasn’t given.”

RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 57 280 1,209
MORTGAGES 55 244 916
FORECLOSURE NOTICES 8 52 151
BUILDING PERMITS 158 699 2,751
BANKRUPTCIES 37 157 618
BUSINESS LICENSES 12 77 276
UTILITY CONNECTIONS 0 0 0
MARRIAGE LICENSES 0 0 0