Public board criticizes tenants, questions point of ending notorious landlord’s tax break

The local board in charge of low-income housing tax breaks seems to have shifted its stance toward national landlord The Millennia Companies and its tenants at Memphis Towers, who have organized under the Memphis Tenants Union.

MTU members have been attending Health, Educational and Housing Facilities Board meetings since late June, asking it to hold their landlord accountable for poor conditions at Memphis Towers by ending the company’s tax break. At their October meeting, board members expressed support for the tenants, asked Millennia representatives sharp questions about the property and discussed the possibility of ending the company’s tax break. On Wednesday, the board’s lawyer, Charles Carpenter, complimented Millennia, questioned the intentions of the tenants and criticized them for yelling at a Millennia representative in the hallway after a prior meeting.

“(Millennia is) in compliance with most of our oversight,” said Carpenter. “To terminate the (tax break) would add over $400,000 per year in new taxes to the property. … How does that benefit the tenants?”

Unlike meetings of other quasi-governmental public boards — such as the Downtown Memphis Commission — HEHFB meetings are primarily run by a lawyer, Carpenter, who has represented the board for over 15 years. The board members and the entity’s staff almost always follow his recommendations. Also, Carpenter speaks for the board publicly, as both board members and staff refer media questions to him.

The board decided to delay any action against Millennia until at least February, by which time Millennia interim executive director Arthur Krauer said his team will have completed the security upgrades long-awaited by the board and tenants.

MTU members left the meeting frustrated by what they saw as the board’s continued inaction.

“They keep kicking the can down the road,” said Memphis Tenants Union organizer Caroline Francisco. “It’s untenable.”

Francisco said MTU will likely switch tactics because the board seems unlikely to end Millennia’s tax break anytime soon. She said she’s unsure what its new strategy will be since that will be decided at upcoming meetings with tenants.

‘Extremely frustrating’

In return for tax breaks and tax-exempt bonds from the HEHFB, landlords promise to maintain healthy, safe and attractive exteriors and provide certain “tenant benefits,” such as renovations or social services. This year, the HEHFB has started taking a more proactive approach to making sure incentivized landlords are following through on these promises.

For its Memphis Towers incentives, Millennia promised upgraded appliances, an elevator modernization, a new electrical system, new cabinets, updated flooring and remediation of mold and asbestos.

Before the public comment period at Wednesday’s meeting, though, HEHFB chairman Dan Reid told tenants the board did not want to hear complaints related to issues inside the building, saying those are the responsibility of City of Memphis Code Enforcement. Instead, he wanted the conversation to focus on the property’s exterior and security — issues the board has focused on in its compliance efforts.

When residents did complain about mold and management issues, Reid would cut them off.

"It’s extremely frustrating to see the board not only not take action but … (also) interrupt (tenants) … and treat them in this patronizing and infantilizing (manner),” Francisco said.

Within the requested scope of comment, residents complained about the building’s lack of security, the broken front door and the absence of maintenance men — issues the board has questioned Millennia about at prior meetings.

After the comments, Carpenter asked Francisco to explain how ending Millennia’s tax break would help the tenants.

She told him that it would prove to Millennia that they can’t benefit from tax breaks if they treat tenants as poorly as they have. The tax incentive, she said, was clearly not incentivizing the company to be a decent landlord, so the board should change its approach.

Carpenter told her he didn’t agree with her assessment and that Millennia was mostly in compliance despite its presence on the board’s watchlist and some security issues.

“The thing about terminating a (tax break), and I want us to think this through, is all that will do is increase the taxes for the property,” he told her.

He then advised the MTU to take its complaints to the Shelby County Environmental Court instead since it has jurisdiction over violations of city building codes.

“(On Wednesday), more than any meeting before (the board) tried to evade responsibility,” Francisco said later. “We are very clear … they have the power to (end the incentive), and they haven’t done that yet.”

After the public comment period, Krauer and the board’s compliance staff updated the board members on Millennia’s progress in addressing prior concerns.

Since November, the company has fixed the property’s gate, which made the property much more secure, according to Bryce Miller, one of the board’s compliance staff members. Miller said Millennia has done “fairly well” securing the building during its ongoing renovations.

However, Miller also noted that the building’s new camera system remains inoperable. Carpenter also criticized the company for this, especially since it had promised at multiple prior meetings that the system would be operational soon.

Krauer said the cameras aren’t yet operational because of a dispute between Millennia and the construction company renovating the property. In late November, the construction firm filed a $3.1 million lien against Millennia for work it said it had completed but not been paid for.

Millennia will likely hire a new construction firm to finish the renovations, Krauer said. He hopes the new firm will be able to have the cameras working by the end of December and the rest of the renovations completed by early 2024.

Krauer had promised completion of construction by November at the board’s August meeting and then promised a December completion at the board’s October meeting.

The board told Krauer they’d like another update at their January or February meeting and would let him know which one later.

HUD attention in November

In mid-November, Millennia’s treatment of Memphis Towers tenants drew monitoring by the U.S. Department of Housing and Urban Development.

The landlord distributed dozens of notices — labeled “10 Day Notice to Vacate” — to tenants it claimed were behind on their rent. The letters listed the amounts Millennia said tenants owed, which ranged from hundreds to thousands of dollars.

Tenants were shocked.

“Since that notice came, I cannot sleep,” MTU member Joyce Warren told MLK50 a week later. “Because I don’t know when they’re coming in … to put me out of my house.”

While Warren admitted she did owe rent, she said she owed far less than the company claimed. And fellow MTU member Andrea Smith showed MLK50 photos of monthly rent payments management claimed she had missed.

“I didn’t know what was going on,” said Smith. “They hadn’t told us anything about anything and they just put that (notice) on our door. … It was really worrying.”

A HUD spokeswoman said the agency learned about the notices on Nov. 14, the day MTU called a press conference about the situation, which drew coverage from a couple of local television stations. She said HUD officials were concerned because, under HUD policy, any such notice should give tenants at least 30 days to remedy the situation, and because it appeared some were sent to tenants who were fulfilling all the obligations of their lease. HUD officials met with Millennia that same day, she said.

In that meeting, Millennia told HUD the letters were a mistake and the company would quickly rescind them. Within a week, the company distributed an apology letter.

MTU organizer Alex Uhlmann told MLK50 that Millennia had distributed similar letters earlier this year. Instead of a press conference that time, his organization had gotten a local lawyer involved, which had abated any evictions.

Since the property has had five or six different property managers this year, Uhlmann said it’s possible the company has simply made mistakes in keeping track of tenants’ rent payments. However, he finds it more likely the company uses the notices as a “cash grab” to intimidate residents into paying additional rent.

Even if the notices were a mistake, Uhlmann said they prove Millennia doesn’t deserve to be managing Memphis Towers or receiving a tax break for doing so.

“If you can’t manage staff and can’t keep accurate books, do you really deserve to be running these properties and receiving these subsidies?” he said.

Jacob Steimer is a corps member with Report for America, a national service program that places journalists in local newsrooms. Email him at Jacob.Steimer@mlk50.com

Other Millennia issues

The Millennia Cos. owns five Memphis properties and has had major maintenance issues across its local portfolio. Residents at its Downtown property, Hope Heights, went without hot water for six weeks earlier this year, according to WREG. Local public officials have reprimanded and fined the company for years for its mismanagement of Serenity Towers, where residents have had to live without air conditioning, hot water or reliable elevators for months at a time, according to The Commercial Appeal.

The City of Atlanta is currently suing the company over conditions at one of its properties there.

This article originally appeared on Memphis Commercial Appeal: Memphis housing board delays action on Millennia Memphis Towers tax break