International Paper to Remain in Memphis
It looks like International Paper won’t have a political fight on its hands after all.
The company has decided on trying to complete a deal with local economic development that would include incentives to help IP keep and expand its headquarters presence here.
Those incentives would include multiple 15-year tax freezes on new and existing buildings, a more palatable proposition than a 30-year tax freeze that it looked at one point like the company was interested in, according to sources.
An Economic Development Growth Engine Board meeting was expected next week to vote on the project.
Shelby County Commissioner Mike Ritz said the company would be seeking a payment-in-lieu-of-taxes benefit on “a good number of pieces of real estate” but not on IP’s corporate airplanes.
“They worked it out, like we’d hoped they would,” Ritz said. “There was just no chance they’d get past 15 years with the County Commission.”
In other IP-related news, the company is selling the building products division of Temple-Inland Inc. for $750 million in cash to Georgia-Pacific LLC.
The assets in the sale include 16 manufacturing plants that make particleboard, fiberboard and gypsum wallboard as well as five solid wood mills. International Paper CEO John Faraci said the assets and division are not a part of IP¹s core strategy but have value. International Paper expects to complete the sale in the first quarter of 2013 and the company intends to use the money from the sale to reduce its debt.
International Paper bought Temple-Inland, of Austin, Texas, in a $4.5 billion transaction that began in late 2011 and was completed in February.
The announcement Thursday, Dec. 13, caps a busy week for the global paper and packaging company headquartered in Memphis.
For more on the International Paper deal and an in-depth look at how cities use incentives to attract and retain companies, see this week’s cover story, Page 14.
Downtown Candle Co. to Open on G.E. Patterson
Downtown Candle Co., a boutique candle concept by Eumora Reese, is slated to open its first brick-and-mortar location in February in the South Main Historic Arts District at 107 E. G.E. Patterson Ave.
The retailer will fill the 1,500-square-foot bay recently vacated by Delphinium Boutique in between Hoot + Louise and The Arcade Restaurant.
Downtown Candle Co.’s candles are made from pure soybeans and botanical oils and are packed in recycled boxes. Reese, a Downtown resident, has been crafting candles for seven years, but didn’t brand the business until this past January.
“I wanted to be Downtown in the South Main area with the foot traffic and the entertainment district,” Reese said.
Downtown Candle Co. has booths at several events throughout the year, including the Cooper-Young Festival, Germantown Festival and trade shows at Agricenter International and The Cannon Center for Performing Arts.
“We do a lot of those shows and the demand just really, really grew,” Reese said.
Reese said Downtown Candle Co. is hoping to open during South Main’s monthly Trolley Night in February.
Federal Regulators Charge Eight Directors of Morgan Keegan Funds
The U.S. Securities and Exchange Commission announced charges Monday, Dec. 10, against eight former members of the boards of five Morgan Keegan mutual funds for “violating their asset pricing responsibilities under the federal securities laws.”
The Memphis-based funds, according to regulators, were invested in some securities backed by subprime mortgages and “fraudulently overstated the value of their securities” as the housing market was collapsing in 2007.
The SEC and other state regulators previously charged the funds’ managers with fraud, and Morgan Keegan – which has since been sold to Raymond James Financial Inc. – later agreed to pay a fine to settle the charges.
“Investors rely on board members to establish an accurate process for valuing their mutual fund investments,” said Robert Khuzami, director of the SEC’s enforcement division, in a statement about the action.
“Otherwise, they are left in the dark about the value of their investments and handicapped in their ability to make informed decisions.
Had the board not abdicated its responsibilities, investors may have stood a better chance of preserving their hard-earned nest assets.”
Morgan Keegan issued a statement in response to the action blasting the action as the SEC “retroactively” regulating by enforcement an area the board has not provided “meaningful guidance” in through the normal regulatory process.
The eight fund directors named in the enforcement action are J. Kenneth Alderman of Birmingham, Ala.; Jack R. Blair of Germantown; Albert C. Johnson of Hoover, Ala.; James Stillman R. McFadden of Germantown; Allen B. Morgan Jr. of Memphis; W. Randall Pittman of Birmingham; Mary S. Stone of Birmingham; and Archie W. Willis III of Memphis.
Bigfish Hosts Health Care Social Media Meet-Up
Memphis-based creative company Bigfish will host a free health care social media meet-up next week.
The event on Dec. 19 will be held starting at noon at the Bigfish office on the second floor of Minglewood Hall.
The one-hour discussion will focus on audience building, segmentation and monetization specific to health care and nonprofit organizations, and it will include a light lunch.
John Avola, liaison of iMarketing social and mobile at ALSAC/St. Jude Children’s Research Hospital will serve as a guest speaker. Tim Nicholson, Bigfish president, and Addie McGowan, director of social media, will lead the discussion.
Bigfish creates brands, develops social media solutions and designs websites for membership organizations, foundations, small businesses and health care professionals.
The company’s social media portfolio includes a host of local nonprofit organizations.
They include Boys & Girls Club of Greater Memphis, Baptist Memorial Health Care Corp., McDonald Murrmann Women’s Clinic, Pediatrics East, The Next Thing You Do, Best Lawn and Marx-Bensdorf Realtors.
Visit www.gobigfishgo.com/hcsm to register for the event.
Jobless Aid Applications Drop to 343,000
The number of Americans seeking unemployment benefits fell sharply for a fourth straight week, a sign that the job market may be improving.
The Labor Department said Thursday that weekly applications for unemployment benefits fell 29,000 last week to a seasonally adjusted 343,000, the lowest in two months. It is the second-lowest total this year.
Applications are a proxy for layoffs, so the drop indicates that companies are cutting fewer jobs. But employers also need to step up hiring to rapidly push down the unemployment rate.
The drop suggests that companies aren’t laying off workers in advance of the “fiscal cliff,” the package of tax increases and spending cuts set to take effect early next year.
“Worries about the fiscal cliff are not translating into any significant weakening in the labor market yet,” said Jim O’Sullivan, an economist at High Frequency Economics. “Today’s reading suggests net improvement, although it is just one week.”
Applications spiked five weeks ago because of Superstorm Sandy. The storm’s impact has now faded. The four-week average, a less volatile measure, fell 27,000 to 381,500.
Before the storm, applications had fluctuated between 360,000 and 390,000 this year.
The storm had little effect on overall hiring in November. Employers added 146,000 jobs last month, the government said last week. That’s about the same as the average monthly gain of 150,000 in the past year.
The unemployment rate fell to 7.7 percent – a four-year low – from 7.9 percent in October. But the decline occurred mostly because more people without jobs gave up looking for work. The government counts people without jobs as unemployed only if they’re actively seeking one.
The total number of people receiving benefits rose to 5.6 million in the week that ended Nov. 24, the latest period for which data are available. That’s nearly 700,000 more than in the previous week. The figure isn’t seasonally adjusted, so it can be volatile from week to week.
David Alexander Named President of TruGreen
David Alexander, the former CEO of Citi Trends, is the new president of TruGreen lawn care company, leaders of The ServiceMaster Co. announced Tuesday, Dec. 11.
ServiceMaster CEO Hank Mullany announced the appointment of Alexander two months after TruGreen president Tom Brackett announced his resignation and one month after ServiceMaster posted a third quarter operating loss of $724 million, much of the loss attributed to TruGreen’s performance.
TruGreen is one of seven businesses and franchises providing home and commercial services as part of ServiceMaster, which is based in Memphis.
Alexander’s resume shows that before he was with Citi Trends, an urban retailer based in Savannah, Ga., he served as president and chief operating officer at Family Dollar Stores.
More recently he was a retail consultant for Apax Partners of London. And for two years, he was chairman, president and CEO of Portrait Corp. of America.
Changes at TruGreen were the first order of business for Mullany when he became ServiceMaster CEO in April 2011. Brackett was an interim choice to be head of TruGreen because of his experience at the Terminix division of ServiceMaster. He became the permanent head of the lawn care business as it changed its sales methods and offering of services.
Mullany has been interim president of TruGreen since Brackett’s departure.
Herff Jones Inc. Chooses Chief Operating Officer
Jeff Webb, founder and CEO of Memphis-based Varsity Brands Inc., will be the new president and chief operating officer effective Jan. 1 at Herff Jones Inc., a manufacturer of graduation-related items like yearbooks, rings, caps and gowns.
Herff Jones’ current president and CEO Joe Slaughter is retiring as of June 30, 2014. In addition to his new role, Webb will remain the CEO of Varsity, which employs nearly 850 full-time staff, 250 of whom are based in the Memphis area.
Webb started Varsity out of his apartment in Memphis in 1974. Today, the company produces more than 1 million uniforms annually, and educates more than 320,000 athletes annually at camps nationwide.
Eric Trump Donates $20 Million to St. Jude
A year after he donated $1 million to St. Jude Children’s Research Hospital, Eric Trump has donated $20 million to the Memphis medical and research institution.
The son of Donald Trump pledged the $20 million through his Eric Trump Foundation for a new surgical and intensive care center wing to the hospital.
The foundation has as its mission raising money for terminally ill children at St. Jude. It already funds a research lab working on Acute Megakaryocytic Leukemia. It was childhood leukemia that was the initial focus of St. Jude when it opened in 1962.
The Eric Trump Foundation’s chief fundraiser is a September golf tournament and auction at Trump National Golf Club in Westchester, N.Y.
Fed: High Unemployment for Next Three Years
The Federal Reserve projects the unemployment rate will stay elevated until late 2015, suggesting it will keep short-term interest rates low for the next three years.
The latest economic forecasts released Wednesday after the Fed’s final meeting of the year were little changed from September. But they coincided with a new communication strategy announced by the Fed that links future interest rate hikes with unemployment below 6.5 percent.
The unemployment rate was 7.7 percent in November.
The central bank said that it expects economic growth to improve next year but that it will be no stronger than 3 percent. Growth could increase to 3.5 percent in 2014 and 3.7 percent in 2015.
Unemployment will fall no lower than 7.4 percent next year and 6.8 percent by the end of 2014, the Fed projects. The earliest the Fed sees unemployment dropping below 6.5 percent is the end of 2015.
The Fed said it plans to keep its key short-term interest rate near zero as long as unemployment remains above 6.5 percent and inflation is expected to stay below 2.5 percent.
The latest forecast projects inflation will stay at or below 2 percent for the next three years. That gives the Fed more leeway to pursue aggressive measures.
In an effort to drive the unemployment rate lower, the Fed said after its meeting that it will spend a total of $85 billion a month to sustain an aggressive drive to keep long-term interest rates low. The goal is to encourage more borrowing and spending, which drives economic growth.
The Fed said it will continue buying bonds until the job market shows substantial improvement.
Fewer US CEOs Expect Hiring Dip Next 6 Months
A survey of U.S. chief executives shows the number of large companies that plan to add jobs or hire more workers is essentially unchanged versus three months ago, although fewer expect hiring to decrease.
The Business Roundtable said Wednesday that 29 percent of its member CEOs plan to increase hiring over the next six months, the same as in September when the group released its previous quarterly survey.
But only 29 percent expect hiring to decrease versus 34 percent in the previous report.
CEOs are slightly more pessimistic about their future sales, capital spending and the overall U.S. economy, amid uncertainty over the impact of budget cuts and tax increases that are set to take effect at the start of next year.
CEOs are worried about the pending U.S. budget changes, known as the “fiscal cliff.”
Earlier this month, all the Roundtable members delivered letters to the White House and to congressional leaders urging a compromise that includes more revenue, even if it means raising tax rates, and structural and benefit changes to social programs.
The Roundtable combines CEOs’ survey responses on sales, capital spending and hiring into an index gauging the executives’ overall economic outlook. The latest index was 65.6, a slight dip from 66.0 in the third quarter, but down sharply from 89.1 in the second quarter.
Lenny’s Sub Shop Gives to Needy This Holiday
Memphis-based Lenny’s Sub Shop is using its Facebook page to bring holiday cheer to those in need.
Via the “Lenny’s Gives Back Holiday Contest” which kicked off Dec. 3, fans of the sandwich chain’s Facebook page were encouraged to visit the Facebook page at www.facebook.com/LennysSubs and nominate someone they believe deserves financial aid this holiday season. Starting Dec. 10, fans were able to log on and vote for the nomination they feel most deserves the $1,000 grand prize.
Second place through fifth place will receive $500. The top 200 stories are available for Lenny’s Sub Shop’s Facebook fans to vote on through Wednesday, and the winners will be announced Friday.
Forensic Engineering Firm Opens Memphis Office
Rimkus Consulting Group Inc., a Houston-based forensic engineering consulting firm, opened a new office at 1661 International Drive, suite 400, in Memphis Dec. 1.
The new office is led by Rimkus district manager, Lawrence Wedderstrand. The addition of this location for Rimkus Consulting Group will provide increased regional coverage, according to a company press release.
Wedderstrand said the office will work closely with Rimkus offices in Nashville, Jackson, Miss., and Little Rock, Ark. He added that the Memphis office will work with the local market to address a variety of issues and legal matters involving catastrophic events, property damage, construction defects, fire and explosions, vehicle accidents and product failures.
Eclectic Eye Supports Child Advocacy Center
Local optometric boutique Eclectic Eye is supporting the Memphis Child Advocacy Center this holiday season by collecting teddy bears for the organization’s Bearing It Together program, which serves children who are victims of sexual and severe physical abuse through prevention, education and intervention.
Donations of brand new teddy bears will be accepted at the boutique’s Memphis location, 242 S. Cooper St., and Collierville location, 3670 S. Houston Levee Road, suite 102, through Dec. 22.
Additionally, for every frame purchase made during December, Eclectic Eye will donate $5 to the nonprofit.
US Employers Advertise More Jobs in October
U.S. employers advertised more jobs in October than September, a hopeful sign hiring could pick up.
The Labor Department says job openings rose by 128,000 to 3.68 million. That’s the most since June.
The number of available jobs is slowly climbing back to the roughly 4 million that were advertised each month before the recession began in December 2007.
With nearly 12.3 million people unemployed in October, there were 3.3 unemployed people, on average, competing for each open job. That’s the lowest ratio since November 2008. Still, in a healthy economy, the ratio is roughly 2 to 1.
Companies kept creating jobs in November at a modest pace. Employers added 146,000 net jobs last month, the government said Friday.
Haslam Decides Against Health Insurance Exchange
Gov. Bill Haslam has decided not to create a state-run health insurance exchange, leaving the operation to the federal government.
Haslam announced his decision during a speech Monday, Dec. 10. The Republican governor, who had until Friday to decide, said the lack of information from the federal government was “scary.”
The exchanges, part of the federal health care overhaul, create new online markets where consumers will be able to buy individual private health insurance coverage.
Haslam previously said the state likely could run an exchange more efficiently but acknowledged getting legislative approval would be difficult.
Many Republican lawmakers ran for office on a platform of opposing President Barack Obama’s health care plan. Tea party supporters protested the idea of a state-run exchange outside the Capitol last week, deriding it as “Haslamcare.”
Wharton, Lenoir Relaunch ‘Bank on Memphis’ Program
Memphis Mayor A C Wharton Jr. and Shelby County Trustee David Lenoir are relaunching a financial literacy program, “Bank On Memphis,” with a $10,000 contribution from Regions Bank for renewed marketing and other outreach costs.
Bank On Memphis was launched in March 2011 as a countywide effort designed to reach an estimated 96,000 unbanked or underbanked residents. The goal was then and remains to better explain the banking process and its benefits and lower barriers that might keep poorer citizens from depositing their money or prompt them to seek out legal but more expensive financial solutions like payday and title loans when lower interest financing options are available.
The relaunch will focus on the South Memphis area and it will worth in conjunction with Wharton’s Innovation Delivery Team effort.
The innovation team effort is a set of initiatives to reduce gun violence and encourage small locally owned business growth in three sections of the city, including South Memphis. It is funded separately by the Bloomberg Foundation.
Memphis Bar Association Announces New Positions
The Memphis Bar Association has its new officers for 2013.
Linda Warren Seely, director of private attorney involvement with Memphis Area Legal Services Inc., is the 2013 president. Kirk Caraway, an attorney with Allen, Summers, Simpson, Lillie & Gresham PLLC, is the new vice president. Tommy Parker, an attorney with Baker, Donelson, Bearman, Caldwell & Berkowitz PC is the new secretary/treasurer.
New members of the board of directors include David Harris, Jana Davis Lamanna, Emily Landry, Mike Robb, Abby Webb, Shea Wellford and Young Lawyers Division president Annie Christoff. Newly elected section representatives are Dean DeCandia and Clint Hermes.
UT Health Science Center Awarded $375,000 for Eye Research
The National Eye Institute has awarded a grant worth $375,000 to the University of Tennessee Health Science Center for vision research.
The grant from the NEI, which is an agency of the U.S. Department of Health and Human Services, will fund research to focus on development of new blood vessels for the retina.
The primary objective of the NEI’s Core Grants for Vision Research is to provide groups of investigators who have achieved independent NEI funding with additional support for conducting vision research.
NEI, the first government organization solely dedicated to research on human visual diseases and disorders, was established by Congress in 1968.
Memphis Area Association of Realtors Reports November Home Sales
Memphis-area home sales for November increased 8.5 percent from a year ago, with 1,180 total sales recorded in the Memphis Area Association of Realtors MAARdata property records database.
Total sales decreased 13.9 percent from October. Average sales price year over year was up 6.2 percent at $128,339.
Inventory declined 4.4 percent, with 6,805 units listed for sale. Sales volume year to date increased 19.3 percent to $1.79 billion.
The database includes records of all property transactions in Shelby, Fayette and Tipton counties.
To see real estate information company Chandler Reports’ November totals for Shelby County, see Page 26.
Real Estate Magazine Names Cates to Hall of Fame
Andy Cates, executive vice president with Colliers International Memphis, was recently honored as a part of the 2012 Midwest Real Estate News Magazine’s Hall of Fame, which honors the Midwest’s biggest names in commercial real estate.
Cates has completed more than 450 transactions involving more than 45 million square feet since joining Colliers in 1998. He serves on the Colliers International Industrial Advisory Board and the Logistics/Transportation Services Group Steering Committee.
Cates has been recognized at the state level by Business Tennessee Magazine, and is frequently named a top CoStar broker. In October, Cates was honored as one of the top 10 percent of Colliers brokerage professionals as part of the company’s Everest Club.
Martin Institute Picks Baker as New Executive Director
Jamie Feild Baker will become executive director of the Martin Institute for Teaching Excellence with the new year.
Baker, a national education consultant who has been working with the Martin Institute for about a year, was named to the post Dec. 12 by the institute’s board of trustees. Clif Mims, the institute’s first executive director, will continue to work on some projects but will leave the position to continue his work at the University of Memphis where he is an assistant professor working in instructional design and technology.
The institute was started in 2010 on the campus of Presbyterian Day School with a gift from PDS trustee and former Saks Inc. CEO and board chairman Brad Martin.
Working with PDS and the University of Memphis, the institute’s goal is to advance professional development of teachers in public and private education in the region. The institute is also in the third year of a teacher residency program.
Baker is a native Memphian and St. Mary’s Episcopal School graduate who earned her degree in economics and finance from Georgetown University. She worked as an institutional salesman in various companies’ fixed income divisions.