VOL. 6 | NO. 33 | Saturday, August 10, 2013
MAAR Reports Strong Gains in July Home Sales
Memphis-area home sales posted strong gains in July.
According to the Memphis Area Association of Realtors, 1,714 sales were recorded in the area, up 22.5 percent from 1,399 last July.
MAAR records home sales in Shelby, Fayette, Tipton, Hardeman, Hardin, McNairy and Lauderdale counties in Tennessee; DeSoto County in Mississippi; and Crittenden County in Arkansas.
The average sales price in July was $161,399, up 8.8 percent from $148,400 last July. Total sales volume for July was $276.6 million, up 32.2 percent from $207.6 million last year.
Through July, 9,471 homes have been sold, up 10.8 percent from 8,458 sales over the same period last year. The year-to-date average sales price was $141,924, up 10 percent from $129,050 last year. Sales volume through July weighed in at $1.3 billion, up 21.8 percent from $1.1 billion last year.
Transportation Secretary Tours Main Street Downtown
U.S. Transportation Secretary Anthony Foxx got a look at Main Street Memphis from Uptown to South Main Wednesday, Aug. 7, as the city prepares to use $15 million in federal grant funds to renovate it and add a pedestrian and bicycle boardwalk across the Mississippi River.
The federal and state grant funding for the Main Street to Main Street Multi-Modal Connector Project was formally received with a Memphis City Council vote Tuesday, and with it comes a schedule for project milestones the city must meet.
Construction on the Harahan Bridge boardwalk is to begin later this year. The boardwalk will link the improved Main Street Memphis to Broadway Avenue in West Memphis, Ark., which also gets federal funding for renovations.
During the Memphis visit, Foxx met with U.S. Rep. Steve Cohen of Memphis and Memphis Mayor A C Wharton Jr. about another round of federal funding for which the city is expected to apply to improve rail facilities on Presidents Island.
Verso Paper Posts Second-Quarter Loss
Memphis-based Verso Paper Corp. reported its net sales for the quarter ended June 30 dropped $34.9 million compared to a year ago. And the company posted a $39.2 million net loss before special items.
The maker of coated papers and specialty paper products reported an operating loss of $8.5 million for its second quarter, a loss of about $1 million less than the same quarter last year.
Verso president and CEO David Peterson said prices for coated paper were stable in the first six months of the company’s fiscal year and that he expects price improvements in the third quarter.
Memphis Airport Scores Top Grade on FAA Inspection
Memphis International Airport officials said the airport has passed its annual safety inspection by the Federal Aviation Administration with “no discrepancy.”
“Passing our inspection with ‘no discrepancy’ is a tremendous accomplishment, considering the complexity of our airport’s activity and the amount of construction vehicles and equipment working on the airfield,” said Scott Brockman, the airport’s executive vice president and chief operating officer.
The extensive, three-day FAA inspection is required of all commercial air carrier airports to maintain their operating certificates. The evaluation ensures compliance with detailed operational and safety standards set forth by the FAA.
Fulmer Joins Loan Operations at BankTennessee
Joy Fulmer has joined the loan operations department at BankTennessee.
She’ll help the loan operations manager, process loan payments, pay taxes and insurance, perform escrow analysis and help with documentation.
BankTennessee CEO Jim Rout described Fulmer, who worked in the mortgage industry in Fort Worth, Texas, before joining the Collierville-based bank, as highly qualified and an asset to the bank and its customers.
Bigfish Teams Up With Center for Southern Folklore
Local creative agency Bigfish is teaming up with the Center for Southern Folklore to sponsor free music during Elvis Week by bringing Austin, Texas-based artist Elsa Cross to play in Memphis.
Cross is playing a show at the center, 123 S. Main St., Thursday, Aug. 15, at 7 p.m. The show is free, though the center welcomes donations to fund its operations.
Memphis PMC Plant Announces Expansion
PMC Group N.A. Inc. announced Monday, Aug. 5, that it is consolidating its manufacturing operations in Ohio, Kentucky and Memphis as part of an ongoing effort to improve production efficiency.
The company said it would invest in “significant capacity” expansions at its Memphis and Carrolton, Ky., facilities for stabilizers, lubricants, tin intermediates and ester intermediates.
The chemical and plastics company said the transition would begin during the fourth quarter and is expected to be complete by the end of the first quarter of 2014.
“The current economic environment drove the need to optimize the manufacturing footprint of the organometallics business,” said Dr. Matthew Stershic, general manager of PMC Organometallix Inc. in a statement “Our investments in this project will position the business to more efficiently serve its customers and invest in technological innovations for the future.”
PMC Biogenix, a subsidiary of PM Group, operates a 42-acre campus in North Memphis, where it focuses on the production of oleochemicals. PMC acquired those operations in 2010, when the company acquired Chemtura Corp.’s oleochemical business
International Paper Tower Construction to Begin Soon
Highwoods Properties Inc. is getting close to starting construction on International Paper’s new office tower.
Highwoods has filed a $952,440 building permit to lay the foundation for the $56.1 million office tower.
Highwoods is aiming to begin construction by the end of August and complete the building early in the second quarter of 2015.
The new tower will be International Paper’s fourth building at its East Memphis office campus and is part of the company’s headquarters expansion.
Earlier this year, the Memphis and Shelby County Economic Development Growth Engine granted the company a $56.9 million payment-in-lieu-of-taxes incentive to persuade International Paper to stay in Memphis and expand. The company will retain 2,274 high-paying jobs in Memphis, add 101 new employees and build the fourth office tower.
Real Estate Road Show Heads to Hickory Hill
The Shelby County Real Estate Road Show starts its second year Aug. 28 with an event that will provide information on the county’s tax sale and land bank.
The free event will be held at the Hickory Hill Community Center, 3910 Ridgeway Road. Registration will begin at 5:30 p.m., with the 90-minute program starting at 6 p.m.
Real estate information company Chandler Reports is sponsoring the show. La Prensa Latina is participating as a media sponsor, and the event will be presented in English and Spanish.
Representatives from the Shelby County Chancery Court Clerk and Master’s office, as well as a title attorney from the Shelby County Trustee’s office, will be on hand to answer questions.
Since August 2012, county trustee David Lenoir has held road shows around the county for a number of groups, including real estate agents, real estate attorneys, nonprofit groups and neighborhood redevelopment organizations.
The show was created to promote the county tax sale and Shelby County Land Bank, and to solicit comments from the public to help improve the process of divesting county-owned properties, Lenoir said. The county conducts four tax sales a year, with the next one scheduled for Sept. 13. To register for the event, go to shelbycountytrustee.com and click on the “Real Estate Road Show” item under “Events.”
County Pension Fund Value Drops Slightly
The value of the pension fund that pays benefits to Shelby County retirees took a small step backward from May to June, new figures show.
The fund’s value dropped from about $1.03 billion in May to about $1 billion in June. Still, the last time the fund was higher than that during June was in 2007, when the fund’s value was $1.04 billion.
Driven in part by a roaring stock market, the size of the county’s retirement defined benefit plan portfolio has topped $1 billion every month from January to June except for February, when its value stood at $999.6 million.
Start Co. Expands West With San Francisco Office
Start Co., formerly LaunchYourCity Inc., has essentially expanded its footprint to the West Coast, the organization announced this week.
It has opened an office in San Francisco to serve as a launch pad from which to “encourage technology talent and startup investors to look into Memphis to grow and prosper.”
The office will be led by serial entrepreneur Mara Lewis.
Meanwhile, Start Co. also has added three employees to support the enterprise in Memphis. Hillary Quirk and Rachel Wilhite will serve as community manager and relationship manager, respectively. Al Pickett will serve as mentorship director.
Start Co. also has announced a partnership with JumpStart Inc., a nationally recognized nonprofit venture development organization.
The partnership will attempt to capture data related to creating and developing high-growth ventures, among other things. Mike Mozenter, president of JumpStart’s regional consulting arm, said the group chose to work with Start Co. because of its track record supporting high-growth tech startups in Memphis.
Tenet Healthcare Reports Wider Second-Quarter Loss
Hospital operator Tenet Healthcare Corp. reported this week it took a larger loss in the second quarter on lower admissions and a series of costs related to early debt repayment and other items.
During the quarter Tenet took a charge of $171 million related to the early retirement of debt, its second such charge this year. Tenet also reported greater depreciation and amortization expenses and impairment, restructuring, and acquisition costs. Tenet said its adjusted admissions fell 0.7 percent because of reduced inpatient admissions. Those admissions were weaker than expected for the first half of 2013.
Tenet reported a loss of $50 million, or 49 cents per share, after taking a loss of $6 million, or 6 cents per share, a year ago. Excluding one-time items, the company said it earned 66 cents per share, up from 41 cents per share in the second quarter of 2012. Its revenue increased 7 percent, to $2.42 billion from $2.27 billion.
Analysts expected income of 70 cents per share and $2.42 billion in revenue, according to FactSet.
Tenet said outpatient visits grew 2.5 percent and inpatient admissions fell 3.5 percent, with emergency department visits and surgeries both rising. Adjusted admissions combines both inpatient admissions and outpatient procedures.
The company said bad debt costs, or bills the company does not expect to be paid, increased 9 percent to $207 million.
Southwest’s Revenue Rises as Traffic Drops
Southwest Airlines Co. said on Wednesday that a key measure of revenue rose as much as 5 percent in July, even though its flights weren’t quite as full as a year ago.
Southwest estimated that its passenger revenue for each seat carried one mile was up 4 percent to 5 percent for the month.
Traffic fell 0.7 percent. Southwest boosted its flying capacity by 0.6 percent by adding longer flights. Because it added capacity as traffic fell, occupancy on its planes fell 1.1 percentage points, to 83.5 percent.
The overall number of flights declined 4.7 percent, and the number of people Southwest carried fell 3.2 percent for the month.
For the first seven months of the year, traffic has risen 1.2 percent. Flying capacity is up 1.6 percent. Occupancy has fallen 0.4 percentage points, to 80.1 percent.
Magna Bank Records $1.5 Million Quarterly Profit
Magna Bank recorded a profit of $1.55 million for the second quarter, up from a little less than $1 million during the same period in 2012.
The bank’s year-to-date profit through the second quarter was $2.9 million, up from $1.6 million one year ago.
In a letter to shareholders, the bank also reported that yields on loan and investment portfolios “are under pressure as maturing assets are renewed at lower rates and new assets are priced at lower yields.”
Mahaffey Named One of Fastest-Growing Urban Firms
Mahaffey Fabric Structures has been recognized as one of the 100 fastest-growing urban businesses in America.
The Initiative for a Competitive Inner City – a nonprofit research and strategy organization focused on U.S. inner city economies and the businesses that succeed there – placed Mahaffey at 85 on its list of the 100 fastest-growing companies in the inner city.
To qualify for the list, which was published in Fortune Magazine, companies were required to have at least 51 percent of their operations located in an economically distressed urban area, have at least 10 full-time employees and produce revenue that met certain growth targets.
Mahaffey, located on Delp Street, is a leading provider of portable structures, and produces weddings, corporate events, fairs, sporting events, festivals and more.
The company was No. 91 on the list of fastest-growing urban companies last year. In 2009 and 2011, Mahaffey made the Inc. 5000 list of America’s Fastest Growing Private Companies.
Commission Delays Action on Spring Creek Ranch
The Shelby County Commission on Monday, Aug. 5, delayed voting for a month on a resort addition to the Spring Creek Ranch development at Collierville-Arlington and Raleigh LaGrange roads.
And developers of the First Citizens National Bank mixed-use commercial space at Austin Peay Highway and Millington-Arlington Road withdrew their proposal from consideration. The development was for what is now a vacant lot at the corner. The commission was preparing to send the plan back to the Land Use Control Board, which had approved the project when the developer announced he was pulling the item.
Prodigi Arts Unveils New Website, Message
Memphis-based creative production agency Prodigi Arts has a new logo, website, staff and central message.
The business is expanding its digital repertoire to include photo manipulation, live-action animation and stop-motion. It was founded in 2008 with a goal of bringing the animation industry to Memphis.
Recent additions to the team have included graduates of the Memphis College of Art and the Savannah College of Art and Design. They have backgrounds and skills in animation as well as in illustration, photography and painting, adding to the new digital services that Prodigi Arts will begin offering to its clients.
Prodigi Arts also has a redesigned website that displays news, blog entries and past projects in a more visually appealing layout that is easier for users to navigate.
GM to Invest Millions More at Tennessee Factory
General Motors plans to spend another $167 million at its Tennessee factory so it can build two new midsize vehicles.
The investment disclosed Tuesday is on top of a previously announced $183 million investment. The spending is expected to create or keep 1,800 jobs, but GM wouldn’t say how many new people would be hired.
The company also wouldn’t identify the new vehicles. They could be new versions of the Chevrolet Equinox and GMC Terrain crossover SUVs.
The assembly plant in Spring Hill, about 30 miles south of Nashville, now makes the Equinox, as does a factory in Canada. Although they’re selling well, they were last reworked in 2009. They compete against newer vehicles like the Honda CR-V, Ford Escape and Toyota RAV-4.
The assembly plant was idled amid the economic downturn in 2009. But production was restarted following a 2011 contract agreement with the United Auto Workers that included salary concessions for entry-level workers.
The Spring Hill plant produced more than 3.7 million Saturns between 1990 and 2007. Most of the facility’s workers were then furloughed while the plant underwent a $600 million overhaul to build the build the Traverse crossover.
US Job Openings Rise, Hiring Falls in June
U.S. employers in June advertised the most jobs in five years but hired fewer workers, a mixed sign for the recovering job market. The Labor Department said Tuesday that job openings rose 29,000 in June from May to 3.94 million. That’s the most since May 2008.
Total hiring, however, declined 289,000 to 4.2 million. That’s down from a year earlier and the biggest one-month drop in hiring since June 2010. The job market is improving, largely because layoffs have fallen to prerecession levels.
Longleaf Funds Disappoint in Second Quarter
The Longleaf Partners family of mutual funds – for which Memphis-based Southeastern Asset Management acts as adviser – had a disappointing second quarter.
Three of the four funds were down for the quarter.
The four funds and their quarterly results are the Partners Fund (down 1.8 percent), the Small-Cap Fund (up 2.53 percent), the International Fund (down 1 percent) and the Global Fund (down 0.9 percent).
In a quarterly letter to shareholders, Southeastern’s leadership said that where the Longleaf investments aren’t meeting expectations, discussions are underway with managers of the companies in which the funds invest.
That’s so the companies’ action plans can be evaluated and a continuing analysis can be made about whether those companies still meet the Longleaf investment criteria.
“While absolute returns are our primary focus, underperforming the market over these periods is disappointing and unacceptable, but not unprecedented,” the letter reads.
“When we had a similarly tough stretch in 2000, the Partners and Small-Cap Funds fell behind their benchmarks for 1-, 5-, and 10-year periods by a much wider margin than today’s Partners Fund lag. Then and now, the combination of a few stock-specific challenges and an extreme market environment that rewarded a narrow segment of stocks caused our underperformance.”
Mississippi Casinos Upping the Ante
Gambling revenue has fallen $550,000 since 2007 for casinos in Mississippi – from $2.8 billion to $2.25 billion.
Mississippi once was the nation’s third-largest gambling market, but has lost standing in the last few years, The Clarion-Ledger reported.
Along with the gambling revenues, tax revenues from casinos have dropped $54.4 million, from $194 million in fiscal 2008 to $139.6 million in the fiscal year that ended June 30.
Officials cite competition from other states as the biggest challenge – more than the recession, Hurricane Katrina in 2005 and the Deepwater Horizon oil spill of 2010.
“Gaming isn’t unique anymore – it’s everywhere,” said Allen Godfrey, executive director of the Mississippi Gaming Commission.
Heartland cities like Chicago, Detroit and St. Louis overtook Mississippi last year in the American Gaming Association’s list of the top 20 U.S. casino markets. So did Philadelphia, Pa., and the state of Connecticut. The Mississippi Gulf Coast was No. 8, at almost $1.1 billion in economic impact. Tunica County was No. 10, at $821.9 million. Las Vegas and Atlantic City continue to hold the top two spots.
“Early on, a lot of our visitors came from Oklahoma and Nebraska,” said Lyn Arnold, president and CEO of the Tunica County Chamber of Commerce and Economic Development Foundation.
“Now, Oklahoma has 92 gaming facilities. The competition has been a big drain.”
The state’s oldest casino, the Isle of Capri, is being renovated as a Golden Nugget casino. Spokesman Brad Rhines says it will reopen as the newest, freshest casino on the Gulf Coast.
Community Health Alliance Hires Crowley as Vice President
John Crowley has been hired as vice president of strategic initiatives for Community Health Alliance, Tennessee’s health insurance cooperative.
Crowley was most recently vice president of corporate network management for WellCare Health Plans.
Prior to that, he led provider network management for Cigna in South Carolina, as well as several southeastern and mid-Atlantic states. Crowley began his career in health plan finance with Aetna.
He holds a Bachelor of Arts in financial management from Clemson University and a Master of Arts in economics from the University of South Carolina.
Knoxville-based Community Health Alliance was formed with a $73 million federal loan in August.
Memphis in May to Honor Panama
The annual Memphis in May International Festival will honor Panama during 2014. The 2014 festival is the 38th edition of the event, which annually honors and promotes business ties with a country. International business trade has been a goal of the festival from its beginnings in the mid 1970s. Panama is being honored as the expansion of the Panama Canal nears completion in 2015.
Meanwhile, Ron Coleman, the president and chairman of Competition Cams Inc., is the new chairman of the Memphis in May board. Coleman will lead a Shelby County delegation to visit Panama in March.
First Tennessee Launches Checking Information Guide
First Tennessee Bank has developed a resource to help customers understand fees and features associated with checking accounts. The bank’s new Account Service Fee Guide consolidates checking account information into a one-page guide that incorporates industry guidelines recommended by The Pew Charitable Trusts.
First Tennessee and Pew worked together on the information. The new product, which summarizes information provided to customers when they open checking accounts, is a reference for potential customers who want to compare checking account products offered by First Tennessee and other banks.
The service fee guides are available at www.firsttennessee.com and at First Tennessee branch locations.