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VOL. 7 | NO. 1 | Saturday, December 28, 2013

Daily Digest

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Fred’s Opens New Super Dollar in Memphis

Memphis-based general merchandise retailer Fred’s Inc. began the year reporting a revenue uptick in January, and it’s ending the year with the opening of a new fred’s Super Dollar store in Memphis.

The grand opening of the 16,000-square-foot store at 1290 Lamar Ave., which features a new prototype design, was Friday, Dec. 27.

Besides activities to engage visitors, the new store concept also is intended to be something engaging all on its own. Almost everything about the experience – lighting, shelving, aisle width and signage, among other things – has been rethought.

The food selection, for example, is bigger. The new store has more breakfast foods, quick meals, beverages and other options, with the expanded selection doubling the traditionally available mix of products at fred’s Super Dollar stores.

There’s also a state-of-the-art pharmacy with a drive-thru window at the front of the store. That and other touches are the result of listening to customer wishes and tailoring a shopping experience for them, according to Dave Mueller, senior vice president of sales and marketing for Fred’s Inc.

The presence of a pharmacy at the new store is purposeful. In a regulatory filing from Fred’s shortly before the Christmas holiday, the company explained to investors that it views its pharmacy department as “a key differentiating factor from other small-box discount retailers.”

Newman Talk Planned at Crosstown Arts

A photography-related gallery talk will be held Saturday, Dec. 28, from 2 p.m. to 4 p.m. at the Crosstown Arts Gallery at 422 N. Cleveland St.

Local photographer Gary Walpole will talk about techniques used by Don Newman, whose photographs are on display at Crosstown Arts in the Newman 2 Collection.

Four generations of the Newman family will be on hand to visit with gallery guests. Newman’s widow, daughter, granddaughter and great-granddaughter, as well as Newman’s sister, will be on hand.

Tennessee Supreme Court Rules on Defamation Claims

The Tennessee Supreme Court has ruled that cabinet-level state commissioners have absolute immunity from defamation claims for what they say when they are performing their official duties.

The court ruled Monday, Dec. 23, in the case of Zoyle Jones, a state Department of Corrections employee demoted for allegedly double-billing the state and a private organization for travel expenses.

Jones sued the Corrections Commissioner at the time, George Little, for statements Little made to the media about the demotion. Little specifically talked about two letters he had sent to Jones about the allegations and Jones’ demotion.

Little has since become chief administrative officer for the city of Memphis.

Jones made other legal claims involving his demotion that were dismissed by the Tennessee Claims Commission. But the claims commission kept in place the defamation claim for the high court to make a ruling. The state appealed to the Supreme Court.

The court ruled unanimously that absolute immunity applied to cabinet members in defamation claims that arise from things those state officials say when performing their duties.

“An absolute privilege also furthers important free-expression principles, by allowing these state officials to inform the public about the functioning of government and other significant issues,” Justice Sharon G. Lee wrote in the ruling.

Failed Education Bills to Return in New Session

Proponents of revamping education laws in Tennessee cite a recent report that ranked the state's students tops in the nation in academic improvement as proof that recent reforms are working and more should be considered.

The report released in November by the National Assessment of Educational Progress, or NAEP, showed Tennessee's fourth- and eighth-graders had the largest growth in reading and math of any state from 2011 to 2013, with a 22-point growth across all subject areas.

State education officials said the results were partially due to reforms put in place over the years. Reform advocates say that's all the more reason lawmakers should take up three contentious education initiatives that failed last year.

On their agenda during the session that starts in January will be a so-called "parent trigger" measure that would let parents decide the fate of a struggling school; a proposal that would allow the state to authorize charter schools in counties where there are failing schools; and a renewed tussle between Republican Gov. Bill Haslam, who wants to create a modestly sized school voucher program, and supporters of a much broader voucher plan.

Overall, education officials say the reforms — like toughening curriculum — have improved Tennessee's national ranking. For instance, in the case of fourth-grade students, Tennessee went from 46th to 37th in math and from 41st to 31st in reading, according to the NAEP report.

Still, Rep. John DeBerry said the legislative proposals and other education reform send a message the state is not complacent and there's always room for improvement.

"It's allowed everybody to know that status quo is not acceptable," said the Memphis Democrat, sponsor of the parent trigger legislation. "Everybody has to up their game so to speak, do better."

Democrats Face 2014 Primary Challenge

Shelby County Democrats hold their annual Kennedy Day Dinner fundraiser Jan. 18 as they prepare for the election year of the “big ballot” – the largest ballot of any Shelby County election cycle, and the one that includes the August elections for judicial offices, which happens every eight years.

The keynote speaker at the dinner at Bridges USA, 477 N. Fifth St., will be U.S. Rep. Barbara Lee of California.

Lee is a former chairwoman of the Congressional Black Caucus and a founder of the Congressional Out of Poverty Caucus.

Shelby County Democratic party leaders, like their Republican counterparts, are raising money for a general election ballot and its distribution.

But Democrats face a different challenge in the May primary races that will decide whose names and faces go on the August ballot.

With the lower turnout both parties historically see in their county primaries, Democrats have a group of contenders over several sets of county elections who can win the primaries but can’t win the general elections. And the 2010 sweep by Republicans in every countywide race on that ballot has prompted local Democratic Party chairman Bryan Carson, among other local Democrats, to talk about the need to run a different kind of ticket with different faces.

The party’s 2010 nominee for Shelby County Register of Deeds, Coleman Thompson, already has his petition out for another challenge of Republican incumbent Tom Leatherwood.

Vernon Johnson, who ran in the 2010 Democratic primary for Criminal Court clerk has a petition out as well. He lost in the primary to former Criminal Court Clerk Minerva Johnican, who lost to Republican Kevin Key. Key is seeking re-election.

The local Democratic Party bounced back in 2012 with incumbent General Sessions Court Clerk Ed Stanton and Shelby County Assessor of Property Cheyenne Johnson, both Democrats, winning re-election in hard-fought campaigns. Among the differences was that Stanton and Johnson were both incumbents who courted Republican voters as well as Democrats in the general election campaigns.

Weekly Jobless Claims Drop to 338,000

The number of Americans applying for unemployment benefits dropped by 42,000 last week to a seasonally adjusted 338,000, the biggest drop since November 2012. But economists say the figures from late November and December are warped by seasonal volatility around the Thanksgiving, Christmas and New Year's holidays.

The Labor Department reported Thursday that the less-volatile four-week average rose 4,250 to 348,000.

Claims had jumped 75,000 over the two weeks that ended Dec. 14 before plunging last week. The Labor Department struggles to account for seasonal hiring by retailers and other businesses and for temporary layoffs of cafeteria workers and other employees at schools that close for the holidays.

Unemployment claims are a proxy for layoffs and the recent declines are consistent with a solid job market.

The economy has shown signs of improvement recently, so much so that the Federal Reserve announced Dec. 18 that it would reduce its stimulus spending on bonds by $10 billion — to $75 billion a month. The economy expanded at a 4.1 percent annual pace from July through September, the fastest rate since late 2011 and much greater than previously thought.

Hiring has been healthy the past four months. The economy added an average of 204,000 jobs every month from August through November, an improvement from earlier this year.

30-Year Mortgage Rate Rises to 4.48 Percent

Average U.S. rates for fixed mortgages crept higher this week but remained low by historical standards.

Mortgage buyer Freddie Mac said Thursday that the rate on the 30-year loan increased to 4.48 percent from 4.47 percent last week. The average on the 15-year fixed loan rose to 3.52 percent from 3.51 percent.

Mortgage rates peaked at 4.6 percent in August on expectations that the Federal Reserve would reduce its $85 billion-a-month in bond purchases. Those purchases push mortgage and other long-term rates lower and encourage borrowing and spending. On Dec. 18, the Fed finally decided the economy was strong enough to allow it to reduce the monthly purchases by $10 billion.

Mortgage rates are sharply higher than they were a year ago when the 30-year fixed rate was 3.35 percent and the 15-year was 2.65 percent.

The Commerce Department reported Tuesday that new-home sales dipped 2.1 percent in November to a seasonally adjusted 464,000. But stronger figures for the previous three months suggested that housing may be regaining strength after a summer lull.

The National Association of Realtors said last week that the number of people who bought existing homes in November fell for a third straight month. Higher rates and the lingering effects of the partial government shutdown in October may have deterred some sales.

Verso Paper Remains Listed by NYSE

The New York Stock Exchange has withdrawn its June 28 determination to delist Memphis-based Verso Paper Corp.’s common stock.

The exchange withdrew the delisting determination after adopting a uniform continued listing standard earlier this month that takes into account average market capitalization.

With the new standard, a company is now considered below criteria for the New York Stock Exchange if the company’s average market capitalization over 30 consecutive days of a trading period is less than $50 million. And as that is happening, the company’s total stockholders’ equity must also be less than $50 million.

Verso still remains below the exchange’s criteria for the separate continued listing standard because the average closing price of Verso’s common stock was below $1 per share for 30 consecutive trading days.

With the extension from the new standards, Verso has until Feb. 14 to bring the closing share price and the average closing share price above $1.

Luttrell Names Ingram Interim County Attorney

Shelby County Mayor Mark Luttrell has appointed Marcy Ingram as interim Shelby County Attorney effective Jan. 1.

Luttrell made the interim choice Monday, Dec. 23, as current county attorney Kelly Rayne prepares to leave at the end of the year to become vice president of public policy at the Greater Memphis Chamber.

Ingram is currently deputy county attorney after having served as deputy chief administrative officer and before that as an assistant county attorney.

She has also been an attorney with the law firm Ford and Harrison LLP.

Four Suburban Schools Superintendents Chosen

As the Christmas holiday began, four of Shelby County’s six suburban towns and cities have superintendents for their municipal school districts.

Bartlett Schools board members selected David Stephens as the superintendent of their school system Friday, Dec. 20, in a unanimous vote.

Stephens will come to the post from being deputy superintendent for Shelby County Schools, overseeing the day-to-day operation of the merged school district as it went into its first school year.

Earlier Friday, the Germantown Schools board selected Jason Manuel, principal of Houston Middle School, as Germantown superintendent.

And Millington Schools board members selected David Roper, the former superintendent of schools in Birmingham, Ala., to be their director of schools. Roper is currently a professor of education at Middle Tennessee State University.

The Collierville Schools board was the first of the six suburban boards to come to contract terms with a superintendent, hiring former Shelby County Schools superintendent John Aitken.

That leaves the Lakeland and Arlington municipal schools districts. Leaders of both towns signed an agreement this fall that states both school systems will use the same schools director or superintendent.

Massey Earns Retail Property Designation

Shawn Massey, partner with The Shopping Center Group LLC, is one of 752 commercial real estate professionals across the world to receive a new credential from the International Council of Shopping Centers.

The new ICCS credential, called the Certified Retail Property Executive designation, is awarded to industry professionals for mastering the science of retail operations, leasing and management.

Massey was also recently elected as president of the executive board of the Memphis Metro CCIM (Certified Commercial Investment Member) chapter.

Megabus Adds Service from Memphis to Oxford

Megabus.com, the express bus company with fares starting at $1, has added service from Memphis to Oxford, Miss.

The express bus carrier, which only sells tickets online, now serves 10 cities from Memphis: Oxford and Jackson, Miss.; Chicago; Dallas and Fort Worth, Texas; Little Rock, Ark.; Champaign, Ill.; Atlanta; New Orleans; and Birmingham, Ala.

Tennessee to Receive $1 Million Higher Education Grant

Tennessee is one of three states receiving a million-dollar grant to increase on-time college completion rates.

The Tennessee Board of Regents announced Monday that the three-year grant will come in cash and technical assistance from the Lumina Foundation for Education and in partnership with Complete College America.

Education officials say the grant supports the state's higher education reform efforts that help students finish a degree in two years from a community college and in four years from a university.

The grant will help the state's community colleges and the Regents' six universities create so-called Guided Pathways to Success programs.

The programs are clearly sequenced degree plans that help students understand the best and shortest paths to get them to graduation.

Wunderlich Closes on $40 Million Investment

Memphis-based Wunderlich Securities Inc. has closed on its equity capital investment of up to $40 million.

The closing of the deal led by Altamont Capital Partners, a private San Francisco Bay area-based investment firm, and members of Wunderlich’s management team means Wunderlich is closer to having new funds with which to expand several of the firm’s divisions.

Wunderlich private client group president Jim Parrish, for example, said the firm is moving forward with its private client group expansion strategy and that “great things from Wunderlich in 2014” are coming.

Semmes-Murphey to Open Neck and Back Clinic

Semmes-Murphey Clinic will open a new clinic focused on neck and back issues at its 6325 Humphreys Blvd. location on Friday, Jan. 10.

The Neck and Back Care Clinic will focus on evaluating and diagnosing patients with neck and back problems and will be staffed by specialists in physiatry and pain management, neurosurgery and physical therapy.

The clinic will be available for appointments on Fridays from 1 p.m. to 4 p.m.

The initial team of physicians overseeing the Neck and Back Care Clinic will include Watridge, Dr. Manuel Carro, Dr Autry Parker and Dr. Samuel Polk.

Boston Group Buys SouthernSun Asset Management

Boston-based Affiliated Managers Group Inc. has bought a majority equity interest in Memphis-based investment management firm SouthernSun Asset Management LLC.

SouthernSun, which has about $5 billion in assets under management, was founded in 1989. Founder, CEO and chief investment officer Michael Cook Sr. said SouthernSun will remain autonomous and continue to rely on its own approach to investment management.

Also, the partnership will facilitate equity transfers over time to the next generation of partners at SouthernSun, Cook said.

Strickland Suggests Redbirds Ticket Surcharge

Memphis City Council member Jim Strickland is floating the idea of a Memphis Redbirds ticket surcharge to guarantee a more consistent flow of revenues to pay off the debt from the city’s proposed purchase of AutoZone Park.

Strickland floated the idea in a Thursday, Dec. 19, open letter to constituents, mentioning that a similar surcharge of $1.15 is added to all tickets sold at FedExForum to help pay the debt service from construction of the arena.

Strickland has questioned why the ballpark deal couldn’t follow the financing model of FedExForum.

“I believe keeping the Redbirds in town as a Cardinal AAA franchise is important to the city,” Strickland wrote. “I also believe that spending hundreds of thousands of dollars from the city’s budget to do so is not the best option.”

The general dollar amount is what’s needed beyond sales tax revenue that would pay the majority of the $25 million in debt the administration wants to take out to pay for the deal.

Memphis Mayor A C Wharton Jr. delayed any City Council vote on the terms of a deal until the council’s Jan. 7 session. The council twice delayed a decision, and council members were critical of the specifics of the deal.

First Alliance Teams Up With Radian Partners

First Alliance Bank and Radian Partners LLC have agreed to form a strategic alliance to provide customers of both firms with access to the financial expertise and capabilities of the other.

Memphis-based First Alliance Bank is a 14-year-old locally owned and operated state-chartered bank with four branches in Memphis, Cordova and Oakland. Ten-year-old Radian Partners is a regional wealth management firm with offices in Franklin, Memphis and Union City.

Tennessee Unemployment 8.1 Percent in November

Tennessee's unemployment rate for November was 8.1 percent, four-tenths of one percentage point lower than the previous month.

Department of Labor and Workforce Development Commissioner Burns Phillips said the October to November rate change is the largest monthly decline since April 2010.

The national unemployment rate for November was 7 percent.

State figures show that nonfarm employment increased by 9,400 jobs from October to November.

US Economy Expands at 4.1 Percent Rate

The U.S. economy grew at a solid 4.1 percent annual rate from July through September, the fastest pace since late 2011 and significantly higher than previously believed. Much of the upward revision came from stronger consumer spending.

The Commerce Department's final look at growth in the summer was up from a previous estimate of 3.6 percent. Four-fifths of the revision came from stronger consumer spending, primarily in the area of health care.

The 4.1 percent third quarter growth rate came after the economy expanded at a 2.5 percent rate in the second quarter. Much of the acceleration reflected a buildup in business stockpiles.

Economists expect growth has slowed to between 2 percent and 2.5 percent in the current quarter, in part because they believe inventory growth has slowed.

The third quarter rise in the gross domestic product, the economy's total output of goods and services, was the best performance since a 4.9 percent increase in the final three months of 2011.

Still, analysts expect that for the year, the GDP will only expand by around 1.7 percent, down from the 2.8 percent growth of 2012. Much of that drop-off occurred because consumer spending was depressed by higher taxes that took effect last January and the government's across-the-board spending cuts. The Congressional Budget Office has estimated those two factors shaved 1.5 percentage points from growth in 2013.

Senate Votes Preliminary OK for Yellen to Lead Fed

The Senate has cleared the way for Janet Yellen to succeed Ben Bernanke as head of the Federal Reserve.

Senators voted 59-34 Friday to end debate on the president's nomination of Yellen. Approval is expected Jan. 6, the day the Senate returns from winter recess.

The 67-year-old Yellen will become the first woman to lead the Fed in its century-old history. She will also be the first Democrat to lead the Fed since Paul Volcker left in 1987. Yellen is currently vice chair of the Fed.

Bernanke told reporters that Yellen supported the Fed's decision this week to gradually reduce the monthly bond purchases the Fed has been making to goose the economy. The move comes amid signs the economy is improving.

Walgreen's Quarterly Profit Jumps 68 Percent

Walgreen's fiscal first-quarter earnings soared 68 percent as investments in other companies paid off for the nation's largest drugstore chain, but a slowdown in generic drug introductions helped squeeze profitability.

The Deerfield Ill., company said Friday that it booked a total of $376 million in income during the quarter that ended Nov. 30 from its stakes in European health and beauty retailer Alliance Boots and U.S. pharmaceutical wholesaler AmerisourceBergen Corp.

Last year, Walgreen Co. acquired a 45 percent stake in Alliance Boots, which runs the largest drugstore chain in the United Kingdom, and it has an option to buy the rest of the company in 2015. Earlier this year, it also bought an ownership stake in AmerisourceBergen and entered a supply agreement with the company.

Overall, Walgreen earned $695 million, or 72 cents per share, in a fiscal first-quarter performance that matched analyst expectations. That was up from $413 million, or 43 cents per share, a year ago, when the company absorbed Alliance Boots deal charges and took a $24 million hit after Superstorm Sandy forced it to temporarily close hundreds of stores.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 75 255 11,693
MORTGAGES 72 295 15,274
FORECLOSURE NOTICES 3 71 2,982
BUILDING PERMITS 0 392 27,646
BANKRUPTCIES 62 280 11,242
BUSINESS LICENSES 35 98 4,136
UTILITY CONNECTIONS 94 516 17,000
MARRIAGE LICENSES 18 80 3,544

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