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VOL. 6 | NO. 8 | Saturday, February 16, 2013

Daily Digest

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J.M. Smucker Co. Applies for Tax Break to Expand

The J.M. Smucker Co. will reverse the decision it announced in 2010 to close its Memphis plant and lay off employees by this year if the company, which makes fruit spreads here, gets a tax break for a $55 million expansion it’s planning here.

The company is applying for a 12-year payment-in-lieu-of-taxes benefit, under which almost $5.5 million in taxes would be foregone. In return, the company would keep 125 jobs in Memphis.

The company’s PILOT application explains the project will retrain the company’s current remaining workforce to produce products using new machinery and technologies. Its PILOT request will be heard Monday, Feb. 18, by the city-county Economic Development Growth Engine Board.

“The packaged consumer food industry is highly competitive, and profitability is dependent on volatile agricultural commodity prices and other difficult-to-predict variables,” Smucker’s application reads. “As such, the certainty of tax abatements for a specified number of years influences the company’s choice of location for long-term capital investments.”

Smucker announced in 2010 it would close its Memphis plant and lay off 161 employees by 2013. The intention was to consolidate its operation to “improve its supply chain as part of its ongoing efforts to enhance the long-term strength and profitability of its leading brands,” a release stated.

The company’s Memphis operation dates back to 1969.

Calvary Kicks Off Annual Lenten Series, Waffle Shop

Calvary Episcopal Church is busy preparing this week for its 90th Lenten Preaching Series and Waffle Shop – an annual institution that many Memphians have chosen as an annual culinary rite of passage.

Through Friday, March 22, Calvary’s famous Waffle Shop at 102 N. Second St. will be open every weekday from 11 a.m. until 1:30 p.m., serving traditional favorites like homemade waffles, salads and daily specials. Calvary will also offer take-out orders and pre-ordered “Lunches to Go.”

This year’s Preaching Series, held each weekday from 12:05 p.m. to 12:45 p.m., will feature national and local spiritual leaders from a variety of denominations and religions including Rabbi Sandy Sasso, Bishop Spong, the Rev. Dr. John Philip Newell and Imam Feisal Abdul Rauf, among others.

A new concept Calvary has created this year for those with time-sensitive lunch hours is a separate meditation room where people can eat their meals in quiet and watch the preaching series via simulcast.

Additionally, Calvary will have a “Waffle Shop After Dark” for those who may not be able to make it during lunch or who want to bring their families for an evening meal. This series will be every Wednesday during Lent, with the Waffle Shop open from 5:15 p.m. to 6:15 p.m. and the speaker beginning at 6:30 p.m.

Founded in 1832, Calvary Episcopal Church is a parish of the Episcopal Diocese of West Tennessee and The Episcopal Church, a province of the Anglican Communion. Calvary’s parish today comprises more than 1,000 baptized members.

Pickler Cleared of Conflict Allegations

A countywide school board ethics committee recommended no board action Wednesday, Feb. 13, against board member David Pickler on conflict of interest allegations made by fellow board member Martavius Jones.

The committee also recommended the board revise its conflict of interest policy.

The specific complaint was that Pickler voted for a school board budget last June that included a $12 million contribution for investment into a Tennessee School Boards Association trust for which Pickler’s financial services firm was the financial adviser. Jones also called on Pickler to resign from the school board.

Pickler denied any conflict and any wrongdoing.

Memphis City Schools attorney Dorsey Hopson, before he was appointed interim superintendent, said his preliminary inquiries showed the Memphis City Schools board decided in 2009 to set aside money for such an account. In June, the MCS superintendent and the school system’s chief financial officer decided to put the money into the Tennessee School Boards Association account.

“In my review of the records, there was no vote by the board to put the money into the TSBA account and there was no requirement,” Hopson said last month. “The board had a vote early on to set the money aside but not the actual decision where to place it.”

The 2009 decision was made by the Memphis City Schools board at a time when there were still separate city and county boards of education and Pickler was a member of the county school board, not the city school board. The 2012 decision was after the creation of the current 23-member board structure in which Pickler became a member because of his position on the old Shelby County Schools board.

Between the two dates is the 2010 decision by the city school board to move toward a consolidation of the two school systems.

Senate Votes to Place Income Tax Ban on Ballot

The Senate voted Thursday to place a proposed constitutional amendment to ban a state income tax before Tennessee voters.

The chamber approved the measure on a 26-4 vote, and if the House concurs, it would be placed on the ballot in next year’s general election.

The political fallout from failed efforts to impose a state income tax more than a decade ago has already made renewed efforts exceedingly unlikely. But Republican Sen. Brian Kelsey of Germantown said his proposal is aimed at eliminating any uncertainty about the measure in the future.

Sen. Douglas Henry of Nashville, one of the four Democrats to vote against the measure, likened himself to “the skunk at the garden party” for raising concerns that the proposal would also eliminate the possibility of payroll taxes on employers.

“If you’re going to rule out an income tax, you should not rule out the payroll tax, because we may very well need it some time,” Henry said.

He stressed that he has long opposed the income tax, including during his time as chairman of the Senate Finance Committee, when three governors unsuccessfully sought his support for changing Tennessee’s sales tax-based system.

But the state’s fiscal situation could become difficult with the payroll tax option off the table, he said.

Kelsey is also the sponsor of a constitutional amendment to give the lawmakers the power to confirm or deny the governor’s appointments to the state Supreme Court.

A scheduled vote was put off for a week on the request of Sen. Ophelia Ford, D-Memphis.

New Technology Center To Open at Southwest College

Southwest Tennessee Community College will hold a grand opening of the Inventory Locator Service Technology Center Feb. 26 at 10 a.m.

There will be a ribbon cutting ceremony followed by remarks from Dr. Nathan Essex, president of Southwest, and Eric Anderson, president of Inventory Locator Service LLC, the local firm sponsoring the new technology center.

Located in the Butler Building on the Southwest campus, the center will function as a testing facility for the college’s Information Technology Services Department as well as for students taking information technology classes.

Crye-Leike Offers Free Home Buying, Selling Class

Several agents with Crye-Leike Realtors Inc. will host a free-to-the-public home buying and selling class on Saturday, Feb. 16, from 10 a.m. to 11:30 a.m. at Crye-Leike’s Hickory Ridge branch office, 3565 Ridge Meadow Parkway.

Crye-Leike Realtors Bertha Pitts, Brenda Hampton, Tina Black, Alice Payne, Joyce Miller and Carolyn Randolph will help potential buyers with getting pre-qualified to buy a home, obtaining a credit report, credit repair counseling, the type of mortgages available, and the importance of house inspection and homeowners insurance.

Potential sellers will learn how housing is performing in their area, home staging tips, and ways to market a home to get the most amount of money in the least amount of time.

Free food and door prizes will be provided. For questions about the class, contact Black at 859-1322 or Crye-Leike’s Hickory Ridge branch office at 794-9925.

Paragon Bank Employees Made Community Impact

Employees of Paragon National Bank spent more than 500 hours volunteering in the community in 2012.

Each Paragon employee is granted one week of paid time to support local, regional and national nonprofit groups of their choosing through the bank’s Assisting the Community Through Service program.

The bank began tracking employees’ use of time through the program in 2008, and since then the team has contributed more than 2,000 hours to dozens of community organizations around the Memphis area.

Unemployment Aid Applications Fall to 341,000

The number of people seeking unemployment benefits fell by 27,000 last week, an indication that hiring could improve.

The Labor Department said Thursday that weekly applications dropped to a seasonally adjusted 341,000, the lowest level in three weeks. The four-week average, a less volatile measure, ticked up to 352,500 from a five-year low of 351,000 the previous week.

Applications have declined slowly but steadily in recent months. The four-week average has fallen 5 percent since November. Applications are a proxy for layoffs. As they fall, net hiring typically rises.

The snowstorm that hit the Northeast last weekend had limited impact on the latest figures. The report covers the week ended Feb. 9, before the storm hit. The Labor Department said it estimated figures for two states, including Connecticut where the storm closed state offices. Illinois also didn’t provide data.

Job gains have picked up in the past three months, although companies remain cautious about adding workers.

Employers added an average of 200,000 jobs a month from November through January. That’s up from about 150,000 in the previous three months.

The economy added 157,000 jobs in January, the government said earlier this month. And revisions showed employers added 181,000 jobs per month last year, up from an earlier estimate of 153,000.

Bill Shielding Commenters Passes State Senate

A measure to block courts from granting subpoenas for identities of anonymous commenters on news websites has passed the Senate.

The proposal sponsored by Republican Sen. Brian Kelsey of Germantown was unanimously approved 32-0 on Wednesday. The companion bill was also scheduled to be heard Wednesday in the House Civil Justice Subcommittee.

Currently, a person who gathers information for publication or broadcast isn’t required by a court, a grand jury, the General Assembly or any administrative body to disclose information or the source of any information “procured for publication or broadcast.”

Kelsey’s proposal adds to the current law. It does not apply, however, in cases in which defamatory comments were made.

Meritan Veteran Tapped as New President

Meritan Inc. has a new president.

Melanie Keller is the new president of the organization, following the recent retirement of Deborah Cotney, who led the nonprofit social services agency for 30 years.

Keller joined Meritan in 2006 and served as Meritan’s executive vice president before assuming the role of president. She also has served Meritan as the senior director of the agency’s Home Health Services division.

In her role as president, Keller is responsible for the executive oversight of more than 500 employees and Meritan’s $21 million annual budget, as well as managing Meritan’s quality improvement and strategic planning efforts.

Meritan was created in 1961 and has grown into a nationally accredited, nonprofit health and social service agency now serving a four-state area focusing on the needs of seniors, visually and developmentally disabled individuals and special-needs foster children.

Retail Sales Rise 0.1 Percent in US

Americans barely spent more last month at retail businesses and restaurants after higher taxes cut their paychecks.

The small increase suggests consumer spending may be weak in the January-March quarter, which could hold back economic growth.

Retail sales ticked up 0.1 percent in January from December, the Commerce Department said Wednesday.

That follows a 0.5 percent increase in December and is the smallest in three months.

Sales fell at auto dealerships, clothing stores and furniture stores. The declines came after big gains in each of those categories in December.

Sales rose last month at home-improvement stores, gas stations and online retailers.

So-called core retail sales, which exclude autos, building materials, and gas stations, ticked up 0.2 percent. That’s down from 0.6 percent in December. Economists pay close attention to core sales because they strip out the most volatile categories.

The retail sales report is the government’s first look at consumer spending, which drives 70 percent of economic activity.

Nearly all working Americans are taking home less pay this year. Congress and the White House allowed a temporary 2 percentage point cut in Social Security taxes to expire last month.

That means a person earning $50,000 a year will have about $1,000 less to spend in 2013. A household with two high-paid workers will have up to $4,500 less.

Economists were mildly encouraged that spending rose at all after the tax increases took effect. Many expect that spending may pick up later this year as hiring improves.

The Social Security tax increase was a key reason the Conference Board’s index of consumer confidence plummeted last month to its lowest level in 14 months. That survey was taken early in the month, when most Americans were discovering their smaller paychecks.

And some retail store chains reported healthy sales gains last month, suggesting that at least some consumers kept shopping even after the tax cut kicked in. Some of the gains likely reflected healthy holiday discounts.

County Commission Begins Probate Judge Selection

The Shelby County Commission approved plans Monday, Feb. 11, to appoint a Probate Court judge to replace the retiring Judge Robert Benham.

Benham retires at the end of March and the commission will take applications up to March 27 when the body will interview applicants. The commission is scheduled to make its appointment at its April 1 meeting.

Commissioner Chris Thomas said retired Probate Court Judge Donn Southern has expressed an interest in being interim judge to serve until the 2014 judicial elections. That’s when the office will be on the August countywide general election ballot that features nonpartisan judicial races once every eight years.

It is called the “big ballot” by political observers because it is the longest ballot of any election cycle in Shelby County.

California Developer to Build Apartments Near U of M

Newport Beach, Calif.-based Rael Development Corp. plans to break ground this summer on a 74-unit, high-end student housing community near the University of Memphis.

RDC Fund VI Memphis LLC, owner and developer of the yet-to-be-named multifamily complex at 3655 Southern Ave., has filed a $9.35 million building permit with the city-county Office of Construction Code Enforcement. Montgomery Martin Contractors LLC is the general contractor of the $14 million project.

Rael has assembled several parcels and will demolish the existing structures – including vacant apartment structures – on the site in June. Construction is expected to be complete by summer 2014.

Graeme Rael, principal of Rael Development, said the student housing will be upscale and “highly amenitized.”

“Our whole business model, is building extremely high-quality, durable apartments near great campuses, which the University of Memphis is,” Rael said. “We will have swimming, fitness, media center, computing centers. We’re very attuned to security and management.”

The project will mark Rael Development’s first in Memphis. Rael said his firm looks at the university’s current supply and potential for growth.

“We like to work very closely with the universities where we locate,” he said. “Even though it’s a fully private project, we still view the university as a partner.”

The apartments will have a range of one- to four-bedroom units. On-site surface parking will be available to residents.

The architect is St. Louis-based Rosemann & Associates PC. Rael said the design will be “traditional leaning to contemporary” and that it will “fit with the context” of the surrounding community.

Bank of Bartlett Launches Mobile Banking Product

Bank of Bartlett has joined the list of banks that have launched a mobile banking service.

The bank now has mobile banking capability on all types of mobile devices, including iPhones and Android phones, Web-enabled smartphones and older cell phones through three formats including a Bank of Bartlett mobile banking app.

Customers can set up their mobile banking feature by accessing their Bank of Bartlett online banking account. The bank’s services include online and electronic banking platform that also features Internet banking and the bank’s no-fee network of 368 automatic teller machines across Tennessee, including 60 Bank of Bartlett ATMs in Memphis-area Walgreens stores.

Bank of Bartlett has $370.4 million in total assets and operates eight bank branches in Shelby County.

Airlines Lose Fewer Bags, Get to Gates on Time

U.S. airlines were less likely in 2012 to lose your suitcase than at any other point in the last two decades, the government announced Tuesday.

There were only 3.09 reports of lost, delayed or damaged baggage for every 1,000 passengers, the lowest annual rate since the Department of Transportation started tracking incidents in 1988.

Airlines also improved their performance in getting planes to gates on time. Last year, 81.85 percent of flights arrived within 15 minutes of their scheduled time. That is the third highest rate since 1988. The record was set in 2002 at 82.14 percent.

Airlines benefited from good weather in the first half of the year and fewer planes in the sky because of the weak economy. And fewer passengers are checking bags because of fees.

The worst year for baggage handling was 1989, when nearly eight suitcases per 1,000 passengers were reported late, lost or damaged.

Baggage handling is directly tied to airline’s on-time performance. When flights are late, bags often miss their connection.

Airlines have been working hard to improve their performance. They are flying newer planes with fewer maintenance problems. New tools track the boarding of passengers and loading of baggage onto individual flights. If either falls behind schedule, extra workers are deployed to ensure an on-time departure.

The airlines are also being more realistic about their schedules. Flight times have been extended on some trips to account for air traffic delays. For instance, Delta Air Lines adds up to 16 minutes for Atlanta-to-New York flights during peak hours.

All of that has led to more on-time flights. There are still problems, however. About one out of every six flights is late – and that’s after airlines have adjusted schedules to account for congestion.

Weather remains one of the key factors in delays. Hawaiian Airlines — which often flies into sunny airports — remained in December as the best-performing airline, with a 93.3 percent on-time rate. Delta was number two at 85 percent, according to the DOT’s Bureau of Transportation Statistics.

Memphis Area Association of Realtors Reports January Home Sales

Memphis-area home sales for January increased 46.1 percent from a year ago, with 1,259 total sales recorded in the Memphis Area Association of Realtors MAARdata property records database.

Total sales rose 8.9 percent from December. Average sales price was up 7.3 percent at $123,696.

Inventory declined 6.3 percent, with 6,070 units listed for sale. Sales volume for the month year over year increased 56.6 percent to $155.7 million.

The MAARdata system includes records of all property transactions in Shelby, Fayette and Tipton counties.

Peterson Joins Local Office of Jackson Lewis LLP

Vandana Peterson has joined the Memphis office of Jackson Lewis LLP as an associate.

Jackson Lewis is one of the country’s largest and fastest-growing workplace law firms.

Peterson has served as an assistant dean and adjunct professor at the University of Alabama School of Law. She’s also worked as an associate in Clifford Chance LLP’s corporate finance and restructuring groups, in addition to being a summer associate for McDermott Will & Emery LLP’s antitrust and government regulatory practice.

$4.25 Billion Recovered in Probing Health Care Fraud

The government says it recovered almost $8 for each dollar it spent investigating health care fraud over the past three years, including a record $4.2 billion last year.

The $7.90 average return on investment is the highest in the 16-year history of the Health Care Fraud and Abuse Program. Since 1997, the program — a joint effort of the departments of Justice and Health and Human Services — has returned more than $23 billion to the Medicare trust funds.

Overall, the Justice Department opened more than 1,100 criminal health care fraud investigations last year involving 2,148 potential defendants.

More than 800 defendants were convicted of health care fraud-related crimes during the year and the department opened nearly 900 new civil investigations.

UT to Update Decade-Old Agritourism Survey

With agritourism taking root at farms across the state, the University of Tennessee Extension’s Center for Profitable Agriculture is updating a decade-old survey on the industry.

The 2003 survey included responses from 48 percent of Tennessee’s agriculture operations.

The Center for Profitable Agriculture’s Megan Bruch told the Chattanooga Times Free Press (http://bit.ly/12FYzd0) that 68 percent of respondents included agritourism in their operations.

Common attractions included retail markets, farm tours, pick-your-own farms and petting zoos.

Many farmers earned $25,000 or less a year from their agritourism operations, but 15 percent made more than $100,000. At the time, total projected revenue from agritourism was more than $21 million.

Bruch said updating the survey will help quantify agritourism’s standing in Tennessee. She expects to see larger numbers for visitors and sales.

Farmer Andrew Dixon said he’s already filled out his survey and sent it in.

His family’s Grandaddy’s Farm in Estill Springs opened to the public seven years ago.

“Agritourism, basically, is another crop for us,” Dixon said. “We’ve got corn, wheat and soybeans as our main row-crop operation, and agritourism is another way for us to diversify and to help spread out our risk.”

Each fall, people come to the farm for tours, a produce market, a nature trail, hay rides, mazes, tractor-tire swings and a farm-oriented playground, he said. The contact with the public brings in funds and also helps to market the farm’s products.

Oil Dips Slightly as Asia Observes Lunar New Year

The price of oil dipped slightly toward $95 a barrel on Monday as investors cut back on speculative positions and most Asian markets were closed for a holiday.

By early afternoon in Europe, the benchmark oil contract for March delivery was down 30 cents to $95.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 11 cents on Friday.

Trading was expected to be light for much of the week with several Asian markets shut for the Lunar New Year.

Analysts noted that for the first time in eight weeks there was a net reduction in investors’ positions betting that the Nymex contract will continue to advance.

LaunchYourCity Programs Soon Leaving Downtown

The LaunchYourCity entrepreneurial platform, which includes elements like Upstart Memphis and the Seed Hatchery startup accelerator, is getting set to leave the EmergeMemphis building Downtown and move to Playhouse on the Square in Midtown.

As a result of that impending move – LaunchYourCity is preparing to set up shop in Midtown – Eric Mathews will no longer be the interim executive director of the EmergeMemphis business incubator. Instead, he will remain the co-president of LaunchYourCity and will remain focused on its continued growth and myriad programs in its new location.

Mathews said the move resulted from some “heartfelt deliberation” and a desire to redouble LaunchYourCity’s focus on its myriad programs, which are expanding rapidly.

The EmergeMemphis board, meanwhile, has tapped former Pinnacle Airlines CEO Phil Trenary to provide strategic consulting and to help EmergeMemphis as it looks to hire a permanent executive director.

Over the past year, Mathews said he and others have worked to get Emerge back onto solid footing that it didn’t have before. In that time, the organization has adopted a strategic new vision, improved member amenities, added new member companies and welcomed FedEx Labs to a renewed commitment to the organization.

EmergeMemphis also recently completed upgrades to the building and has plans to host community events on the new rooftop, as well as in the meeting and conference spaces within the facility.

“Really, this is a testament to incubation. It’s a good story for incubation and entrepreneurship,” Mathews said of the impending move. “This has been personal to me. I’ve dedicated a lot of time to it. And it’s been a spectacular year if you look at the past 12 months.”

Evolve Bank Opening Branch in Marion

Evolve Bank & Trust is opening a full-service branch in Marion, Ark., in March.

Evolve bought and is currently renovating a 7,000-square-foot SunTrust Banks Inc. building in Marion, and once completed it will be Evolve’s fifth branch in eastern Arkansas. It currently operates branches in Arkansas and Tennessee and mortgage production offices around the U.S.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 89 242 14,959
MORTGAGES 111 255 19,585
FORECLOSURE NOTICES 21 43 3,838
BUILDING PERMITS 153 512 35,842
BANKRUPTCIES 61 182 14,216
BUSINESS LICENSES 18 104 5,095
UTILITY CONNECTIONS 76 246 21,679
MARRIAGE LICENSES 16 75 4,632

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