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VOL. 6 | NO. 11 | Saturday, March 09, 2013

Daily Digest

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Fred's February Revenue Figure Declines 1.5 Percent

Discount retailer Fred’s Inc. reported Thursday that a key revenue figure fell 1.5 percent in February.

Fred’s also lowered its fourth quarter guidance due to markdowns and higher-than-expected costs.

Company CEO Bruce Efird said delayed tax returns and an increased payroll tax weighed on customer’s spending patterns, but there were some bright spots.

Revenue in stores open at least one year increased for general merchandise, and the company’s spring layaway program was popular.

Overall, revenue in stores open at least one year for the month ended March 2 fell 1.5 percent. Analysts expected a slightly smaller 1.3 percent decline, according to Thomson Reuters.

Total revenue for the period was nearly flat at $159.2 million.

The company now expects net income of 16 cents to 21 cents per share, from prior guidance of 31 cents to 36 cents per share.

Analysts expect 28 cents per share. The cut is due to markdowns on basic products and food, as well as higher-than-expected insurance and other operating costs.

Fred’s, based in Memphis, operates 713 discount general merchandise stores.

Southern College of Optometry Raises $3.3 Million in One Year

Southern College of Optometry has raised more than $3.3 million in the year since it launched its “Envision Our Progress” campaign, setting a college fundraising record, it announced this week.

The goal of the “Envision Our Progress” campaign was $4 million over five years, with the money going toward construction of the academic classroom facility now under way at its Midtown campus, as well as support of the school’s student scholarship program and patient care initiatives within the Memphis community.

Along with alumni, support from the ophthalmic community has included the Marco Family Foundation, Alcon and Essilor of America, as well as donations from the Assisi Foundation and the Plough Foundation.

The college hopes to raise the remaining $700,000 by 2014.

UTHSC Awarded $333,000 Diabetes Research Grant

U.S. Rep. Steve Cohen says the University of Tennessee Health Science Center has been awarded a federal grant of more than $333,000 for diabetes, endocrinology and metabolic research.

Cohen said in a statement Tuesday that the center, located in Memphis, was awarded the grant by the U.S. Department of Health and Human Services.

The $333,102 will be distributed by the National Institute of Diabetes and Digestive and Kidney Diseases.

Cohen, a Memphis Democrat, says the grant will give researchers the tools they need to help people in Memphis and across the country reduce risk factors, improve diabetes management and increase their quality of life.

US Household Wealth Regains Pre-Recession Peak

It took 5½ years.

Surging stock prices and steady home-price increases have finally allowed Americans to regain the $16 trillion in wealth they lost to the Great Recession. The gains are helping support the economy and could lead to further spending and growth.

Household wealth amounted to $66.1 trillion at the end of 2012, the Federal Reserve said Thursday. That was $1.2 trillion more than three months earlier and 98 percent of the pre-recession peak.

Further increases in stock and home prices this year mean that Americans’ net worth has since topped the pre-recession peak of $67.4 trillion, private economists say. Wealth had bottomed at $51.2 trillion in early 2009.

“It’s all but certain that we surpassed that peak in the first quarter,” said Aaron Smith, senior economist at Moody’s Analytics.

Household wealth, or net worth, reflects the value of assets like homes, stocks and bank accounts minus debts like mortgages and credit cards. National home prices have extended their gains this year. And the Standard & Poor’s 500 index, a broad gauge of the stock market, has surged 8 percent since Jan. 1.

Some economists caution that the regained wealth might spur less consumer spending than it did before the recession. Americans are cashing out less home equity, for example, than they did five years ago, notes Dana Saporta, an economist at Credit Suisse.

FAA to Close Seven Control Towers in Mississippi

Seven air traffic control towers in Mississippi are among 173 scheduled to be closed nationwide in early April, as the Federal Aviation Administration shuts off funding for those services.

The shutdowns are the result of the FAA’s move to reduce spending by $600 million under automatic federal budget cuts known as sequestration. The FAA cuts affect mostly small- and medium-sized airports.

The FAA said it will consider keeping some towers open on a case-by-case basis if local authorities can prove its tower closure would “adversely affect the national interest.”

Mississippi airports on the list are Tupelo Regional, Stennis International in Bay St. Louis, Golden Triangle in Columbus, Mid-Delta in Greenville, Hawkins Field at Jackson, Key Field in Meridian and Olive Branch Regional. Jackson-Evers International Airport and Gulfport-Biloxi International Airport were not on the list.

Josh Abramson, executive director of Tupelo Regional, said the airport would remain open, but pilots will have to communicate with each other instead of relying on the airport tower to direct traffic.

Abramson said flights will continue at Tupelo Regional. Silver Airways, which provides commercial air service to Atlanta, will be unaffected.

Lofton Appointed as Wharton's Information Officer

Dewanna Lofton has accepted Memphis Mayor A C Wharton Jr.’s appointment to public information officer for the city of Memphis. Lofton’s resignation of her position as director of communications and alumni engagement at Leadership Memphis is effective March 15. She started with the nonprofit in September.

Lofton’s past work experience includes being a business writer for The Commercial Appeal; senior account supervisor for McNeely Pigott & Fox Public Relations; manager of internal communications for Smith & Nephew; PR/communication consultant for Medtronic Spine & Biologics; and certified life and career coach for InnerScope Life & Career Coaching.

Leadership Memphis now has four communications positions available for new hires.

City Council Delays Sales Tax Votes

Memphis City Council members delayed Tuesday, March 5, final votes on an ordinance to put a half-percent sales tax hike to Memphis voters sometime before Sept. 30 and a resolution outlining how the estimated $47 million in revenue from the tax hike would be used.

The delay comes as details are worked out on how to provide the pre-kindergarten access that $27 million of the revenue would be used to provide.

The remaining $20 million would be used to roll back the city property tax rate by 20 cents in the new fiscal year. Final votes are scheduled for the April 2 council meeting.

In other action, the council approved on third and final readings two long-delayed ordinances that allow the city to impound or put a parking boot on vehicles whose drivers dump tires illegally. The ordinances also provide for a $50 fine for violating several different parts of the city code that forbid tire dumping. The delay in final consideration came as attorneys for the city reviewed and fine tuned some of the specific provisions.

The council also gave final approval Tuesday to an ordinance creating a Memphis Tree Board, an advisory board of citizens serving without pay who will advise the city on trees in public spaces including city parks.

And the council approved the reappointment of Jerry Collins as Memphis Light, Gas and Water Division president.

Launch Tennessee Adds Commercialization Director

Launch Tennessee, a public-private group focused on supporting the development of high-growth companies in Tennessee, has tapped a new commercialization director.

Jim Stefansic will be responsible for overseeing all of Launch Tennessee’s commercialization efforts and strengthening the state’s tech-focused new venture creation. His predecessor stepped down from the role full-time in September 2011 to join a Nashville diagnostics startup.

Prior to joining Launch Tennessee, Stefansic co-founded Pathfinder Therapeutics Inc., a spinoff of his research at Vanderbilt University.

Olymbec Files $5.5 Million Mortgage on Brinkley Plaza

Montreal-based Olymbec USA LLC, an entity of Olymbec Corporate Group, has filed a $5.45 million mortgage on Brinkley Plaza in Downtown Memphis.

Olymbec president Richard Stern signed the mortgage with Standard Insurance Co., which matures March 2028. William L. Rosenberg of First American Title Insurance Co. out of Nashville was the trustee.

Olymbec in October acquired the 219,557-square-foot office tower at 80 Monroe Ave., its ground lease and the adjacent 300-space covered parking garage for $7.2 million. The Canadian real estate investment firm bought the Class B, 10-story building from a partnership made up of entities related to local commercial real estate groups CB Richard Ellis Memphis and Loeb Properties Inc.

Sanderlin Place, Loeb’s two-thirds ownership entity, and Brinkley Plaza II Partnership, CBRE’s one-third ownership entity, bought Brinkley Plaza in 2003 for $6 million.

Built in 1923, Brinkley Plaza sits on 0.66 acres at the corner of Monroe and South Main Street. The Shelby County Assessor of Property’s 2012 appraisal was $4.4 million.

Although the office high-rise was 60 percent occupied at time of sale, Stern told The Daily News last fall that he’s bullish that Brinkley Plaza can “easily” achieve the average office occupancy rate of 80 percent. CBRE Memphis continues to lease and manage Brinkley Plaza. The current asking rate is $14.50 to $15.50 per square foot, and is marketed as the “best office value in Memphis.”

Welford Elected a Fellow of Tennessee Bar Foundation

Shea Sisk Wellford, a director and partner with the Memphis law firm of Martin, Tate, Morrow & Marston PC, has been elected as a fellow of the Tennessee Bar Foundation.

Only 30 attorneys across Tennessee this year were invited by the foundation’s board of trustees to become a foundation fellow. In total, 766 attorneys in Tennessee are fellows of the Foundation.

The Tennessee Bar Foundation is a philanthropic organization that honors attorneys and financially supports law-related public projects. During 2013, the foundation will distribute $650,000 in awards to 53 organizations across Tennessee.

St. George’s School Launches App for Parents

St. George’s Independent School has put school calendars, sports schedules, private postings for parents and even news items and videos on a new app announced to parents last week.

The app, which works on iPhones and iPads, is free in the Apple App Store.

The school with campuses in Memphis, Germantown and Collierville also launched a blog last week that is part of the school’s “Parenting Roadmap” evening and lunchtime sessions.

The sessions, open to the general public as well as St. George’s parents, now come with blog posts written by administrators at the school as well as the schools’ early childhood director.

US Home Prices Rose by Most in Nearly 7 Years

U.S. home prices jumped in January, a sign the housing market is gaining momentum as it nears the spring selling season.

Home prices rose 9.7 percent in January from a year ago, according to data released Tuesday by CoreLogic. That’s up from an 8.3 percent increase in December and the biggest annual gain since April 2006.

Prices rose in all states except Delaware and Illinois. And prices increased in 92 of the 100 largest metro areas, up from 87 in December.

Home prices also rose 0.7 percent in January from December. That’s a solid increase given that sales usually slow over the winter months.

Rising demand combined with fewer available homes is pushing up prices. Sales of previously owned homes ticked up in January after rising to their highest level in five years in 2012, according to the National Association of Realtors. At the same time, inventories of homes for sale fell to a 13-year low.

Waddell Recaps 2012 at State of the Union Address

Once a year, Waddell & Associates president and CEO David Waddell presents a “State of the Union” address to clients.

The events are multi-pronged, offering a look back at the past year’s performance, what happened in the broader economy over the past year, and what the company is forecasting for the year to come, as well as how it will invest client funds in response to that forecast.

This time last year, Waddell had called the previous year “really kind of a funky year.”

And it was. There were natural disasters, the Arab Spring, congressional gridlock, a U.S. credit downgrade and more that all combined to make panicked investors pay more attention to their emotions than to market fundamentals.

However, looking back at the previous 12 months Waddell called 2012 a “pretty good year,” one free from a major crisis.

Most of his company’s theses were borne out to be true. The company, for example, expected stock prices to go higher, and they did, Waddell said.

“We expected confidence would take the market higher,” he added. “We expected a return of optimism to benefit international (investments) more than domestic (investments).”

Check, and check.

“My gut tells me that if we get through this year without a global crisis, we’ll see a recovery in animal spirits,” Waddell told The Daily News. He was referring to the phrase economists often use to describe what drives investment behavior in the face of uncertainty, when rationality alone isn’t a cause for action.

Another theme he hit on was that he’s passionate about the increasing urbanization of the world.

“As nations urbanize, they move up the food chain,” he said. “The amount of entrepreneurial activity happening around the world right now is unprecedented. The urbanization trend is hugely powerful.”

More affluence, he added, leads to more consumption. He referenced this statistic: From 2001 to 2011, the U.S. saw the addition of 131 billionaires in the country.

China added a little less than 300 billionaires during that same period. The only difference was China started with just one billionaire during that period.

Town of Oakland Projecting Big Growth in Coming Years

The town of Oakland is estimated to grow almost 20 percent over the next four years, according to the Oakland Regional Chamber.

The Oakland Economic Development Committee recently launched a campaign to raise awareness for the growing community.

The campaign “It’s Well Within Your Reach” recently launched through television commercials, advertisements in local magazines and through social media. The Oakland chamber also recently launched a new website, www.OaklandTNChamber.com, related to that same effort.

The site is intended to be a tool for the Oakland community, newcomers and businesses.

Spearman Receives Emmett O'Ryan Award

Memphis filmmaker Alan Spearman recently received the third annual Emmett O’Ryan Award for Artistic Inspiration, which is given by Metropolitan Bank to an emerging artist for his or her work that also bears promise for future artistic significance. The honor comes with a $2,000 cash award and the nominating organization receives $500.

Spearman, an Emmy Award-winning filmmaker and photojournalist, made his directorial debut in 2007. He was nominated for the Emmett O’Ryan Award by Indie Memphis.

Commercial Professionals Achieve Designations

Eleven members of local professional organizations in commercial real estate reached elite status in 2012 in their respective fields, which include the Memphis metro area’s appraisers, commercial brokers and property managers.

The Memphis Chapter of the Appraisal Institute designated Kristi Rikard of Judy Kitchens Appraisals a member.

Also, the Institute of Real Estate Management’s Memphis Chapter inducted four new members last year. Three members achieved the Certified Property Manager designation: Jay Snow and Ron Suzore, both with Belz Enterprises, and Matt Fulton of Education Realty Trust. Tracy Jamison of Tesco Properties earned the Accredited Residential Manager certification.

The Society of Office and Industrial Realtors Memphis Chapter increased its local membership by more than 10 percent in one year by adding five new members: Jeb Fields, Matt Weathersby and Mark Jenkins of Cushman & Wakefield/Commercial Advisors LLC; Tyne Brownlow of IP Commercial Properties; and Preston Thomas of Colliers International.

Meanwhile, the Memphis Metro CCIM Chapter awarded the Certified Commercial Investment Member designation to Barry Smith of Southern Bancorp.

FedEx Plans $25 Million Distribution Center in Northeast Indiana

FedEx Corp. plans to build a $25 million distribution center in northeastern Indiana that’s expected to create nearly 90 jobs. The News-Sentinel reports an application for tax “phase-ins” filed with Allen County officials says FedEx will invest $12.5 million in a new 178,000-square-foot distribution center on about 40 acres in New Haven.

The company will spend a similar amount on equipment needed to handle, sort and distribute materials. The application says FedEx expects the project just east of Fort Wayne to create 87 part-time jobs. Construction is expected to begin in May with a completion date slated for September 2014.

Memphis Heritage Names Hagan President, Elects Board

Joey Hagan, principal of Memphis-based Architecture Inc., has been named president of the board for Memphis Heritage for 2013-2014. Hagan was nominated by the previous board and elected by the organization’s general membership at its annual meeting Feb. 26.

Hagan will serve as president and CEO of Memphis Heritage. He will also be the organization’s spokesperson and preside over all meetings of the executive committee, board of directors and general membership. Hagan’s term will be for one year beginning March 1, with the possibility of being re-elected for up to three years.

Other board members for 2013-2014 include: vice president Rashana Lincoln; treasurer Aaron Chestnut; secretary Leigh Gilliland; past president John Griffin; and new board members Wes Riddle, Carol Deforest, Tony Armstrong and Antonio Raciti. The newly elected board members and officers will serve alongside Hagan and existing board members to govern Memphis Heritage for the next year.

Architecture Inc. specializes in historic preservation, adaptive use, renovation/restoration, national parks service (historic tax credit) certified projects and multifamily developments.

Memphis Heritage was founded in 1975 to educate and coordinate individuals and groups to save, improve, reuse and maintain architecturally and historically significant buildings, streets, neighborhoods, parks and cultural artifacts of Shelby County.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 70 125 13,455
MORTGAGES 119 192 17,541
FORECLOSURE NOTICES 19 51 3,442
BUILDING PERMITS 146 769 31,699
BANKRUPTCIES 62 128 12,823
BUSINESS LICENSES 40 51 4,648
UTILITY CONNECTIONS 80 233 19,690
MARRIAGE LICENSES 25 69 4,129

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