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VOL. 7 | NO. 33 | Saturday, August 09, 2014

Daily Digest

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United Way Beginning Search for New President

United Way of the Mid-South President Bryce Haugsdahl has announced his retirement after 40 years of service with several United Way chapters. Doug Byrnes, senior vice president of finance and chief financial officer of United Way of the Mid-South, will serve as interim president as a search for a new president begins.

As president of the local United Way, Haugsdahl led staff, nonprofits and local volunteers in a strategic examination of United Way to help it become more effective and efficient in improving lives across the region. Before becoming president four years ago, he was the longtime senior vice president of fundraising and led the work of raising resources to help local nonprofit programs address health and human service needs.

Haugsdahl also recently served as chairman of the board for the United Ways of Tennessee organization to improve coordination and cooperation between chapters across the state.

$26.3M Permit Filed for Pyramid Hotel

Bass Pro Shops will soon begin work on a 101-room hotel at The Pyramid.

Mississippi-based W.G. Yates & Sons Construction, the contractor working to transform The Pyramid into a Bass Pro Shops destination center, was recently issued a $26.3 million permit for the project's Big Cedar Lodge hotel, including rooms, meeting space and a banquet kitchen.

In 2010, the city of Memphis and Bass Pro entered into a lease for the destination retailer to occupy the redeveloped Pyramid for an initial period of 20 years, with seven five-year renewals for a possible total of 55 years.

Since then, the city prepared the shuttered Downtown arena to be redeveloped by the Springfield, Mo.-based retailer into a tourist and retail destination attraction. Bass Pro and Yates have been handling the retailer’s portion of the work, and the project is projected to open this December.

Fred’s July Sales Metric Edges Up

Fred's sales at stores open at least a year edged up 0.7 percent in July, helped by better customer traffic and stronger sales of some general merchandise.

But the discount retailer lowered its second-quarter guidance, in part because of costs at its pharmacy department.

Fred's July same-store sales growth was slower than the 2.5 percent rise that the Memphis-based company reported a year ago.

Sales at stores open at least a year is a key gauge of a retailer's health because it excludes results from locations recently opened or closed.

Fred's Inc. said Thursday that general merchandise sales increases were seen in categories including health aids, housewares, flooring, stationery, toys, auto and hardware and several consumable departments.

The pharmacy department also reported higher sales in July but its margins continued to be pressured by vendor cost increases on brand and generic drugs.

Fred's said that due to the cost increases the pharmacy department is facing as well as other costs, it now foresees a second-quarter loss between 15 cents and 20 cents per share. The guidance excludes reserves for the disposition of inventory and stores that don't fit its convenience center model. Its prior outlook was for an adjusted operating profit of 4 cents to 9 cents per share.

Lakeland Explores Combo Middle-High School

With the academic year underway, the city of Lakeland is exploring the idea of building a combined middle and high school to go with its one current school, Lakeland Elementary.

So far, it is a discussion item among school board members and Lakeland city commissioners.

The preliminary estimate for such a school is $50 million, which would probably mean a property tax increase in the city. Lakeland implemented its first property tax in advance of forming its own school system.

Part of the discussion is whether such a tax hike would be approved by Lakeland commissioners or by voters in a referendum.

Lakeland leaders acknowledged earlier this year that they would probably begin making plans for another school. Lakeland children in middle and high school now attend classes in Arlington and Bartlett under agreements among those systems.

Collierville school board members voted earlier this year to begin a preliminary look at a new high school in Collierville to meet demand there. The shift would create space for Collierville teenagers who attend Houston High in the Germantown Municipal Schools District under an agreement between the two systems.

Lawsuit Over Nineteenth Century Club Dropped

The Union Avenue building that once housed the Nineteenth Century Club could soon meet the wrecking ball.

A plaintiff seeking to stop the planned demolition of the once-stately mansion has dropped the appeal of a lawsuit challenging the legality of the sale of the property, removing a major obstacle to its proposed redevelopment.

Attorneys representing the plaintiff said multiple attempts to find a buyer who would preserve the building failed, leaving them no choice but to drop the appeal.

“While we continue to believe we have a strong legal case that the 2013 sale of the building was invalid, we no longer have a buyer for the property, so a victory on appeal could prove to be a hollow victory,” said attorneys Steve Mulroy and Webb Brewer in a statement. “It is our continuing hope that the building be saved.”

The plaintiff was appealing a Chancery Court decision declaring the sale valid and permitting the demolition of the mansion to make way for a shopping center.

The regal but decaying property on Union was built in 1907 by Rowland Jones, a Memphis lumber king.

In 1926, the 15,813-square-foot house was acquired by the Nineteenth Century Club, a philanthropic women’s organization.

The Union Group LLC, whose owners operate several restaurants in the Memphis area, acquired the property for $550,000 in 2013 after winning a competitive bidding process, beating out a group that offered $350,000 and wanted to turn the property into a women’s business center. Proceeds from the sale went to the Children's Museum of Memphis.

U of M Athletes Win Academic Honors

A total of 153 University of Memphis student-athletes have been named to the American Athletic Conference All-Academic Team for posting a GPA of 3.0 or higher for both semesters of the 2013-14 academic calendar.

Not included in that total are members of the rifle team, nor the 28 football players recognized during the fall as American Athletic Conference All-Academic honorees. Rifle is a member of the Great American Rifle Conference, so was not included in the award winners list released by the AAC.

The Tiger baseball, men’s soccer and women’s track and field programs each had 17 honorees, while women’s cross country, men’s cross country and softball each had 10 honorees.

Earlier this summer, the Memphis athletic department had six teams honored with American Athletic Conference Team Academic Excellence Awards for posting the highest cumulative team GPAs in the league in their respective sports: women’s cross country, men’s golf, women’s soccer, women’s tennis, women’s indoor track and field and women’s outdoor track and field.

Wright Medical Sees Second-Quarter Loss

Though Wright Medical Group’s sales increased for the second straight quarter, the company reported a net loss of $53.6 million, or $1.08 per share, in the second quarter.

That compares with a loss of $15.5 million, or 34 cents per share, during the second quarter of 2013.

For 2014, the company’s total net loss is now more than $83.8 million.

The second quarter of 2014 did, however, bring a 19 percent increase in sales, which totaled $72.4 million. For the year, sales stand at $143.4 million.

After selling off its knee and hip divisions in 2013, Wright Medical has focused this year on foot and ankle products, including its new Infinity ankle.

Wright Medical CEO Robert Palmisano said in a statement that the company is confident there will be a strong acceleration in the second half of the year.

Overton Square Parking Permit Trial Approved

Memphis City Council members Tuesday, Aug. 5, approved a residential parking permit zone in the Overton Square area on a one-year trial basis. The trial program is a way of resolving parking problems that have come with the revitalization of the Overton Square area. Some homeowners have complained that they can’t park near their homes because of the side street traffic, specifically around Restaurant Iris and Second Line on Monroe Avenue.

The ordinance approved Tuesday allows 75 percent of the homeowners on a street to petition the council for permits that would allow only them to park on their street. If the council approves, the designation comes with signs marking the area for permit parking only. The permits would cost $50 each, although the council could waive the fee.

Kelly English, owner of Restaurant Iris and Second Line, opposes the permits, saying it could hurt his business. But the council heard from numerous homeowners on Monroe by the restaurants who favored the proposal.

In other action, the council approved a special use permit for the Exchange Building on Court Square that would convert the apartment building to a gradual blend of apartments and hotel rooms.

The council also appropriated $750,000 for renovations to the Pink Palace Planetarium and $104,000 for improvements to Denver Park in Frayser.

American Snuff Gets Sustainability Honor

American Snuff Co. has been awarded the Tennessee Green Star Partnership Three-Star Certification, the Tennessee Department of Environment and Conservation’s highest award for sustainable business practices.

American Snuff Co. is the first Memphis-based company and only the 13th in the state to hold the award. The Tennessee Green Star Partnership is TDEC’s environmental leadership program and seeks to recognize organizations that are committed to sustainable practices and continuous improvement throughout their entire operation.

ASC Memphis is the second Reynolds American subsidiary to receive state-level recognition for their outstanding sustainability efforts.

PILOT Incentives Go Before City Council

The incentives used to attract companies to the city and county or retain existing jobs got a hearing before a Memphis City Council committee Tuesday, Aug. 5.

In the ultra-competitive world of economic development, incentives can tip the scales in favor of Memphis and Shelby County, said Reid Dulburger, president and CEO of the city-county Economic Development and Growth Engine.

The payment-in-lieu-of-taxes incentive program has come under fire for years from critics who contend it is corporate welfare that erodes the local tax base.

But Dulburger said the PILOT program helps the city and county overcome obstacles, such as the highest combined tax rate in the state.

“When it comes down to the eleventh hour, we try to use our incentives to overcome these shortcomings,” Dulburger said. “The most important card we have to play is the PILOT.”

The debate over incentives exploded after the City Council voted in June to slash some benefits to city workers and retirees, igniting a backlash of criticism over the PILOT program and other incentives.

The PILOT program works by abating taxes – 85 percent on the city side this year, before dropping to 75 percent in 2016, and 75 percent on the county side – for real and personal property improvements. Companies pay the full amount of taxes on the pre-developed land.

Critics have claimed that companies who don’t live up to their promises regarding job creation and capital investment levels face no penalties. But Dulburger said 15 companies have had their PILOTs terminated and 22 companies have had their PILOT term reduced.

The council committee took no action Tuesday. Another hearing is scheduled for Aug. 19.

Southern Airways Plans SEC Football Flights

Southern Airways has released its schedule for the 2014 season of SEC football flights, concentrated around the games of five key teams within Southern’s standard route map.

The schedule includes five University of Alabama games, 10 Auburn University games, all 12 University of Mississippi games, four University of Arkansas games and four University of Florida games.

In addition, starting in October, Southern will resume nonstop flights between Memphis (Olive Branch) and Knoxville, ideal for University of Tennessee home games.

Southern’s SEC flights will depart from three primary locations: Destin, Fla.; Memphis (Olive

Branch); and Oxford, Miss. Most game-day flights arrive two hours before kickoff and depart 2 hours after the end of the game.

Game-day flights must be booked via Southern’s call center, open Monday through Friday from 8 a.m. to 5 p.m., at 800-329-0485. All SEC charter fares are round-trip and begin at $298 per person for certain games. Visit iFlySouthern.com/Packages/Sports for more information.

Basketball Qualifier Coming to Memphis

A one-on-one street basketball tournament is coming to Halle Park for the 2014 Red Bull King of the Rock USA Qualifier.

The Memphis qualifier will follow one-on-one street basketball rules in a single-elimination tournament. Only two- and three-pointers count in each five-minute game, while five fouls equal an automatic loss. The competition is open to amateurs and pros alike; however, players must be at least 16 years old to participate. Registration is first come, first served.

The Memphis qualifier first-place winner will receive a $1,000 cash prize and a paid trip to the Red Bull King of the Rock World Finals to be held Sept. 6 in the prison exercise yards of Samasana Island, Taiwan.

Registration for the Memphis qualifier begins at noon, and games begin at 1 p.m. There is no registration fee. The event takes place at Halle Park – The Precinct, at 2634 Mt. Moriah Road.

Legend Donates $30,000 to Soulsville School

Nine-time Grammy winner John Legend has made a $30,000 donation to the Soulsville Charter School in Memphis through the singer's Show Me Campaign program.

In a statement about his contribution, the singer said the Soulsville Foundation is using the legacy of Stax Records to change the lives of young people by offering "valuable and unique education opportunities."

A private practice room in the adjacent Stax Music Academy that the charter school students also use has been named after Legend, who founded the Show Me Campaign in 2007 to break the cycle of poverty. Legend also visited the Soulsville Charter School shortly after it was founded in 2005 with a class of 60 sixth-graders.

He performed for them and explained how he'd grown up with his share of economic difficulty. Soulsville Foundation spokesman Tim Sampson said the children listened in awe that day and left inspired by how success can transcend circumstance.

Commission Approves School Facilities Study

Shelby County Commissioners approved Monday, Aug. 4, a $1.8 million school facilities study to be conducted by Shelby County Schools.

And the commission approved a resolution asking Tennessee legislators to change laws on the approval of land use and zoning changes within five miles of the Memphis city limits. The change would make the Shelby County Commission the only body needed for approval. Currently, such changes within the 5-mile limit also require approval of the Memphis City Council.

The commission delayed again the third and final reading of an ordinance that would increase the pay of Shelby County Schools board members to $15,000 a year, with the chairman being paid $16,000. The measure needed nine votes to pass and only eight commissioners were present.

The item was delayed to the commission’s last meeting of the current term of office, which runs out at the end of August.

That will be the last chance for the measure sponsored by Commissioner Mike Ritz.

The commission that takes office Sept. 1 will elect the chairman for the first year of the new term at their first meeting in September.

Outgoing chairman James Harvey has scheduled a luncheon meeting with the new commissioners the day after the election.

Lyons Named PCL Pitcher of the Week

Memphis Redbirds starting pitcher Tyler Lyons has been named the Pacific Coast League’s Pitcher of the Week for the July 26 to Aug. 3 period.

Lyons, 26, went 2-0 with a 0.56 ERA and 11 strikeouts over a pair of complete games at Omaha and Round Rock during the week. Lyons didn’t walk a batter and limited hitters to a .148 average against (8-for-54) over 16.0 innings.

His two complete games moved him into first place on the Redbirds career ranks, passing P.J. Walters with five since the 2012 season. He is also the first pitcher in the PCL this season to record two complete games in one week.

Overall for Memphis this season, Lyons has tossed five quality starts in 11 outings, going 6-1 with a 3.55 ERA. He has struck out a 57 batters against only 14 walks.

A member of the Cardinals’ 40-man roster, Lyons is one of five Redbirds pitchers to be promoted to St. Louis this season, joining Eric Fornataro, Jorge Rondon, Sam Freeman and Nick Greenwood. The southpaw went 0-3 with a 5.46 ERA and 24 strikeouts in seven games (four starts) for the Cardinals.

U of M Holiday Inn Appoints Food Director

Daniel R. Bamrick has been named the director of food and beverage services with the Wilson Conference Center Group LLC for the Holiday Inn and Fogelman Executive Conference Center at the University of Memphis.

Bamrick has more than 30 years of hospitality industry experience, most recently as the food and beverage director at the four-star Peabody hotel. He also has served as general manager and food and beverage director at Southland Park and general manager/food and beverage manager at a variety of country clubs.

Bamrick holds a degree in hospitality and foodservice management from the Culinary Institute of America in Hyde Park, N.Y., and he serves on a variety of industry and civic boards.

Services Firms See Increased Growth

U.S. services firms grew at the fastest rate in more than eight years in July, the latest sign of an economy picking up speed in the second half of the year.

The Institute for Supply Management said Tuesday that its service-sector index jumped to 58.7, up from 56 in June. Any figure above 50 indicates expansion. June's reading is the highest since December 2005. The ISM is a trade group of purchasing managers.

The services survey covers businesses that employ 90 percent of the workforce, including retail, construction, health care and financial services firms.

The strong reading suggests Americans are increasingly confident about the economy and willing to spend more. Sixteen industries tracked by the survey grew in July, led by construction, educational services and retail. Only utilities said that business slowed last month.

"We are encouraged by the widespread strengthening in demand evident in this survey," said Paul Dales, an economist at Capital Economics.

Americans are traveling more this summer, boosting the tourism industry, said Anthony Nieves, chairman of the ISM's survey committee. Construction firms are benefiting from growing demand for renovation and remodeling work, he added.

A measure of overall sales soared to its highest level in more than three years, the ISM said, and a gauge of new orders jumped to its highest reading in nearly eight years.

Village at Germantown Begins Expansion

The Village at Germantown, 7820 Walking Horse Circle, will break ground on its new health care center Wednesday, Aug. 6, at 9 a.m.

The center will add 52,000 square feet to the continuing care retirement community, which provides independent and assisted living, as well as skilled nursing care and memory care.

The current memory care and assisted living suites will be relocated to the new building, where additional space will be available to build more suites for both levels of care. The number of assisted living suites will increase from 13 to 32, and the number of memory care suites will increase from 8 to 16.

Skilled nursing suites will be built in the current space that houses the memory care and assisted living rooms. This space will allow for additional skilled nursing rooms, increasing the current number of suites from 30 to 50.

The 1,800 square feet at the entrance to the health care center will be designed as a physical, speech and occupational therapy complex.

The $22 million expansion and renovation project will be funded through tax exempt bonds.

The expected completion date for the assisted living project is the middle of 2015. The entire project is expected to be completed by the middle of 2016.

Regions Insurance Grows Benefits Practice

Regions Insurance, an affiliate of Regions Bank, has expanded its employee benefits practice in Memphis.

Joining Regions Insurance are Stuart Zalowitz and Jonathan Frisch, owners of Zalowitz Frisch Benefits Group. That addition continues Regions Insurance’s efforts to expand its coverage and capabilities throughout the Southeast.

Zalowitz Frisch Benefits Group has become one of the leading employee benefits brokerage and consulting firms in Memphis. And with the addition of the Zalowitz Frisch team, Regions Insurance will be among the largest employee benefits brokerages in Memphis.

Tenn. AIA Honors ANF’s Pounders

Memphis architect Louis R. Pounders of ANF Architects has been awarded the William Strickland Lifetime Achievement Award by the American Institute of Architects Tennessee. ANF is formerly Askew Nixon Ferguson Architects.

It is the highest honor given by AIA Tennessee. Pounders is its third recipient and the first from Memphis.

The award is named in honor of William Strickland, the architect who designed the state Capitol building in Nashville in 1859.

Pounders received the award at the group’s state convention in Nashville July 31.

Metropolitan Bank Expands Board

Metropolitan Bank has added James Wingett to its board of directors.

Wingett lives in Memphis, where he’s a founding partner and managing director of Wolf River Capital. Before his time at Wolf River, he was a founding member, managing director and principal of FTN Financial’s Structured Finance Group.

Metropolitan is a $950 million financial institution currently operating eight full-service banking offices in Mississippi and Tennessee.

Arkansas Starts Fiscal Year Below Forecast

Sluggish corporate income and sales tax collections pushed Arkansas' revenue below forecast and below the same month in 2013 as it started its fiscal year in July, state finance officials said Monday.

The Arkansas Department of Finance and Administration said the state's net available revenue in July totaled $403.1 million, which was $7.1 million below the same month last year and $9.8 million lower than expected. The state's fiscal year began July 1.

DFA Director Richard Weiss said he didn't believe the figures were a cause for concern yet, since the state's fiscal year just began.

"In the big picture, it really doesn't tell us a whole lot," Weiss told reporters.

The state's corporate income tax collections totaled $18.4 million, which is $8.5 million lower than July 2013 and $9.7 million below forecast. Sales tax collections totaled $185.5 million, which is $500,000 lower than the same month last year and $7.6 million below forecast.

TSA Finds Loaded Guns at Memphis Airport

The Transportation Security Administration says two loaded guns have been found at a security checkpoint at Memphis International Airport.

The TSA says the weapons were found in passengers' carry-on bags on Sunday.

In both cases, airport police were notified and they took possession of the bags and firearms. Both passengers were cited on local charges.

TSA officers at have found 13 firearms at the Memphis airport's security checkpoint this year. A total of 18 firearms were found at the airport last year.

Airfares on the Rise, Outpacing Inflation

Travelers, prepare to pay more for your flight.

The average roundtrip ticket within the U.S., including taxes, reached $509.15 in the first six months of this year, up nearly $14 from the same period last year. Domestic airfare continues to outpace inflation, rising 2.7 percent compared to the 2.1 percent gain in the Consumer Price Index.

Airfare has gone up 10.7 percent in the past five years – after adjusting for inflation – according to an Associated Press analysis of data from the Airlines Reporting Corp., which processes ticket transactions for airlines and more than 9,400 travel agencies, including websites such as Expedia and Orbitz. The formula for rising fares seems simple, but it eluded the airlines for years: Match the supply of seats to passenger demand.

McIver to Receive Bar’s Dorsey Award

Harrison McIver, the executive director of Memphis Area Legal Services Inc., will be in Boston Friday, Aug. 8, to receive the American Bar Association’s Dorsey Award.

The award recognizes the work of public defenders and civil legal aid attorneys and is named in honor of the late Charles H. Dorsey Jr., director of Maryland’s Legal Aid Bureau Inc.

McIver has been executive director of the nonprofit law firm since 1998. During that time he has also served as a leader of the National Legal and Defender Association as well as the Tennessee Alliance for Legal Services. The award will be given during the American Bar Association’s annual meeting in Boston.

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RECORD TOTALS DAY WEEK YEAR
PROPERTY SALES 110 154 13,810
MORTGAGES 135 193 18,019
FORECLOSURE NOTICES 15 39 3,544
BUILDING PERMITS 430 430 32,733
BANKRUPTCIES 52 130 13,133
BUSINESS LICENSES 20 45 4,750
UTILITY CONNECTIONS 83 204 20,104
MARRIAGE LICENSES 0 33 4,230

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