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VOL. 124 | NO. 94 | Thursday, May 14, 2009

Daily Digest

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Nettleton Condos In Foreclosure, to Be Sold

Nettleton LP, the developer of the Nettleton condominiums at 435 S. Front St., has defaulted on two construction loans through Merchants and Farmers Bank totaling $10.7 million. Its remaining 31 condo units are in foreclosure, according to notices that appear on Page 40 of today’s print edition of The Daily News and also at The Daily News Online, www.memphisdailynews.com.

The first loan in default was for $8.3 million and dated Jan. 20, 2006; the second was for $2.4 million and dated Sept. 4, 2008.

Nettleton LP has sold five of the building’s condos. The owners of those units are not included in this matter, but the partnership’s remaining condos will be sold next month at a substitute trustee’s sale.

T. Jay Campbell Jr. of the law firm Adams and Reese LLP is the substitute trustee for the properties. He will hold a sale of the properties June 11 at noon on the steps of the southwest corner of the Shelby County Courthouse.

The Nettleton LP is a Tennessee limited partnership composed of AJW Management LLC of Tennessee and AJW Ventures LLC of Georgia. Chris Adams signed both trust deeds in default.

The four-story Nettleton sits on the northwest corner of South Front Street and Nettleton Avenue in the South Main Historic Arts District. Built in 1915, it originally was a warehouse for Piggly Wiggly grocery stores, according to the Nettleton’s Web site.

Source: The Daily News Online & Chandler Reports

LUCB to Consider Memphis Union Mission Site

Among the development proposals on the agenda for today’s Memphis-Shelby County Land Use Control Board meeting is a planned development application for a Memphis Union Mission facility at the corner of Lamar Avenue and Knight Arnold Road.

The size of the property where the mission wants to build its new facility is a little more than 12 acres, and the proposal includes a new group shelter, chapel and indoor and outdoor recreational areas.

The LUCB meeting will begin at 10 a.m. in the City Council chambers of City Hall at 125 N. Main St.

State to Spend Stimulus Money On West Tenn. Solar Project

Tennessee will spend $62 million in federal stimulus money on facilities for solar power generation and research, Gov. Phil Bredesen said Wednesday.

The Democratic governor said a five-megawatt solar plant in Haywood County would be among the largest in the eastern United States. A plant that size could generate power for about 600 to 700 homes, he said.

Bredesen calls the plant a “solar farm” because he wants to grow solar generation capacity, using proceeds from the sale of electricity to the Tennessee Valley Authority.

“The reason I call this a farm is that once we plant this thing, it is going to continue to grow,” Bredesen said.

The governor first proposed the Tennessee Solar Institute in an address to lawmakers earlier this year, seeking to spur green energy jobs and affordable clean energy technology. The research center, a joint effort by the University of Tennessee in Knoxville and the Oak Ridge National Laboratory, is to be housed at UT’s new Cherokee Farm Innovation Campus.

The U.S. Department of Energy would have to approve Tennessee’s plans before the projects could get under way. The money would be about evenly divided between the two projects.

Bredesen said the federal money is restricted to alternative energy programs and could not be spent on plugging other budget holes.

State officials expect both projects could grow, depending on demand. Bredesen said the cost of solar panels is expected to decrease in the future.

“It helps to get us on the front edge of the curve on this stuff, and establish Tennessee as a place that is serious about investing in these alternative technologies,” he said.

Bredesen said he expects the plant to use materials produced by Sharp Electronics Corp., which manufactures solar panels in Memphis, and AGC Flat Glass in Kingsport, which makes glass for solar panels.

The plant will be the largest solar installation in Tennessee. TVA has eight small photovoltaic systems around the state, mostly for demonstration purposes at high-visibility locations.

Bredesen said the 20-acre West Tennessee solar plant would also be located along Interstate 40, “so that everybody who travels through Tennessee can see exactly what it is we’re doing here.”

Canadian National Sells Three Rail Lines in Miss.

Canadian National Railway, parent of Illinois Central Railroad, reported Wednesday it has sold 252 miles of rail line in Mississippi, including unprofitable routes from Natchez to Brookhaven and from Canton to Memphis.

The Montreal-based company said it has sold those two segments plus another line to Grenada Railway LLC and Natchez Railway LLC – both non-carrier affiliates of V&S Railway LLC and A&K Railroad Materials Inc., which are headquartered in Salt Lake City.

CN said the deal transfers ownership of 252 miles of track and preserves rail service on the two longest of these rail lines for at least the next two years.

The terms of the transaction were not disclosed.

The longest of the rail lines runs 175 miles and parallels Interstate 55 from Memphis to about two miles north of Canton. The Natchez-to-Brookhaven line runs about 66 miles. The third segment – the 11-mile Water Valley Branch Line – intersects the Grenada Line at Water Valley Junction and extends to Coffeeville in Yalobusha County.

Jim Vena, CN’s senior vice president of the southern region, said Wednesday in a statement that the deal will allow the rail lines to remain open to serve local businesses.

“CN will continue to offer interchange service to the new short lines, maintaining every customer’s seamless access to the broader CN network,” Vena said.

Retail Sales Drop Unexpectedly in April

Retail sales fell for a second straight month in April, a disappointing performance that raised doubts about whether consumers were regaining their desire to shop. A rebound in consumer demand is a necessary ingredient for ending the recession.

The U.S. Commerce Department reported Wednesday that retail sales fell 0.4 percent last month. Many economists had expected a flat reading, and the April weakness followed a 1.3 percent drop in March that was worse than first estimated.

Retail sales had posted gains in January and February after falling for six straight months, raising hopes that the all-important consumer sector of the economy might be stabilizing. But the setbacks in March and April could darken some forecasts because consumer spending accounts for about 70 percent of economic activity.

The hope had been that consumers were starting to feel better about spending, helped by the start of tax breaks included in the $787 billion stimulus bill. Households had spent the fall hunkered down in the face of thousands of job layoffs and the worst financial crisis since the 1930s.

The latest retail data “are yet another illustration that, although the worst is now over, there is still no evidence of an actual recovery,” Paul Dales, U.S. economist with Capital Economics in Toronto, wrote in a research note.

While anecdotal evidence suggests some improvement in sales in recent weeks, “to offset the plunge in wealth, the household saving rate still needs to double from the current rate of 4 percent,” Dales wrote. “With falling employment hitting incomes, this can only be achieved by a further retrenchment in spending.”

The April retail sales dip came despite a 0.2 percent increase in auto sales, which fell 2 percent in March. Excluding autos, the drop in retail sales would have been 0.5 percent, much worse than the 0.2 percent gain economists expected.

Sales outside of autos showed widespread weakness last month. Demand at department stores and general merchandise stores fell 0.1 percent and sales at specialty clothing stores dropped 0.5 percent.

Department store operator Macy’s Inc. on Wednesday reported a wider loss for the first quarter partly because of restructuring charges. Still, the company expects to see an improvement in sales from its localization efforts beginning in the fourth quarter of 2009, and in the spring of 2010.

Sales also fell in April at furniture stores, electronic and appliance stores, food and beverage stores and gasoline stations, according to the Commerce Department.

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PROPERTY SALES 119 482 10,051
MORTGAGES 119 497 11,811
BUILDING PERMITS 268 1,056 21,366
BANKRUPTCIES 50 263 6,700

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