VOL. 123 | NO. 77 | Friday, April 18, 2008
Pat O'Brien's-Memphis Property in Foreclosure
The property housing Pat O'Brien's-Memphis at 310 Beale St. is in foreclosure after a first-run Notice of Substitute Trustees' Sale was filed against the restaurant's owners this week. Wachovia Commercial Mortgage Inc., formerly known as The Money Store Commercial Mortgage Inc., is the owner and holder of the debt.
The notice appears on Page 32 of today's Daily News and also is available at www.memphisdailynews.com.
According to the notice, 310 Beale Street Properties LLC and Hurricane Memphis LLC are in default of payment on a Dec. 20, 2001, construction deed of trust issued by Wachovia, formerly known as The Money Store Commercial Mortgage Inc. The original principal amount of the loan is $2.6 million.
Hurricane Memphis opened the Memphis franchise of the popular New Orleans restaurant and bar in 2002. The company's chief manager was Kevin Kelly, who died in 2006. The manager of the property's landlord, 310 Beale Street Properties, is Curtis Wegener.
Hurricane Memphis was paying an annual base rent of the greater of $484,762 or 5.65 percent of gross sales to the landlord, according to the company's most recent lease documents on the Shelby County Register of Deeds Web site.
The Downtown restaurant and bar opened on Beale in the fall of 2002 after a lengthy process to bring a Memphis version of the New Orleans nightspot here. It took roughly 11 years from the initial discussions before the restaurant opened at the northeast corner of Beale and Rufus Thomas Boulevard, according to numerous news reports.
At the time, the Memphis restaurant was Pat O'Brien's first franchise. Pat O'Brien's International Inc. now operates restaurants in Cancun, Mexico, Orlando, Fla., and San Antonio.
The Memphis establishment - with 13,000 square feet plus an additional 3,000 square feet of patio space - is a replica of the New Orleans establishment, with its signature layout featuring multiple bars, wrought-iron railings and a piano bar. The original "Pat O's," as patrons call it, opened in New Orleans in 1942, serving its famous "Hurricane" mixed drinks.
The foreclosure sale is scheduled for May 9 at noon on the southwest steps of the Shelby County Courthouse. The sale will include the real estate, as well as all of the property's machinery, equipment furniture and fixtures, according to the foreclosure notice.
First Horizon Q1 Earnings Drop 89 Percent
First Horizon National Corp.'s first-quarter earnings dropped 89 percent as the company's provision for loan losses grew because of national construction and home equity portfolio deterioration.
First-quarter earnings fell to $7.9 million, or 6 cents per share, from $70.5 million, or 55 cents per share, a year ago.
Analysts surveyed by Thomson Financial forecast earnings of 13 cents per share.
First-quarter net interest income, or profit from lending, fell 4 percent to $228.1 million, from $237.4 million in the prior year.
Noninterest income, or income from fees and charges, grew 40 percent to $383.1 million, from $272.9 million a year ago.
First Horizon's provision for loan losses jumped to $240 million, from $156.5 million in the fourth quarter, as its construction and home equity portfolio deteriorated.
"We continue to consider near-term strategic alternatives to reduce our mortgage business and will continue investing in our successful regional banking and capital markets businesses," said First Horizon CEO Jerry Baker. "We also recognize that in the current environment a strong capital position and adequate liquidity are essential."
Six Foreclosures Filed Against Alexanders
Six first-run foreclosure notices for properties owned by Charles or Patricia Alexander have been published this week in The Daily News.
The properties facing foreclosure are 1563 Airways Blvd., 2137 Wabash Ave., 1252 S. Orleans St., 1737 Vesey Ave., 2299 Hubbard St. and 3363 Rosamond Ave.
The Hubbard Street and Rosamond Avenue properties are subject to two Internal Revenue Service tax liens, one for $1,247.10 filed in October 2006 and a second for $5,096.09 filed in February.
The Hubbard Street property also is subject to a third IRS tax lien for $9,522.67 filed in January 2007.
The U.S. Department of Justice is listed as an interested party in the Vesey Avenue property, and SouthTrust Bank is mentioned as an interested party in the Airways Boulevard property.
The Alexanders have seen more than 60 foreclosures for their properties since February. For more information on the Alexanders and previous foreclosure notices filed against them, visit www.memphisdailynews.com.
Analyst Downgrades International Paper
A Credit Suisse analyst has cut his rating on International Paper Co. stock and criticized the company's plans for a new acquisition.
Mark W. Connelly downgraded the stock to "Neutral" from "Outperform," and slashed his price target on the shares to $28 from $39, implying he expects the stock to remain basically flat for the next year.
The analyst said many investors were caught off-guard by IP's purchase of Weyerhaeuser's containerboard segment for $6 billion in cash. The purchase, announced in March, is part of IP's reorganization to focus more on producing uncoated paper and containerboard.
"Most investors we talk to interpret the Weyerhaeuser deal as out of step with the strategy IP set out over the past few years," Connelly wrote in a client note.
Connelly said investors can't be quite as confident about IP's direction as they once were. Containerboard, used to make corrugated boxes, is highly cyclical and is starting to show signs of weakness, he added.
The analyst said the lofty price tag was surprising, and came in above his estimate of the Weyerhaeuser division's value, even before the credit markets began to unravel. "Very few, if any, expected IP to be the last bidder standing for Weyerhaeuser's chronically underperforming, U.S.-based containerboard assets," Connelly wrote.
Unemployment Claims See Increase
The number of newly laid off workers filing claims for unemployment benefits increased last week after a big decline in the previous week.
The Labor Department said Thursday that applications for unemployment benefits rose to 372,000, an increase of 17,000 from the previous week.
The four-week average for claims was 376,000, down only slightly from 376,750, the previous week. Aside from the period in the fall of 2005 after Hurricane Katrina hit, the four-week average for claims has risen to levels last seen in 2003 when the country was mired in a long jobless recovery after the 2001 recession.
Claims have been unusually volatile in recent weeks, falling by 51,000 two weeks ago after having risen by 35,000 the week before that.
The unemployment rate jumped to 5.1 percent in March as businesses cut 80,000 jobs, the biggest drop in payrolls in five years.
In another sign of labor market weakness, the total number of people receiving unemployment benefits rose to 2.98 million for the week ending April 5, up 26,000 from the previous week and the largest amount in nearly four years.
Cummins Mid-South Donates Billboard to ArtsMemphis
Cummins Mid-South LLC has donated a billboard at 3770 S. Perkins Road to ArtsMemphis to inspire other local businesses to support the arts.
The billboard features young dancers from Watoto De Afrika's "African Butterfly" troupe performing in traditional costume.
Watoto De Afrika is a performing arts program for black children ages 8 to 17. The program was founded by Donald O'Conner in the mid-1980s.
"We first saw Watoto De Afrika perform more than 10 years ago, and everyone was impressed," said Tom Owens, vice president for marketing, communication and business development of Cummins Mid-South. "We've been proud supporters ever since. It is vital to recognize the impact we all can have if we help keep the arts alive in our community."
Farmers Market To Open Saturday
The Memphis Farmers Market will open Saturday, two weeks earlier than usual, at The Pavilion at Central Station on Front Street at G.E. Patterson Avenue in the South Main Arts District.
The preseason market will have handcrafted artisan products, including soaps and lotions, hand-turned wooden bowls, and cutting boards, among other products.
Also, there will be fresh vegetables such as turnip greens, onions, potatoes and spinach.
USTA Tournament Comes to Tunica
The United States Tennis Association Pro Challenger tournament is coming to Tunica May 3-10 at Tunica National Golf and Tennis.
The Fitz Casino & Hotel will host players in the tournament at the casino's newly renovated hotel.
Tunica National is both the title sponsor and the event location, and the event will be free to the public during the qualifying rounds and daily main matches. The finals will be held May 10.
This report compiled by Rosalind Guy with contributions from reporters Andy Meek and Eric Smith, editorial assistant Rebekah Hearn and The Associated Press.