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VOL. 123 | NO. 241 | Wednesday, December 10, 2008

Daily Digest

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Former Bill Heard Dealership Sells for $10 Million

The former Bill Heard Chevrolet dealership in Collierville has sold for $10 million. Eagle Land Co. LLC, which shares a Columbus, Ga., address with Bill Heard Chevrolet Inc., has sold the property at 4605 Houston Levee Road to Sunrise Buick Pontiac GMC at Collierville LLC.

Sunrise Buick took out a $10 million loan from GMAC Bank in conjunction with the sale. The loan has a maturity date of Jan. 1, 2014.

Columbus, Ga.-based Bill Heard Enterprises Inc. filed Chapter 11 bankruptcy protection in September, closing all 13 of its locations throughout the country. Bill Heard once was the largest chain of Chevy dealers in the U.S.

The dealership is an 111,885-square-foot, two-story car masonry building built in 2000. It sits on a 20.3-acre lot at the southwest corner of Houston Levee Road and Tenn. 385.

The Shelby County Assessor’s 2008 appraisal of the property is $11.6 million.

When reached by phone at the dealership, a representative answered the phone “Sunrise Buick,” but could not comment on the sale. A message left for the general manager was not immediately returned.

Attempts to reach representatives with Bill Heard were not returned by press time, and officials with the Collierville town government were unavailable for comment.

Source: The Daily News Online & Chandler Reports

Trust One to Cut 11 Jobs in Memphis

Trust One Bank, a subsidiary of Georgia-based Synovus Financial Corp., will begin a round of job cuts starting Jan. 2 and ending Oct. 2. Eleven of the company’s 78 Memphis jobs will be cut, according to a notice it filed with the Federal Deposit Insurance Corp. Dec. 3.

The staff reductions are part of a company streamlining effort begun in April and is called Project Optimus. As part of the project, Synovus is looking to find $50 million in savings and expects to cut 650 jobs over the next two years, according to company information.

AutoZone Posts Lower Fiscal First-Quarter Profit

Auto parts retailer AutoZone Inc. reported Tuesday its fiscal first-quarter profit fell slightly amid higher expenses and weak domestic same-store sales in a tough economy.

For the quarter ended Nov. 22, the Memphis-based company earned $131.4 million, down less than a percent from $132.5 million in the same quarter last year. Earnings per share rose to $2.23 per share from $2.02 because of fewer shares outstanding in the recent period.

Sales rose 1.6 percent to $1.48 billion from $1.46 billion in the year-ago period. But domestic same-store sales – or sales at domestic stores open at least a year – fell 1.5 percent.

Analysts polled by Thomson Reuters expected a profit of $2.18 per share on $1.49 billion in sales.

Company officials attributed the sales shortfall to disruptions caused by hurricanes Gustav and Ike, noting that sales became more consistent beginning in October.

During the quarter AutoZone opened 30 new stores in the U.S. and two stores in Mexico. As of Nov. 22, the company had 4,122 stores in the U.S. and 150 stores in Mexico.

Pending Home Sales Down Slightly in October

Pending U.S. home sales fell slightly in October, despite a spate of bad economic news and turmoil in the stock markets, the National Association of Realtors reported Tuesday.

The group’s seasonally adjusted index of pending sales for existing homes fell 0.7 percent from September to a reading of 88.9, beating economists’ average estimate of 86.5, according to a survey by Thomson Reuters. The index was 1 percent below October a year ago.

Home sales have rebounded in recent months in large part because deeply discounted foreclosures and distressed sales account for up to 40 percent of all transactions, according to the Realtors group.

Home sales are considered pending when the seller has accepted an offer, but the deal has not yet closed. Typically there is a one- to two-month lag before a sale is completed.

An index reading of 100 is equal to the average level of sales activity in 2001, when the index started. It sunk to a record low of 83 in March.

While conditions are uneven around the country, the Realtors association noted that pending home sales are showing gains in some areas, including in Florida and California markets, Providence, R.I., Lansing, Mich., Oklahoma City and Las Vegas.

The pending home sales index posted annual declines in every region but the West, which saw a 17.4 percent increase.

Separately, the Realtors association estimated U.S. existing home sales will total 4.96 million this year, compared to 5.65 million in 2007.

Prices are expected to fall more than 9 percent to a median of $198,500.

Next year, sales are expected to increase to 5.19 million, and prices will edge up to a median of $199,200.

Still, Lawrence Yun, chief economist for the NAR, said that projecting prices is tough in an ever-changing economic environment with variables that differ by region.

“The home price correction to date has brought prices in line with fundamentals, but buyer pessimism could cause prices to overshoot downward, resulting in further economic deterioration,” Yun said.

Looking ahead into 2009, the 30-year fixed-rate mortgage probably will be 5.6 percent in the first quarter, and rise to 6 percent by the end of 2009, the Realtors association reported.

Corker Disappointed In Auto Bailout Direction

U.S. Sen. Bob Corker, R-Tenn., released a statement Monday expressing his disappointment with the shape a bailout plan for the auto industry is taking that congressional Democrats are pushing, which appears set to include a $15 billion loan to hard-pressed automakers.

Corker, a member of the Senate Banking, Housing and Urban Affairs Committee, told reporters a few days ago the situation facing the Big 3 carmakers – General Motors, Chrysler and Ford – is dire but that if the companies are not willing to make tough changes on their own that he would not support extending taxpayer money to them.

“We’re on the precipice right now,” Corker said. “These companies – General Motors, I think, will not make it beyond the end of December. Chrysler is on the verge of the same thing, and Chrysler is searching for someone to buy them. Ford’s in a little different situation ... and there is no way I would risk one penny of taxpayer money unless they’re willing to do the draconian things they need to do to be successful.”

Three Area Arts Orgs. Receive $10K Grants

Opera Memphis, Ballet Memphis and the Germantown Performing Arts Centre each have been awarded $10,000 grants from the National Endowment for the Arts in the first round of grants awarded for 2009.

Opera Memphis was awarded its grant to support performances of “Scott Joplin and Treemonisha,” based on the opera by Joplin. Ballet Memphis was awarded its grant to support the creation and presentation of “AbunDance: Visual Riches,” a series of dances based on a work of art seen at a local museum or gallery. GPAC was awarded the grant for its presentation of Italy’s Teatro de Piazzo O D’Occasione’s “Farfalle” (Butterflies).

The National Endowment of the Arts will distribute more than $23 million in the first round of the 2009 fiscal year to support more than 1,000 projects by nonprofit national, regional, state and local organizations as well as 42 poets. Eight organizations in the state of Tennessee have received grants totaling $93,000.

Fitch Says Recession Challenges Freight Shippers

Fitch Ratings reported Tuesday that 2009 will be more difficult than this year for freight shippers, as the recession drags down the financial performance of trucking and railroad companies.

The credit-rating agency said the large railroads are in better shape to handle the recession because they are coming out of five years of strong growth and enjoy more pricing power.

Fitch said high profit margins at Union Pacific Corp., Burlington Northern Santa Fe Corp., CSX Corp. and Norfolk Southern Corp. have kept their debt ratios in check despite increased borrowing. Each has relatively large cash balances and access to credit, Fitch said.

The agency said it doesn’t expect changes in the railroads’ credit ratings or outlooks in 2009 unless the companies borrow more heavily to buy back their own shares.

The trucking industry enters 2009 in weaker health, Fitch said. Overcapacity has hurt pricing power, particularly in the less-than-truckload sector, and demand has remained weak through the fourth quarter.

With consumer spending and industrial companies such as auto manufacturers expected to cut back, trucking companies face more risk for “a significant decline” in credit quality next year, Fitch said.

Fitch has “negative” rating outlooks on several trucking companies, including FedEx Corp., which has a large less-than-truckload business. Fitch said it could lower the issuer default rating of YRC Worldwide and Con-way.

PROPERTY SALES 38 38 20,670
MORTGAGES 45 45 23,790
BUILDING PERMITS 187 187 42,781
BANKRUPTCIES 57 57 13,237