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VOL. 123 | NO. 208 | Thursday, October 23, 2008

Daily Digest

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Lamar Crossing Developer Sells Center to TICs

Lamar South LLC, the company that developed the Lamar Crossing shopping center at 2926 Lamar Ave., has sold the property to a pair of tenant-in-common buyers for a combined $6.6 million.

An entity called Lamar Crossing McKinney LLC bought 78.5 percent and Lamar Crossing Maiden LLC bought 21.5 percent of the center.

The 64,835-square-foot retail center, completed in 2006, sits on 9.5 acres off Lamar Avenue/U.S. 78, just north of Interstate 240. It’s the site of the former Cherokee Lanes bowling alley. The Shelby County Assessor of Property’s 2008 appraisal is $4.2 million.

Calls to two of the partners for Chattanooga-based Lamar South were not immediately returned.

Source: The Daily News Online & Chandler Reports

Center City Board To Discuss Streetscape Bid

At today’s Center City Commission board of director’s meeting, members will discuss the bid selection for Streetscape Improvements Phase II, among other things.

The item relates to streetscape improvements adjacent to Court Square Center and the Burch, Porter & Johnson PLLC building at 130 N. Court Ave. Zellner Construction Services has been recommended for the project.

Board members also will receive reports from the Safety & Security, Traffic & Transportation and Clean & Green committees. Members will get a monthly financial report update, as well as highlights of the month from the marketing, operations and the planning and development departments.

The meeting will begin at noon at the CCC, 114 N. Main St.

CA Shrinks Circulation, Increases Subscription Rates

The Commercial Appeal has for the second time this year stopped delivery to outlying areas and is raising rates to cut costs.

“Simply put, we are making very difficult decisions to help our business survive,” Karl D. Wurzbach, the newspaper’s vice president of circulation, said in a recent letter to subscribers.

All subscriptions will increase by $2 a month beginning this month. Last week, the newspaper stopped deliveries to another 5,600 subscribers. This followed a cutback in March when the newspaper stopped deliveries to 4,000 readers.

“We have seen newsprint increase by over 30 percent while health care expense grew by over 21 percent in 2008 and will go up another 20 percent in 2009,” Wurzbach wrote. “At the same time, gasoline prices have forced us to subsidize the carriers who deliver your newspapers by as much as $75,000 per month.”

NWA Loses $317M in Q3, Driven by Hedging

Northwest Airlines Corp. on Wednesday posted a $317 million third-quarter loss driven by fuel hedges that are in the red because of falling oil prices, but said it would have made money otherwise.

The nation’s fifth-largest carrier reported that it lost $1.20 per share, compared to a profit of $244 million, or 93 cents per share, during the same period last year. Revenue rose 12.4 percent to almost $3.8 billion.

Northwest reported that without the accounting charges for the fuel hedges it would have made a profit of $93 million, or 35 cents per share. That’s well ahead of the average of analysts surveyed by Thomson Reuters, who expected a profit of 25 cents per share on revenue of $3.78 billion.

Northwest’s non-cash charge for fuel hedges that are under water was $410 million.

Northwest collected 8.1 percent more in so-called unit revenue, or money collected per passenger for each available seat it flew. That happened even as Northwest, like other big carriers, shrank. Airlines began removing capacity late in the July-to-September quarter, originally as a way to fight high fuel prices. Fuel prices fell but removing flights ended up cushioning airlines from an economic slowdown.

Those reductions make airlines “well-suited to deal with potential future demand softness,” President and Chief Executive Doug Steenland said on a conference call.

“The airline industry in general and Northwest in particular are well positioned to prosper despite the current economic uncertainties,” he said.

Northwest officials said the airline saves $40 million per year for every $1 per barrel decline in oil prices – and oil has fallen more than $70 since its peak in July. But even though oil prices are off their peak, Northwest still paid more than $688 million more for jet fuel during the quarter than during the same period last year.

Northwest also predicted a fourth-quarter operating profit based on current market predictions for oil prices. That would not include possible accounting charges for fuel hedging.

Fed to Bump Up Rate on Bank Reserves

The Federal Reserve announced Wednesday it will boost the interest rate paid to commercial banks on excess reserves, helping the central bank battle the credit crisis.

The move will encourage banks to keep excess reserves at the Fed because they will be earning higher interest on that money. That will give the Fed more control over interest rates and more leverage to battle the credit debacle.

Under the new formula, which takes effect today, the Fed will pay banks 1.15 percent on excess reserves. The Fed pays banks three-quarters of a percentage point under the old formula.

Congress in the recently enacted $700 billion financial bailout bill gave the Fed the power to pay interest on reserves for the first time.

The Fed concluded that narrowing the difference between its key lending rate – called the federal funds rate – and the rate paid on excess reserves “would help foster trading in the funds market at rates closer to the target rate.”

The funds rate is the rate banks charge each other on overnight loans. That rate – now at 1.50 percent – is the Fed’s main lever for influencing overall economic activity. The change announced Wednesday should help keep the funds rate more stable.

“The board will continue to evaluate the appropriate setting of the rate on excess balances in light of evolving market conditions and make further adjustments as needed,” the Fed said.

Porter-Leath Seeks Volunteers for Toy Truck

Porter-Leath is looking for volunteer groups to collect donations for the organization’s children as part of the annual WRVR Toy Truck event.

The volunteer groups will collect donations for Porter-Leath using WRVR collection cans throughout November. Groups can be businesses, schools, clubs, organizations or any other local group that would like to participate.

Funds raised will be delivered to the WRVR Toy Truck event Dec. 1-5 at Bud Davis Cadillac and all proceeds will benefit the children and families served by Porter-Leath.

Interested groups can contact Porter-Leath at 577-4100 or visit www.porterleath.org for more information and to schedule a time to pick up cans.

Court Lifts Ban On Medtronic’s Use of Stent

A court order that bars Medtronic Inc.’s use of a system for implanting stents in heart patients will end on Oct. 29, the medical device maker has reported.

A federal court in Northern California ordered the end to the injunction preventing Medtronic’s access to the Rapid Exchange system. Medtronic officials said on Tuesday night that the court found Abbott Laboratories, which holds a patent on the system, would not suffer irreparable injury from an end to the injunction.

Scott Stoffel, a spokesman for Abbott, said Wednesday the Chicago-based company “is studying its options, including a potential appeal and seeking significant damages.”

Abbott said last week that the U.S. Patent and Trademark Office had granted an interim yearlong extension of its patent on the stent delivery system. Stoffel said Wednesday that Abbott is confident the patent office will grant a longer extension running until May 2011.

The injunction, which dates to 2000, bars Medtronic from manufacturing, using or selling any Rapid Exchange catheter in the U.S. that infringes on Abbott’s patent.

Medtronic said it would announce its commercial plans related to the system after the injunction ends.

Doctors use the system to implant stents in patients with clogged coronary arteries. Stents are tiny mesh-metal tubes that prop open arteries that have been surgically cleared of plaque.

PROPERTY SALES 94 322 4,193
MORTGAGES 95 320 4,710
BANKRUPTCIES 48 211 3,096