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VOL. 124 | NO. 131 | Tuesday, July 7, 2009

Daily Digest

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Foreclosure Issued For 310 Beale St.

Two entities, 310 Beale Street Properties LLC and Hurricane Memphis LLC, have defaulted on a December 2001 construction loan for $2.6 million. The lender is Wachovia Commercial Mortgage Inc. doing business as The Money Store Commercial Mortgage Inc. The first-run foreclosure notice appears on Page 40 of today’s paper.

The property facing foreclosure is 310 Beale St., the home of the former Pat O’Brien’s. Curtis Wegener signed the construction deed as manager and member of 310 Beale Street Properties LLC.

The Memphis Center City Development Corp., Alabama Community Development Inc., U.S. Small Business Administration and the Tennessee Department of Revenue all are listed as interested parties in the property.

The foreclosure notice also states the trustees “shall sell concurrently therewith all the personal property owned by 310 Beale Street Properties LLC and Hurricane Memphis LLC,” including “all machinery, equipment, furniture and fixtures.”

Several entities are listed as interested parties in the sale of the personal property: The Money Store Commercial Mortgage Inc., Wachovia SBA Lending Inc., Alabama Development Corp., U.S. Small Business Administration-Tennessee District Office, Enterprise National Bank and First Commerce Leasing Inc.

Carla Peacher-Ryan and R. Spencer Clift III of Baker, Donelson, Bearman, Caldwell & Berkowitz PC have been appointed substitute trustees for the sale, which is scheduled to be July 31 at noon on the southwest steps of the Shelby County Courthouse.

In 2007, Hurricane Memphis LLC defaulted on the same loan, and Wachovia initiated foreclosure proceedings at that time. Hurricane Memphis LLC filed a Chapter 11 bankruptcy petition in May 2008 just ahead of the scheduled foreclosure sale. Pat O’Brien’s closed four months later.

This foreclosure notice also follows a June ruling by a federal bankruptcy judge who denied plans to open a new hip-hop nightclub as Liquid on Beale. The plan was proposed by Cato Walker and Curtis Givens, who founded the former Premier Club on American Way.

See the June 16 issue of The Daily News and the May 30 issue of The Memphis News at www.memphisdailynews.com for more on the court ruling and the troubled history of 310 Beale St.

Source: The Daily News Online & Chandler Reports

Service Sector Shrinks Less Than Expected

The U.S. services economy – from retailers and restaurants to real estate brokers – contracted less than expected in June in its best showing since before the financial crisis struck last fall, according to a private trade group’s gauge.

But with rising unemployment and constrained credit driving consumers to spend less and save more, one analyst said a sustained economic recovery likely is years, not months, away.

“It’s going to take a long time before the economy is really back up to its potential,” said Capital Economics analyst Paul Ashworth.

While the U.S. should see growth in the next few months, he said it could be 2011 or 2012 before the economy reaches a rate of activity that helps boost wages, he said.

The Institute for Supply Management on Monday reported that its services index rose to 47 in June from 44 in May. Economists polled by Thomson Reuters had expected a June reading of 45.5.

Any reading below 50 indicates the services sector is shrinking, and June marked the ninth straight month of contraction. Still, it was the best showing since September, when the index was at 50.

Service industries such as retailing, financial services, transportation and health care make up about 70 percent of the country’s economic activity. Any turnaround in the sector requires improved consumer spending.

The country’s restaurants, shops, professional and other service providers have been hurt as consumers save more and spend less amid the longest recession since World War II.

Business activity, new orders and employment contracted at a sharply slower pace in June than in May, according to the ISM survey. All three hit their highest levels since September, and business activity, at 49.8, is nearly in growth territory.

“The ISM employment indices suggest payrolls should be falling at about 200,000 a month now,” Ashworth said. Employers cut 467,000 jobs in June, and companies slashed an average of nearly 700,000 jobs a month during the first quarter of this year.

The ISM services index closely reflects the country’s retail sales, said High Frequency Economics analyst Ian Shepherdson. National chains this week are expected to report weak sales for June, and Shepherdson doesn’t expect much improvement over the summer.

Miss. Counties Rush To Spend Bridge Funds

More than a dozen Mississippi counties are trying to spend $9 million in state money on bridge replacements before the state takes the money away.

A law that took effect Wednesday will allow the Mississippi Department of Transportation to take back Local System Bridge Program money if counties do not start bridge projects within two years.

As of March, 19 counties stood to lose money when the law took effect. Most of them, upon learning about the law, have started bidding projects or have awarded contracts.

DeSoto County has $202,166 in unspent bridge funds.

Lauderdale County has $2.5 million in unspent bridge funds, the most of any county.

During the past two months, Lauderdale State Aid Engineer Terrell Temple said the county has gotten 14 bridges slated for replacement and three more are in the pipeline.

Catholic Diocese of Memphis To Offer Autism Program

The Catholic schools in the Diocese of Memphis will offer a new program to serve young children with a mild diagnosis of Autism Spectrum Disorder for the 2009-2010 school year.

The Hopeful Outcomes for Preschool and Elementary students program (HOPE) will be offered at Resurrection Catholic School in southeast Memphis for students 3 to 5 years old. Classes will be available either three or five days a week between 8:30 a.m. and 2:30 p.m.

The HOPE program is designed to provide a smaller structured setting with developmentally appropriate teaching strategies using the principles of applied behavior analysis. The program also will offer support workshops to families.

Scholarships will be available to those in need of financial assistance.

For more information about the HOPE program, call Debbie Bell, principal of Resurrection Catholic School, at 546-9926.

Crude Tumbles on Doubts About Economic Rebound

Oil prices tumbled to five-week lows Monday on growing evidence of an extended recession that could mean demand for energy will remain weak for some time.

Benchmark crude for August delivery fell $2.43 – nearly 4 percent – to $64.30 a barrel on the New York Mercantile Exchange.

It was the fourth straight day of declines on Nymex and since the beginning of the month, crude prices have fallen about 8 percent. Prices fell as low as $63.40 Monday.

Natural gas prices plunged as well.

Major energy users, like industrial manufacturers, have been hit hard by the recession and unemployment data released last week in the U.S. and Europe doused hopes for a quick recovery.

“The recent evidence concerning the U.S. economy is terrible. The news regarding Europe seems no better,” said economist Philip Verleger. “This suggests oil use will continue to decline for another year.”

Oil prices had been rising for months on the belief that the economy would improve by the end of the year. Prices also have been pushed higher by the weak U.S. currency.

Because crude is bought and sold in dollars, it essentially becomes cheaper when the dollar falls against other currencies. And the dollar has fallen steadily with the U.S. government spending billions to prop up major banks and the auto industry.

PROPERTY SALES 97 418 8,253
MORTGAGES 112 508 9,293
BUILDING PERMITS 194 1,059 18,126
BANKRUPTCIES 46 208 5,367