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VOL. 124 | NO. 42 | Tuesday, March 3, 2009

Daily Digest

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New Owner Files $1M Loan on Shoe Store

The new owner of the Shoe and Boot Outlet at 3430 Summer Ave. has filed a $1 million construction loan through First Tennessee Bank NA for the property. The owner, 3430 Summer LLC, bought the 6,413-square-foot building Feb. 24 for $426,000 from Helen Eaton and Robert Eaton.

Mark Kabbes signed the trust deed as manager of 3430 Summer LLC. Kabbes is president of Seakay Construction Corp. in Boyds, Md. A message left with him at the company’s main phone number wasn’t immediately returned.

Constructed in 1968, the building sits on 0.85 acres northeast of the National Street and Summer Avenue intersection in the Highland Heights Subdivision. The Shelby County Assessor of Property’s 2008 appraisal was $200,000.

The transaction also included an assignment of rents and leases to the lender, First Tennessee.

The Summer Avenue property formerly was home to a bank and the Holy Trinity United Church of Christ before Shoe and Boot Outlet took over in 2003, according to public records.

Source: The Daily News Online & Chandler Reports

Construction Activity Falls More Than Expected

Construction spending plunged more than twice as much as expected in January, led by the largest drop in nonresidential activity in 15 years.

The U.S. Commerce Department reported Monday that overall construction spending dropped 3.3 percent in January, the fourth straight monthly decline, with weakness in all major categories of the building industry. Wall Street economists surveyed by Thomson Reuters expected a 1.5 percent drop in spending.

Residential construction fell 2.9 percent and nonresidential activity dropped 4.3 percent, the biggest decline since January 1994.

Homebuilders are struggling through the worst housing slump in decades. Builders have cut back sharply, but face a rising glut of unsold homes as record mortgage foreclosures dump more properties on the market.

Until recently, the weakness in home construction had been partially offset by strength in nonresidential building. But with the financial sector facing its worst crisis in seven decades, banks have tightened their loan standards, making it harder to get financing for shopping centers and other commercial projects.

Government building also fell. The 2.3 percent drop came as states and municipalities were forced to tighten their belts in the face of the severe downturn.

State and local construction dipped 2.3 percent, while federal construction dropped 6.6 percent.

The overall drop in construction pushed total spending on a seasonally adjusted annual rate to $986.2 billion, the slowest pace since June 2004.

The big declines in housing and rising mortgage defaults have contributed to the worst financial crisis in seven decades. Even with a $700 billion financial rescue package, the government has not been able to stabilize conditions.

Stanford Accounts To Remain Frozen

A federal judge ruled Monday that thousands of investor accounts with Texas billionaire R. Allen Stanford’s financial companies will remain frozen for another 10 days, and a court-appointed receiver said he’s developing a plan to return some of the money to its owners.

The accounts have been frozen by a temporary restraining order during the federal investigation of Stanford’s businesses. U.S. District Judge David C. Godbey on Monday extended the order until March 12.

Stanford’s companies have been in receivership since the U.S. Securities and Exchange Commission filed a civil action alleging involvement in an $8 billion investment fraud. Stanford is accused in the civil charges but has not been charged with a crime.

Texas lawyer Ralph Janvey, the court-appointed receiver authorized to freeze the assets of the billionaire and his main companies, said the Stanford companies have a “liquidity problem ... and tens of millions in unpaid bills.”

Janvey said he plans to start releasing accounts of less than $100,000 to their owners by March 16. Numerous accounts are not tied directly to the alleged fraud, and those account holders now face dire economic consequences because they don’t have access to their money.

“We’re very conscious of the hardships being caused to people who are very innocent,” Janvey said.

Chuck Meadows, an attorney representing R. Allen Stanford, said his client denies the allegations made in the government’s amended claim filed Friday. That claim accused Stanford and his finance chief, James M. Davis, of conducting a “massive Ponzi scheme,” misappropriating billions of dollars of investors’ money and falsifying bank financial statements to conceal the fraud.

Stanford’s chief investment officer Laura Pendergest-Holt, the third executive named in the SEC’s complaint along with R. Allen Stanford and Davis, worked in Stanford’s East Memphis office.

Medtronic Layoffs to Come; Announcement Set for May

Medtronic Inc. Chief Executive Officer William A. Hawkins in a teleconference broadcast to the medical device company’s global employees last week advised that job cuts are being considered, but specifics will not be known until May.

The company employs about 1,400 in Memphis at its Spinal and Biologics Business division. Steve Cragle, the company’s director of corporate public relations, said no decision has been made as to the number of positions or what divisions or geographic operations would be affected. He said the company was striving to be “as transparent as possible” with its global employee base and that any job cuts would follow other cost-cutting measures.

Medtronic is also freezing its merit-based raises and its executive team is taking a 5 percent pay cut. Medtronic is not immune to a highly volatile global economy, Cragle said.

Shelby County Democrats To Begin Leadership Selection

After some confusion and political maneuvering, the Shelby County Democratic Party will begin the two-part process of selecting new leadership Saturday.

The ward and precinct caucuses at Airways Middle School Saturday morning are to select delegates to the March 28 local party convention also at Airways Middle School.

Those delegates will then pick a new local party chairman and executive committee.

Among those vying for chairman are attorneys Van Turner and Jay Bailey, Shelby County Board of Commissioners member J.W. Gibson and party vice chairman Cherry Davis.

Current chairman Keith Norman is not seeking another two-year term.

This Saturday’s gathering is a matter of turning out the largest number of supporters for those campaigning for chairman. The caucuses are divided into state house districts.

Last month, an attempt by the local party to set the date of the first session caused some confusion because of the two-part process Shelby County Democrats use. Most of the state’s other county party organizations do the delegate selection and the convention on the same day.

Addy Awards Given to Local Firms

The Memphis Advertising Federation distributed Silver and Gold ADDY Awards Saturday night.

The top award winners included Counterpart Communication Design for Best of Show, archer>malmo for Best of Print, Red Deluxe for Best of Electronic, archer>malmo for Best Out-of-Home, Harvest Creative for Outstanding Art Direction, Counterpart Communication Design for Outstanding Copywriting and Oden for the Judges’ Special Award.

Snowflake Technologies Receives Innovation Award

Memphis-based biometrics company Snowflake Technologies has been awarded the 2009 Frost & Sullivan Technology Innovation of the Year Award in the North American Biometrics Market for its prototype, which was launched last year.

Snowflake is a subsidiary of Luminetx Corp. The biometrics product is similar to Luminetx’s VeinViewer in that it allows vein patterns to be seen underneath the skin.

The Snowflake prototype uses an identity verification system using an industry approach known as vein pattern recognition.

Frost & Sullivan noted the prototype’s touch-free feature, user-friendliness and accuracy in bestowing the award.

$65K Raised by Local Ronald McDonald House

The Ronald McDonald House Charities of Memphis raised more than $65,000 at its Oscar Night America 2009 party last month.

The Academy Awards viewing party attracted more than 450 guests and was one of 52 officially sanctioned parties by the Academy of Motion Picture Arts and Sciences.

Ronald McDonald House will also hold a Rock the House Online Radiothon Auction March 12-13.

Throughout its 18-year history, the Radiothon Auction has raised more than $5.5 million for children and families of Ronald McDonald House Charities.

To donate, call 800-230-54337 or visit rockthehouse.cmarket.com.

PROPERTY SALES 91 293 13,051
MORTGAGES 58 168 8,171
BUILDING PERMITS 99 744 30,678
BANKRUPTCIES 34 156 6,220