VOL. 127 | NO. 224 | Thursday, November 15, 2012
Delek Buys Lion Oil Facility for $6.4 Million
Delek Logistics Operating LLC has paid $6.4 million for the oil distribution terminal at 1023 Riverside Drive from Lion Oil Co.
The Nov. 7 sale was part of an ongoing transaction in which Brentwood, Tenn.-based Delek US Holdings Inc. acquired the majority interest in Jackson, Miss.-based Lion Oil Co. The acquisition began in 2007 when Delek bought a minority interest in Lion.
Built in 1990, the Memphis facility includes 5,575 square feet of building space plus oil distribution infrastructure on 6.3 acres along the west side of Riverside near its intersection with the Jack Carley Causeway at the entrance to Presidents Island.
The Shelby County Assessor of Property’s 2012 appraisal is $334,400.
The transaction also included two parcels near the main property that provide port access.
Delek Logistics Operating filed a $2.5 million deed of trust and security agreement with assignment of rents through Fifth Third Bank. Danny Norris signed the trust deed as vice president of finance for the borrower.
Source: The Daily News Online & Chandler Reports
– Daily News staff
Center City Revenue Finance Corp. Passes Financing for Downtown Buildings
The Downtown Memphis Commission’s Center City Revenue Finance Corp. passed several housekeeping items at its Tuesday, Nov. 13, board meeting, including assigning a payment-in-lieu-of-taxes (PILOT) lease agreement to Montreal-based Olymbec USA LLC for Brinkley Plaza, 80 Monroe Ave.
In addition, the CCRFC assigned Residence Inn’s PILOT lease at 110 Monroe Ave. to Hospitality Opportunity Fund LLC, which will be taking possession of the 89-unit hotel Nov. 30. Cordova-based Hospitality Management Advisors Inc. has managed the 89-unit property since its construction in 2003 for both Main/Monroe Hotel Partners LP and Houston-based Moody National Cos.
The property was recently auctioned off in lieu of foreclosure and Hospitality Opportunity Fund has teamed with Hospitality Management Advisors to renovate and continue operating the hotel. Paul Morris, president of the Downtown Memphis Commission, said the new buyer “intends to invest some serious money and upgrades into the building and recapitalize it, which will help that property a lot.”
Meanwhile, the CCRFC granted Santa Monica, Calif.-based Hertz Memphis Tree LLC’s request to refinance 175 Toyota Plaza, located at 185 Monroe Ave., with Magna Bank. The CCRFC also voted to allow refinancing the Peabody Hotel Tract at Union Avenue and Second Street for Hotel Peabody GP with Wells Fargo Bank NA.
– Sarah Baker
County Retirement Fund has Strong September
The size of Shelby County’s retirement fund portfolio in September represented the biggest monthly total for 2012.
In fact, the county’s nearly $950 million retirement fund – the amount it stood at as of September, the most recent figures show – is now as big as it’s been since July 2011, when the fund’s valuation approached $970 million.
The fund’s stock holdings are up 13.7 percent year to date and were up 2.4 percent for the month of September. Year to date, the total fund’s valuation is up 10.4 percent.
– Andy Meek
Pinnacle Airlines Delays Reorganization Plan
Pinnacle Airlines Corp. has delayed filing a reorganization plan and financial disclosure to Delta Air Lines possibly until the end of December.
The Memphis-based regional air carrier announced Tuesday, Nov. 13, that it reached the agreement Nov. 7 with Delta.
Delta is the major carrier Pinnacle plans to work with in a bankruptcy reorganization plan that has changed several times.
The latest changes came when Delta reached a contract agreement with the Air Line Pilots Association in June that allowed it to drop service by 50-seat jets quicker than anticipated. Delta and other carriers who use the small jets for regional service say they are too small to use efficiently with the rise in jet fuel prices recently.
The labor agreement caused Pinnacle to scrap an earlier reorganization plan it outlined in April when the company filed for bankruptcy in New York City. The new emerging plan has included a push by Pinnacle for wage and benefit concessions in new contracts it is negotiating with union employees.
The more rapid move away from the 50-seat jets, which Pinnacle still has in its fleet, has caused the carrier to have to compete with other carriers for Delta’s regional and connecting flight business.
Delta followed the contract agreement with pilots with an announcement in October that it will “refleet” to “mainline” aircraft that are 76 seats and larger with the first of those larger jets debuting next summer.
Delta is scheduled to announce more specific details of the refleeting at a December investors day conference in Atlanta, where the airline is based.
– Bill Dries
US Retail Sales Drop 0.3 Percent in October
Americans cut back on spending at retail businesses in October, an indication that some remain cautious about the economic outlook. Superstorm Sandy also depressed car sales and slowed business in the Northeast at the end of the month.
The Commerce Department said Wednesday that sales dropped 0.3 percent after three months of gains. Auto sales fell 1.5 percent, the most in more than a year.
Excluding the volatile categories of autos, gas and building materials, sales fell 0.1 percent. That followed a 0.9 percent gain in September for that category. Online and catalog purchases fell 1.8 percent, the most in a year. Electronics and clothing stores also posted lower sales.
The government said Sandy “had both positive and negative effects” on sales. Some stores and restaurants closed and lost business. Others reported sales increases ahead of the storm as people bought supplies.
Most economists said they thought the storm overall held back sales. Still, they noted that consumers showed signs of cutting back on spending before the weather disrupted business.
Paul Dales, senior U.S. economist at Capital Economics, said November will be a crucial test of the consumer. He noted that many could be starting to worry about tax cuts that will expire at the end of the year if Congress and the White House fail to reach a budget deal before then.
In September, retail sales jumped 1.3 percent. Spending rose in nearly all categories.
The October decline in retail sales may be temporary, economists said. Kavic noted that auto sales may pick up in November as Americans replace cars damaged by the hurricane.
– The Associated Press
Business Stockpiles Grow 0.7 Percent in September
U.S. businesses increased their stockpiles in September, further evidence that economic growth was stronger over the summer than first thought.
The Commerce Department said Wednesday that inventories grew 0.7 percent in September, after a 0.6 percent increase in August.
Retailers, manufacturers and wholesale distributors all boosted their stockpiles. Their sales rose 1.4 percent in September – the most in more than a year.
Companies typically increase their stockpiles when they anticipate sales will rise in coming months. Faster restocking helps drive economic growth. When businesses order more goods, it usually leads to more factory production.
Wholesale stockpiles account for about 27 percent of total business inventories. Stockpiles held by retailers make up about one-third of the total and manufacturing inventories represent about 40 percent.
While growth this summer has improved, economists are still wary about the final three months of this year. Many are worried that companies will hold back on hiring and investment because of the “fiscal cliff,” the package of tax increases and spending cuts slated to take effect early next year. Unless Congress and the White House agree to delay or replace the cliff, it could push the economy into recession in the first half of next year.
Recent reports, however, have shown signs of improvement. Hiring has picked up, which has boosted consumer confidence. Employers added 171,000 jobs in October and job gains in August and September were higher than first estimated.
– The Associated Press