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VOL. 128 | NO. 152 | Tuesday, August 6, 2013

Daily Digest

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California Investor Buys Airways Villas Complex

An affiliate of Foothill Ranch, Calif.-based West Egg Enterprises has paid $1.8 million for the 182-unit Airways Villas Apartments at 2305 Pendleton St. in the Defense Depot area.

Olson West LLC bought the multifamily property in a June 28 limited warranty deed from Nashville-based Pendleton Pines Associates LLC, formerly known as Bel-Air Garden Apartments LP. That entity bought the property in 1994 for $350,000.

Built in 1965, the Class D, 117,356-square-foot complex sits on 6.7 acres on the west side of Pendleton Street north of its intersection with Ketchum Road.

The Shelby County Assessor of Property’s 2013 appraisal is $1.1 million.

The complex is 40 percent occupied, according to a listing on LoopNet.

In conjunction with the purchase, Olson West filed a $1.5 million loan through W. Lee Corbet PC.

Jermaine Massey signed the trust deed as manager on behalf of West Egg Enterprises and as president of Olson West.

West Egg earlier this year bought the Peachtree Apartments 3186 Steel St. in Frayser, one of a handful of recent local investments.

Source: The Daily News Online & Chandler Reports

– Daily News staff

Memphis PMC Plant to Expand

PMC Group N.A. Inc. announced Monday, Aug. 5, that it is consolidating its manufacturing operations in Ohio, Kentucky and Memphis as part of an ongoing effort to improve production efficiency.

The company said it would invest in “significant capacity” expansions at its Memphis and Carrolton, Ky., facilities for stabilizers, lubricants, tin intermediates and ester intermediates.

The chemical and plastics company said the transition would begin during the fourth quarter and is expected to be complete by the end of the first quarter of 2014.

“The current economic environment drove the need to optimize the manufacturing footprint of the organometallics business,” said Dr. Matthew Stershic, general manager of PMC Organometallix Inc. in a statement “Our investments in this project will position the business to more efficiently serve its customers and invest in technological innovations for the future.”

PMC Biogenix, a subsidiary of PM Group, operates a 42-acre campus in North Memphis, where it focuses on the production of oleochemicals. PMC acquired those operations in 2010, when the company acquired Chemtura Corp.’s oleochemical business

– Amos Maki

Seed Hatchery Companies Close Down Operations

A few companies that participated in the inaugural round of Seed Hatchery in 2011 have shut down their operations in recent months.

Work for Pie, a platform to help developers find work, and stiQRd, a QR code-based loyalty and rewards platform, have both closed down.

stiQRd shut down in April, citing a lack of funding and half the team leaving Memphis for other pursuits. Meanwhile, Work for Pie announced via a message on its website Friday, Aug. 2, that it too is shutting down, partly because of a lack of funding.

“On the surface, the reasons are simple,” Work for Pie founders Cliff McKinney and Brad Montgomery wrote. “1. Work for Pie isn’t generating enough revenue to allow us to continue working on it full-time. 2. We failed to secure additional funding to support the company as we built the business. 3. We needed to be able to financially support our families and ultimately decided that we needed new jobs to do so. 4. We didn’t think it was fair to our users, our clients or especially to our new employers to continue to run Work for Pie on a part-time basis.

“To Seed Hatchery and Start Co., thank you for getting us started on this entrepreneurial journey. Despite this outcome, we’d both do it all over again, and you helped us get off the ground. We learned a lot via Seed Hatchery, and are still learning from the folks we’ve had the privilege of mentoring over the past couple years. Thank you for taking chances on crazy ideas and hungry founders who don’t yet know what they don’t know.”

– Andy Meek

International Paper Tower Construction to Begin Soon

Highwoods Properties Inc. is getting close to starting construction on International Paper’s new office tower.

Highwoods has filed a $952,440 building permit to lay the foundation for the $56.1 million office tower.

Highwoods is aiming to begin construction by the end of August and complete the building early in the second quarter of 2015.

The new tower will be International Paper’s fourth building at its East Memphis office campus and is part of the company’s headquarters expansion.

Earlier this year, the Memphis and Shelby County Economic Development Growth Engine granted the company a $56.9 million payment-in-lieu-of-taxes incentive to persuade International Paper to stay in Memphis and expand. The company will retain 2,274 high-paying jobs in Memphis, add 101 new employees and build the fourth office tower.

– Amos Maki

Longleaf Funds Underperform in Second Quarter

The Longleaf Partners family of mutual funds – for which Memphis-based Southeastern Asset Management acts as adviser – had a disappointing second quarter.

Three of the four funds were down for the quarter.

The four funds and their quarterly results are the Partners Fund (down 1.8 percent), the Small-Cap Fund (up 2.53 percent), the International Fund (down 1 percent) and the Global Fund (down 0.9 percent).

In a quarterly letter to shareholders, Southeastern’s leadership said that where the Longleaf investments aren’t meeting expectations, discussions are underway with managers of the companies in which the funds invest.

That’s so the companies’ action plans can be evaluated and a continuing analysis can be made about whether those companies still meet the Longleaf investment criteria.

“While absolute returns are our primary focus, underperforming the market over these periods is disappointing and unacceptable, but not unprecedented,” the letter reads.

“When we had a similarly tough stretch in 2000, the Partners and Small-Cap Funds fell behind their benchmarks for 1-, 5-, and 10-year periods by a much wider margin than today’s Partners Fund lag. Then and now, the combination of a few stock-specific challenges and an extreme market environment that rewarded a narrow segment of stocks caused our underperformance.”

– Andy Meek

Mississippi Casinos Upping the Ante

Gambling revenue has fallen $550,000 since 2007 for casinos in Mississippi – from $2.8 billion to $2.25 billion.

Mississippi once was the nation’s third-largest gambling market, but has lost standing in the last few years, The Clarion-Ledger reported.

Along with the gambling revenues, tax revenues from casinos have dropped $54.4 million, from $194 million in fiscal 2008 to $139.6 million in the fiscal year that ended June 30.

Officials cite competition from other states as the biggest challenge – more than the recession, Hurricane Katrina in 2005 and the Deepwater Horizon oil spill of 2010.

“Gaming isn’t unique anymore – it’s everywhere,” said Allen Godfrey, executive director of the Mississippi Gaming Commission.

Heartland cities like Chicago, Detroit and St. Louis overtook Mississippi last year in the American Gaming Association’s list of the top 20 U.S. casino markets. So did Philadelphia, Pa., and the state of Connecticut. The Mississippi Gulf Coast was No. 8, at almost $1.1 billion in economic impact. Tunica County was No. 10, at $821.9 million. Las Vegas and Atlantic City continue to hold the top two spots.

“Early on, a lot of our visitors came from Oklahoma and Nebraska,” said Lyn Arnold, president and CEO of the Tunica County Chamber of Commerce and Economic Development Foundation.

“Now, Oklahoma has 92 gaming facilities. The competition has been a big drain.”

The state’s oldest casino, the Isle of Capri, is being renovated as a Golden Nugget casino. Spokesman Brad Rhines says it will reopen as the newest, freshest casino on the Gulf Coast.

– The Associated Press

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