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VOL. 6 | NO. 7 | Saturday, February 9, 2013

Daily Digest

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Fred’s Says Sales Increase in January

Fred's Inc. reported Thursday that an extra week helped its revenue for January, but results were more modest by comparison to the prior year on an adjusted basis.

The general merchandise retailer said that its total revenue for January increased 31 percent to $173.6 million compared with $132.4 million in the four-week period of the prior year. But after eliminating the week that ended Feb. 2 of 2013 to make the period comparable to the prior year, its total revenue increased 2 percent for January.

Fred's said that its revenue from stores open at least a year increased 28.6 percent for January but were flat on an adjusted basis. This is considered a key indicator of a retailer's financial performance as it strips away the impact of recently opened or closed stores.

CEO Bruce A. Efird said the company was pleased by improving sales momentum in January, driven by pharmacy and tobacco revenue, as well as programs to help increase the average amount customers decided to spend each visit. He said delays in early tax refunds slowed some sales but overall, management is pleased with the direction of the business.

The company is adding some new pharmacy services, expanding its auto and hardware product offerings and rolling out new concepts, including a smaller drug and dollar store. Efird said that there are significant opportunities to drive higher sales and profits in 2013.

Memphis-based Fred's operates 712 discount general merchandise stores.

Memphis Attorney Ryder Named Republican National Committee Counsel

Memphis attorney and veteran Republican National Committeeman John Ryder is the new general counsel to the Republican National Committee.

Ryder’s appointment was announced Thursday, Feb. 7, by RNC chairman Reince Priebus.

Ryder, of the Memphis law firm Harris, Shelton, Hanover & Walsh PLLC was first elected to the Republican National Committee in 1996. He has served as chairman of the national party’s redistricting committee and presidential nominating schedule committee.

MAA’s Net Income Rises in Fourth Quarter

MAA reported a fourth quarter net income of $22.3 million, as compared to $18.8 million during the fourth quarter of 2011.

Net income results for the quarter ended Dec. 31 for the Memphis-based, apartment-only Real Estate Investment Trust included $3.2 million related to gains on the sale of one apartment community, while net income results for the quarter ended Dec. 31, 2011, included $7.9 million related to gains on the sale of one apartment community.

Net income for the year was $105.2 million, as compared to $48.8 million, in 2011. Net income results for the year ended Dec. 31, included $41.6 million related to gains on the sale of nine apartment communities, while net income results for the year ended Dec. 31, 2011, included $12.8 million related to gains on the sale of two apartment communities.

Funds from Operations (FFO) for the fourth quarter was $53.4 million, as compared to $43.1 million, for the fourth quarter of 2011. For the year, FFO was $196.3 million, compared to $155.5 million in 2011. FFO’s fourth quarter and year-end performance per share both tallied record performances for the company.

MAA’s physical occupancy for same-store portfolio in Q4 averaged 95.6 percent and average effective rents grew 4.8 percent over the same period in the prior year. Resident turnover remained historically low at 56.1 percent on a trailing 12-month basis.

The company funded an additional $20.5 million of costs related to the development pipeline during the fourth quarter, completing construction at the second of five communities under development.

Following quarter end, MAA received a first-time issuer investment grade rating from Standard & Poor's Rating Services of BBB – with a positive outlook.

City Council Begins Move to Ballot on Sales Tax Hike

The Memphis City Council approved on the first of three readings Tuesday, Feb. 5, the ordinance setting up a referendum on a citywide half cent sales tax hike to be held “by Sept. 30, 2013.”

The council delayed action on a resolution that would establish revenue from the tax hike, estimated at $47 million, would be used to fund pre-kindergarten programs and to roll back the city’s property tax rate by 20 cents in the fiscal year that begins July 1. The delay was to vote on the resolution at the same March council meeting when the referendum ordinance is up for third and final reading.

Council member Myron Lowery withdrew his pending “wage theft” ordinance before a vote on third and final reading. Lowery said he pulled the proposal because a version of it failed before the Shelby County Commission previously. Lowery added that he might also bring the proposal back to the council. If he does it would start again at the first of three readings.

The council also approved a $2 million allocation for the Memphis Light, Gas and Water Division trust fund to Memphis Biomed Ventures III LP.

But the council delayed for two weeks a vote on a $10,000 expansion of the utility’s Smart Meter demonstration project with Itron Inc.

The expansion would bring the contract to a value of $390,300.

Council member Janis Fullilove moved for the delay to the Feb. 19 council meeting, saying she wanted to review the demonstration project in council committee sessions that same day.

Memphis Investment Firm Expands Into Nashville

Memphis-based investment firm Duncan-Williams Inc. has continued its national expansion with the opening of a Nashville office.

As part of the expansion, H. Denny Taylor Jr. has joined Duncan-Williams in Nashville as a managing director and will serve as co-head of mergers, acquisitions and capital raising.

Taylor is joined in the Nashville office by Dave Meagher, managing director of health care investment banking.

Taylor brings to Duncan-Williams a 15-year track record of advising companies in business and health care services in various types of M&A transactions, and public and private equity offerings. He has extensive experience in middle-market investment banking with SunTrust Banks Inc., Robinson Humphrey and Morgan Keegan & Co. Inc. He holds undergraduate and graduate degrees from Vanderbilt University and Rice University.

Tennessee Supreme Court Hears Arguments on Voter ID

The Tennessee Supreme Court has heard arguments from the city of Memphis and its residents challenging the state’s voter ID law.

Memphis and two of its residents sued the state of Tennessee to force election officials to accept Memphis library cards as identification at the polls.

The state attorney general’s office argued during Feb. 6 oral arguments the law requires either a state-issued photo ID, federal identification or an ID issued from another state.

Janet M. Kleinfelter, from the Attorney General’s office, also argued that the law was not so onerous that it would deprive people of the right to vote.

But attorneys representing Memphis contend the law makes it too difficult for some people to vote, including 650 people who have not had their votes counted in the last two elections.

Arnot Joins Hillwood as Market Director

Dallas-based Hillwood Investment Properties has hired Bates Arnot as market director.

Arnot will be responsible for marketing and leasing industrial properties in the Dallas and Memphis markets.

Prior to joining Hillwood, Arnot served as senior associate with Stream Realty Partners in Dallas where he focused on institutional leasing, acquisitions and dispositions in the Great Southwest industrial market. While at Stream Realty, he represented several institutional owners including Clarion Partners, KTR Partners, Cabot Properties, Stockbridge Capital Group, DRA Advisors, Interventure Advisors, Prologis and the Dallas Cowboys.

Arnot is a graduate of the University of Texas at Austin, where he received a bachelor’s degree in economics.

Riverfront Development Corp. Promotes Spence

Dorchelle T. Spence has been promoted to vice president of the Riverfront Development Corp., the nonprofit with jurisdiction over the Memphis riverfront public spaces and amenities.

Spence was promoted from her position as communications director. Her new duties have been broadened to include strategic direction as well as marketing, public relations, programming and community relations.

Spence joined the corporation in 2001 after working with the Memphis Redbirds Baseball Foundation and in similar positions at Baptist Memorial Health Care, First Tennessee Bank and Girls Inc. of Memphis.

Forsythe Appraisals Opens Memphis Office

St. Paul, Minn.-based Forsythe Appraisals LLC, the largest independent provider of residential real estate appraisals in the U.S., has opened a Memphis branch office, managed by Chuck Seagle.

The office will provide residential appraisal solutions in Fayette, Haywood, Shelby and Tipton counties. This is Forsythe Appraisals’ second branch office in the state of Tennessee, behind its Nashville branch, which opened in 2006.

Forsythe Appraisals’ president and CEO John Forsythe said in a press release that Memphis is a market that has been on the company’s expansion short-list for “quite some time.” Forsythe Appraisals targets Metropolitan Statistical Areas with populations in excess of 1 million, in markets where housing and employment are “diverse and stable.”

A Memphis native, Seagle is a certified appraiser with more than two decades of industry experience in western and middle Tennessee. He is a graduate of the University of Memphis, a published author on appraisal topics, and was a member of the City of Bartlett planning commission from 2003 to 2007.

Caraway Certified as Million Dollar Advocate

Kirk Caraway, an attorney with Allen, Summers, Simpson, Lillie & Gresham PLLC, has been certified as a member of the Million Dollar Advocates Forum.

The forum is a prestigious group of U.S. trial lawyers. Membership is limited to attorneys who have won million-dollar and multimillion-dollar verdicts, awards and settlements. It was founded in 1993, and there are about 4,000 members throughout the country.

Caraway’s experience includes presenting numerous seminars on employment law topics, litigation of workers’ compensation claims, and trial advocacy skills.

Outside of the office, he’s been involved in charitable causes benefiting underprivileged children, served as a volunteer for Special Olympics and engaged in fundraising for nonprofit legal services for the poor. He also speaks annually to high school students about the legal profession and law-related topics.

Saltsman Hired to Promote School Vouchers in State

The Washington-based American Federation for Children has hired Republican operative Chip Saltsman to promote school vouchers in Tennessee.

Spokeswoman Kimberly Kump said the group’s minimum objective is to help pass Republican Gov. Bill Haslam’s limited school voucher proposal. It would prefer to see the program expanded to be available to a much larger number of children.

Saltsman was most recently chief of staff to U.S. Rep. Chuck Fleischmann of Chattanooga. He previously served as chairman of the Tennessee Republican Party and ran former Arkansas Gov. Mike Huckabee’s presidential bid in 2008.

Kump said Saltsman won’t be directly lobbying lawmakers, but will be responsible for a larger public relations effort. She declined to say how much the group will spend on the promotion campaign.

Advocacy Group Pushes for Higher Teacher Standards

An education advocacy group is pushing for teacher candidates to face higher academic standards before they even begin taking college classes.

The move by the State Collaborative on Reforming Education comes after Tennessee education officials linked teacher effectiveness to better ACT scores. It said some colleges and universities admit teacher education students who score as low as 15 on the college admissions test. A score of 21 on the ACT is considered the standard of readiness for college.

Former Interim Mayor Joe Ford Arrested

Former interim Shelby County Mayor Joe Ford was arrested Tuesday, Feb. 5, by Shelby County Sheriff’s deputies after a liquor store owner swore out a warrant saying Ford had not paid a $1,301 bill from July.

Ford was arrested at his home Tuesday morning on a charge of passing a bad check and theft of property.

The manager of Lauderdale Liquors claims Ford wrote a check on his funeral home business account for $1,301 and the check bounced a month later with Ford ignoring several attempts by the business to collect.

Sheriff’s office detectives contacted Ford last month about the complaint and according to the Sheriff’s office, Ford said he would resolve the matter but did not.

Ford, a former Memphis City Council member and Shelby County Commissioner, was arrested on a similar warrant in September 2011 for theft over a bounced check for two Rolex watches he bought at Las Savell Jewelers. Ford and the business owner later resolved the dispute and the charge was withdrawn.

New Pinnacle Chief Operating Officer has Delta Connections

The new chief operating officer of Pinnacle Airlines Corp. and the last COO for the regional air carrier while it is located in Memphis is a former chief operations officer of Delta Private Jets and former president of Comair.

Ryan Gumm was named to the Pinnacle position Monday, Feb. 4, effective the following day.

The company also announced Gumm will become president and chief executive officer of Pinnacle once Pinnacle emerges from bankruptcy. Current CEO John Spanjers will retire at that time.

Gumm’s Delta connections are another indication of Delta’s intentions to acquire Pinnacle once it emerges from bankruptcy.

Comair was the wholly owned regional air carrier that Delta executives announced they would shut down this past July.

Pinnacle executives announced in January they would move their headquarters from One Commerce Square in Memphis to the Minneapolis-St. Paul International Airport by May in vacant space that is leased by Delta Air Lines.

Work Under Way at Cordova Safety Products

FTN Financial Capital Markets, a divisioRenovation plans are moving forward for Memphis-based Cordova Safety Products’ new digs at 4025 Viscount Ave.

A $600,000 building permit has been filed with the city-county Office of Construction Code Enforcement for Cordova Safety Products, a division of International Sourcing Co. Inc., owned by Himanshu Varma of Varma Family LP. Brooks & Mazzola Construction Company Inc. is listed as the contractor.

Founded in 1994, International Sourcing imports and distributes safety products to distributors and retailers nationwide.

Varma Family LP last March bought 4025 Viscount and 2063 Viscount – more than 1 million square feet of warehouse space formerly occupied by Cleo Inc. gift-wrapping company in Airport Industrial Park Section A – from Corporate Property Associates 4 for $2.6 million.

Varma Family LP in September 2011 bought a 14.4-acre site with an 141,134-square-foot existing building at 2085 W.E. Freeman Drive in Memphis Defense Depot from The Depot Redevelopment Corp. of Memphis and Shelby County, Tennessee, for $1.1 million.

Ardent Film Department Wins Mid-South Emmy

Jonathan Pekar, director of Ardent Studios film department, won the 27th Mid-South Emmy award for Best Commercial Spot for creating the animated Memphis Music Foundation commercial.

The project also showcases the talents of painter Lamar Sorrento and singer/songwriter Keia Johnson.

Pekar is presently developing a new television series called Kids of Memphis, set to air in November.

Ardent Studios, founded by John Fry, has been operating for 46 years. The studio began with early classics by Sam & Dave, Led Zeppelin, Isaac Hayes, Leon Russell and The Staples Singers, then scored hits in the 1970s, 1980s and 1990s with such artists as James Taylor, ZZ Top, REM, George Thorogood, The Allman Brothers, Bob Dylan, and Jimmie and Stevie Ray Vaughan.

In the new millennium, Ardent has recorded hits by The White Stripes, Huey Lewis and the News, Cat Power, North Mississippi Allstars, The Raconteurs, and award-winning music for such films as “Hustle and Flow.”

To date, Ardent has amassed more than 70 Gold and Platinum albums and singles.

Tom James Moves Office to Lynnfield Building

Franklin, Tenn.-based Tom James Co. recently relocated to a 2,858-square-foot office in Lynnfield Office Park Building A, 1255 Lynnfield Road, suite 150 – a result of an expansion in sales force in the custom clothier’s Memphis office.

Tom James Memphis was previously located in 1,000 square feet at 618 Oakley Office Lane near the Poplar-Perkins intersection.

Frazier Baker of Colliers International Memphis represented the tenant in lease negotiations.

Bentley Pembroke and Anna Tranum with Cushman & Wakefield/Commercial Advisors Asset Services LLC represented the landlord, Lake Worth, Fla.-based In-Rel Properties Inc.

Tom James Memphis serves about 2,000 clients in the area with custom-made suits, sportcoats, shirts, trousers, sportswear, outerwear and formal wear.

Jay Lawler, branch manager for Tom James Memphis, said the company’s new space is laid out with more front-of-the-house and back-of-the-house separation.

PROPERTY SALES 63 441 6,018
MORTGAGES 72 450 6,721
BANKRUPTCIES 0 1,045 4,093