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VOL. 6 | NO. 3 | Saturday, January 12, 2013

Daily Digest

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Council Delays Vote on Wage Theft Ordinance

At their first meeting of 2013, Memphis City Council members delayed until Feb. 5 a vote on third and final reading of a “wage theft” ordinance.

Council member Myron Lowery called for the delay at the Tuesday, Jan. 8, meeting saying he wanted to wait until the Shelby County Commission takes its final vote later this month on the same ordinance.

Lowery also said negotiations are under way with the Memphis Restaurant Association and the Memphis Hotel-Motel Association on the terms of the ordinance. Both industry associations have expressed concerns about the original draft.

The council also approved a resolution asking the state for grant money to help pay the cost of infrastructure improvements for the $300 million expansion of the Nike plant in Frayser. And the council approved two street-alley closures related to the expansion near New Allen Road and Frayser Boulevard.

The council approved a special use permit for a four-story 87-room Holiday Inn Express and Suites on Elvis Presley Boulevard being built by EP3 Developers LLC. The site of the Hernando Place hotel is on 3.49 acres that is now a vacant lot on the west side of Elvis Presley near Winchester with entrances on Hernando Road.

Lawmakers Re-Elect State Constitutional Officers

The Legislature has unanimously re-elected the Secretary of State Tre Hargett, Comptroller Justin Wilson and Treasurer David Lillard to another term in office.

Hargett was elected Wednesday to another four-year term, while Wilson and Lillard won their third two-year terms in office. All three were first elected by the Republican majority in the General Assembly in 2009.

Hargett is a former chairman of the Tennessee Regulatory Authority and represented Bartlett in the state House from 1997 through 2006.

Wilson is a Nashville tax attorney who as an aide to then-Gov. Don Sundquist was a supporter for a failed effort to impose a state income tax in 2002. Lillard, of Germantown, is a former member of the Shelby County Commission and financial and tax attorney.

Memphis-Based EdR Closes 2012 on Busy Note

EdR – a Memphis-based developer, owner and manager of collegiate housing – had several closings and transactions in November and December, including $126.5 million in acquisitions and $25.5 million in dispositions.

EdR completed the purchase of two communities adjacent to Texas Tech University in Lubbock, Texas, for $74 million. EdR also closed on its sale of The Reserve at Star Pass – a 1,020-bed collegiate housing community near the University of Arizona – for $25.5 million.

The company purchased The Province, a collegiate community adjacent to Kent State University, for $45 million.

And EdR acquired the ground lease encumbering its 74 percent owned asset, University Towers – a 953-bed collegiate community adjacent to North Carolina State University in Raleigh, N.C. – for $7.5 million.

EdR, an apartment-only Real Estate Investment Trust, owns or manages 67 communities in 24 states with more than 37,000 beds within more than 12,000 units.

Law Enforcement Group Opposes Wine Bill

A group of sheriffs and police chiefs is speaking out against a legislative proposal to allow wine to be sold in Tennessee grocery and convenience stores.

Madison County Sheriff David Woolfork said at a news conference at the legislative office complex in Nashville that greater availability of wine would come at the price of public safety because it would draw the attention of law enforcement away from more pressing issues.

Knoxville Police Chief David Rausch said a recent incident that led a fraternity to be banned from the University of Tennessee should dispel supporters’ claims that underage drinkers aren’t interested in obtaining wine.

In that case a 20-year-old Memphis student was hospitalized after a drinking game involving boxed wine that allegedly included consuming it through an enema.

Memphis Area Association of Realtors Reports December Sales

Memphis-area home sales for December increased 26.5 percent from a year ago, with 1,156 total sales recorded in the Memphis Area Association of Realtors MAARdata property records database.

Average sales price year to date was up 2.2 percent at $128,774.

Total home sales year to date were up 17.2 percent, and monthly sales volume increased 19.8 percent to $1.94 billion.

Total sales decreased 2 percent from November. Inventory declined 4.8 percent, with 6,481 units listed for sale.

The database includes records of all property transactions in Shelby, Fayette and Tipton counties.

To see real estate information company Chandler Reports’ 2012, fourth quarter and December totals for Shelby County, look for the Jan. 18-24 edition of The Memphis News.

December Tax Collections Beat Projections by $25 Million

Tennessee’s general fund revenue collections came in $25 million above expectations in December, bringing the total surplus through the first five months of the budget year to $84 million.

December revenue collections reflect economic activity in November, which included shopping activity surrounding the Thanksgiving holiday.

Finance Commissioner Mark Emkes said the results may reflect renewed consumer confidence, but said revenue figures to be released next month will give a better picture of Christmas season retail activity.

The state collected about $12 million more than expected in December, a 5 percent growth rate. Corporate franchise and excise were nearly $13 million above the budgeted estimate.

New Federal Rules to Curb Risky Mortgages

Federal regulators for the first time are laying out rules aimed at ensuring that mortgage borrowers can afford to repay the loans they take out.

The rules being unveiled Thursday by the Consumer Financial Protection Bureau impose a range of obligations and restrictions on lenders, including bans on the risky “interest-only” and “no documentation” loans that helped inflate the housing bubble.

Lenders will be required to verify and inspect borrowers’ financial records. The rules discourage them from saddling borrowers with total debt payments totaling more than 43 percent of the person’s annual income. That includes existing debts like credit cards and student loans.

CFPB Director Richard Cordray, in remarks prepared for an event Thursday, called the rules “the true essence of ‘responsible lending.’”

The rules, which take effect next year, aim to “make sure that people who work hard to buy their own home can be assured of not only greater consumer protections but also reasonable access to credit,” he said.

Cordray noted that in years leading up to the 2008 financial crisis, consumers could easily obtain mortgages that they could not afford to repay. In contrast, in subsequent years banks tightened lending so much that few could qualify for a home loan. The new rules seek out a middle ground by protecting consumers from bad loans while giving banks the legal assurances they need to increase lending, he said.

The mortgage-lending overhaul is a priority for the agency, which was created under the 2010 financial law known as the Dodd-Frank Act. The agency is charged with reducing the risk of a credit bubble by helping to ensure that borrowers are better informed and loans are more likely to be repaid.

Bronson Sporting Goods Adopts Green Lighting

Tommy Bronson Sporting Goods, a local sporting goods provider for 86 years, has installed Green Ballast Inc.’s patented daylight harvesting fluorescent light ballasts in its new East Memphis location at 964 June Road.

Cliff Hunter, owner of Tommy Bronson Sporting Goods, said in a statement that “proper lighting is a key aspect of merchandising.”

Green Ballast, led by CEO J. Kevin Adams of CB Richard Ellis Memphis, is a developer and marketer of energy efficient electronic ballasts for fluorescent fixtures in the commercial lighting industry. Green Ballast’s ballasts measure and harvest available daylight to calculate and provide only the amount of needed electricity for proper lighting.

In addition to Tommy Bronson, Green Ballast has added several clients to its portfolio in recent months, including commercial real estate developer Belz Enterprises and Scottsdale, Ariz.-based Real Estate Investment Trust Healthcare Trust of America Inc.

Central Defense Security Distributes Coats

Central Defense Security, a leading provider of business, retail and warehouse security, recently distributed 40 coats to underprivileged families served by Memphis community centers.

The coats were collected from CDS employees, clients and the community during a coat drive in November. After the collection efforts, CDS had all of the coats professionally cleaned by Mercury Valet Dry Cleaners, which donated its services.

CDS then worked with Whitehaven Community Center to identify recipients for each of the 40 coats.

The coats were distributed Dec. 7 at the Whitehaven Community Center.

Federal Reserve Pays Government $88.9 Billion

The Federal Reserve paid the federal government a record $88.9 billion in 2012. The central bank earned the money from the Treasury bonds and mortgage-backed securities it has purchased to drive interest rates lower and boost the economy.

The Fed said Thursday that the 2012 payment was up 17.9 percent from 2011 when it paid the federal government $75.4 billion. It also surpassed the previous record payment of $79.3 billion made in 2010.

The Fed began buying Treasury bonds and mortgage bonds during the last recession and has kept up the effort since the downturn ended in June 2009 in an effort to boost the sub-par recovery and lower high unemployment. It is currently purchasing $85 billion in bonds each month.

Fed officials say the massive bond buying, known as quantitative easing, is needed until economic growth is stronger. But critics contend that the bond purchases could ultimately lead to higher inflation.

All of the Fed’s purchases have pushed the central bank’s balance sheet to $2.92 trillion, more than three times the size of the Fed’s holdings before the financial crisis struck in the fall of 2008.

The Fed is funded from interest earned on its portfolio of securities. After covering its expenses, the Fed makes a payment of the remaining amount to the Treasury Department. Before the Fed launched the first bond buying program in 2008, its annual payments had averaged below $30 billion for the previous three years.

The 2012 payment to the Treasury was reduced by $387 million, which went to fund the operations of the Consumer Financial Protection Bureau and the Office of Financial Research, two new agencies created by the 2010 Dodd-Frank Act, which overhauled the government’s financial regulations. Republicans opposed having these agencies receive their operating funds from the Federal Reserve rather than going through the normal appropriations process in Congress.

Hamlet Pleads Not Guilty in Petties Organization Case

A high-ranking member of the Craig Petties drug organization pleaded not guilty Tuesday, Jan. 8, to federal racketeering and drug conspiracy charges.

Chris Hamlet returned to the U.S. in December after serving a prison sentence in Mexico. Hamlet was indicted in 2002 by a federal grand jury in Memphis as part of an investigation that became the largest drug case ever brought in Memphis federal court.

Hamlet’s court-appointed attorney, Robert L. Parris, waived a detention hearing before Federal Magistrate Tu Pham meaning Hamlet will remain in federal custody.

Hamlet fled to Mexico in 2002 along with Petties. Petties was indicted that April as the lone defendant in the first in the series of indictments that eventually mapped out a violent multi-state drug organization with direct ties to the Sinaloa drug cartel in Mexico. Petties was initially charged with possessing 600 pounds of marijuana.

Hamlet was stopped by police a month after the initial Petties indictment coming from Petties’ home and authorities found drugs in the car and at his house in Raleigh.

That was when Petties and Hamlet fled to Mexico. Petties ran the drug organization from Mexico for the next six years and Hamlet was allegedly a key member of the organization.

Myers Named Chief Manager Of Apperson Crump

Richard Myers has been named chief manager of Apperson Crump PLC, Memphis’ oldest continuously practicing law firm. It’s the second time for Myers as the firm’s chief manager. He previously filled that role in 2010 and 2011.

Myers began practicing in 1992 and joined Apperson Crump in 1997. He became a partner in 2002. His practice concentrates on municipal and property law and foreclosure-related matters.

A graduate of the University of Chicago and the Cornell University Law School, Myers also is a director of the World Cataract Foundation.

Kinard Takes Director Job at Memphis Area Association of Realtors

The Memphis Area Association of Realtors has hired Christy Kinard as its new governmental affairs and professional standards director. Her first official day on the job will be Wednesday, Jan. 16.

Kinard most recently served as the legislative affairs advisor/assistant county attorney for Shelby County. She worked 12 years for Shelby County Government, serving as assistant county attorney since 2006. From 2008 to 2011, Kinard was an attorney and parliamentarian for the Shelby County Board of Commissioners.

Kinard received her undergraduate and law degrees from the University of Memphis.

GTx Drug Receives Fast-Track Status From FDA

An experimental GTx Inc. treatment for muscle wasting in patients with a form of lung cancer will be reviewed under the Food and Drug Administration’s fast-track program.

The Memphis company said Tuesday that the drug, enobosarm, is being studied in a couple late-stage trials involving patients with advanced forms of non-small cell lung cancer.

The FDA’s fast-track program is designed to speed up the approval of drugs that treat serious or life-threatening diseases for which there are few other therapies. Those that receive fast-track status receive extra meetings and correspondence with regulators throughout the review process.

The status also raises the possibility of a faster, priority review from the FDA once the drug developer seeks approval.

GTx focuses on developing treatments for cancer and other serious medical conditions. Enobosarm is the most advanced product in the company’s drug development pipeline.

GTx shares rose 60 cents, or 12.6 percent, to $5.35 in premarket trading. Its shares have traded in a 52-week range of $2.62 to $6.55 per share.

International Paper Declares Dividend

International Paper Co. declared a quarterly dividend Tuesday, Jan. 8, of 30 cents per share for the period from Jan. 1 to March 31, 2013. The dividend on common stock in the Memphis-based company is payable on March 15 to holders of record as of the close of business Feb. 15.

The company also announced a regular quarterly dividend of $1 per share for the same period, payable on the same date under the same terms on its cumulative $4 preferred stock.

International Paper executives are scheduled to release their fourth quarter and year-end earnings information Jan. 29 in a conference call with investors and analysts.

Malco Theatres ‘Wraps’ Up Fundraiser

This year, more than 86,500 bows were sold during Malco Theatres’ five-week holiday campaign “Wrapped with Love.”

The annual campaign benefits St. Jude Children’s Research Hospital. The program is in its 14th year, and this year it saw an increase of more than 6,000 bows sold compared to 2011.

The bows are hand-made from actual film and sold for $1 each. The material and volunteer production hours for the bows were donated, and a formal check presentation at the hospital is being planned for early spring.

Since 1999, Malco has raised more than $500,000 for St. Jude through its annual “Wrapped with Love” and “Kids Summer Film Fest” campaigns.

Will Barden Joins Colliers International

Commercial real estate veteran Will Barden has joined Colliers International Memphis as vice president of office services, effective Jan. 2.

Barden brings a wealth of experience in office tenant and user representation and will be teaming with Frazier Baker to help further expand Colliers’ presence in office real estate.

A graduate of the University of Memphis, Barden previously was the principal broker for his own commercial real estate practice, Barden Commercial Realty LLC, for 11 years. Prior to that, he was director of brokerage services group with Trammel Crow Co. for five years.

Before Barden’s real estate career, he worked in finance and accounting positions for 23 years, culminating in his position as chief financial officer for Langston Cos. Inc., a privately held industrial packaging concern based in Memphis.

Federal Lawmakers Assess River Rock-Removal Effort

Two federal lawmakers from Illinois are getting a firsthand look at urgent efforts to clear some Mississippi River bedrock that’s crimping shipping on the waterway.

Sen. Dick Durbin and Rep. Bill Enyart were set to be briefed Monday about the work near Thebes, Ill., by Army Corps of Engineers and Coast Guard officials, then tour the site by boat.

Corps-hired contractors have been working since last month to clear the underwater rock pinnacles from the river.

The effort is considered vital in ensuring that stretch of river remains open to barge traffic as the lingering drought continues to lower the level of the Mississippi.

Barge industry trade groups have expressed concern the ever-dropping river could further restrict barge weights to the point that shipping on the river is halted.

Tennesseans Urged to Test for Radon

Two state agencies, the federal government and the American Lung Association are encouraging Tennesseans to test their homes for radon.

Radon is a naturally occurring gas that can enter homes through foundation cracks or openings.

It’s invisible and odorless and high concentrations can cause health problems including lung cancer.

The Environmental Protection Agency estimates that 70 percent of Tennesseans live in areas with high or moderate risk of radon.

The Tennessee Health Department and the state Department of Environment and Conservation are offering more information about radon and radon testing on their websites or by calling toll free to 800-232-1130.

State officials recommend testing for radon during consistently cold weather.

Supreme Court Hears Dispute Over Class Actions

The U.S. Supreme Court is questioning efforts by consumers’ lawyers to limit the amount of money sought in class-action lawsuits so they are heard in state courts rather than more business-friendly federal court.

The justices on Monday appeared receptive to an insurance company’s argument that lawyers artificially lower the amount of money at stake to keep the lawsuits in state courts that often favor plaintiffs.

The Standard Fire Insurance Co. of Hartford, Conn., says the tactic drags out lawsuits and makes fighting them so expensive that companies would rather settle.

The case involves a 2005 federal law that allows defendants to transfer class actions involving more than $5 million to federal court.

Standard Fire is being sued by an Arkansas homeowner over the cost of repairing hail damage.

High Court Rejects Medicare Challenge

The U.S. Supreme Court has turned away a challenge from former House Majority Leader Dick Armey and other Social Security recipients who say they have the right to reject Medicare in favor of continuing health coverage from private insurers.

The justices did not comment Monday in letting stand a federal appeals court ruling that held that there is no way for people who receive Social Security to reject Medicare benefits.

Armey, a Texas Republican, and two other former federal employees say private insurance covers more than Medicare. Two other plaintiffs are wealthy individuals who have high deductible private insurance and prefer to pay for their health care.

The case was funded by a group called The Fund For Personal Liberty, which says its purpose is to take on burdensome government regulations.

Bureau of Investigation Taking Citizen's Academy Applications

The Tennessee Bureau of Investigation is accepting applications for its Citizen’s Academy.

The TBI says the academy is designed to develop a better understanding and awareness of the agency in the community. It offers citizens a close look at the TBI’s work investigating crime scenes and cyber crime, tracking terrorism information, and doing forensics examinations.

The academy runs from May 7 through May 28 at TBI headquarters in Nashville. It is limited to only 15 citizens.

Applicants must be at least 21 years old and be physically able to meet training and scheduling requirements.

Those interested should fill out the application located on the TBI website at www.tbi.tn.gov and submit it by Feb. 28.

Oil Falls as Uncertainty Hits Energy Markets

The price of oil fell Monday, hit by uncertainty about what the U.S. Federal Reserve might do with its bond purchase program and data showing the U.S. unemployment rate unchanged.

By early afternoon in Europe, benchmark crude for February delivery was down 44 cents to $92.65 per barrel in electronic trading on the New York Mercantile Exchange.

On Friday, the Nymex contract closed up 17 cents at $93.09 a barrel after the U.S. Energy Department’s Energy Information Administration reported that the nation’s crude supplies fell by 11.1 million barrels during the last week of 2012, much more than analysts expected.

The impact of last week’s release of a transcript of the Federal Reserve’s December meeting showing that policymakers disagreed over how long to keep a bond-purchase program in place was still being felt on the market.

Traders inferred the Fed might shorten the program, which could send U.S. interest rates, and therefore the dollar, higher. That in turn would hurt the price of oil. Oil, which is priced in dollars, tends to fall as the dollar strengthens and makes crude more expensive for investors holding foreign currencies.

On Monday, the euro was down at $1.3030 from $1.3065 on Friday.

Brent crude, used to price international varieties of oil, was down 44 cents to $110.87 a barrel on the ICE Futures exchange in London.

Unemployment Benefits Extended in Tennessee

Tennessee residents will continue to get federal extended unemployment benefits for at least another year.

The Tennessee Department of Labor and Workforce Development had warned late last month that the benefits were about to expire.

But the agency announced last week that they have been extended through Jan. 1, 2014.

Congress created the Emergency Unemployment Compensation program in 2008 to provide unemployment benefits to workers who had exhausted their state benefits. The legislation has been amended 10 times since it became effective.

About 30,000 Tennesseans receive the benefits.

Labor Commissioner Karla Davis said in a news release that claimants can get help finding jobs by using the Jobs4TN.gov website or visiting one of the department’s career centers.

In-Synk Business Book Review Makes Changes

The two-year-old In-Synk Business Book Review is getting an upgrade in 2013.

It had been held on the first Friday morning of each month. But in the new year, it’s moving to the noon hour. It will include lunch, upgrading the series to a lunch-and-learn format.

The In-Synk Business Book Review will continue to introduce the content of a “latest or greatest” business or leadership book, after which a discussion will ensue.

The first book review of 2013 will be Friday, Jan. 11, when Synk will review “Good Strategy, Bad Strategy: The Difference and Why it Matters,” by Richard Rumelt.

To celebrate the new time and the addition of lunch, Synk is offering a couple of other incentives to attend. All participants in the Book Review in 2012 are eligible for a free ticket. Two-for-the-price-of-one tickets also available, as is a six-ticket season pass.

To register for the January book review, visit http://insynkgoodstratbadstrat.eventbrite.com, or www.in-synk.com, or http://bookreviewseasonpass.eventbrite.com for a season pass.

The book reviews will continue to be held at the Triumph Bank board room at Poplar Avenue and Interstate 240.

Doors will open at 11:30 a.m., the review begins at noon and will end by 12:45 p.m.

Laurenzi to Head Local Civil Rights Unit

Veteran federal prosecutor Larry Laurenzi is the new chief of the Civil Rights Unit of the U.S. Attorney’s office for the Western District of Tennessee.

Laurenzi was appointed to the post by U.S. Attorney Ed Stanton as Steve Parker leaves the post to join a U.S. Justice Department detail in New Orleans.

Stanton created the unit within the office in February 2011 as part of a new division of cases. The unit’s jurisdiction includes not only traditional civil rights violation investigations and cases but some government corruption cases as well as human trafficking cases and hate crime allegations.

Laurenzi has served several times as acting U.S. attorney for the district.

Assistant U.S. Attorneys Brian Coleman and Jonathan Skrmetti remain with the unit.

Ray Rico Freelance Moves Into Cooper-Young

Ray Rico Freelance has inked a lease for 550 square feet in the heart of the Cooper-Young Historic District after working for six years as a freelancer out of his nearby home and hiring strictly contract labor.

The space at 2294 Young Ave. sits on the opposite corner of the current Cooper-Young Business Association office. Previous tenants include Victory Bicycle Studio and Shoenista’s.

Rico had outside bricks sandblasted and constructed and painted inside walls in order to better prepare the space for client meetings. The team has already been working with Eric Mathews of LaunchMemphis on its one-year growth plan, to open Memphis’ first creative co-op.

Additionally, Ray Rico Freelance has created and filled two full-time positions. Kathy Benefiel, who has a background in the medical field, manages office administration and bookkeeping. Tammy Bryant, with past experience in print sales and advertising, oversees new business development and client expectations. Ray Rico Freelance also plans to employ a full-time Web developer.

Ray Rico Freelance specializes in branding and design, speedy printing and online marketing, including social media and website design. Other services include grant writing, promotional items, copywriting and editing, photography and videography.

PROPERTY SALES 93 424 6,970
MORTGAGES 42 281 4,410
BUILDING PERMITS 196 704 16,619
BANKRUPTCIES 38 174 3,570