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VOL. 7 | NO. 52 | Saturday, December 20, 2014

Daily Digest

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ServiceMaster Lays Off 40, Eliminates 21 Positions

The Servicemaster Co. announced this week it will lay off 40 employees effective next month, most of them from the company’s Memphis headquarters.

The changes also include eliminating 11 unfilled positions across the franchise services that are the various commercial and residential service brands that make up Servicemaster. Another 10 unfilled positions in Servicemaster’s Human Resources division will also be eliminated.

Southwest Adding Seasonal Memphis-Baltimore Flight

Southwest Airlines is adding a seasonal second daily nonstop flight between Memphis International Airport and Baltimore-Washington International Airport to its summer schedule, which begins June 7.

“The Washington, D.C., area is a popular destination for our passengers, so we are pleased that Southwest Airlines has chosen to add this additional summer service,” said Scott Brockman, president and CEO of the Memphis-Shelby County Airport Authority, in a statement.

The additional flight will be the second seasonal addition for Southwest in 2015 and is scheduled to conclude in August.

Dan Landson of Southwest Airlines said the additional flight “is aimed at handling the expected demand during the peak summer travel period." The airline also is adding a seasonal second frequency flight to Orlando International Airport in March.

Southwest also provides nonstop service to Chicago Midway, Houston Hobby and Tampa.

In-Rel Sells 2 Office Buildings for $16.8M

Affiliates of Clark Tower owner In-Rel Properties Inc. have sold two of the company’s other Memphis office buildings to a private equity firm for $16.8 million as part of a larger portfolio.

New York-based Mount Kellett Capital Management bought Poplar Towers at 6263 Poplar Ave. from Poplar Towers LLC for $8.7 million, or $67.01 per square foot. The firm also bought the Lipscomb & Pitts Building at 2670 Union Ave. Extended from L&P Building Owner LLC for $8.1 million, or $57.76 per square foot.

The 129,533-square-foot Poplar Towers, built in 1973, is situated on 3.7 acres on the south side of Poplar Avenue between Ridgeway and West Massey roads. The Shelby County Assessor of Property’s 2014 appraisal is $6.1 million.

The 139,388-square-foot Lipscomb & Pitts Building, built in 1975, is situated on 2.2 acres on the west side of Union Avenue Extended, south of Poplar. The assessor’s 2014 appraisal is $4.8 million.

In-Rel Properties continues to own the iconic 33-story Clark Tower on Poplar Avenue, as well as Lynnfield Office Park and the 2400 Poplar building, according to the company’s website.

Mount Kellett, which was founded by former Goldman Sachs executive Mark McGoldrick, focuses its investments on global distressed, special situations and opportunistic investing. The firm currently manages approximately $7 billion.

Tenn. Funding Board Projects Lower Growth

The State Funding Board projects that Tennessee revenue growth will slow down in the upcoming budget year.

Under revenue estimates adopted by the panel on Tuesday, the state's general fund would grow 2.6 percent to 3 percent in the budget year that begins on July 1. That compares with a revised projection for the current budget year's collections to grow 3.85 percent to 4.2 percent.

At the top of the range of the projections, the state's general fund would grow by $409 million in the current budget year and by $304 million in the next.

The Revenue Department estimates that the phase-out of the state inheritance tax will cause those collections to be $34 million next year, down from $107 million in the 2013-2014 budget year.

Elvis Presley Enterprises Seeks $57M Building Permit

Elvis Presley Enterprises has applied for a $57 million building permit for its planned 450-room hotel near Graceland.

The application for the permit filed through the city-county Office of Construction Code Enforcement lists Flintco Inc. as the contractor and Chad Stewart and Associates as the engineer.

The resort-style Guest House at Graceland, the largest hotel development in Memphis in decades, will include a grand stairwell connecting two floors in the lobby that harkens back to the main staircase at Graceland itself. The hotel, scheduled to open in fall 2015, also will include Jungle Room-inspired prints and accents, plus a sports bar and lounge that recalls the design of Graceland’s billiard room.

Other design touches include the separation of the hotel façade into three components to give it the feel of three separate residential-scale hotel buildings added over time.

This is EPE’s second building permit application for the project. In November, the company sought a $70 million building permit.

Elvis Presley Enterprises is moving forward with long-delayed plans to develop and enhance the 120-acre Graceland campus.

The development plan relies on the creation of a tax increment financing district and a tourism development zone, as well as a 5 percent tourism surcharge on tickets and similar items sold on the campus.

Memphis, Fuente Agree on Extension

University of Memphis officials announced Thursday they have reached an agreement on a contract extension with football coach Justin Fuente.

In his third year at Memphis, Fuente led the Tigers to a 9-3 record and a share of the American Athletic Conference Championship – their first league title in more than 40 years. He was the unanimous choice for American Athletic Conference Coach of the Year and a finalist for the Eddie Robinson National Coach of the Year award.

Contract terms were not announced. Fuente’s previous contract reportedly paid him a little more than $1 million per year and ran through 2017. Fuente’s name came up as several coaching jobs opened around the country. Fuente was clear that he was not going to make any “definitive” statements.

“If something comes along and there’s mutual interest and a better situation, I’ll look at all those things,” Fuente, 38, said recently, adding that he enjoys coaching at Memphis and he has a lot of “sweat equity” invested in the program.

“It is a genuine pleasure to be able to share that we have a new contract in place for Coach Fuente,” Memphis President Dr. David Rudd said in a statement. “He is a proven winner in and out of the classroom and has demonstrated a remarkable capacity to attract, retain and develop student-athletes that have been wonderful ambassadors of our University and the city of Memphis.”

The Tigers are preparing to compete in their first bowl game since 2008. Memphis will face the BYU Cougars in the Miami Beach Bowl on Monday, Dec. 22. Kickoff is slated for 1 p.m. and the game will be carried live on ESPN.

Memphis Accounting Firms Joining Forces

Two Memphis accounting firms are joining forces effective Jan. 1.

Memphis-based CPA firm Cannon Wright Blount has acquired Zoccola Kaplan PLLC, with the latter moving into Cannon Wright Blount’s newly expanded offices early next year.

Zoccola Kaplan was founded in 1983 and offers a range of services, especially in the area of audits.

Twelve employees from Zoccola Kaplan will join Cannon Wright Blount in the next several weeks, and Cannon Wright Blount says clients won’t see any change in services from the firm as a result.

Post-merger, which is Cannon Wright Blount’s fifth, the combined team will employ almost 50 people.

Haslam Taps Boyd to Lead Economic Development

Gov. Bill Haslam has named former higher education adviser Randy Boyd to become his new commissioner of economic development.

Boyd is the founder and CEO of Knoxville-based Radio Systems Corp., a privately owned maker of technology-based pet products like PetSafe and Invisible Fence.

Boyd in 2009 co-founded tnAchieves, a nonprofit scholarship organization that has helped pay the full community college tuition for more than 10,000 high school graduates, and that became a model for Haslam's free tuition program.

In 2013, Boyd become a full-time unpaid adviser to Haslam on higher education initiatives, and helped develop the governor's "Drive to 55" campaign to improve college graduation rates from 32 percent to 55 percent by the year 2025.

Boyd succeeds Bill Hagerty, who announced he was stepping down last month.

Drug Disposal Workers Charged in Drug Theft

Two men who worked at a drug disposal waste facility on Rivergate Road have been indicted on theft of property and drug possession charges by a Shelby County grand jury this week.

James Duffie and Kelvin Threat were arrested in August by the Memphis Police Organized Crime Unit at the facility. Police said they confiscated five large plastic bags filled with prescription medications in Duffie’s and Threat’s cars.

Police allege they found 195 different types of pills, syringes, lotions, patches, IV bags and liquid medication in the bags that had been discarded by nursing homes and hospitals after the deaths of patients in those facilities.

The medicine included Xanax, Demerol, Valium, Hydrocodone, Morphine, Methadone, Oxycodone and OxyContin.

Junior Achievement Plans After-School Program

Junior Achievement of Memphis and the Mid-South Inc. has partnered with Regions Bank and the Memphis Public Library & Information Center to offer ninth- through 12th-graders the JA Company Program in an after-school setting starting in January.

JA Company Program, which dates back to Junior Achievement’s founding in 1919, gives high school students the opportunity to learn firsthand the steps involved in launching their own businesses. It is part of a blended-learning approach that brings together likeminded, business-savvy high school students and professionals from across the city to discuss the basics of entrepreneurship, financial literacy and business success.

The goal of the program is for students to develop skills they need to succeed in future academics and the workplace.

The after-school sessions, held at the Benjamin L. Hooks Central Library, 3030 Poplar Ave., will be guided by corporate volunteers. Interested students in grades 9 through 12 may contact Junior Achievement at 901-366-7800 or email jloving@jamemphis.org for more information.

Outgoing Botanic Garden Director Thanks Donors

Outgoing Memphis Botanic Garden executive director Jim Duncan sent an email to supporters Wednesday thanking them for their support over the years and including the traditional year-end donation request.

However, his note asked for that donation to be made in honor of the garden’s growth over the last decade and to “establish a financial platform for the future.”

“In 2015, a new executive director will assume leadership of the Memphis Botanic Garden, with ambitions to build on the success that the garden currently enjoys,” he wrote. “The past ten years that I have served as director have been wonderful, and I have been blessed with a great staff and supporters who collectively have made our growth and current position of strength possible.

“Traditionally, we send you a year-end letter requesting a donation, and usually cite current needs and offer reasons why you should consider making a gift to the garden. While the needs and reasons are still there, this year we are asking you to make a donation that will commemorate the past ten years and help establish a financial platform for the future.”

UofM Faculty Express Concerns About Program

Faculty members at the University of Memphis say they have concerns about a new teacher training program under consideration.

The Commercial Appeal reports the newspaper and faculty obtained Relay Graduate School of Education's 448-page application last month through the Freedom of Information Act. The university has offered Relay free classroom and office space for the program that it proposes to start next summer.

According to the newspaper, faculty in the college of education sent a letter on Wednesday to President David Rudd.

"This decision is literally bringing a direct competitor onto our campus and promoting them as an option for our undergraduates to move into Relay's Graduate School of Education MAT (master's of arts in teaching) degree," according to the letter from faculty in Instruction and Curriculum Leadership.

"Of perhaps even greater concern and cause for alarm is the secretive manner in which the University's administration has undertaken this endeavor, after indicating that we would be informed as details were put into writing earlier this academic year," the letter says.

Rudd said on Thursday that he plans to forward the final agreement to faculty, but the current documents are preliminary.

The Tennessee Higher Education Commission is scheduled to decide next month whether Relay will be allowed to operate in the state.

Evaporcool Partners With Kemmons Wilson Cos.

Evaporcool Solutions, a Memphis-based manufacturer of commercial aftermarket HVAC efficiency systems, has announced a new partnership with Kemmons Wilson Cos.

Evaporcool’s product makes air-conditioning and refrigeration systems more energy-efficient and helps reduce the clients’ carbon footprint, saving the client money and lowering maintenance costs. Evaporcool’s management determined that the company was at the right stage for a strategic partner, and after a national search, Evaporcool decided to work locally with Kemmons Wilson Cos.

Kemmons Wilson Cos. will be providing not only capital for growth but also strategic and tactical guidance by playing an active role in the business.

Yamaha Jet Boat to Grow Tenn. Plant, Add 150 Jobs

Yamaha Jet Boat Manufacturing USA is expanding its production facility in East Tennessee, creating 150 new jobs.

The company announced it will spend about $18 million to buy a 36,000-square-foot building next to its current plant in Vonore that will be used for offices and production.

The company plans to begin operating in the new location by the end of next year, with production scheduled to begin in the second half of 2016.

State economic development officials planned to seek approval from the State Funding Board on Tuesday for a Fast Track grant of $870,000 for Yamaha to expand.

Yamaha is the largest manufacturer of 19- to 24-foot sport boats in the United States. The company last expanded its operations in Monroe County last year.

Homebuilder Sentiment Slips in December

U.S. homebuilders are feeling slightly less confident in their sales prospects heading into next year, even as their overall sales outlook remains favorable.

The National Association of Home Builders/Wells Fargo builder sentiment index released Monday slipped this month to 57, down one point from 58 in November.

Readings above 50 indicate more builders view sales conditions as good, rather than poor.

Builders' view of current sales conditions and their outlook for sales over the next six months also declined slightly. A measure of traffic by prospective buyers held steady.

The index also found sentiment had improved in the West and Northeast, but took a step back in the Midwest and South, which accounts for half of the new-home market.

The latest reading reflects a housing market that is slowly recovering, said David Crowe, the NAHB's chief economist.

"As we head into 2015, the housing market should continue to recover at a steady, gradual pace," Crowe said.

UTHSC Researcher Wins Breast Cancer Study Grant

Gustavo Miranda-Carboni, assistant professor in the Division of Hematology and Oncology at the University of Tennessee Health Science Center, has received a one-year grant totaling $158,232 from the National Cancer Institute, a subsidiary of the National Institutes of Health, to study triple negative breast cancer.

Breast cancer kills more than 45,000 women per year from metastasis to the brain, bones, liver and lungs. Approximately 15 to 20 percent of breast carcinomas are classified as “triple receptor negative,” and those subtypes have the worst survival outcome.

The long-term goal of Miranda-Carboni and his research team is to develop targeted therapeutics to treat or prevent lung metastasis for TNBC patients.

“The resources for African-American women afflicted with TNBC are not very plentiful due to a significant lack of medical care access,” Miranda-Carboni said in a statement. “It is our hope that in collaboration with West Cancer Center and Regional One Health, we can develop a treatment against TNBC metastasis in African-American women at high risk for the disease.”

ITT Files $5.8M Loan on Cordova Building

ITT Technical Institute has filed a $5.8 million loan on its Cordova campus.

ITT Educational Services Inc. filed the loan on the property at 7260 Goodlett Farms Parkway in Cordova through Cerberus Business Finance LLC, an affiliate of New York-based Cerberus Capital Management, according to a Nov. 25 deed of trust.

The local transaction is part of a larger $100 million financing agreement with Cerberus. ITT used a portion of the proceeds of the loan and other funds on Dec. 4 to provide approximately $89.2 million in cash collateral for letters of credit that remained outstanding.

The 30,857-square-foot mixed-use office building was built in on 4.2 acres in 2005. The Shelby County Assessor of Property’s 2014 appraisal is $3.3 million.

ITT, a for-profit college, is facing several challenges. The college’s stock price has dipped this year and a deal to sell some of its properties to raise cash fell apart. In addition, the federal government is exploring ITT’s operations, including claims of predatory lending.

Haslam Reaches Deal to Expand Medicaid

Gov. Bill Haslam announced Monday, Dec. 15, that he has reached a deal with federal officials to expand Medicaid in Tennessee after months of discussions.

The Republican's administration is touting it as an alternative deal with federal officials. The program, dubbed Insure Tennessee, would provide coverage for the state's uninsured without creating new taxes for Tennesseans.

Haslam announced at a news conference at the state Capitol that the state would offer a voucher to purchase insurance in the private market, according to statement from the governor's office and a news conference.

Health care advocates had heavily criticized the Republican governor for refusing last year to agree to $1.4 billion in federal funds to cover about 180,000 uninsured Tennesseans under the terms the money was offered.

Tennessee would become the 28th state plus Washington, D.C., to expand Medicaid under President Barack Obama's health care law, and the 10th initiated by a Republican governor.

Under the two-year pilot program, the Tennessee Hospital Association will cover any additional costs to the state. Haslam said the program will automatically terminate if either federal funding or support from hospitals "changes in anyway."

Haslam said he plans to call a special session for lawmakers to take up the plan early next year.

"After 17 months of hard work, we will be presenting a plan to the General Assembly next year that addresses health outcomes and costs," Haslam said.

A Vanderbilt poll released this month said 56 percent supported expanding Medicaid for low-income residents.

New Daisy to Host New Year’s Broadcast

On New Year’s Eve, the New Daisy will be transformed into a one-night "light and sound spectacular" with its Lights Out! NYE Experience event.

Beginning at 10 p.m., iHeartRadio will broadcast live from the New Daisy, 340 Beale St., to more than an estimated 8 million listeners across the country with on-air personality Brodee as part of the iHeartMedia NYE "Coast to Coast" celebration.

The evening also will be hosted by Mattie and Daddy of the hit TMC show “Party Down South,” and will feature some of the Mid South's top DJs, including DJ Epic (Kiss106), Ben Murray (Radio Now), and Tubbz (Q107.5) as well as a special guest appearance by Grammy nominee Al Kapone at 2 a.m.

Events run from 9 p.m. to 5 a.m. Early bird tickets are $20 through ticketweb.com and the New Daisy box office. VIP Tables are available by calling 901-525-8981.

Akbari Introduces Bill to End ASD Phase-Ins

Democratic state Rep. Raumesh Akbari of Memphis has introduced a bill that would bar the state-run Achievement School District from phased-in takeovers of schools a grade or two per school year.

The bill, filed for the upcoming session of the Tennessee Legislature, which begins Jan. 13, would reinforce what has been the practice of Shelby County Schools for the current school year. The Shelby County Schools board voted earlier this year to close schools the ASD was to take over a grade at a time.

SCS superintendent Dorsey Hopson is preparing a proposed policy that would address the issue generally.

Meanwhile, Akbari has also filed a bill that would bar the ASD from changing the grade structure of schools it takes over.

Factory Output Eclipses Pre-Recession High

U.S. manufacturing output in November surpassed its pre-recession peak, as auto production kicked into a higher gear.

The Federal Reserve said Monday that factory production rose 1.1 percent last month, up from a 0.4 percent improvement in October. Manufacturing output has risen 4.8 percent over the past 12 months. It's now above the previous high set just before the downturn began in December 2007.

Total industrial production grew 1.3 percent in November, rising in part as utilities faced additional demand because of colder-than-usual weather. Mining production slid 0.1 percent last month.

The growth points to a U.S. manufacturing base that has been insulated from a turbulent global economy.

"The strengthening in domestic demand is offsetting the effects of the weakening global backdrop and the stronger dollar," said Paul Dales, a senior U.S. economist at Capital Economics.

Council Approves More Rape Kit Testing Funds

Memphis City Council members approved Tuesday, Dec. 16, $1.5 million more in city funding for rape kit testing. The money comes from higher-than-anticipated revenue collections on the city’s tax on mixed drinks.

Council chairman Jim Strickland amended the resolution to say that if the city secures private or federal and state funding to test the rape kits in the city’s backlog that the city funding will be used for forensic analysis as well as police personnel to continue processing rape kits beyond the backlog.

The council also approved on the second of three readings changes to the city’s taxi ordinance that are expected to see more debate including input from the city’s cab companies before a vote on third and final reading at the Jan. 6 council meeting.

Meanwhile, council member Lee Harris turned in his letter of resignation from the council Tuesday. Harris was elected to the state Senate this past November.

His resignation is effective Jan. 12, the day before the Tennessee Legislature opens its 2015 session.

The council will vote on appointing someone to his seat at its Jan. 20 meeting.

Those applying for the appointment have to sign an affidavit saying they live in the council district and submit proof of residence. They also submit a petition signed by 25 voters who live in the district.

The council office began handing out the packets with the paperwork Wednesday and the council set a Jan. 7 deadline to file the paperwork at City Hall.

Tenn. Opposes Supreme Court Gay Marriage Hearing

The Tennessee attorney general is asking the U.S. Supreme Court to let a ruling stand that upheld the state's ban on same-sex marriage.

The November decision by the 6th U.S. Circuit Court of Appeals marked a rare victory for gay marriage opponents. But because it conflicts with decisions in other circuits, legal observers believe it could push the Supreme Court to take up the issue of gay marriage, possibly as soon as this spring.

In a Monday court filing, Tennessee argues that there is no need for the Supreme Court to review the case because both the 6th Circuit's opinion and Supreme Court precedent recognize the inherent power of the states to define marriage. There is no conflict between the 6th Circuit and the Supreme Court, attorneys argue. As for the conflict between the circuits, the Supreme Court declines to hear cases all the time in which that is the case.

"The decision of the Sixth Circuit thus upholds and affirms Tennessee's 'historic and essential authority to define the marital relation,'" the brief reads, quoting from an earlier Supreme Court decision.

The 6th Circuit's 2-1 opinion affecting Tennessee, Kentucky, Michigan and Ohio said states have the right to set rules for marriage. And it said that changing a definition of marriage that dates to "the earliest days of human history" is better done through the political process, not the courts.

Raleigh Apartments Sell for $2.5 Million

The Creekwood Village Apartments in Raleigh have been sold for $2.5 million.

Creekwood Village Apartments of Memphis LP sold the 96-unit apartment complex at 5101 Raleigh Lagrange Road to Creekwood Village Partners, according to a Dec. 16 special warranty deed.

Built on seven acres on Raleigh Lagrange just east of Old Austin Peay Highway, the Class D apartment community’s 2014 appraisal is $1.3 million, according to the Shelby County Assessor of Property.

Collierville Retail Center Sells for $3M

A Collierville retail center has been sold for $3 million.

KCBBHB LLC sold the retail center at 10210 Collierville Road to Exeter 14214 DE LLC, according to a special warranty deed.

Built in 2007, the 10,731-square-foot Class A retail center sits on 1.4 acres on Collierville Road near South Houston Levee Road and Tenn. 385. The Shelby County Assessor of Property’s 2014 appraisal is $1.4 million.

U of M Baseball Camp Set for Jan. 17-18

The University of Memphis baseball team will host its 2015 Winter High School Camp on Jan. 17-18. The two-day camp is for high school students only, and will take place at FedExPark, 974 Getwell Road, on the university’s Park Avenue campus.

Campers will receive professional instruction on hitting, pitching and catching from Tiger baseball coaches. The Jan. 17 instruction is for hitters and position players, while Jan. 18 is slated for pitching and catching training.

Camp fees are $125 per day, or $200 for both days of instruction. Campers are encouraged to sign up online at memphisbaseballcamps.com. For more information, contact camp coordinator and assistant baseball coach Lee Parks at 901-678-5041 or flparks@memphis.edu.

Jobless Aid Applications Decline to 289,000

Fewer Americans sought unemployment benefits last week, a sign of solid job security and growing confidence among employers.

Weekly unemployment benefit applications dropped 6,000 to a seasonally adjusted 289,000, the Labor Department said Thursday. That is the lowest level since late October.

The four-week average, a less volatile measure, declined 750 to 298,750.

Applications are a proxy for layoffs. The average has fallen nearly 13 percent in the past year, evidence the job market is improving. Companies are cutting fewer jobs as the economy expands and hiring has picked up.

In the first 11 months of this year, employers have added 2.65 million jobs. That already makes 2014 the best year for hiring since 1999.

The figures are "low enough to signal very strong payroll growth," said Ian Shepherdson, chief economist at Pantheon Macroeconomics. The current level of applications is consistent with monthly job gains of about 300,000, he added.

Just 2.37 million people are receiving benefits, down from more than 4 million a year ago. Some former recipients have found jobs, but many have used up all the benefits available to them. A federal extended benefits program expired at the end of last year. Barely a quarter of the 9.1 million people out of work receive unemployment aid.

Still, hiring is accelerating. Employers added 321,000 jobs in November, the most in nearly three years. The unemployment rate held steady at 5.8 percent, down from 7 percent 12 months earlier.

Apple Wins Class-Action IPod Price Lawsuit

After just a few hours of deliberation, a jury in California found in favor of Apple on Tuesday in a billion-dollar class-action lawsuit over the price of its iPod music players.

The eight-member jury in U.S. District Court rejected a claim by attorneys for consumers and iPod resellers, who argued that Apple's use of restrictive software amounted to anticompetitive behavior aimed at freezing out competing makers of portable music players. Apple had argued that the software provided necessary security protection and was part of a larger package of features that made its iPods and iTunes music store popular with consumers.

Apple applauded the verdict in a statement: "We created iPod and iTunes to give our customers the world's best way to listen to music. Every time we've updated those products – and every Apple product over the years – we've done it to make the user experience even better."

Attorneys for the plaintiffs said they plan to appeal. "We're glad we got this to the jury," said attorney Bonny Sweeney, who had argued on behalf of the estimated 8 million consumers who purchased iPods from 2006 to 2009. But she asserted that a ruling by Judge Yvonne Gonzalez Rogers in Oakland, California, kept the jury from considering the full effect of the iTunes software update that was the focus of the trial.

PROPERTY SALES 23 23 1,365
MORTGAGES 21 21 1,068
BUILDING PERMITS 117 117 3,173