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VOL. 7 | NO. 2 | Saturday, January 4, 2014

Daily Digest

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Corinth Silicon Plant Adds to 2013 Mississippi Jobs Total

Mississippi Gov. Phil Bryant capped a busy 2013 on the economic development front with a New Year’s Eve announcement of a $200 million silicon metal plant near Corinth.

The Mississippi Silicon plant will employ 200 when completed in the town of Burnsville, 100 miles southeast of Memphis. The metal made there will be used in chemical, aluminum and automotive plants.

Mississippi Silicon is a company formed by Investor Clean Tech I LLC and Rima Holdings USA Inc.

Mississippi is providing financing through a state revolving fund for building construction and workforce training. The state is also using new market tax credits. Additional incentives are being provided by Tishomingo County government and the Tennessee Valley Authority.

Just before the Mississippi Silicon announcement, Bryant’s office tallied $1 billion in new investment in the state during 2013 and the creation of 6,265 new jobs.

That compares to $455.5 million in new investment in Mississippi in 2012 and the creation of 2,664 new jobs.

Announcements in 2013 included a $140-million Feuer Powertrain plant in Tunica that will create 300 new jobs; executives of the German-based company broke ground for the plant this past September.

In May, the Danish company Roxul Inc. broke ground on a $160-million plant near Byhalia in Marshall County’s Chickasaw Trail Industrial Park at the Tennessee state line. The Mississippi plant is the first U.S. plant by the company that makes rockwool insulation.

Earlier in December, Aluma-Form Inc., which makes overhead electric utility products, began construction of a $6.7 million plant in a Walnut industrial park. The new plant for the company, which was founded in Memphis in 1961, will create 125 new jobs.

Other economic development prizes in the region for 2013 included Nissan breaking ground in Canton on a $50 million North American supplier park in July. And in April, Yokohama Tire Corp. announced it was building a $300 million commercial tire truck plant in West Point.

Fox Takes Helm of Transit Authority

With the end of 2014, Tom Fox has become interim president and general manager of the Memphis Area Transit Authority.

Fox, who had been deputy general manager of the city’s bus system, took the reins of the transit authority New Year’s Day, when the retirement of MATA president and general manager William Hudson took effect.

Hudson had been head of the transit authority since 1993.

The city of Memphis is undertaking a national search for a new president and general manager.

French Quarter Inn Sells for $1.9 Million

The long-vacant French Quarter Inn on Madison Avenue near Overton Square has been sold for $1.9 million, according to property records.

California-based NCE Realty and Capital Group LLC closed Dec. 31 on the purchase of the 105-room inn at the northeast corner of Madison Avenue and Cooper Street.

The shuttered hotel at 2144 Madison Ave. is adjacent to the revived Overton Square, where Loeb Properties Inc. has pumped around $20 million into a major redevelopment of the arts and entertainment district.

The hotel, which opened in 1984, was purchased by Donald W. Pemberton, Ron Kirkpatrick, Garnett Murphy, Rex Amonette and Carroll Brunthaver after it closed in 2008.

The ownership group, called FQI LLC, bought the property for $1 million in 2009.

The Shelby County Assessor of Property’s 2013 appraisal at $1.5 million.

The sale comes after a previous deal collapsed in October. Austin, Texas-based ASC Management had until Oct. 31 to close on the purchase of the property but did not complete the sale.

In 2012, a contract from two local partners to transform the 77,866-square-foot structure into a Comfort Suites fell through after it faced fierce opposition from neighbors who wanted a more upscale, boutique hotel.

Plough Foundation Hosts Breakfast on Elder Abuse

The Plough Foundation is holding a community breakfast Jan. 8 to address mistreatment and abuse of the elderly.

The series follows an exclusive study the foundation commissioned that found a variety of social and economic data about the elderly in Shelby County. Plough Foundation executive director Mike Carpenter said the elderly are vulnerable, for example, to being victimized because of factors such as diminished physical capacity and mobility.

The event will be held at the Holiday Inn University of Memphis starting at 8 a.m.

Tenn. Prevailing Wage Law Rescinded as of Jan. 1

As of Jan. 1, most government building projects in Tennessee no longer have to pay the prevailing wage.

WPLN-FM reports Tennessee’s prevailing wage law was in place for nearly four decades before the General Assembly voted to repeal it last year. The idea behind the law was to make sure every electrician or plumber hired on a government-funded project got paid the going rate.

Sen. Jack Johnson, a Franklin Republican, sponsored the repeal. He said the law stifled competition and made building projects too expensive.

With the change, local governments can still choose to have contractors pay a wage that’s roughly average, but they don’t have to.

The prevailing wage still has to be paid on highway projects in order for the state to receive federal highway funds.

Reaves Files for County Commission

Shelby County Schools board member David Reaves has filed to run for the District 3 Shelby County Commission seat.

Reaves becomes the first candidate for the commission to file his petition. He will be running in the Republican primary for the seat held by Chris Thomas.

Thomas, who was hired as Lakeland city manager in December, has said he will serve the remainder of his term on the commission but will not seek re-election in 2014.

Those running for the commission are running in a new set of single-member districts that replace the existing structure of four multi-member districts and one single-member district.

Meanwhile, former Germantown alderman Mark Billingsley has a qualifying petition out for the Republican primary for commission District 4. Other prospective candidates in District 4 with petitions out are Republican Ron Fittes and Democrat Jacqueline Jackson.

And Cynthia Gentry, who had earlier pulled a petition for the Democratic primary for Juvenile Court clerk, has pulled a petition for the Democratic primary for Probate Court clerk.

Candidates in the nonjudicial county races have until noon Feb. 20 to file their qualifying petitions for the May 6 county primaries.

Unemployment Benefit Claims Drop to 339,000

The number of Americans seeking unemployment benefits dipped 2,000 last week to a seasonally adjusted 339,000, evidence that layoffs are low and hiring will likely remain steady.

The Labor Department said Thursday that the less volatile four-week average rose 8,500 to 357,250.

The average was driven up in recent weeks by spikes that reflected seasonal volatility around the Thanksgiving and Christmas holidays. The government struggles to account for seasonal hiring by retailers and other businesses and for temporary layoffs of school employees during the holidays.

Applications are a proxy for layoffs. They appear to have stabilized near pre-recession levels and are at a level consistent with solid hiring.

The job market has picked up in recent months. Employers have added an average of 200,000 jobs a month from August through November. That’s helped lower the unemployment rate to a five-year low of 7 percent.

Still, nearly 4.5 million people received some form of unemployment benefits in the week ending Dec. 14, the latest data available. That’s 180,000 more than the previous week.

Of those recipients, about 1.3 million stand to lose their benefits this month, according to the National Employment Law Project, an advocacy group. That’s because Congress opted not to renew an emergency federal program, which provided up to 47 weeks of additional benefits. The program expired last week.

Average Mortgage Rate Rises to 4.53 Percent

Average U.S. rates for fixed mortgages edged higher this week for the third straight week but remained low by historical standards.

Mortgage buyer Freddie Mac said Thursday that the average for the 30-year loan rose to 4.53 percent from 4.48 percent last week. The average for the 15-year loan increased to 3.55 percent from 3.52 percent.

Mortgage rates peaked in August at 4.6 percent amid expectations the Federal Reserve would reduce its $85 billion a month in bond purchases. The purchases push mortgage and other long-term rates lower. Last month the Fed deemed the economy strong enough for it to reduce the monthly purchases by $10 billion.

Mortgage rates are sharply higher than they were a year ago when the 30-year fixed rate was 3.35 percent and the 15-year was 2.65 percent. That’s contributed to a decline in home sales over the past three months.

MAAR Honors Area’s Top Realtors

The Memphis Area Association of Realtors has named Carol Lott of Crye-Leike Realtors the 2013 Realtor of the Year, while Carmen Prince of Fast Track Realty has been named 2013 Realtor-Associate of the Year.

The 2013 Affiliate of the Year award went to Sandy Moore of Baymark Title and Escrow Service. Jules Wade of Prudential Collins-Maury received the Outstanding Leadership Award.

The Community Service Award was garnered by Kathy Webb of Murphy, DeZonia and Webb. William Mitchell of Crye-Leike Realtors received the Lifetime Achievement Award. The MAAR Mentor Award went to Ray Bouder of Real Estate Mart of Tennessee.

Regina Hubbard, MAAR’s 2013 president, gave Presidential Awards to Janey Outlan of Prudential Collins-Maury; Frances Anderson, Brenda Hampton and Carol Lott of Crye-Leike Realtors; and Marshall Gordon of J.D. Marks.

Church Health Center Wellness Hosts Open House

The Church Health Center is hosting an open house at its wellness facility, Church Health Center Wellness, on Jan. 11.

The event, at 1115 Union Ave., will be held from 9 a.m. to 1 p.m. and is free and open to the public.

It will include health screenings, yoga and stretching classes, healthy cooking demos, activities for children and facility tours.

Lisa Carson, director of Church Health Center Wellness, said the event will be a day of “fun, fitness and fellowship.”

NYC Sues FedEx Over Cigarette Deliveries

The City of New York filed a civil lawsuit on Monday accusing FedEx of illegally delivering tons of untaxed cigarettes to city residents from a distributor on an Indian reservation on Long Island.

The suit, filed at a federal court in Manhattan, accuses FedEx of knowingly violating the terms of a 2006 settlement with New York’s attorney general in which the company agreed to stop all deliveries of mail-order cigarettes to state residents.

City lawyers said that even as that deal was being negotiated, FedEx continued to deliver cigarettes from select tobacco dealers, including the Shinnecock Smoke Shop, located on the Shinnecock reservation in eastern Long Island.

Between 2005 and 2012 the company shipped at least 55,000 cartons of cigarettes from the shop to consumers in New York City, according to the lawsuit. That total – an estimated 20 tons – doesn’t include cartons shipped elsewhere in the state or the country.

FedEx had a public policy of not delivering cigarettes to homes anywhere in the U.S., but the city claims the shipper ignored that policy when it came to the Shinnecock shop. The suit said FedEx even signed a written agreement giving the smoke shop discounted rates because it was doing so much business.

The city is seeking $825,000 in lost tax revenue, plus nearly $2.5 million in penalties.

FedEx said in a statement that it supported the city’s efforts to stop illegal cigarette shipments and had ceased doing business with the shop involved, but it said the city’s claims are “overstated and not founded in law.”

Walgreen Offers Help Tied to Health Overhaul

Walgreen Co. will fill prescriptions at no upfront cost to some patients who don’t have all the information they need for coverage received through the health care overhaul.

The nation’s largest drugstore chain said Monday that it will provide up to a 30-day supply of some branded and generic medicines to patients who can confirm their enrollment through the overhaul’s public insurance marketplaces but have yet to receive a plan identification number, which is normally needed to process a claim.

The Deerfield, Ill., company’s offer excludes complex and expensive medications like cancer drugs or treatments for rare diseases.

These patients won’t have to pay anything at the pharmacy, but they may receive a bill later for the co-payment their plan requires them to make. The drugstore chain also will collect payment from the insurer once it verifies enrollment.

The overhaul aims to cover millions of uninsured people, with many insurance customers signing up either through state-based insurance exchanges or a federally operated website, www.healthcare.gov. Website crashes and other problems marred the debut of that website last fall.

Insurers also are worried about technical problems that involve the government passing along inaccurate information on enrollees. It remains to be seen whether more complications will crop up when people try to use their benefits in the new year.

Home Price Gains Slow in October From Sept.

U.S. home prices rose in October from the previous year at the fastest pace in almost eight years. But price gains slowed in most U.S. cities from September to October, suggesting the increases are leveling off.

The Standard & Poor’s/Case-Shiller 20-city home price index rose 0.2 percent from September to October, down from a 0.7 percent increase from August to September.

Monthly price gains slowed in 18 of the 20 cities tracked by the index. And prices declined in nine cities, including Chicago, Denver, and Washington.

For the year, prices are still strong, reflecting big gains in earlier months. They have risen 13.6 percent over the past 12 months, the fastest since February 2006.

The Case-Shiller index covers roughly half of U.S. homes. It isn’t adjusted for seasonal variations, so the change partly reflects slower buying in the fall. The index measures prices compared with those in January 2000 and creates a three-month moving average. The October figures are the latest available.

Harris to Lead Council’s Budget Committee

Memphis City Council member Lee Harris will be chairman of the council’s budget committee for 2014.

Harris’ selection is one of several made by incoming council chairman Jim Strickland, who in 2013 had been budget committee chairman as well as council vice chairman.

Harris was chairman of the council’s audit committee last year, an assignment that now goes to council member Edmund Ford Jr.

Strickland also made council member Myron Lowery chairman of the Memphis Light, Gas and Water committee, which had been chaired by council member Janis Fullilove.

As committee chairwoman, Fullilove had focused on the utility’s widening of its smart meter pilot program. Fullilove was opposed to the new meter technology, saying it was intrusive and unsafe. The council nevertheless approved expanding the use of the meters.

MLGW President Jerry Collins, who was also a frequent target of Fullilove’s criticism during committee sessions, denied the meters are unsafe or that they can be used to spy on utility customers beyond providing more specific billing information to go with time-of-use utility rates.

Fullilove will become chairwoman of the council’s public services and neighborhoods committee.

Council committees meet twice a month, on the same Tuesdays that the full council meets. The committee sessions begin at 8:30 a.m. and end just before the 3:30 p.m. voting session of the full council.

Committee recommendations on items going to the full council are not binding on how the council votes.

The council’s first meeting of 2014 will be Jan. 7.

Fullilove Pulls Petition for County Clerk

Memphis City Council member Janis Fullilove has pulled a qualifying petition to run for Shelby County Clerk in the 2014 county elections.

Fullilove pulled the petition to run in the May 6 Democratic primary.

Republican incumbent Wayne Mashburn has already filed his qualifying petition for re-election.

Candidates for the partisan county offices have until Feb. 20 to file the petitions for a place on the ballot.

The winners of the May primaries and independent candidates advance to the Aug. 7 county general election.

Fullilove was elected to her second term on the City Council in 2011.

Evelyn Pitarro also has a petition out to run in the Democratic primary for County Clerk.

In other developments, Eddie Jones has pulled a qualifying petition to run in the Democratic primary for County Commission District 11.

United Housing Receives $10,000 Education Grant

United Housing Inc. has received a $10,000 grant from the Women’s Foundation for a Greater Memphis.

The grant, which will be used to help cover the cost of United Housing’s Homebuyer Education and Counseling program, was awarded as part of the Women’s Foundation’s annual Grants Showcase and Volunteer Recognition event.

United Housing helps both first-time and recurring homebuyers throughout West Tennessee purchase homes and provides free homebuyer and foreclosure prevention education. Clients who take part in the Homebuyer Education and Counseling program must complete the course and one-on-one counseling to gain access to lower mortgage interest rates and down-payment assistance.

The nonprofit organization says 61 percent of its clients are women, 58 percent are African-American, 15 percent are Latino and 32 percent are female-headed, single-parent households.

Many Tenn. Tax Preparers Have Not Renewed IDs

Close to half of Tennessee’s tax preparers have not yet renewed their preparer tax identification numbers, and the current numbers expire on Tuesday.

According to the Internal Revenue Service, anyone who prepares or helps prepare all or substantially all of a federal tax return, claim for refund or other federal form for compensation must have a valid tax identification number. All enrolled agents also must have one. Tax professionals can visit www.irs.gov/ptin to obtain or renew their numbers.

Preparers must renew their identification numbers if they plan to prepare returns in 2014.

The IRS says that more than 5,900 of Tennessee’s 12,000 tax preparers who have identification numbers have not yet renewed.

Haslam Appoints New Appeals Court Judge

Gov. Bill Haslam has appointed Crockett County lawyer Brandon O. Gibson to the western section of the Tennessee Court of Appeals.

In a Thursday, Dec. 26, news release, Haslam says Gibson will replace Judge David R. Farmer when his term expires Aug. 31.

The 38-year-old Gibson has been in private practice at the Pentecost & Glenn law firm in Jackson since 2003.

Her practice there has focused on governmental entity defense, employment defense, commercial litigation, civil rights litigation and transactional services. Her work for the firm has included its satellite office in Crockett County.

Prior to her work at Pentecost & Glenn, Gibson was at the Waldrop & Hall law firm in Jackson from 2001 to 2003. She was previously at the Potter Minton firm in Tyler, Texas.

Target: Customers’ PINs Among Stolen Data

Target said Friday that debit-card PINs were among the financial information stolen from millions of customers who shopped at the retailer earlier this month.

The company said the stolen personal identification numbers, which customers type in to keypads to make secure transactions, were encrypted and that this strongly reduces risk to customers. In addition to the encrypted PINs, customer names, credit and debit card numbers, card expiration dates and the embedded code on the magnetic strip on back of the cards were stolen from about 40 million credit and debit cards used at Target between Nov. 27 and Dec. 15.

Security experts say it’s the second-largest theft of card accounts in U.S. history, surpassed only by a scam that began in 2005 involving retailer TJX Cos.

Target said it doesn’t have access to nor does it store the encryption key within its system, and the PIN information can only be decrypted when it is received by the retailer’s external, independent payment processor.

“We remain confident that PIN numbers are safe and secure,” spokeswoman Molly Snyder said in an emailed statement Friday. “The PIN information was fully encrypted at the keypad, remained encrypted within our system, and remained encrypted when it was removed from our systems.” The company maintains that the “key” necessary to decrypt that data never existed within Target’s system and could not have been taken during the hack.

However, Gartner security analyst Avivah Litan said Friday that the PINs for the affected cards are not safe and people “should change them at this point.”

More Than 93,000 Apply for Ark. Private Option

The Arkansas Department of Human Services says more than 93,000 people have filed applications for health insurance under Arkansas’ private option plan to expand Medicaid.

The state said Thursday that of those 93,000 applications, more than 74,000 have been deemed eligible for the private option. This year, the Arkansas Legislature voted to use Medicaid money for private health insurance coverage for about 250,000 people. The agency says about 5,900 people have been assigned to the traditional Medicaid plan because of health needs. The coverage starts Jan. 1.

The program is separate from the federal health insurance program that operates through the HealthCare.gov website.

Tenn. Rep. Brenda Gilmore Elected Director of Women in Government

Rep. Brenda Gilmore has been elected a state director for a group advocating for women serving in state legislatures.

Gilmore, a Nashville Democrat, was elected to the position within Women in Government by her female colleagues in the state General Assembly.

State directors work to identify key issues, policies and priorities for the national group to focus on.

Gilmore said in a release Thursday that she is humbled to have been chosen, and that she wants to work to ensure more women are elected to public office in Tennessee.

ACLU Will Appeal NSA Phone Surveillance Ruling

A civil rights lawyer says the American Civil Liberties Union is very disappointed that a New York judge has found that a government program that collects millions of Americans’ telephone records is legal.

Attorney Brett Max Kaufman said the ACLU will appeal Friday’s ruling by federal Judge William Pauley in Manhattan. The judge concluded that the program was legal and a valuable part of the nation’s efforts to combat the threat of terrorism. The judge said the phone collection program only works because it collects everything.

Kaufman said he hopes a federal appeals court in New York agrees with the reasoning of a Washington, D.C., federal judge who concluded earlier this month that the program likely violates the Constitution.

Halbert Pull Petition for Criminal Court Clerk

Memphis City Council member Wanda Halbert pulled a qualifying petition Monday, Dec. 30, to run for Shelby County Criminal Court clerk in 2014.

Halbert, who is serving her second term on the council after serving on the now-defunct Memphis City Schools board, would run in the May Democratic primary for the position, which is now held by Republican Kevin Key.

Halbert, along with other prospective contenders, has until Feb. 20 to file her petition.

Other likely contenders who already have petitions out for the Democratic primary for clerk are Vernon Johnson, who ran in the 2010 Democratic primary, and Michael McCusker, currently a Shelby County assistant district attorney.

Key, who won election to the clerk’s office in 2010, has a possible opponent in the May GOP primary. Richard DeSaussure has pulled a petition.

Also pulling a qualifying petition Monday was Brandon Echols for the Democratic primary in County Commission District 7.

Farmers Market Vendors Donate Food to Needy

Nine vendors from Agricenter International’s Farmers Market have donated 19,046 pounds of fresh produce and bread to help feed the needy in Memphis.

The vendors worked with the West Tennessee Gleaning Network. The vendors donated food between May 4 and Oct. 31 and topped last year’s total of 12,255 pounds by almost 6,800 pounds.

Food from the farmers market that hasn’t been sold is donated to a variety of groups. The gleaning network collected almost 35,000 pounds of food throughout Shelby County in 2013.

Wells Fargo in $591 Million Deal With Fannie Mae

Wells Fargo says it has made a $591 million deal with Fannie Mae to settle obligations related to loans that went bad after the housing bubble burst.

The deal announced Monday covers loans made through 2008. Wells Fargo & Co. says it resolves nearly all repurchase liabilities it has with Fannie Mae, the federal mortgage buyer.

After adjusting for other repurchases, San Francisco-based Wells Fargo will pay out $541 million, which it says it had already set aside. Wells Fargo agreed in September to pay $869 million to Freddie Mac to settle similar claims.

Lenders including Bank of America, Citigroup and JPMorgan Chase have also agreed to settle mortgage claims with Fannie this year.

Cooper Tire Ends Buyout Agreement With Apollo

Cooper Tire & Rubber Co. is calling off its sale to India’s Apollo Tyres, unraveling a $2.2 billion deal announced just over six months ago.

Cooper said financing is no longer available and it continues to claim, as it has for months, that Apollo breached the terms of the agreement.

Apollo said after the announcement Monday, which it called disappointing, that it may pursue legal remedies.

Both companies agreed to the sale in June, but things deteriorated rapidly. Negotiations with the union representing Cooper employees became a sticking point.

Apollo sought a better price citing labor issues in China and weaker profit, which Cooper said was a stalling tactic. The Findlay, Ohio, company took its claim to a Delaware court, but a ruling last month found no breach of obligations on Apollo’s part.

Cooper Chairman and CEO Roy Armes said during a brief, Monday morning webcast that Cooper never received a new offer from Apollo that came with committed financing and that presented “unreasonable risk” for his company.

Company executives vowed to pursue a reverse termination fee of $112.5 million and other possible damages. They do not believe the company owes Apollo a $50 million termination fee that was part of the initial agreement.

Cooper will return to court with Apollo to resolve some remaining issues, including whether Apollo made an appropriate effort to reach a deal with the union, said Chief Financial Officer Brad Hughes.

Apollo Tyres Ltd. said Monday that it had made “exhaustive efforts to find a sensible way forward over the last several months.” Cooper shares soared to nearly $35 in June after it announced the buyout, but they have fallen steadily since then.

Memphis Made, Reverb Unite for Coffee Stout

A partnership between a small production brewery in Memphis and a micro coffee roastery hints at new developments for each venture in 2014.

Memphis Made Brewing Co., which launched in mid-October and is based in Cooper-Young, has teamed up with Reverb Coffee Co. to produce Reverberation, a Belgian-style coffee stout.

Memphis Made co-founder Drew Barton said the brewery, which scored quick success with its inaugural limited-edition beers, had been considering the possibility of creating some kind of coffee stout. A desire to work with a local coffee-maker, and the happenstance of getting an email from Reverb’s owner, led to the tie-up.

“This is definitely something we want to do more of,” said Barton, who added that Memphis Made going forward will release new beers roughly each quarter.

At the same time, it will continue to put out specialty brews like Reverberation. Rather than have a year-round flagship beer, Memphis Made will produce mostly seasonal beers, according to a recent blog post from the company. The first two beers the company rolled out were South Cooper Saison and Parkways Pale Ale. Their names were a nod to the company’s Memphis roots – one referring to the historic parkways that once made up the city’s boundaries and the other to the brewery’s headquarters at 768 S. Cooper St.

Barton and Memphis Made’s co-founder, Andy Ashby, also are among the organizers of the Cooper-Young Regional Beerfest. Reverb owner Jeremy Harris has been keeping an eye out since launching Reverb in early 2013 for ways to make more people aware of his coffee – and to get it into more hands.

Without a physical storefront for Reverb, Harris set out to get his java onto the shelves of local businesses.

“There’s a cafe opening up in the University of Memphis area that’ll be using my coffee,” Harris said. “I’m still throwing around the idea of opening a cafe of my own, a small coffee shop, and what that might look like. My biggest thing right now is trying to make more partnerships and develop wholesale contracts. That would allow me to open a coffee shop a lot more stress-free.”

PROPERTY SALES 107 331 6,877
MORTGAGES 60 239 4,368
BUILDING PERMITS 190 508 16,423
BANKRUPTCIES 22 136 3,532