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VOL. 7 | NO. 13 | Saturday, March 22, 2014

Daily Digest

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Dunavant Awards Coming in April

The nominations are in and the committee selecting the recipients of the 11th annual Dunavant Public Servant Awards is weighing its choices.

The awards, to be given at an April 21 luncheon of the Rotary Club of Memphis East at the Holiday Inn University of Memphis, honor one elected official and one non-elected official each year who meet the standards of public service identified with the late Probate Court Clerk Bobby Dunavant.

The awards, cosponsored by The Daily News and the University of Memphis, are also about promoting those standards in leaders to come as well as fostering discussion about what the standards mean on a day-to-day basis in government service.

So far, presales of tables for the event indicate a crowd larger than last year’s crowd.

The keynote speaker of the luncheon will be U.S. Sen. Lamar Alexander, R-Tenn., who is also a former governor of Tennessee, U.S. secretary of education and president of the University of Tennessee.

For more information on the event, go to www.rotaryclubofmemphiseast.org.

The University of Memphis is organizing a symposium on public service the same day as the luncheon. It is the second annual symposium and is also cosponsored by The Daily News.

The awards take place against the political backdrop of an election year statewide and in Shelby County.

Alexander is seeking re-election to another six-year term in the Senate.

Meanwhile, the courthouse clerks’ offices and judges positions are on the ballot this year in the once-every-eight-year election cycle that politicos refer to as the “big ballot.”

East Buntyn Gearing Up For Artwalk Festival

Memphis’ East Buntyn neighborhood is gearing up for the fifth annual East Buntyn Artwalk, a celebration of art and community that happens April 27.

St. James Church at 461 S. Prescott St. will serve as the event’s hub, hosting live music, a silent auction, food trucks and more. For the event, homeowners will host regional artists in their front yards to create an open-air bazaar of galleries around the neighborhood. The galleries will display and sell work and will represent an expected pool of more than 60 artists.

St. James Church also will host a silent auction tent, live entertainment and food trucks.

Bill Changes Way Charter Schools Authorized

The state Senate has approved legislation that changes the way certain charter schools are authorized.

The measure sponsored by Republican Sen. Dolores Gresham of Somerville was approved 20-12 on Thursday. The House version was approved 62-30 last year. It must now approve technical changes made by the Senate before heading to the governor for his consideration.

Under the legislation, the State Board of Education would become an authorizer and be able to overrule local school board decisions on charter applications in five counties where there are failing schools.

Those counties include the state’s four largest cities: Davidson, Hamilton, Knox and Shelby. Hardeman County also would be affected.

Currently, local school boards decide whether to authorize a charter application, and opponents of the legislation say it should stay that way.

IRS Says Tennesseans Owed $12.8 Million for 2010

The Internal Revenue Service says more than 16,000 Tennesseans who didn’t file their tax returns in 2010 are due refunds totaling more than $12.8 million.

The IRS says those who are owed refunds have a deadline of April 15 to file their 2010 tax return in order to collect the money.

There is no penalty for filing late for a refund. However, in order to get the money, taxpayers have three years to file a return to claim a refund.

Nationwide, more than 900,000 people who did not file a tax return in 2010 are due almost $760 million in refunds.

If the refund is not claimed within the three-year window, the money becomes the property of the U.S. Treasury.

Attorney General Election Measure Fails in Senate

A proposed constitutional amendment calling for the popular election of the state’s attorney general has failed again in the Senate.

The measure sponsored by Republican Sen. Mae Beavers of Mt. Juliet was defeated 16-15 on Thursday after failing to get a majority of 17 votes. It failed to pass 15-14 last month.

Under the state’s constitution, the attorney general is appointed to an eight-year term by the state Supreme Court.

Senate Majority Leader Jim Kyle was the only Democrat to vote for the measure on Thursday.

Kyle has said the popular election of the attorney general could present the best opportunity for a Democrat to run a competitive statewide race. The only current positions elected by the entire state are the governor and the Tennessee’s two U.S. senators.

Under Senate rules, Beavers cannot bring the measure up again.

Sales of US Existing Homes Slip to 19-Month Low

Sales of U.S. existing homes slipped in February to their lowest level since July 2012 as severe winter weather, rising prices and a tight supply of homes discouraged buyers.

The National Association of Realtors said Thursday that sales declined 0.4 percent last month to a seasonally adjusted annual rate of 4.6 million. That was the sixth decline in the past seven months.

Freezing temperatures and snowstorms likely kept many buyers from visiting open houses. And higher mortgage rates have weighed on sales since last fall.

Still, there were some signs that the market could pick up in the coming months. Sales improved in the South and West, where weather was less of a factor. And more people decided to sell, boosting the supply of available homes 6.4 percent to 2 million.

Home prices are rising despite the sluggish sales, a sign that the number of homes for sale remains low. The median sales price has risen 9.1 percent in the past year, the Realtors said, to $189,000.

Investors are accounting for an increasing share of purchases, while first-time buyers remain historically low. All-cash sales, which are mostly by investors, rose to 35 percent of purchases in February, up from 32 percent a year ago.

First-time buyers accounted for only 28 percent of sales in February, slightly more than in January. That’s far below the 40 percent that’s typical of a healthy market. First-time buyers are being held back by tight credit standards and high levels of student loan debt, the Realtors said.

Sales of existing homes climbed steadily in the first half of last year, reaching an annual pace of 5.38 million in July. And sales totaled 5.1 million in all of 2013, the most in seven years. That’s still below the 5.5 million that is consistent with a healthy housing market.

Average 30-Year Mortgage Falls to 4.32 Percent

Average U.S. rates on fixed mortgages declined last week, edging closer to historically low levels.

Mortgage buyer Freddie Mac said Thursday that the average rate for the 30-year loan fell to 4.32 percent from 4.37 percent last week. The average for the 15-year mortgage eased to 3.32 percent from 3.38 percent.

Mortgage rates have risen about a full percentage point since hitting record lows roughly a year ago.

The increase was driven by speculation that the Federal Reserve would reduce its $85 billion-a-month bond purchases, which have helped keep long-term interest rates low.

Deeming the economy to be gaining strength, the Fed announced in December and January — and again on Wednesday — that it was reducing its monthly bond purchases.

The Fed said after its latest two-day policy meeting that even after it raises short-term interest rates, the job market strengthens and inflation rises, the central bank expects its benchmark short-term rate to stay unusually low.

To calculate average mortgage rates, Freddie Mac surveys lenders across the country between Monday and Wednesday each week. The average doesn’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for a 30-year mortgage was unchanged at 0.6 point. The fee for a 15-year loan also held steady at 0.6 point.

The average rate on a one-year adjustable-rate mortgage edged up to 2.49 percent from 2.48 percent. The average fee remained at 0.4 point.

The average rate on a five-year adjustable mortgage fell to 3.02 percent from 3.09 percent. The fee was unchanged at 0.4 point.

Home Builders Break Ground for VESTA

The West Tennessee Home Builders Association is kicking off the 2014 Fall VESTA Home Show with a special groundbreaking ceremony.

The groundbreaking ceremony, which will include the introduction of the 2014 VESTA homebuilders, will be held Thursday, March 20, at 10 a.m. at Shaw’s Creek Reserve Piperton, at 100 Kilmory Drive in Rossville.

The fall VESTA show will feature five new homes from some of the Mid-South’s top homebuilders. Fayette Cares, an interdenominational, nonpartisan organization that brings churches, businesses, service agencies and individuals together to provide aid for Fayette County residents in need, will be this year’s charitable partner and receive a portion of the show’s total proceeds.

Free Tuition Proposal Advancing in Senate

Gov. Bill Haslam’s proposal to create a community college program for all high school graduates is advancing in the Senate.

The “Tennessee Promise” legislation advanced out of the Senate Education Committee 8-1 on Wednesday. It’s similar to one moving in the House.

The proposal would cover a full ride at two-year schools for any high school graduate, at a cost of $34 million per year.

The measure was amended to change lottery scholarship amounts. Initially, the bill sought to lower the current $4,000 lottery scholarship amount at four-year colleges to $3,000 for freshmen and sophomores, but increase it to $5,000 for juniors and seniors.

The amended version makes the amount $3,500 for freshman and sophomores, and $4,500 for juniors and seniors.

The move is meant to encourage students to consider going to two-year colleges first.

Chris Christie to Keynote Tenn. GOP fundraiser

New Jersey Gov. Chris Christie is scheduled to headline the Tennessee Republican Party’s annual fundraiser on May 30.

State Republican Party Chairman Chris Devaney said the appearance will give voters a chance to form their own impressions about Christie as he considers a presidential bid.

Christie has been working to revive his image following a political retribution scandal in which his aides ordered the closing of lanes near New Jersey’s George Washington Bridge.

Wednesday’s announcement comes on the same day that former Florida Gov. Jeb Bush, another potential Republican presidential candidate, was making an appearance in Nashville.

The Tennessee GOP event is chaired by U.S. Rep. Marsha Blackburn, who cited Christie’s electoral successes in a largely Democratic state and said the New Jersey governor “knows what it takes to lead.”

Current Account Deficit Falls to 14-Year Low

Big gains in exports and overseas investment income narrowed the U.S. current account deficit to the lowest level in 14 years in the October-December quarter.

The imbalance fell to $81.1 billion in the fourth quarter, down from $96.4 billion in the July-September quarter, the Commerce Department said Wednesday. That’s the smallest gap since the third quarter of 1999.

The current account is the country’s broadest measure of trade, covering not only goods and services but also investment flows. A smaller trade deficit usually means that U.S. companies are producing more to meet domestic and overseas demand.

Goods exports rose 1.9 percent to $405.4 billion, driven by higher overseas sales of petroleum and agricultural products.

Americans received $206.1 billion in overseas income, mostly from investments, a 4.3 percent increase from the previous quarter. Payments to overseas owners of U.S. assets rose 2.4 percent to $137.8 billion. That helped push the U.S. income surplus to $64.4 billion.

As a percentage of the U.S. economy, the current account deficit declined to 1.9 percent, the lowest since the third quarter of 1997.

Greenfield Products Expanding in Obion

Tennessee officials say Greenfield Products, a manufacturer of heavy equipment attachments, is investing $6.3 million to expand its operations in Obion County, adding 100 jobs during the next two years.

The company says it is adding 80,000 square feet of manufacturing space in Union City to begin engineering and manufacturing large heavy equipment.

Greenfield Products makes custom fork mounted attachments such as masts and carriages. The company also manufactures intermodal attachments including handling spreaders, container chassis shipping units and bomb carts for the container handling industry.

Greenfield Products will be hiring certified welders, fabricators, machinists, production planners and painters.

JPMorgan Selling Commodities Business

JPMorgan said on Wednesday that it has made a deal to sell its physical commodities business for $3.5 billion, after new regulations crimped its ability to control power plants, warehouses, and oil refineries.

If it’s approved by regulators, the deal would put the commodities business in the hands of energy and commodities trading company Mercuria Energy Group Ltd.

Big banks have long profited from price swings in metals, energy, and other commodities. But some had branched out into owning physical facilities. Last summer JPMorgan said that the possibility of new regulations on whether banks could continue to do that was a factor behind its decision to consider selling some of its physical commodities business, which includes metals and energy assets.

JPMorgan Chase & Co. said Wednesday that after the sale it will still provide traditional banking activities in the commodities markets. It will also continue to make markets, provide liquidity and risk management and offer advice to global companies and institutions.

Humane Society to Vie For ASPCA Grant

The Humane Society of Memphis & Shelby County has been accepted as a contestant in the 2014 ASPCA Rachael Ray $100K Challenge.

HSMSC is competing with 50 other shelters nationwide for a chance at more than $600,000 in grant funding, including a grand prize of $100,000. The competition is aimed at getting more animals adopted or returned to their owners. The contest period is June 1 through Aug. 31.

In order to qualify, each shelter must adopt out more than 300 animals in the three-month period than in the previous year.

HSMSC will host a community brainstorming session Monday, March 24, at 6:30 p.m. in the community room at the 935 Farm Road facility to discuss ideas and strategies for increasing adoptions.

US Home Construction Falls for 3rd Month in Feb.

U.S. home construction fell for a third month in February, but in a hopeful sign, applications for building permits rose to their highest level in four months.

Builders started work on 907,000 homes at a seasonally adjusted annual rate in February, the Commerce Department said Tuesday. That was down a slight 0.2 percent from January, when construction had fallen 11.2 percent. The declines have been blamed in large part on severe winter weather in much of the country.

Applications for permits to build homes, considered a gauge of future activity, rose a solid 7.7 percent in February to 1.02 million units. Many analysts expect housing sales and construction to show further gains this year, helped by a stronger economy.

The weakness in construction came in the apartment sector. Construction of single-family homes rose 0.3 percent in February to an annual rate of 583,000. But this was offset by a 1.2 percent drop in apartment construction, which fell to a rate of 324,000.

By region of the country, construction activity fell a sharp 37.5 percent in the Northeast, a region hit by frigid weather in February. Construction was also down in the West, dropping 5.5 percent.

But activity in the Midwest, which had fallen sharply in January because of bad weather, rebounded 34.5 percent in February. Activity was up 7.3 percent in the South, the region which accounts for more than half of home construction.

Hard Rock, Nike File Building Permits

Hard Rock Café International has filed a $2.5 million building permit application with the city-county Office of Construction Code Enforcement for its coming renovation of the Lansky building at 126 Beale St.

The restaurant chain featuring music memorabilia and live performances announced earlier this year its plans to move to the Lansky building from its current location at Beale and Hernando Street in the Beale Street entertainment district. The new location is on the other side of Second Street from the current western border of the district.

The contractor is W.G. Yates & Sons Construction Co.

Hard Rock executives filed a $2.5 million permit in February for interior renovations at the site, which is owned by BJHA LLC, an entity affiliated with the Lansky family.

In other building permit news, a $20 million permit application was filed by Wynright Corp. for the expansion of the Nike plant at 3100 New Frayser Blvd.

Airport Authority To Hire Research Manager

The Memphis and Shelby County Airport Authority is seeking to enhance its air service development program by hiring a Senior Manager of Air Service Research and Development.

“We are in the process of reinventing the Memphis International Airport,” said Scott Brockman, president and CEO of the airport authority. “Our primary focus is the relentless pursuit of frequent and affordable air service, and this management-level position will ensure that we maintain that focus.”

The new manager will be responsible for researching, developing and executing air service development strategies designed to increase domestic and international passenger activity and cargo air service at Memphis International Airport. This position will also work with closely with local business leaders to identify areas of focus.

Details about the position and requirements can be found at mscaa.com. The closing date for applications is April 13.

Jack Daniel’s Opposes Changing Whiskey Law

If it isn’t fermented in Tennessee from mash of at least 51 percent corn, aged in new charred oak barrels, filtered through maple charcoal and bottled at a minimum of 80 proof, it isn’t Tennessee whiskey. So says a year-old law that resembles almost to the letter the process used to make Jack Daniel’s, the world’s best-known Tennessee whiskey.

Now state lawmakers are considering dialing back some of those requirements that they say make it too difficult for craft distilleries to market their spirits as Tennessee whiskey, a distinctive and popular draw in the booming American liquor business.

But the people behind Jack Daniel’s see the hand of a bigger competitor at work — Diageo PLC, the British conglomerate that owns George Dickel, another Tennessee whiskey made about 15 miles up the road.

“It’s really more to weaken a title on a label that we’ve worked very hard for,” said Jeff Arnett, the master distiller at the Jack Daniel’s distillery in Lynchburg, Tenn. “As a state, I don’t think Tennessee should be bashful about being protective of Tennessee whiskey over say bourbon or scotch or any of the other products that we compete with.”

Republican state Rep. Bill Sanderson emphasized that his bill wouldn’t do away with last year’s law enacted largely on the behest of Jack Daniel’s corporate parent, Louisville, Ky.,-based Brown-Forman Corp. The principal change would be to allow Tennessee whiskey makers to reuse barrels, which he said would present considerable savings over new ones that can cost $600 each.

“There are a lot of ways to make high-quality whiskey, even if it’s not necessarily the way Jack Daniel’s does it,” Sanderson said. “What gives them the right to call theirs Tennessee whiskey, and not others?”

Tennessee Honored For Reforestation

The Tennessee Wildlife Resources Agency has received the Arbor Day Foundation’s 2014 Forest Lands Leadership Award.

The award is given annually to an individual or organization that provides leadership in advancing sustainable forestry on public land.

The TWRA was recognized this year for its bottomland hardwood forest restoration program in West Tennessee. Through that program, approximately 3 million trees have been planted on 6,800 acres of former row crop land.

As the trees and shrubs grow into forests, they will provide habitat and mast in an area where it is critically needed. TWRA’s goal is to connect the fragmented forests of West Tennessee into an uninterrupted travel corridor through which wildlife can freely fly, walk and crawl.

Unemployment Rates Fall in 43 States

Unemployment rates fell in 43 U.S. states in January as more Americans began looking for work and most quickly found jobs.

The Labor Department said Monday that the unemployment rate rose in just one state – Iowa – where the rate increased to 4.3 percent from 4.2 percent. Still, that’s far below the national rate of 6.6 percent that month. Rates were unchanged in six states.

Tennessee’s unemployment rate stood at 7.2 percent in January, down from 8.1 percent a year ago and down from 7.7 percent in December.

The data demonstrates that the steady decline in the unemployment rate nationwide has been broad-based, occurring throughout much of the country. The overall U.S. unemployment rate has fallen 1 percentage point in the past 12 months.

Twenty-three states reported more hiring in January, while 27 said that the number of jobs fell. Harsh winter weather weighed on hiring nationwide, with employers adding just 129,000 jobs in January. That’s below the average monthly gain of about 180,000 in the previous two years.

US Factory Output Rebounds in February

U.S. factory output rebounded strongly in February after harsh winter storms caused a steep drop-off in production in January. Manufacturers produced more autos, home electronics and chemicals.

The Federal Reserve said Monday that factory production surged 0.8 percent, nearly reversing a 0.9 percent plunge in January that was due mainly to weather. February’s gain was the largest in six months.

The figures suggest that factories are poised to boost output and drive more economic growth as the weather improves.

“Assuming that the weather returns to seasonal norms, output will rise rapidly in the coming months,” Paul Dales, an economist at Capital Economics, said in a note to clients.

Overall industrial production, which includes manufacturing, mining and utilities, rose 0.6 percent in February, the biggest increase since September. Industrial production had fallen 0.2 percent in January.

Utility output dipped 0.2 percent despite the cold weather. The drop came after a sharp 3.8 percent jump in January. Mining production rose 0.3 percent.

Auto production rose 4.6 percent after falling 5.1 percent in January. Home electronic output increased 0.7 percent. And food production rose about 1 percent.

Factories ran at 76.4 percent of capacity, up one-half of a percentage point over the month and 2.3 percentage points below the long-run average.

Collierville Pepsi Plant Lays Off 55

The Pepsi Beverages Co. plant in Collierville is laying off 55 workers as it shut down soft drink and other beverage production immediately at the plant at 110 S. Byhalia Road, according to a notice the company sent to Collierville city leaders.

The facility will remain open as a warehouse and distribution facility for Pepsi products. That part of the operation employs approximately 100 people.

In North America, PepsiCo has been struggling with a decline in overall soda consumption in the U.S. and loss of market share to rival Coca-Cola. PepsiCo includes the Frito-Lay snack food division, which has prompted some speculation that PepsiCo executives might spin off its soft drink sector to focus exclusively on the Frito-Lay division.

PepsiCo executives said in February they intend to keep the soft drink pairing with snacks.

Magna Bank Posts Positive 2013 Results

Magna Bank enjoyed a strong 2013, with newly released results for the year including a 40 percent gain in net income from 2012 to 2013.

Among the bank’s other highlights for the year, Magna grew its assets by almost 7 percent to $532 million. Loan growth was up 15.6 percent and retail deposit growth grew 8 percent.

One of the largest areas of growth for Magna in 2013 was commercial real estate, where loan production had a 40 percent improvement over 2012. In 2014, Magna expects increased growth from consumer and business loans, plus deposit growth from businesses as corporate cash flow improves.

U of M Names Walker Associate Athletic Dir.

Dr. Adam G. Walker has rejoined the University of Memphis Athletic Department as senior associate athletic director for development. Walker previously served the department as its director of major gifts.

In his new position, Walker will manage and direct all athletic fundraising operations, including major gifts, endowments, capital campaigns and the annual fund.

Walker returns to athletics after working almost two years as the senior director of development for the Fogelman College of Business & Economics at the University of Memphis.

Ballo Begins New Roles At UTHSC, West Clinic

Dr. Matthew T. Ballo has received appointments as founding chairman of the new Department of Radiation Oncology at the University of Tennessee Health Science Center and director of radiation oncology at the UT/West Clinic.

Previously, Ballo was at the University of Texas M.D. Anderson Cancer Center in Houston, where he served as professor of radiation oncology in the Department of Radiation Oncology.

Ballo will play a key role in expanding the radiation/oncology program at UT/West Clinic. He also has plans to develop a radiation oncology residency program.

Federal Reserve Report On Memphis Area Issued

A Federal Reserve report shows economic conditions in the housing sector in the Memphis area are healthy, but the employment market can do better.

The Federal Reserve in St. Louis released its quarterly Burgundy Books last week, examining economic conditions St. Louis, Little Rock, Louisville and Memphis. The Memphis zone includes northern Mississippi, eastern Arkansas, and western Tennessee, with a population of about 3.1 million people

The zone’s unemployment rate averaged 9.6 percent, essentially unchanged from the previous quarter and higher than the national average.

Employment growth in fourth quarter 2013 outpaced the nation in the education and health, manufacturing, and financial activities industries. However, overall growth was weaker compared with fourth quarter 2012.

PROPERTY SALES 83 405 4,276
MORTGAGES 104 424 4,814
BUILDING PERMITS 148 883 10,151
BANKRUPTCIES 53 264 3,149