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VOL. 8 | NO. 26 | Saturday, June 20, 2015

Daily Digest

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MDH Buys Belz’s Memphis Industrial Portfolio

An Atlanta-based firm has acquired a large industrial portfolio from Belz Enterprises.

Atlanta-based MDH Partners LLC bought 22 industrial buildings in the Memphis area totaling more than 3.1 million square feet.

The buildings are located in the Northeast, Southeast, and DeSoto County submarkets and are located in the Shelby Oaks, Southridge, Democrat Square North, Meltech and Metro industrial parks. The portfolio currently is 95 percent leased.

A purchase price was not immediately available.

MDH officials said the company is bullish on the Memphis industrial market because its key logistical advantages position it for growth as the dynamics of regional and national distribution supply-chain logistics continue to evolve.

“We decided to pursue this portfolio because of the functionality of the buildings, their strong tenant base, and the high standards of construction to which iconic Memphis developer Belz Enterprises originally developed them,” said Jeffrey Small, MDH’s chief executive and a founding member of the company, in a statement. “Our strategy here is twofold: We will implement a significant capital improvement plan to position the assets for the future growth of the local and national economies, and we will embrace the well-established local brokerage community."

Memphis-based Cushman & Wakefield/Commercial Advisors has been tapped to lead leasing efforts for MDH.

Prior to the sale, Belz owned and operated more than 20 major industrial facilities in excess of 9 million square feet.

The Memphis-based real estate developer has been on a selling spree in recent years. It sold two large Memphis retail centers, Park Place Centre in December 2010 for $10.3 million and Eastgate Shopping Center for $31.5 million in January 2011.

It sold The Peabody Orlando in August 2013 for $717 million. It also sold The Peabody Little Rock in June 2012 for an undisclosed price.

– Amos Maki

FedEx Records $2.2 Billion Pension Accounting Charge

FedEx Corp. has changed accounting procedures for its pension plan in order to provide a more timely view of the plan’s performance.

FedEx said in a statement it will record an estimated $2.2 billion non-cash, pretax charge for the fourth quarter of fiscal 2015 ($1.4 billion, net of tax, or $4.88 per diluted share for the fourth quarter and $1.4 billion, net of tax, or $4.81 per diluted share for fiscal year 2015) in connection with the changes in its pension accounting methods.

The accounting change, announced Friday, June 12, will have no effect on employees’ pension benefits or the funding requirements for any FedEx pension plans or FedEx cash flows.

The company said that the new accounting method will make the plan’s operating performance “easier to understand and more transparent” by immediately recognizing gains and losses in the fourth quarter of the fiscal year, rather than amortizing them over many years.

FedEx also has agreed to pay $228 million to settle two lawsuits over how the company classified employees at FedEx Ground.

The Memphis-based company is settling the two California-based lawsuits over how FedEx Ground classified its employees as contractors and not full FedEx employees, which the employees claimed caused a loss of wages and benefits.

“This settlement resolves claims dating back to 2000 that concern a model FedEx Ground no longer operates,” said Christine Richards, general counsel for FedEx, in a statement.

FedEx will take a one-time, after-tax charge against earnings of $133 million, or $0.47 per share, in the fiscal fourth quarter that ended May 31.

– Amos Maki

Memphis Music Attractions Take 3 of Top 5 Spots in Poll

The results of USA Today 10Best’s latest poll have confirmed something Memphians already know: Memphis rocks.

Three local attractions – Graceland, Sun Studio and the Stax Museum of American Soul Music – were among the 20 nominees up for “Best Musical Attraction.” After four weeks of voting, all three made it into the top five, with Graceland winning by a landslide, according to the results released Friday, June 12.

Sun Studio finished at No. 2, while Stax came in at No. 5.

Tennessee had five of the top 10 attractions. The two other Tennessee attractions to claim top spots: Nashville’s Grand Old Opry (No. 4) and Pigeon Forge’s Dollywood (No. 6).

Also finishing in the Top 10 were the Rock and Roll Hall of Fame and Museum in Cleveland (No. 3), Motown Museum in Detroit (No. 7), EMP Museum in Seattle (No. 8), Joshua Tree National Park in California (No. 9) and Hansa Studios in Berlin (No. 10).

A panel of experts picked the initial 20 nominees, which also included Abbey Road in London and the Apollo Theater in New York.

– Daily News staff

The Lakes at Ridgeway Apartments Sell For $7.5M

RoCo-Lakes LLC, a Michigan limited liability company, purchased two parcels comprising The Lakes at Ridgeway Apartments on June 11.

The Hickory Hill property, located at 5995 Waterstone Oak Way on the west side of Ridgeway Road and south of Knight Arnold Road, sold for $7.5 million, according to a special warranty deed filed June 12.

RRE Waterstone Holdings LLC had owned the 36-acre complex since 2010 when it purchased both parcels for $5.7 million.

A mortgage for $6.2 million with Keybank National Association was filed at the time of sale. The loan matures on June 11, 2017.

The two-story frame, 378-unit apartment complex was built in 1973. The Shelby County Assessor of Property lists an appraisal value for both parcels of $6.4 million.

– Chandler Reports & The Daily News Online

Truck Stop Restaurant Plan Hits End of the Road

The developers behind the proposed Truck Stop restaurant on the northwest corner of Central Avenue and Cooper Street have pulled the plug on the project after a year and a half of regulatory hurdles and different standards involved in using intermodal shipping containers.

Taylor Berger and Michael Tauer went public with the idea in late 2013 for a restaurant built from the shipping containers and an area for food trucks to park to provide the food at a key intersection between the Overton Square and Cooper-Young districts.

The first indication of the hurdles the project would face was the underground fuel tanks on the property, which originally was a gas station and later became the site of Midtown Nursery.

Tauer said it was the first in what he likened to “death by a thousand paper cuts.”

“It was a novel concept for Memphis, and it was to be designed out of nontraditional building materials,” he said. “We were faced with a sort of continual trickle of increased unanticipated costs and restrictions and obligations as we went through the permitting process and as we continued to refine the project.”

The changes were an attempt to bring the overall cost of the project down and it didn’t work.

“At the end of the day, the long and short of it is it just got too expensive.” Tauer added, saying it got “to a point that it was simply no longer economically feasible to do, which frankly is a huge punch in the gut.”

The idea of a restaurant surfaced shortly after changes in city ordinances that permitted food trucks. The positive public response led to food truck rodeos and similar events.

Meanwhile, Tauer and Berger were trying to make a fixed location with what amounted to rotating kitchens work financially. Tauer said he learned from the experience but “that education came at a very steep cost.”

“This was a special one to us, and we had already spent a lot of money to get it to this point,” he said. “Right now, the thought of trying to gear back up at another location is just not in the cards.”

– Bill Dries

St. Jude Awarded $2.9M in Federal Grants

St. Jude Children’s Research Hospital is getting a set of four grants totaling $2.9 million from the federal department of Health and Human Services.

The grants were announced Wednesday, June 17, in Washington D.C. by U.S. Rep. Steve Cohen.

The largest of the four grants, $2 million from the National Cancer Institute, is to study and compare normal and neoplastic brain growth.

A $369,205 grant is to study the RNA splicing seen in Alzheimer’s disease. Another $338,200 grant is for the study of protein interactions in cellular survival states.

And a $173,133 grant is for the study of the design and development of infectious disease therapeutics.

– Bill Dries

CBU Preserves Cupola from Kenrick Hall

Work crews demolishing Kenrick Hall on the campus of Christian Brothers University removed the building’s cupola Monday, June 15, for preservation as they prepare to bring down the rest of the historic structure.

The circa-1939 building is giving way to a new school of the arts to be named for Rosa Deal, Christian Brother’s first woman faculty member.

The cupola was carefully braced and lifted off the roof of Kenrick Hall by workers with Grinder, Taber & Grinder Inc. for repurposing in a future project.

Woodland Tree Service also is collecting wood materials from the building and a tulip poplar tree near the hall to recycle as furniture.

– Bill Dries

Green Projects in Memphis, Millington Get State Grants

A 50-kilowatt solar array at Lichterman Nature Center and an upgrade of lighting and HVAC systems in the Millington police and court buildings were both funded by Tennessee state government Clean Tennessee Energy grants announced Monday, June 15.

The $80,000 grant to the Memphis Parks Division is for the Lichterman solar array, which will be the first solar installation on city property. It will save the city an estimated $7,200 in annual energy costs.

The $240,000 grant to the city of Millington will upgrade inadequate systems by replacing them with more efficient units. The lighting and HVAC improvements will reduce the amount of electricity used by 35 percent and natural gas by 29 percent.

The more efficient units will save the city of Millington $14,000 a year.

The two grants were part of a total of $3.1 million awarded by the Clean Tennessee Energy grants program.

– Bill Dries

New Nursing College Dean Named for UTHSC

Dr. Wendy Likes is the new permanent dean for the College of Nursing at the University of Tennessee Health Science Center.

In that role, she’ll serve as the lead administrator for the college, with responsibility for managing a team of more than 105 faculty and staff members.

The college serves some 400 nursing students each year who acquire degrees at all levels. Likes’ appointment became effective on June 10.

During her tenure at UTHSC, Dr. Likes has worked in the Colleges of Nursing, Medicine and Graduate Health Sciences, first as an assistant professor for several years, then as an associate professor in the same three colleges from July 2009 to the present.

– Andy Meek

First Horizon National Corp. Reveals Stress Test Results

The Memphis-based parent company of First Tennessee Bank has passed its annual, federally mandated “stress test.”

First Horizon National Corp. said this week the 2015 Dodd-Frank Act stress test shows the company would “remain capitalized at levels significantly better than ‘adequate’ even in severely adverse economic and financial conditions.”

National banks and federal savings associations with assets of at least $10 billion are required to undergo the annual stress tests, which measure capital levels against hypothetical “severely adverse” events specified by regulators including a greater-than-50-percent drop in the U.S. stock market, a greater-than-25-percent drop in U.S. real estate values, a significant contraction of the U.S. economy and a jump in oil prices.

– Andy Meek

MLGW Tops List for Lowest Winter Bills

Memphis Light, Gas and Water Division tops a new list for the lowest combined winter residential bill among 30 cities.

It is the third consecutive year the utility’s comparison has put it at the top for the lowest bill.

MLGW began tracking the rates in 1991.

The winter 2015 bill for the four services offered by MLGW came in at $251.06 a month. That compares to $603.23 a month in Boston.

Among cities in Tennessee in the rankings, Jackson came in 12th with a monthly winter bill of $352.87 and Chattanooga 14th at $357.18. Nashville was 20th in the ranking with a $401.83 monthly bill and Knoxville’s winter bill of $450.45 was 24th on the listing.

– Bill Dries

Cohen Bill To Bar Airlines from Shrinking Carry-Ons

Legislation introduced Monday, June 16, by U.S. Rep. Steve Cohen of Memphis would bar airlines from reducing the size of carry-on baggage.

Cohen’s legislation, which he calls the Carry On Freedom Act, is in response to a proposal by the International Air Transport Association to reduce the size of carry-ons by 21 percent. The current maximum size is 22 inches tall by 14 inches wide by 9 inches deep; the proposal would take a half inch off the maximum height and width and drop the maximum depth to 7.5 inches.

Cohen termed the proposal, already adopted by eight international airlines, “a transparent attempt to squeeze even more money out of passengers by forcing them to pay baggage fees to check luggage they purchased specifically to avoid those fees.”

He also said the proposal comes at a time when airlines are making “huge profits.”

Cohen is a member of the House Transportation Subcommittee on Aviation.

The trade association is pushing the proposal as a way to standardize carry-on size and guarantee that every passenger on any commercial jet of 120 seats or more would could bring and store a carry-on.

– Bill Dries

Houston Levee Convenience Store Sells for $3.8 Million

4301 Bee Ridge Associates Ltd., a Texas limited partnership, purchased the gas station and convenience store located at 101 South Houston Levee Road in Cordova for $3.8 million, according to a special warranty deed filed on June 17.

DM Restaurants Inc. purchased the land for the property in August 2007 for $1.6 million and built the BP gas station with a convenience store and Dairy Queen Grill and Chill restaurant in 2009.

The property located at the southwest corner of Walnut Grove and Houston Levee roads sits on 1.84 acres and has a tax appraisal value of $2.5 million.

– Chandler Reports & The Daily News Online

Three Finalists Named for Chancery Court Vacancy

Memphis attorneys Frank S. Cantrell, Kimbrough Brown Mullins and James Robert Newsom III are the three finalists for the Shelby County Chancery Court vacancy.

The Governor’s Council for Judicial Appointments named the three finalists Wednesday, June 17. Their names go to Tennessee Gov. Bill Haslam who will pick one of the three or seek a new list of finalists from the commission.

The position has been open since the April death of Chancellor Oscar “Bo” Carr.

– Bill Dries

Memphis Startup ‘Pickle’ Lands $135,000 in Funding

A local entrepreneur has secured $135,000 in funding for her startup company, Pickle.

Morgan Steffy, an entrepreneurship fellow at the University of Memphis Crews Center for Entrepreneurship, has secured the funds for the competitive “selfie” and photo sharing application. Users can upload photos to challenge in categories such as “best dog selfie” or “most disheveled morning face” and other users vote for a winner.

The majority of the funding came from Wolf River Angels, the investment arm of Memphis-based accelerator program Start Co.

Steffy was selected as one of the inaugural class of Crews Center Entrepreneurship fellows last fall. She recently won $1,000 in the G60 (Gone in 60 Seconds) Elevator Pitch competition in Jonesboro, Ark.

Visit http://www.trypickle.com for more information.

– Daily News staff

Germantown Schools to Hold Town Hall Meetings

The Germantown Municipal School District is holding a set of three town hall meetings next week on new school options.

The Germantown school board voted in May to explore the idea of a new elementary school for the system.

The meetings to gather public input are: June 22 at Pickering Center, June 23 at Dogwood Elementary School and June 24 at Riverdale Elementary School. They each start at 6:30 p.m.

Germantown schools superintendent Jason Manuel will talk about the school system’s classroom space problems as well as the attendance projections.

– Bill Dries

Nike Vendor Files Two Permits Totaling $8.5M

Elk Grove, Ill.-based Wynright Corp. applied for two building permits – one for $7.2 million and another for $1.3 million – through the city-county Office of Construction Code Enforcement for work on Nike’s $301 million expansion at 3100 New Frayser Blvd. The permit description said the scope of work included “engineering material and installation.”

In 2012, the board of the Memphis and Shelby County Economic Development Growth Engine approved a 15-year payment-in-lieu-of-taxes agreement with Nike for the expansion. According to the approved PILOT, the expansion would retain 1,600 jobs and add 250 more once the facility opens.

In January 2013, Nike paid Belz Investco GP $2.2 million for about 200 acres of vacant land north of the company’s 1.1 million-square-foot facility in Frayser.

– Amos Maki

Yogis Converge on St. Jude, Raise $40,000 for Hospital

A national program for yoga enthusiasts struck a pose in Memphis last weekend and raised more than $40,000 for St. Jude Children’s Research Hospital.

The hospital hosted Yoga Gives to St. Jude Kids on its campus Saturday, June 13. Yogis of all ages and experience levels participated in the fundraiser, held in the St. Jude pavilion.

Participants were rewarded with St. Jude swag for raising funds: $250 earned them a tube bandanna and tank top; $500 got them a yoga mat towel; and $1,000 was enough for a yoga mat bag.

Yoga Gives events are held throughout the U.S. The next event will be June 20 in West Hollywood, Calif.

– Daily News staff

Grizzlies Holding Kids Basketball Camps

The Memphis Grizzlies will host their 2015 Summer Basketball Day Camps at several locations throughout Memphis and Tennessee for boys and girls ages 7-16.

From the art of the jump shot to defensive footwork, instructors will share their knowledge and love of the game during sessions that focus on improvement both for the individuals and within a team setting.

The 2015 Grizzlies Summer Basketball Day Camps are $245 per person per camp, beginning with the tip-off clinic at Lausanne Collegiate School, June 29-July 2, and concluding with the final camp August 3-6 at Independent Presbyterian Church. To register or find out more information on any of the camps that are part of the 2015 Grizzlies Summer Basketball Day Camp series visit www.grizzlies.com/camps.

Each camp participant will receive two ticket vouchers to a future Grizzlies home game (redeemable once the 2015-16 regular season schedule is released), basketball skills and drills instruction, a camp T-shirt and lunch. Additional tickets to select Grizzlies games will be available for purchase at a discounted rate for all Summer Basketball Day Camp participants and their families.

– Don Wade

Archer-Malmo Picks Up Quartet of National Awards

Memphis-based marketing communications firm archer-malmo has won two gold and two silver honors from the National American Advertising Awards.

The agency won for submissions that included a “Brainstorm Survival Kit,” intended to drive inspiration and creativity at agency brainstorms.

The firm also won recognition for its employee wedding invitation designed by a-m creative professionals as well as its “Start Q” invitation, a set of unique items to invite stakeholders and investors to Memphis for the Memphis in May World Championship Barbecue Cooking Contest.

– Andy Meek

PROPERTY SALES 56 295 6,392
MORTGAGES 26 180 4,035
BUILDING PERMITS 128 840 15,361
BANKRUPTCIES 31 153 3,270