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VOL. 9 | NO. 10 | Saturday, March 5, 2016

Daily Digest

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Director of Memphis VA Center Replaced, Relocated

Diane Knight, director of the Memphis Veterans Administration Medical Center, was replaced Thursday, Feb. 25, and relocated to the Nashville VA.

No reason was given for the abrupt change by VA officials in Washington.

The Memphis center was one of several across the country reviewed for problems in wait times and specifically for questions about patient deaths.

The system of guaranteed wait times for veterans was found to be fraudulent, with administrators routinely falsifying records to meet the goals.

Knight was the target of much of the frustration from Memphis veterans during town hall meetings and inspections of the Memphis facility in 2014.

U.S. Rep. Steve Cohen of Memphis said he looked forward to working with acting director Dr. Bill H. Mills.

In a written statement, Cohen expressed “hope that his operational and administrative experience will bring the quality of care that Memphis veterans deserve.”

Mills comes to the Memphis assignment from being director of the VA Medical Center in Altoona, Pa.

– Bill Dries

State Deannexation Bill Clears House Committee

State legislation that would allow residents in certain sections of cities to self-initiate deannexation referendums has cleared a key hurdle in the Tennessee Legislature.

First introduced in February 2015, the bill moved through the state Senate committee process last year but stalled when the House Finance, Ways and Means Committee deferred it to 2016.

The bill states: “Any incorporated municipality, whether incorporated by general or special act, may contract its limits within any given territory; provided, that it is approved by a majority of the qualified voters.”

If a majority of voters fail to approve the referendum, no further election could be held on the issue for 36 months.

Republican state Sen. Brian Kelsey, who co-sponsored the Senate bill, said he’s pleased the legislation is moving forward in the House.

“This legislation will bring much needed economic growth to neighborhoods like Cordova and Southwind.”

The proposal faces stiff opposition from municipal leaders who argue a deannexation measure would destabilize the financial planning of cities and towns across the state.

The bill is pending final action on the Senate floor, and the House version now moves to the floor of the House of Representatives for final consideration.

If the bill is delayed or defeated in either chamber, it starts over again in both houses of the Legislature.

– Kate Simone

ZeroTo510 Nearing Application Deadline

Applications for the fifth cohort of ZeroTo510, Memphis’ medical device startup accelerator, are being accepted for two more weeks.

The deadline is March 15. According to the program, now in its fifth year, ZeroTo510, has accelerated the creation of 20 new companies, $9.2 million in investments, and more than 40 jobs. In addition, 60 percent of graduates have received post-accelerator follow-on funding, at an average of $675,000 per company.

The nationally recognized program has attracted entrepreneurs from the Memphis area and from outside the local entrepreneurial ecosystem, including from Vanderbilt University in Nashville, Georgia Tech in Atlanta, Johns Hopkins University in Baltimore, Duke University in Durham, N.C., and from Washington, D.C., Little Rock, Ark., and Chihuahua, Mexico.

– Andy Meek

Deal for Commercial Appeal Parent Co. Almost Final

Shareholders of Journal Media Group Inc., parent company of Memphis’ The Commercial Appeal, have approved a merger agreement that will see Journal Media’s acquisition by Gannett Co. Inc.

The deal with Gannett, parent company of USA Today, still needs to meet customary closing conditions, including regulatory approval, before it’s final. The company today said that’s expected to happen and the deal to close this month.

More than 92 percent of Journal Media shareholders voted at a special meeting Tuesday, March 1, in favor of the transaction.

– Andy Meek

State Systems Acquires Columbia Fire Equipment

Memphis-based State Systems Inc. has acquired Columbia Fire Equipment, a fire safety company that provides extinguishers, alarms and suppression systems in Columbia, Tenn. It is the third acquisition for State Systems in less than a year.

Columbia Fire Equipment was founded in 1970 by William Smith and has served Middle Tennessee for more than 45 years. Effective immediately, State Systems will absorb the company’s employees and begin servicing customers in Columbia and surrounding areas, with plans to expand the business further into Middle Tennessee.

“A well-established and highly regarded local company, Columbia Fire Equipment is a great fit for State Systems as we expand into the region for the first time,” said Bob McBride, CEO of State Systems Inc. “Furthermore, we’re hoping to dig in quickly and be able to expand our products and services offered in this market to include other options in personal property protection, in addition to fire safety.”

Financial terms of the deal were not released.

Smith will remain in place to assist with the transition, and Robin Jones, who has been with Columbia Fire Equipment for 12 years, will become general manager.

State Systems now serves a customer base from western Arkansas through Middle Tennessee.

Last May it acquired Ver-Max Inc., a fire protection company based in Corinth, Miss., that had a customer base of 500 within a 50-mile radius of Corinth. It also purchased Memphis-based ESI Companies Inc., which provides nurse call equipment to hospitals, last year.

State Systems Inc. is a privately owned total protection company offering a wide range of products and services housed in five company divisions. It is expected to move into a new headquarters facility at 1861 Vanderhorn Drive off Pleasant View Road in the first quarter of this year. For more about the company, visit statesystemsinc.com.

– Terry Hollahan

MATA Guard Pleads Guilty In Passenger’s Death

A Memphis Area Transit Authority security guard has pleaded guilty to aggravated assault involving an unruly passenger who died of complications three months later, Shelby County District Attorney General Amy Weirich said Wednesday, March 2.

Adicus Mitchell, 51, faces three to six years in prison when he is sentenced April 1 by Criminal Court Judge Lee Coffee. He also is eligible to seek diversion or probation.

Mitchell, who was scheduled to go to trial this week, entered his plea Tuesday.

The incident dates back to May 6, 2014, at the MATA bus terminal at 444 N. Main St., where a bus driver notified Mitchell that he had an unruly passenger, according to the statement from Weirich’s office.

Robert Gray, 69, made obscene remarks to a female passenger and was slow to get off the bus when it pulled into the terminal.

Mitchell and Gray exchanged words in a confrontation that was captured on an audio-video recording. Mitchell forcefully shoved Gray out the front door, causing him to land face first on the concrete, where he lay motionless.

Gray was hospitalized in critical condition and two months later was transferred to a long-term care facility, where he died on Aug. 3. The medical examiner ruled the cause of death to be complications from blunt force head trauma.

– Kate Simone

Council Rejects Hotel At Jackson and Front

Memphis City Council members rejected a hotel with retail Tuesday, March 1, on the northeast corner of Jackson Avenue and Front Street, across from The Pyramid in the Pinch District, that was first proposed last year.

The development by Front Street Group moved ahead to a vote even after what looked like an agreement with the Greater Memphis Chamber and St. Jude Children's Research Hospital fell through.

The chamber and the hospital wanted the hotel to wait three more months on a master plan for development of the larger Pinch District coordinated with a coming expansion of St. Jude. The developers didn't want to wait.

“It’s just one of those things,” said councilman Berlin Boyd, whose district includes the Pinch and St. Jude. “I don’t want to lose the investment from St. Jude.”

The hospital’s expansion with new capacity and new construction as well as new research programs totals $8 billion. And Boyd said other cities are trying to get St. Jude to do it in their cities instead of Memphis.

Boyd also said St. Jude is seeking $75 million in state funding from Tennessee Gov. Bill Haslam

The council rejected the item with a 4-7 vote.

Councilwoman Janis Fullilove argued there was no need to reject the hotel or hold up the developers. She questioned whether there were rival hotel developers with political connections seeking the property.

“Whenever you want to throw a sucker punch, always use St. Jude and the babies,” she said. “That’ll get you every time.”

Shea Flinn, vice president of the Greater Memphis Chamber’s Chairman’s Circle and a former city council member, discounted the “conspiracy theories,” saying they were circulating six years ago when The Pyramid was sitting dormant and St. Jude had no expansion plans.

– Bill Dries

Strickland Outlines $136.1M In Capital Expense Surprises

The city has to put up $30 million over five years to match a $30 million federal grant the city got in 2015 for the South City development, including demolition and redevelopment of the Foote Homes public housing development.

The local match is one of several “surprises” Memphis Mayor Jim Strickland told Memphis City Council members about that will affect his upcoming capital improvements budget proposal.

That is the one-time spending budget on construction and renovation projects that the city finances with bonds.

The total of these surprises over the next four fiscal years is $136.1 million.

“They are obligations,” Strickland said.

They include replacing the police and fire department radio systems at an estimated cost of $60 million over three years which Strickland referred to as “a real kick in the shin.”

Also on the list is $15 million over five years for city maintenance and renovation of FedExForum and another $15 million over the same period for the Memphis Area Transit Authority.

The $24 million the city initially pegged as the cost of police body cameras and cameras in patrol cars has also grown by an additional $6 million.

Some of the money is from the operating budget as well as the capital budget.

“As you can see, all of those items are on top of what we come to you for every year – paving, cars, police vehicles, fire trucks,” Strickland said. “We try to limit our CIP to about $70 million per year. These five items get you a long way toward that $70 million. It’s going to be a real challenge on the CIP front for three or four years.”

– Bill Dries

City & State Adding Covered Patio on Broad

It looks like the Broad Avenue coffee shop and retailer City & State will have a new addition by the time its one-year anniversary rolls around next month – a patio that owner Lisa Toro says should double and maybe even triple the seating capacity.

Although City & State has had some patio seating available until now, she said the business decided to create a more year-round space to accommodate the growing traffic.

The patio – for which EDGE’s ICED program is providing a loan for the buildout – will be fully covered, with City & State looking to add heaters with the arrival of fall and winter.

Toro said completion is anticipated for early April and that it should provide space for an additional 30 to 40 people.

– Andy Meek

Humphreys Ink Becomes Anderson Humphreys

Times change and so do company names.

After 30 years, the name Humphreys Ink Advertising is being retired. Company founder and president Anderson Humphreys has formed a new company, Anderson Humphreys LLC.

“The field of advertising has changed, perhaps more than any other type of business,” Humphreys said. “Everything we do now is electronic-based utilizing computers and the Internet. There are no longer type houses, nor film houses required to produce expensive film negatives for printing. Even couriers are rarely used.”

Humphreys, who describes advertising as a blend of art and science, says the name change also reflects the substantial role he personally will play in handling and directing accounts for clients.

For more information, visit andersonhumphreys.com.

– Don Wade

Tri-State Bank Gets Former First Tennessee Exec as CEO

On the heels of the capital investment it recently secured from First Tennessee Bank, Tri-State Bank of Memphis now has a former First Tennessee executive as its new CEO.

Christine Munson, formerly executive vice president and head of corporate banking for First Tennessee and its parent First Horizon National Corp., is Tri-State’s new chief executive.

Her hire is the latest in a flurry of major announcements from Tri-State in recent weeks. Since the end of 2015, the bank has also sold its main branch and headquarters at S. Main & Beale St. as well as acquired capital investment from Belz Investco and First Tennessee Bank.

– Andy Meek

GTx Results Show Narrowing Loss

Memphis-based biopharmaceutical company GTx Inc. is currently enrolling patients in three clinical trials – two trials evaluating its product enobosarm as a potential treatment for women with advanced breast cancer, and another trial studying enobosarm as a potential treatment for stress urinary incontinence in postmenopausal women.

That’s according to the company’s fourth-quarter and year-end results released Thursday, March 3.

GTx executive chairman Dr. Robert Wills said about the results that in 2015 the company continued to make important progress across its “pipeline assets.”

The company narrowed its loss for the just-ended quarter – $3.2 million, compared to a net loss of $14.5 million for the same period in 2014. That was also the same trend for the full year.

The net loss for 2015 was $18.7 million, compared to a net loss of $39.4 million for 2014.

– Andy Meek

East Memphis Medical Office Fetches $1.2 Million

A medical office building at the corner of White Station Road and Poplar Avenue has sold for $1.2 million. In a warranty deed signed Feb, 29, Tennessee-based 5210 LLC sold the property at 5210 Poplar to Tennessee-based Banc3 Holdings Inc.

The 13,414-square-foot, Class C office building was built in 1979 and was most recently appraised at $1.3 million, according to the Shelby County Assessor of Property.

– Madeline Faber

Collins to Help Develop Plan For Crime Commission

Former Memphis City Council member Harold Collins will lead the Memphis-Shelby Crime Commission in developing a new long-range plan for Operation Safe Community.

Shelby County District Attorney General Amy Weirich, who is the chairwoman of the OSC coalition, announced Feb. 25 that Collins will be joining the crime commission staff.

– Bill Dries

NBMBAA Memphis Taking Scholarship Applications

The Memphis Chapter of the National Black MBA Association is taking applications for the 2016 Rafael Dodd Graduate Scholarship, which offers financial assistance to local students enrolled in a graduate business or management program.

Scholarships are apportioned based on an applicant’s demonstrated academic achievement, community service, letter of reference, verbal skills and resume.

The NBMBAA Memphis chapter was founded in 1993. Its mission is to stimulate the intellectual and economic wealth of the African-American community, enhancing the community at large. The scholarship deadline is April 1. For more information email memphis_nbmbaa@yahoo.com.

– Kate Simone

PROPERTY SALES 81 201 16,108
MORTGAGES 40 104 10,026
BUILDING PERMITS 130 336 38,272
BANKRUPTCIES 28 56 7,528