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VOL. 9 | NO. 36 | Saturday, September 3, 2016

Daily Digest

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FedEx Taps Murfreesboro For Distribution Center

Memphis-based FedEx Corp. has announced plans to build a $190 million distribution center in Murfreesboro, Tenn.

The shipping company will add the equivalent of 200 full-time positions to work at the 1-million-square-foot facility, The Daily News Journal reports.

About 40 of the new positions will pay an average of $53,500 per year, while the remaining jobs will pay an average of $24,000 annually.

Brian Hercules, vice president for economic development at the Rutherford County Chamber of Commerce, said there are hundreds of additional contract jobs like long-haul drivers that will also gain work through the facility.

Construction is set to begin by the end of the year and scheduled to be complete by early 2018.

– The Associated Press

Democrats Seek Hearings Exchange Rate Increases

The state’s Democratic Caucus has requested hearings in the House and Senate Commerce and Insurance committees to probe how insurance rates for the 2017 Tennessee Health Care Marketplace could rise so high year to year.

The annual increase in premiums on the exchange for individual coverage from the state’s largest insurer on the exchange, BlueCross BlueShield of Tennessee, came in at 62 percent.

“Tennessee's rate increase is more than double the national average, and we gave the insurers 100 percent of the requested hike, something almost no other state has done," state Sen. Jeff Yarbro said in a release. "It appears that such a massive rate hike is unique to Tennessee and not simply an inevitable consequence of Obamacare. It's worth exploring what decisions by the administration and by the Legislature have led to such a volatile environment for consumers in our state."

Yarbro and state Rep. John Ray Clemmons penned a letter asking the chairman of the respective committees for hearings.

Earlier this week, the state Department of Commerce and Insurance released the rates insurance companies will be charging. The companies said they have lost money by providing insurance on the exchange and underestimated claims.

The lawmakers seeking the hearings want to know why the higher rates were not negotiated down, according to the letter.

"If Tennessee is in a position where insurance companies have the power to effectively dictate the rate increases that will be approved by its state regulator, the General Assembly must consider whether some corrective action is required," the letter states.

The Caucus reports that insurance rates in states that expanded Medicaid, unlike Tennessee, generally have lower rates. In Arkansas for example, BlueCross BlueShield sought a 14 percent rate increase but received 10 percent, according to Yarbro and Clemmons. They also noted that states that haven’t expanded Medicaid still have large numbers of people who are uninsured, which drives up health-care costs for everyone.

"Any legislator – whether or not they support Insure Tennessee – should be deeply concerned for our state's insurance market to fare worse than other states," Clemmons said. "While most people on the exchange get a tax credit to help with the cost of insurance, the middle-class families and small business owners who use the exchange, but make too much to earn a subsidy, will be deeply affected by this decision.”

Cigna’s plans will increase 46.5 percent, Humana’s will jump 44 percent, and Aetna’s will rise 14 percent. UnitedHealthcare will not sell on the marketplace in 2017. The changes, which go into effect on Jan. 1, apply to individual policies only, not to group policies.

– Daily News staff

Patrick Accounting Settles on New Office

Patrick Accounting & Patrick Payroll has announced its new office space at 5570 Murray Ave.

The company’s growth since 2004 and the anticipation of additional growth made the move into a larger office necessary for expansion, the company said. Managing member Matthew Patrick led a complete renovation of the building, which has housed several medical practices in the past.

The facility provides employees with amenities including an open work space environment, a full kitchen and employee lounge. It also has a number of meeting areas designed so that employees can work with clients in a variety of ways.

– Andy Meek

Fred’s Names New CEO, Reports Q2 Net Loss

Memphis-based discount retailer Fred’s Inc. has named Mike Bloom its new chief executive officer.

CEO Jerry Shore announced that he will retire next February from the company where he has worked for 16 years. But Bloom will assume the CEO role effective immediately.

Bloom came on board in January 2015 as president and chief operating officer, bringing experience in similar operations to Fred’s. He served in a variety of executive roles at competing retailers Family Dollar and CVS Caremark Corp., which has a large pharmacy operation.

For the past several years, Fred’s has been trying to position itself as more of a health care company than a general merchandiser, putting more resources and revenue strategies into pharmacy operations.

About 18 months ago in March 2015, Fred’s announced an agreement to acquire Reeves-Sain Drug Store Inc. for $66 million.

In addition to a single Reeves-Sain pharmacy in Murfreesboro, Tenn., the deal gave Fred’s access to EntrustRx, a specialty pharmacy operation that has a regional presence in the Southeast.

It was the largest acquisition in Fred’s history.

Meanwhile, the company reported disappointing second-quarter financial results on Tuesday, Aug. 30.

For the second quarter ended July 30, 2016, Fred's reported a net loss of $6.9 million, or 18 cents per share, compared with a net loss of $4.9 million, or 13 cents per share, for the second quarter of last year. For the first six months of 2016, Fred's net loss totaled $5.7 million, or 15 cents per share, compared with a net loss of $4.9 million, or 13 cents per share, for the same period last year. Total sales for the second quarter declined 3 percent compared with the second quarter of last year, while total sales for the first half of 2016 increased 2.3 percent from a year ago.

“We are disappointed with the company's performance,” Bloom said in a statement, “as comparable store sales were down in front store, retail pharmacy and specialty pharmacy.”

In other personnel moves, Fred’s promoted Craig Barnes to the newly created role of COO-Front Store. In this role, Barnes will manage merchandising, marketing, supply chain, store operations and real estate.

Barnes joined Fred’s in 2014 and worked as executive vice president of supply chain, global and domestic logistics.

– Daily News staff

Mallory Alexander Adds To Executive Team

Robert “Bob” E. Mallory has been appointed chief administrative officer for Memphis-based supply chain specialist Mallory Alexander International Logistics.

Mallory will be based in Memphis and will focus on developing programs to drive company growth through expansion and acquisitions. He is a member of the fifth-generation family that owns the Mallory Alexander company, and he has more than 20 years of international sales experience in former positions at Morgan Keegan & Co. and Raymond James Financial.

“We are committed to growing with our customers strategically to support their supply chains,” Neely Mallory, president of Mallory Alexander, said in a statement. “Bob E.’s financial experience is a critical addition to our Executive Team, and in this newly created position, he will be focused on targeting future growth opportunities.”

Mallory Alexander offers services in customs brokerage, domestic and international freight forwarding, NVOCC, warehousing, Foreign Trade Zone operations, and consulting. The company has more than 500 employees and operations throughout the United States as well as international branches in Mexico and China.

– Madeline Faber

Central Defense Raises $13K For Summer Camp

Memphis-based Central Defense Security, a leading provider of business, retail and warehouse security, raised $13,576 to support the city of Memphis Division of Parks and Neighborhoods’ Summer Day Camp program this year, the company has announced. The funds were used to offset the registration, activity and early arrival fees for 123 campers at several community centers around the city and cover the costs for special Fun Days at three locations. It is CDS’ fifth year to raise money for the camp program.

“Supporting the City’s Summer Day Camp program is something we’re passionate about, as it gives us the opportunity to secure the community in a different way than we normally do,” Larry Carroll, chief operating officer at Central Defense Security, said in a statement.

The cost to attend the seven-week program is $162 per child, and it allows children to participate in recreational and educational activities, as well as attend various field trips in the city. Specifically, the campers are able to spend time doing arts and crafts, playground games, cultural arts, musical expression, and health and fitness programs.

In addition to sponsoring campers, CDS’ donation enabled Hickory Hill, Marion Hale and McFarland Community Center to host special Fun Days at their respective locations. The special days were filled with activities including, water slides, a dunk tank, a game truck and dance contest.

– Daily News staff

Construction Continues At Patterson Flats

Work continues on the 175-unit Patterson Flats development in Downtown’s South End.

Developer Elmington Capital Group, doing business as ECG Patterson Development LLC, recently filed building permit applications for $13.7 million of new construction between East Butler Avenue and East G.E. Patterson Avenue.

The largest building permit is intended for a $6.6 million four-story building with an elevator at 263 E. Butler Ave. The other permits are $5.3 million for a three-story building at 280 E. G.E. Patterson and $1.8 million for a three-story building at 293 E. Butler.

All the new construction will be wood framing, according to the applications, which list Patton & Taylor Enterprises as the contractor for the project.

Overall, the Nashville-based developer plans to build four three-story buildings totaling 206,845 square feet. On-site parking includes 125 units between the buildings and 35 spaces on the north side of Butler in a separate lot.

– Madeline Faber

County Commission OKs Gravel Mine Expansion

Shelby County Commissioners unanimously approved Monday, Aug. 29, an expansion of the Standard Construction Co. Inc. gravel mining operation on Godwin Road in northeast Shelby County. The commission vote followed a delay earlier this month in Standard’s application for a special use permit.

The commission amended the permit to require a report from Standard in 2018 on its gravel operations.

Commissioners approved a set of five contracts totaling $2.3 million with Christ Community Health Services, Friends For Life, Regional One Health, Mobile Ministry of Dentistry and Serenity Recovery Centers to provide health and early intervention services to those with HIV who are uninsured or underinsured.

The contracts are funded by grants from the federal Ryan White program.

The services include oral health care, mental health, outpatient substance abuse and other intervention services.

The commission on Monday also approved grants totaling $210,000 to six local nonprofits from the commission’s $1.3 million grant fund that is divided equally among the 13 commissioners at $100,000 each.

The grants by individual commissioners must be approved by the full commission and frequently involve proposals in which several commissioners pool their grant resources. Each of the grants approved Monday were such joint resolutions.

They went to the groups Women of Concern, Books From Birth Inc., Hattiloo Theatre Inc., Agape Child & Family Services, Agricenter International and the IBEW-Jonnie Dawson Charitable Foundation.

The grants approved Monday leave a balance of $1 million in the commission’s fund.

– Bill Dries

Chili’s Commits $30M To St. Jude Program

Chili’s Grill & Bar has announced the start of its annual Create-A-Pepper campaign benefiting St. Jude Children’s Research Hospital with a six-year, $30 million commitment to the hospital.

To commemorate this milestone, the St. Jude School Program will be named in honor of Chili’s.

More than 1,300 Chili’s locations are participating in this year’s Create-A-Pepper program, which runs Thursday, Sept. 1, through Sept. 29. During that time, customers can decorate a pepper coloring sheet for a donation, add a donation to their check, and purchase Create-A-Pepper T-shirts and other promotional items.

The restaurant chain will celebrate St. Jude Day on Sept. 21. On that day only, it will donate at least $100,000 to St. Jude in celebration of the new commitment.

This year marks the brand’s 14th year of teaming up with St. Jude and its second multiyear commitment.

To date, Chili’s has raised more than $58 million for St. Jude. The St. Jude School Program gives patients a way to focus on the future and keep up with schoolwork during their stay at the hospital – whether staying for a few months or years.

– Andy Meek

CBRE, Mosaik Partner To Map Cellular Service

CBRE has partnered with Memphis-based Mosaik to analyze cellular and Wi-Fi coverage at commercial properties.

With the launch of CBRE’s new Benchmark In-Building Cellular Mapping Services, CBRE Telecom Advisory Services will be able to quantify the network quality of entire properties or an individual unit.

“We cannot emphasize enough the importance of in-building coverage,” said Cris Kimbrough, managing director of Telecom Advisory Services for CBRE. “When individuals have poor in-building network experiences, it impacts their overall view of a property.”

With the Mosaik partnership, CBRE will be able to remedy coverage issues by determining where distributed antenna systems or other small cell installations may be needed. By using Mosaik’s Signal Insights application, CBRE or property owners will be able to map both indoor and outdoor signals and analyze performance indicators like download speed and signal strength.

“After all, high-quality wireless services are no longer just an amenity, rather a vital service that helps increase productivity for most businesses,” said Chip Strange, vice president of products and technology at Mosaik.

CBRE expects to start offering Benchmark In-Building Cellular Mapping to its customers this October.

– Madeline Faber

Towers Apartments Sell for $13.5 Million

An apartment high-rise in the Memphis Medical District has sold for $13.5 million.

Memphis 2192 TN LLC, a company of Millennia Housing Development, purchased the eight-story, 306-unit Memphis Towers apartments from Memphis II LP in an Aug. 19 warranty deed.

The Class C property at 1081 Court Ave. was built in 1978. The building bears 185,146 square feet and is situated on 2.9 acres on the south side of Court east of North Camilla Street. The Shelby County Assessor most recently appraised the property at $5.4 million.

In conjunction with the sale, Memphis 2192 TN LLC filed a $10 million loan through Pillar Multifamily LLC. Frank T. Sinitio signed as the borrower’s managing member. The loan matures Sept. 1, 2023.

– Madeline Faber

Grizzlies to Hold D-League Open Tryout on Oct. 9

The Iowa Energy, the NBA Development League affiliate of the Memphis Grizzlies, will hold their annual open player tryouts for the upcoming 2016-17 season on Oct. 9.

The tryouts will be held from 1 p.m. to 5 p.m. at the Hyde Gym on the Memphis University School campus, 6191 Park Ave. Doors will open for registration at noon.

Basketball staff from both the Grizzlies and Iowa Energy will be on hand to make evaluations.

All applicants must complete the required paperwork; registrations completed before Oct. 9 are $150. Same-day registration is $200. Go to grizzlies.com or iowanba.com for more information.

– Don Wade

Quality Suites Hotel Sells for $2 Million

A Quality Suites hotel in Cordova has sold for $2 million.

Akshar Macon LLC purchased the hotel from Minesh Patel in an Aug. 25 warranty deed. Built in 1996, the property at 8166 Varnavas Drive bears 66,050 square feet. It sits on 2.2 acres on the north side of Varnavas east of North Germantown Parkway, and the Shelby County Assessor’s 2016 appraisal was $2 million.

In conjunction with the sale, Akshare Macon LLC filed a $3.7 construction loan woth Centennial Bank. The loan matures Aug. 25, 2041.

– Madeline Faber

VIA Productions Hires Business Director

VIA Productions, a full-service production company with offices in Memphis and Los Angeles, has added Lindsey Roberts as director of business development.

In that newly created role, Roberts will drive new business, build strategic relationships and drive new opportunities.

Prior to joining VIA, Roberts spent five years with Vaco Memphis as a staffing manager and executive recruiter. The announcement follows a year of new partnerships and staffing growth.

And with the addition of Roberts, VIA aims to further bolster its presence in both Memphis and Los Angeles.

– Andy Meek

Indie Memphis Partners With FedEx Institute

The FedEx Institute of Technology is launching the 2017 Film Innovation Challenge, a contest open to filmmakers across the country that highlights the latest advances in technology innovation.

Contestants are invited to submit films between five and 10 minutes long in one of two categories: Film Innovation and Technical Innovation. Each category is designed to push the limits of how film can incorporate emerging technologies, both as subject matter and as technical development. The Film Innovation Challenge festival highlighting the finalists will be held at the FedEx Institute of Technology on Jan. 19.

A special category has been made available to University of Memphis students and alumni, who may submit to either the technical innovation or film innovation category and will be judged against a separate pool from the national competition.

The deadline for submissions is Dec. 9, with finalists notified on Dec. 19. Submissions must fit one of two categories:

• Film Innovation Challenge: Films must feature emerging trends in science and technology as their principal subject matter. This may be presented in the form of a documentary, original fictional work or experimental piece. Content must focus on technology advances which could be implemented in the next five to 10 years based on the current state of emerging technologies.

• Technical Innovation Challenge: Films should exhibit a technical innovation in their filmmaking process. Technical innovation is defined as the incorporation of a new or emerging technology which can include virtual reality/immersive technology, micro filmography or advanced CGI. Entries must include an essay explaining the implemented innovation. Email essays to fedex@memphis.edu with subject line: “Film Innovation Challenge: Technical Innovation Essay.” Only technique will be judged.

Visit memphis.edu/fedex/film for complete details.

– Don Wade

Mississippi Casino Revenue Flat in July as Regions Split

Casino revenue was flat in Mississippi July, as gamblers lost less at Mississippi River casinos but lost more at Gulf Coast gambling halls.

Figures released by the state Revenue Department show casinos won $189.3 million in July, down 0.2 percent from $189.6 million in July 2015.

Revenue at the 16 Mississippi River casinos fell 3 percent from July 2015, dipping to $84 million. Receipts at casinos in that region have fallen in 41 of the last 48 months.

Gamblers lost $105 million at the 12 coastal casinos, an increase of less than 1 percent from last July. It's the 20th increase for coastal casinos in the last 24 months.

Numbers exclude Choctaw Indian casinos, which don't report winnings to the state.

– The Associated Press

Casual Pint Begins Highland Row Buildout

Work has begun on The Casual Pint, a market and bar planned for Highland Row. Developer Highland Row LLC, a partnership between Memphis-based Poag Shopping Centers and Indiana-based Milhaus Development, recently field a building permit for $195,000 worth of tenant buildout at 387 S. Highland St.

The Casual Pint will open this fall.

– Madeline Faber

Downtown Kooky Canuck Preparing to Move

Kooky Canuck is moving next door. Montgomery Martin Contractors recently filed a $689,000 building permit to convert the ground floor of 87 S. Second St. By October, Kooky Canuck will vacate its home of 11 years at 97 S. Second St.

Owners Shawn and Lana Danko will expand draft beer offerings and add a brunch menu on Saturdays and Sundays.

Graham Reese Design Group is handling the design.

– Madeline Faber

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