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VOL. 11 | NO. 23 | Saturday, June 9, 2018

Daily Digest

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Malco Planning Theater For Lakeland’s Lake District

More good news for Lakeland residents as Malco Theatres Inc. has signed a letter of intent to construct a “state-of-the-art” movie theater in The Lake District.

The news of Malco’s 38,000-square-foot theater comes several months after the 160-acre mixed-use project announced its first tenant would be The Stock Market, an upscale grocery store operated by independent retailer Jeff Burkhead.

“With multiple entertainment options proposed at The Lake District and an abundant amount of dining, Malco Theatres will further enhance the dynamic atmosphere,” developer Yehuda Netanel of Gilad Development Inc. said in a statement. “We are focused on creating a daily destination that maximizes the human experience and provides memorable entertainment accessible to everyone.”

Shawn Massey of The Shopping Center Group represented the Lake District in the deal, while Michael Lightman of Michael Lightman Realty represented Malco Theatres.

Malco vice president David Tashie said the Lake District was the “clear choice” for a theater in northeast Shelby County due to a changing retail landscape that favors entertainment options within mixed-use developments.

Malco is also in the process of bringing a seven-screen theater, known as the Powerhouse Cinema, to the $55 million Central Station project in Downtown’s South Main Historic Arts District.

Including the new Malco theater, the Lake District will include 300,000 square feet of retail and restaurant space, two hotels, 240 custom-built single-family homes, 390 apartments and 168 age-restricted apartments.

– Patrick Lantrip

Trump Commutes Sentence In Memphis Drug Case

President Donald Trump commuted the sentence Wednesday, June 6, of a woman serving a life sentence in a Memphis drug case whose cause was championed by reality TV star Kim Kardashian West in a recent visit to the White House.

Alice Marie Johnson, 63, spent more than two decades serving life without parole. She was released hours after the White House announced that Trump had commuted her sentence, running to greet her family with her arms opened wide for a group hug outside the federal prison in Aliceville, Alabama.

On Thursday morning, she saw her first sunrise in years at home in Memphis.

Johnson has a job lined up as an administrative assistant in a dental office, but she said she'll keep pushing for sentencing reform for nonviolent first-time offenders who don't pose a threat to their communities.

Johnson was convicted in 1996 on eight criminal counts related to a Memphis-based cocaine trafficking operation involving more than a dozen people. The 1994 indictment describes dozens of deliveries and drug transactions, many involving Johnson.

She was sentenced to life in prison in 1997, and appellate judges and the U.S. Supreme Court rejected her appeals. Prosecutors opposed a pending reduction in her sentence, citing federal guidelines based on the large quantity of drugs involved.

Unlike a pardon, the commutation will not erase Johnson's conviction, only end her sentence.

– The Associated Press

Fred’s Completes Sale Of Specialty Pharmacy Unit

Memphis-based Fred’s Inc. has completed the sale of its specialty pharmacy unit, EntrustRx, to CVS Health Corp.

Fred’s and CVS closed the deal Monday, June 4, a month after the company’s reached a definitive agreement for the sale. CVS paid $40 million cash, and will also pay amount equal to the value of EntrustRx’s inventory up to $5.5 million.

“We are pleased to conclude the sale of EntrustRx, an important step in our plans to monetize non-core assets as part of our broader turnaround efforts,” Fred’s interim CEO Joe Anto said in a statement. “The cash proceeds will allow us to pay down a significant portion of our debt and also be used for general corporate purposes.”

Fred’s advisers for the EntrustRx sale were Covington Associates and Bass, Berry & Sims.

The sale comes amid turmoil at Fred’s, which has seen the value of its shares (Nasdaq: FRED) drop dramatically amid declining sales. The company also has seen high turnover in its corporate ranks. Three C-suite executives left in April, including CEO Michael Bloom, who had been in the position less than two years. His departure led to Anto’s appointment as interim CEO.

Anto laid out a broad turnaround strategy during the company’s annual presentation in early May. Along with the EntrustRx sale, Fred’s is exploring different options for its retail pharmacy portfolio, according to Anto. It also could sell “significant portions” of its real estate portfolio, he added.

– Daily News staff

$20M Permit Filed For Bakery Apartments

The team redeveloping the Wonder Bread bakery and several nearby properties has filed a $20 million building permit application for the apartment portion of the $73 million mixed-use project.

LRK was tapped to handle the design work, while Montgomery Martin Contractors will head up the construction.

The application lists SWH Partners as the property owner and tenant. Founded as Schaedle Worthington Hyde Properties in 1991, the Atlanta-based firm specializes in multifamily and mixed-use investments, including development and other value-creation strategies.

Lead developer Development Services Group announced plans last August for the bakery project, including nearly 300 upscale multifamily units, a 480-space garage and 150,000 square feet of office and retail space. Later that month, Orion Federal Credit Union confirmed plans to move its headquarters to the development.

– Patrick Lantrip

Univ. of Memphis Trustees Approve Tuition Freeze

University of Memphis trustees voted Wednesday, June 6, to freeze tuition for the next year after a 2.6 percent tuition hike this year. The freeze recommended by U of M president David Rudd puts tuition at $9,700 for a student taking 15 credit hours.

And the trustees approved raising the campus minimum wage for full-time employees to $10.60 an hour from the current $10.10 an hour. Rudd described the raise he recommended as incremental and to be followed by further pay steps. The action follows Shelby County Schools’ decision to raise its minimum wage to $15 an hour for full-time employees, while the city of Memphis approved a $15.50 hourly minimum wage for its full-time workers.

In other action, the U of M trustees approved a salary supplement of $50,000 for Rudd from private funds.

The group also approved three new academic programs: doctorates in physical therapy and social work, and a Master of Science program in engineering management.

– Bill Dries

THM Buys Last 2 Parcels Near 100 North Main

New York-based Townhouse Management Co., doing business as THM Memphis Acquisitions LLC, has acquired the last two parcels that share a block with the 37-story 100 North Main building, which it plans to redevelop into a 600-room Loews hotel.

Listed as 0 Main Street and 0 Jefferson, the two parcels were purchased from Jefferson Partners for $1.7 million, according to a May 31 warranty deed. The two empty parcels total a combined 0.6 acres and were collectively appraised for $670,000 by the Shelby County Assessor this year.

The proposed renovation of the city’s tallest building carries a preliminary price tag of $400 million.

– Patrick Lantrip

Royals Pick Tigers’ Bowlan In 2nd Round of MLB Draft

University of Memphis junior right-handed pitcher Jonathan Bowlan was selected in the second round of the MLB Draft by the Kansas City Royals Monday, June 4.

Bowlan was taken with the No. 58 overall pick, making him the Tigers’ second-highest draft pick in program history.

Bowlan made 14 starts this season, recording a 3.71 ERA with 104 strikeouts in 85 innings pitched. He became the first Tiger since 2013 to record 100 strikeouts in a season.

Earlier this season, he set the Memphis and American Athletic Conference record with 18 strikeouts in a complete-game win over USF. The 18 strikeouts, all of which were swinging, are the most by a pitcher in a Division I game this season.

In his three-year Memphis career, Bowlan struck out 211 batters in 224 innings and recorded a 3.90 ERA.

Bowlan is the Tigers highest draft pick since Dave Anderson was selected with the No. 22 overall pick by the Los Angeles Dodgers in 1981.

A second-generation Tiger, Bowlan’s father, Mark, was drafted by the St. Louis Cardinals in the 19th round of the 1989 draft. Mark Bowlan pitched at Memphis from 1987 to 1989 and threw the only perfect game in program history, against Louisville in 1987.

– Don Wade

2 More Tigers Taken In MLB Draft

University of Memphis players Riley Cabral and Tyler Webb were both selected in the 2018 Major League Baseball Draft. Cabral was selected in the 31st round by the Houston Astros, while Webb went to the Minnesota Twins in the 40th round. Previously, pitcher Jonathan Bowlan was selected in the second round by the Kansas City Royals.

Cabral came to Memphis after a successful two-year career at Chipola College, where he was drafted in the 16th round of the 2017 MLB Draft.

The Oklahoma City native recorded a 4. 85 ERA, a 6-5 record and one save in 17 appearances for the Tigers this season. He struck out 58 batters in 59 1/3 innings pitched.

Cabral is the first Memphis Tiger to be drafted by the Astros.

Webb’s selection marks the third-consecutive season that a Memphis outfielder has been drafted. Webb played two seasons at the University of Memphis after transferring from Galveston College. He compiled a .289 career batting average with 35 doubles, three triples and seven home runs. He drove in 52 runs and scored 71 runs in 107 career games played.

In his first season with the program in 2016, Webb batted .305 with 16 doubles and six home runs. He scored 43 runs and drove in 25.

Webb is the third Memphis Tiger to be drafted by the by the Twins and the first since Philip Chapman in 2011.

– Don Wade

Int'l Paper Calls Off Bid for Smurfit Kappa

Memphis-based International Paper Co. has called off its bid for now to acquire Smurfit Kappa Group PLC, Europe’s largest maker of cardboard boxes, IP executives announced Tuesday, June 6.

The company’s statement said specifically IP will “not make an offer for Smurfit Kappa Groups PLC given the lack of engagement by Smurfit Kappa’s board of directors and management.”

“While we continue to believe in the strategic and financial potential of this combination, our commitment was to proceed in a disciplined manner that would create value for both sets of shareholders,” International Paper chairman and CEO Mark Sutton said in the same statement.

“Moving forward, we remain focused on executing our strategy and are excited about our outlook. We have many levers to create shareholder value and will be responsible stewards of our shareholders’ capital.”

International Paper made its first offer to buy the Irish company for $10.7 billion in February and put a revised $11 billion proposal on the table in March – both rejected by Smurfit leaders.

The Irish Takeover Panel, a regulatory body in Ireland, gave IP until June 6 to make a final binding offer on Smurfit in what would have amounted to a hostile takeover bid.

In May, International Paper indicated it probably would not submit a third bid to the panel and would instead try to talk with Smurfit leaders about an agreement short of a takeover.

With Tuesday’s formal confirmation, International Paper said it reserves the right within the next year to renew its bid for Smurfit Kappa.

– Bill Dries

SCS Pulls Permit for New Goodlett Elementary

Shelby County Schools has filed a $25 million building permit application for construction of a new Goodlett Elementary School at 3000 Claudette St.

The larger school is to be built on the site of the existing Goodlett Elementary, which is at 3001 S. Goodlett St. Once completed, the new school will allow Shelby County Schools to close nearby Knight Road Elementary.

The school system is also moving ahead with plans for a new Alcy Elementary that will also be larger than the existing school now on the site. That will allow the school system to consolidate students from nearby Magnolia and Charjean elementary schools into the new Alcy.

– Bill Dries

Hallmark Channel to Shoot Holiday Film at Graceland

Hallmark Channel is heading to Graceland to shoot a holiday film next month.

Country music singer and 2018 Daytime Emmy Award nominee Kellie Pickler is set to star in “Christmas at Graceland,” which begins production July 9.

The holiday film features music made famous by Elvis Presley, according to the Hallmark Channel, which will air it as part of its “Countdown to Christmas” event.

Joel Weinshanker, managing partner of Graceland Holdings, is among the executive producers, along with Pickler, Corey Salter, Marc Rosen and J.J. Jamieson. The film is a Crown Media Family Networks production, and the teleplay is written by Gregg Rossen and Brian Sawyer.

Pickler stars as Laurel, a Chicago-based business executive who travels to Memphis to secure one of the city’s oldest family-owned banks. While in Memphis, she reunites with an old flame Clay, a local music promoter with loftier aspirations. Though Laurel tries to keep her eye on the prize of the business acquisition, Clay reminds her of the days when they were a performing duo.

Memphis & Shelby County Film Commissioner Linn Sitler welcomed Hallmark Channel back to the city.

“Our last Hallmark movie, John Grisham’s award-winning ‘A Painted House,’ was such high quality and so enjoyable,” Sitler said in a statement. “We love the opportunity to show off our local crew and talent – and our great locations: Graceland and Memphis – and at Christmas.”

– Daily News staff

Lori James Leases Up At Laurelwood

The contemporary women’s boutique Lori James is moving to Laurelwood Shopping Center in East Memphis.

The 30-year-old boutique owned by Memphian Lori James has been at Regalia Shopping Center since its inception. The Laurelwood location will be approximately 2,500 square feet and is slated to open in July.

“With so many stores continuing to open in the center, we feel that this move will be a positive step in advancing the growth of our boutique,” James said in a written statement.

– Bill Dries

Collierville to Add Drainage Inlets South of Square

The town of Collierville is installing new drainage inlets along five streets south of the town square to improve drainage in those areas as part of a $2.3 million project.

The inlets along Echo Cove, Harris Cove, West Street, Friendship Cove and Hurdle Drive will improve the transition of the flow of stormwater into Collierville’s stormwater network.

The $1.3 million in improvements begins in July in the Alcorn Village neighborhood. Construction there is expected to take three months.

Phase two of the project includes replacing the box culvert at Sycamore and South Street with a culvert that has larger capacity.

That $1 million project gets started in September and is also expected to take three months to complete.

The $2.3 million in total improvements are funded with federal Community Development Block Grant funding that comes to Collierville through the Tennessee Department of Economic and Community Development.

– Bill Dries

Council Drops Referendum From November Ballot

There will be no referendum question on the Nov. 6 election ballot that would change a basic structural feature of city government.

The Memphis City Council rejected on third and final reading Tuesday, June 5, a referendum question that, if approved by city voters, would have required council approval of city contracts.

The measure, introduced by councilman Martavius Jones, died on third and final reading for lack of a second.

The power of the mayor to make contracts without council approval is one of the central features of the charter that created the mayor-council form of government 50 years ago. The power to enter into contracts is one of several features that makes the structure of city government a “strong mayor” form of government.

After several delays earlier this year, the council also gave final approval Tuesday to two de-annexation ordinances that will de-annex the portion of Eads within the city limits as well as uninhabited flood plain land in southwest Memphis unless a majority of residents in each area petition to remain in the city.

The council approved the city’s purchase of land next to Rodney Baber Park in Frayser for $68,000 as part of a larger federal resiliency grant program to create a Wolf River Greenway area in the expanded park area by the Wolf River.

In planning and development items, the council approved an amended planned development for the One Beale project that calls for seven- and nine-story buildings on a larger site, which now incorporates land east of Wagner Place in its first phase. Council members also approved transferring ownership of Wagner Place north of Pontotoc Avenue to the developers. The public would still be able to use the street. The transfer is because the hotel development on the east side of Wagner and Beale will include an overhang that encroaches on Wagner.

– Bill Dries

Commission Takes 1st Vote On Property Tax Rate Cut

Shelby County commissioners voted 8-0 Monday, June 4, in favor of a county property tax rate of $4.05 for the fiscal year that begins July 1. Commissioners Turner, Burgess and Willie Brooks abstained on the first reading vote, which automatically advances the measure to second and third readings regardless of the vote count under the commission’s rules.

County Mayor Mark Luttrell has proposed dropping the current $4.11 rate to $4.05, estimating it should eliminate the $20 million windfall the county got from the recertified property tax rate based on the 2017 countywide reappraisal of property, with a 1-cent reduction beyond that.

Commissioners also approved county funding of $518,160 from the county’s reserves in the current fiscal year as what commission chairwoman Heidi Shafer described as “seed money” toward an opioid addiction treatment plan.

The plan with the Shelby County Health Department and the University of Tennessee Health Science Center includes a contract with UTHSC not to exceed $2 million for a year to establish an Addiction Medicine Network.

The county startup funding would start immediately and automatically flow into the new fiscal year next month to begin hiring counselors and others for the program to provide wrap-around services for those addicted to opioids.

– Bill Dries

Memphis Daily News Wins 9 Green Eyeshade Awards

The Daily News and the Memphis News placed in nine categories in the Society of Professional Journalists’ annual Green Eyeshade Awards, including five first-place finishes. The regional awards cover an 11-state area.

The Memphis News placed first in public affairs reporting among non-daily newspapers for 2017 stories by Bill Dries on the city’s decision to end new sewer connections outside the city of Memphis and the controversy over the Beale Street Entertainment District’s Saturday cover charge.

The weekly’s editorials also finished first among all non-dailies in the contest.

Andy Meek’s weekly coverage of the 20th anniversary of the opening of Wolfchase Galleria and the state of malls in retail trade won first place in business reporting.

Don Wade finished first in sports reporting and sports commentary among non-daily newspapers.

Reporters Patrick Lantrip and Michael Waddell placed second in non-daily technology reporting for Lantrip’s cover story on precision agriculture and the use of technology in farming and Waddell’s cover story on medical device companies in Memphis.

Bill Dries’ coverage of politics for The Memphis News placed third among all non-dailies, while his political reporting for The Daily News took third place among dailies of all sizes in the 11-state region.

The Daily News also took second-place honors for deadline reporting among small dailies for Bill Dries’ and Patrick Lantrip’s coverage of the January protest of President Donald Trump’s first version of a travel ban on immigrants.

– Daily News staff

Former US Atty. Laurenzi Joins Baker Donelson

Former U.S. Attorney Lawrence Laurenzi has joined Baker Donelson law firm as of counsel.

Laurenzi, a career federal prosecutor with more than 35 years of experience in the U.S. Attorney’s office for the Western District of Tennessee, is joining the firm’s government enforcement and investigations group.

The group defends businesses and executives in investigations and prosecutions. The Baker Donelson group is led by Joe Whitley, former U.S. attorney in Georgia as well as former general counsel of the U.S. Department of Homeland Security.

Laurenzi served as U.S. attorney from 2008 to 2010. He was also acting U.S. attorney three times.

When he retired earlier this year, Laurenzi was serving as first assistant U.S. attorney. Before that, he had been the office’s criminal chief.

– Bill Dries

US Attorney’s Office to Get 2 New Federal Prosecutors

The U.S. Attorney’s Office for the Western District of Tennessee will be getting two new prosecutors as part of a national increase of 311 new assistant U.S. attorneys announced Monday, June 4, by U.S. Attorney General Jeff Sessions.

Michael Dunavant, U.S. attorney for the Western District of Tennessee, said one of the new positions will work on violent crime cases and the other on civil enforcement cases.

The office got two new prosecutors late last year to work on violent crime cases in the Memphis office and the Jackson office.

“Now, with this additional violent crime prosecutor position, we can continue to increase our caseloads in the area of firearms, gangs and violent crimes in Memphis and across West Tennessee,” Dunavant said in a written statement. “Likewise, with the allocation of the new Civil ACE position, our office will be better positioned to affirmatively litigate cases in the growing areas of health care fraud, elder abuse, nursing home complaints and prescription opioid diversion.”

– Bill Dries

Moody’s Reaffirms MSCAA Bond Rating, Ups Outlook

Credit rating agency Moody’s Investors Service has upgraded the Memphis-Shelby County Airport Authority’s ratings outlook from “stable” to “positive” while affirming the airport’s general revenue bonds at A3.

This marks the second recent upgrade from one of the “Big Three” rating agencies after S&P Global Ratings raised its long-term and underlying rating for the MSCAA from “A-” to “A” last month.

“The ‘positive’ rating outlook from Moody’s mirrors our own optimism for the future of Memphis International Airport,” MSCAA president and CEO Scott Brockman said in a statement. “By maintaining a strong financial foundation, MEM is well-positioned to continue its recent strong growth trends.”

Memphis International Airport’s sustained positive trajectory of enplanements since fiscal year 2016 was cited by Moody’s as one of its primary factors in the upgrade, in addition to long-term growth prospects and cargo operations led by FedEx.

– Patrick Lantrip

Tenn. Brewery’s 1st Phase 100 Percent Leased

The first phase of the Tennessee Brewery development is now completely leased, according to multifamily investment and property management company Fogelman Properties.

Since opening its doors December 2017, the Tennessee Brewery has become the real estate company’s fastest “opening to stabilization” community to date.

“The Tennessee Brewery has quickly become one of most profiled Memphis development projects and is a proven success story of adaptive reuse in Memphis,” Mark Fogelman, president of Fogelman Properties, said in a release. “Billy (Orgel) and his team took an old, dilapidated building and radically transformed it into an incredibly vibrant development with marketable rents and exceptional features.”

Construction on the second phase, which includes an additional 121 units, is expected to begin in early July with a delivery date scheduled in the summer of 2019.

– Patrick Lantrip

PROPERTY SALES 64 87 1,429
MORTGAGES 39 60 1,107