Friday, November 28, 2003

Planes and Brains

Feeling bullish on Memphis? Two new companies are selling stock.

Posted By on Fri, Nov 28, 2003 at 4:00 AM

Just in time for the holidays, two new Memphis companies are going public with stock offerings, hoping to become mainstays of the airport and the medical center -- or what's left of it -- for years to come.

This week, Pinnacle Airlines Corp., a subsidiary of Northwest Airlines, went to market with 19.4 million shares, priced at $14. Buy some and you'll own a piece of one of the country's largest regional jet services based out of Memphis, Detroit, and Minneapolis. Northwest bought Pinnacle in 1997 and gave most of the stock to its pension plans in 2002 and 2003. The CEO is Philip Trenary.

Risk factors listed in the prospectus include possible terrorist attacks, labor unrest among Pinnacle's 2,438 employees, competition from Mesaba and other regional jets, more debt than capital, and heavy dependence upon Northwest.

On the plus side, business is good, on-time performance is among the best in the industry, service is offered to 76 cities and 29 states, and there's a sweetheart deal with the Memphis and Shelby County Airport Authority. By increasing its fleet and juggling routes, Pinnacle expects to grow a measurement called "available seat miles" 24 percent a year through 2006.

A second Memphis company, GTx, is the brainchild of AutoZone founder J.R. "Pitt" Hyde III. Its business is applied medical research into new drugs to treat prostate cancer, which Hyde himself has beaten, and other types of cancer. It is expected to start selling shares to the public in December or early in 2004.

GTx has actually been around since 1997 but has only 43 employees and a low profile. That will change after the stock goes public, and if the company is successful in partnership with the University of Tennessee medical school, it could remake the site of the old Baptist Hospital and the medical center in several years.

GTx has no revenues. In the start-up stage, investors will be betting on UT's brains and intellectual property and Hyde's business savvy and dedication. The stock price won't be set until just before the offering.

Herenton scolds MLGW in letter

Add Mayor Willie Herenton to the list of Memphians frustrated by Memphis Light Gas & Water. And that could be bad news for the utility as it seeks approval for a rate increase next month.

In a letter to members of the City Council and MLGW president Herman Morris, Herenton says he has "yet to understand MLGW's need to advertise and support costly promotions when, in fact, it is the exclusive service provider. Consumer information that is useful to the citizenry is understandable."

MLGW's "Hometown Energy" campaign extols the wonders of a public utility working tirelessly for its customers. The trouble is, for years many of those customers have had a devil of a time contacting the power company when they have problems. The city has requested help from FedEx in developing a call center for all of city government and its entities, including MLGW.

"It also concerns me that Memphis Light Gas & Water has invested approximately $30 million in an automated billing system and CRM [Citizen Relationship Management] application that apparently has problems," Herenton wrote.

The mayor said he intends to provide the council "with some pertinent information that will be helpful during the upcoming MLGW hearings."

The council meets December 2nd. At this point, MLGW's rate-increase request has been denied, and Morris has not yet been named by the mayor for another term as president.

Calvin Williams Defense Fund

As chief administrator of the Shelby County Commission for four years, Calvin Williams was in a position to do favors for a lot of people. Now that he's been indicted for official misconduct, Williams is asking friends to help pay for his legal defense.

In a letter this month from the "Friends of Calvin Williams," potential donors are asked to make contributions by a bipartisan list of signers including zoning attorney Homer Branan III, local GOP activist and attorney David Kustoff, attorney Richard Glassman, the Rev. Lasimba Gray, suburban developer Jackie Welch, and George Reems -- a former employee of the Circuit Court Clerk's office who was involved in a moonlighting venture with Williams that got both of them in trouble.

"I have spent the last 20 years of my life helping others in the community," Williams says in the letter. "I'm sure that I have helped you in some form in the past."

Williams resigned under pressure from his $101,856 job as commission administrator in January. He was indicted on state charges in October. He has been given a lower-paying job in the county's Equal Opportunity Compliance Office.

E-mail: branston@memphisflyer.com

Thursday, November 20, 2003

Unsolved Mystery

Medical examiner O.C. Smith has let office accreditation lapse.

Posted By on Thu, Nov 20, 2003 at 4:00 AM

In the wake of a continuing federal grand jury investigation of the bizarre assault upon Shelby County medical examiner Dr. O.C. Smith, his office has allowed its professional accreditation to lapse.

Smith replaced longtime medical examiner Dr. Jerry Francisco in 2000. Under Francisco, the office was accredited by the National Association of Medical Examiners (NAME) from June 1998 to June 2003. NAME records show that the accreditation, which could have been renewed by a process that includes inspections and interviews with the medical examiner and staff, was instead allowed to lapse.

Through Shelby County Health Department spokesman Brenda Ward, Smith declined to be interviewed by the Flyer. He has consistently refused media requests for interviews since he says someone attacked him outside his office 19 months ago, bound him with barbed wire, and attached a bomb to his chest. Police and federal investigators have failed to find the assailant.

A federal grand jury in Memphis has been looking into the case, which has attracted interest and skepticism from nationally famous medical examiners Dr. Cyril Wecht and Dr. Michael Baden. Shelby County mayor A C Wharton last month asked the Shelby County Commission to replace Smith, but he continues to serve at least until the local medical society can recommend willing and qualified replacements.

Nationwide, more than 300 medical examiner offices and forensic science labs are accredited by either NAME or the American Society of Crime Laboratory Directors. Among them are the Tennessee Bureau of Investigation crime labs in Knoxville and Nashville and the Nashville and Davidson County Forensic Sciences Center. The Shelby County Medical Examiner's Office is not accredited by either one.

"Accreditation matters quite a bit," said Dr. Bruce Levy, chief medical examiner for Tennessee and Davidson County. "Dr. Francisco was one of the earliest proponents of this whole process and Memphis was one of the first offices to be accredited. From the point of view of NAME, it's a shame to lose an office."

Smith is still on the job. That's the scoop gleaned from phone calls to his office. But it is unclear whether his duties have changed in light of the publicity he's gotten this year. For example, two weeks ago, a burning body was found in a sewer -- just the sort of gruesome, sensational case depicted on hit television shows about ace medical detectives. Asked if Smith fielded it, Shelby County District Attorney General Bill Gibbons said, "It is my understanding that he did not go to the scene in the case of the burning body in the sewer. He or an assistant medical examiner is responsible for the autopsy."

Gibbons added, "Whether or not Dr. Smith or an assistant medical examiner goes to a particular homicide scene is not our call. From time to time, he has gone to the scene. In many cases, probably most, he does not go to the scene."

Last month, Gibbons and Wharton (who was the Shelby County public defender before he was elected mayor) had either a disagreement or miscommunication about Smith's status as a potential expert witness in local criminal cases. County Attorney Brian Kuhn said this week he still isn't clear and suggested the Flyer ask Gibbons and officials at the University of Tennessee, which is Smith's employer. Spokesman Odell Horton Jr. said Smith's status "has not changed from UT's standpoint" and added that the UT College of Nursing has an active and accredited program at the medical examiner's office.

Gibbons reiterated his position that "Dr. Smith may very well be used by us as an expert. We have never indicated that we would not use him."

The backdrop to this verbal fandango is the federal investigation of the Smith assault. If, as investigators originally theorized, the bomber proves to be a religiously motivated attacker with a grudge against Smith because of his testimony in the capital murder case of Philip Workman, then Wharton could have some apologizing and explaining to do. But if Smith knows more about the attack than he has said publicly so far, or if he was involved somehow, then defense attorneys are likely to suggest that several other Smith investigations were contaminated.

It has been a rough autumn for police and prosecutors. Another federal grand jury has uncovered massive theft and returned indictments against several former employees of the police department property and evidence room. Police oversight of money, drugs, and crucial evidence in criminal cases was apparently all but nonexistent despite warnings raised in an audit two years ago of the organized crime unit.

The news that comes out of the federal building in the next few months will determine a lot more than the fate of one medical examiner.

E-mail: branston@memphisflyer.com

Thursday, November 13, 2003

Talent Magnet or Brain Drain?

Memphis joins the fray in "a Darwinian fight for survival" of the fittest.

Posted By on Thu, Nov 13, 2003 at 4:00 AM

Why do you live here? Or why don't you live here?

Good questions, and not just conversation starters. More and more cities -- Memphis among them -- really want to know.

Because highly skilled, college-educated, mobile, young Americans have a choice. The buzz matters. And a consensus is growing that cities, like college football or basketball programs, can improve themselves and bring in a better recruiting class. They can either be "talent magnets" like Atlanta, Seattle, Austin, and Denver or fall into the dreaded "brain drain" ranks along with Cleveland, Detroit, and Buffalo.

Last weekend, The Washington Post published a long two-part story on all of this. The lead, by writer Blaine Harden, was priceless: "In a Darwinian fight for survival, American cities are scheming to steal each other's young." The Cleveland Plain Dealer ran a series on the "quiet crisis," and The Denver Post did a similar story a week ago. The New York Times has a reporter in Memphis this week looking into the local Talent Magnet project.

Some of this reporting points out the obvious. Is it lost on anyone in the South that Atlanta long ago left Birmingham, Memphis, and Jackson in the dust? Or that Austin, Ann Arbor, and Oxford are above-all college towns, and college graduates like college towns? There is more than a whiff of class and race bias when Detroit is compared to Minneapolis or Stockton, California, to San Diego.

The underlying premise, however, is that a place's destiny is not all in the demographic cards. Cities can prosper by reinventing themselves by not only the old method of recruiting industries and companies but by attracting talented people with well-endowed enterprise zones and quality-of-life features. Artists, writers, techies, musicians, and gays are the new coveted class. Creative people, in turn, will create the new companies and industries.

Memphis got into this game early on thanks largely to the efforts of the Memphis Regional Chamber of Commerce and Carol Coletta, creator and host of the syndicated public-radio program Smart City.

Few cities are better suited to such an experiment than Memphis with its history of entrepreneurial companies, its population ebb and flow from white flight to downtown revival, its competition with Nashville, and especially its racial balance. Those lists of America's "best cities" often look like America's whitest cities. What works in Memphis has to be color-blind.

At the local level, it's plain that some schools and neighborhoods are talent magnets. The county school system as a whole and Memphis optional schools like White Station High School and John P. Freeman Elementary are thriving. The performance gap between them and the have-nots grows wider every few years because under a choice policy many of the best-and-brightest students from all over cluster in the best schools.

The harder question is whether cities or even whole regions can primp and preen and in general make themselves more attractive. In her new book, The End of Detroit, author Micheline Maynard (a recent guest on Smart City) describes how Kentucky and Tennessee and, more recently, Alabama, Texas, and Mississippi lured American, German, and Japanese car manufacturers with cheaper labor and incentives. But industrial relocation and factory jobs aren't the focus of the talent magnet and brain-drain stories. The new recruiting targets individuals.

The upside is enormous, of course, if the catch is a St. Jude Children's Research Hospital, Southeastern Asset Management, Saturn, or Dell. One Memphis entrepreneur has said that location, weather, airport infrastructure, political support, and local ties were the main reasons he chose Memphis over Louisville and Nashville, "but if Nashville had come in and made a big pitch, who knows?" His name: FedEx founder Fred Smith.

The chamber of commerce says by its calculations Nashville is attracting newcomers much more successfully than Memphis. But the grass always looks greener somewhere else. Earlier this year, an editorial titled "Nashville Population Declining" ran in the weekly Nashville Scene: "If you want something to get really worried about, chew on this: people are fleeing Nashville. ... In a nutshell, we're losing rich folks and replacing them with smaller numbers of poor folks."

If you haven't noticed, reporters and professors and researchers get paid to spot trends and will do their damnedest to find them. When a lot of them simultaneously start producing thumb-suckers about a quiet crisis, sprawl without growth, a brain-drain, or a talent magnet, it can only mean one thing: They're on to something or they're not. I happen to think they are, but then I'm a reporter.

E-mail: branston@memphisflyer.com

Be Fair

Area alternative markets offer fairly traded gift items.

Posted By on Thu, Nov 13, 2003 at 4:00 AM

If you purchase a garment sewn in Haiti from a U.S. retailer for $10, the seamstress may only earn 10 cents for her work, according to the National Labor Committee. If you purchase a pound of Colombian coffee for seven bucks at the grocery store, there's a good chance the grower may have only received 80 cents from the North American distributor.

In free-trade markets, the cost of production can exceed the amount the producers are paid, but some socially conscious shoppers are finding solutions through the "fair trade" movement that's sweeping the United States and Europe. On November 15th and 16th, from noon to 4 p.m., an assortment of fairly traded crafts and coffee will be available at Trinity United Methodist Church's Fifth Annual Alternative Christmas Market.

The buyer is assured that the producer will receive a significantly higher percentage of the profit because items are shipped directly from craft cooperatives in Third World countries rather than delivered to retailers via middlemen. For example, if that pound of Colombian coffee is sold at a fair-trade market, the producer could earn up to $1.26 per pound.

"We are so tied up in ourselves that we don't realize what we're doing sometimes," says Kay Jordan, co-organizer of the Alternative Christmas Market. "A person in Bangladesh may only end up with one cent from a garment that I may pay $15 to $20 for at Target. When I buy that garment, I'm really supporting keeping a person in poverty. But if I can shift some of my shopping to fair trade, I'm doing something about that."

The two-day market at Trinity United Methodist will feature a wide range of craft items from Pakistan, Guatemala, Kenya, Sri Lanka, and other developing countries. Items include handmade jewelry, tribal drums, onyx bookends, woven baskets, picture frames, hand-carved musical instruments, as well as seasonal crafts such as nativity sets and Christmas ornaments.

The stock comes from Ten Thousand Villages, an agency of the Mennonite Central Committee and the largest fair-trade organization in the U.S. According to the Fair Trade Federation, Ten Thousand Villages has created about 12,500 full-time jobs for disadvantaged artisans and farmers since 1985.

They'll be shipping about $14,000 worth of merchandise to the church. All profits will be sent back to the agency and distributed to the craftspeople.

"A lot of these craftspeople are women trying to support their family, and for various reasons, the man is not there," explains Jordan. "We've all heard about how in Africa there are so many sad deaths due to AIDS, which leaves families struggling. The fact that they're able to market these items in a country that has more money is really important."

In addition to the crafts, the market will have a children's gift room where youngsters can make candles, Christmas decorations, and cards. They'll also have booths set up where donations can be made in the name of the person who already has everything.

Jordan says there will be several charities available, and the most popular each year is Heifer International, which allows donors to choose livestock to be sent to families in Third World countries. Shoppers can also make donations to help send Christmas packages to soldiers serving overseas, or they can allot funds for an upcoming housing project the United Methodist Church has planned for North Memphis.

Two other Memphis churches have jumped on the fair-trade bandwagon in the past couple of years. Both First Congregational Church in Midtown and Prescott Memorial Baptist Church in the U of M area offer year-round fair-trade shops. Global Goods at First Congo offers a variety of coffee, chocolate, crafts, and garments handmade with natural fibers. Global Goods is open Friday from 6 to 9 p.m. and Saturday-Sunday from 10 a.m. to 3 p.m.

The International Artisans Market at Prescott carries coffees, teas, and craft items and is open Wednesdays from 11 a.m. to 2 p.m. and 5 to 6 p.m., Saturdays from 11 a.m. to 2 p.m., and Sundays from 12:30 to 1:30 p.m. The market also delivers items to assisted-living facilities.

Says Jordan, "This kind of socially conscious shopping is a blast. It really reflects the spirit of the Christmas season."

The Fifth Annual Alternative Christmas Market at Trinity United Methodist Church is located at 1738 Galloway. For more information, call 274-6895 or 278-1517.

Global Goods at First Congregational Church is located at 1000 S. Cooper. For more information, call 278-6786 or 725-4990.

The International Artisans Market at Prescott Memorial Baptist Church is located at 499 Patterson. For more information, call 327-8479.

E-mail: bphillips@memphisflyer.com

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