Wednesday, September 28, 2011

The Next Four Years

Follow-through and fulfillment are tasks for Wharton and council.

Posted By on Wed, Sep 28, 2011 at 1:54 PM

Memphis mayor A C Wharton will be reelected on October 6th.

Theoretically, Shelby County commissioner James Harvey or former Memphis city councilman Edmund Ford Sr. could win, just as the University of Memphis could win the rest of its football games this year, but they won't.

A couple of incumbent council members are in some danger, but most of the council will be back too, assuring continuity in city government for a few more years.

That's important, because Memphis has a lot of unfinished business at the fairgrounds, riverfront, aerotropolis, the Bass Pro Pyramid, Graceland and Elvis Presley Boulevard, Overton Square, Beale Street, Electrolux, and the public schools. Since 2007, Wharton, the council, and business supporters have laid the foundation or secured funding for those projects. The theme of the next four years will be follow-through and fulfillment.

Here are the knowns and known-unknowns on the big deals.

Fairgrounds: The city council and interim mayor Myron Lowery went for the quick fix and threw in with the football guys — University of Memphis athletic director R.C. Johnson, Fred Jones of the Southern Heritage Classic, and Steve Ehrhart of the AutoZone Liberty Bowl — over developer Henry Turley's proposed youth sports center with retail and hotels. Tiger Lane is in its second season as a tailgating area, but the fairgrounds falls short of its goal of becoming an everyday facility. The $75 million in Tourism Development Zone financing Turley secured from the state in 2008 was contingent on his group's investment of $50 million.

Riverfront: At a cost of $38 million, Beale Street Landing is scheduled to open in the summer of 2012. The boat dock will serve the Great American Steamboat Company, which is scheduled to begin offering cruises in 2012. The company, which is getting a $9 million loan of federal funds from the city, says its headquarters will be in Memphis and create 268 jobs. Previous companies offering Mississippi River cruises went out of business. The Riverfront Development Corporation calls Tom Lee Park "the worst riverfront park in America." Some of this year's Memphis in May events were moved to the fairgrounds because of flooding. Scenic Riverside Drive is already closed to cars in May and was closed to cars last weekend for a charity bike ride. Regular "Riverside Rides" could bring Memphians down to the park to judge for themselves.

Airport: "America's hassle-free connector hub" is certainly that but in part because of over-capacity on the passenger side as Delta cut back its flights in Memphis. Vendors are hurting. The new $89 million Ground Transportation Center is scheduled to open in 2012. To achieve aerotropolis status, more office tenants around the airport are needed.

Bass Pro Pyramid: The store opening is set for August 2013. Requests for proposals for development of the Pinch neighborhood will go out in early 2012. The 160-room expansion of the Marriott hotel next to the convention center is not expected until 2016.

Graceland: In 2007, the city secured Tourism Development Zone status to fund $250 million in new visitor facilities and improvements along Elvis Presley Boulevard. But in May, the driving force, Robert Sillerman, sold his company, including Graceland and Elvis Presley Enterprises, to Apollo Global Management, whose enthusiasm for Memphis is unclear.

Overton Square: The city is spending $6 million for a two-story parking garage and floodwater retention basin, which are not yet under way. Loeb Properties wants to redevelop the square as an arts, entertainment, and retail center in 2012. Meanwhile, vacancies abound.

Beale Street: It's no longer developer John Elkington's headache. The city is taking over control of the Beale Street Historic District. Bright side: A consultant's report says Beale is the biggest source of downtown tourism taxes. Dark side: city running a nightclub district.

Electrolux: Groundbreaking for the future pride of Presidents Island is October 5th. The manufacturer of kitchen appliances is getting $188 million in state and local subsidies to create 1,240 direct jobs and construction costs of $361 million.

Schools: The merger of Memphis and Shelby County schools will occur in 2013. Their combined enrollment of approximately 150,000 could dwindle between now and then, and even more after that date if some suburbs start their own systems. The talk of "a new world-class school system" is grandiose. Catching up to state benchmarks is more realistic given the low test scores in MCS.

Wednesday, September 21, 2011

A Bicycle Mecca

On the TransAmerica Trail, the exceptional is ordinary.

Posted By on Wed, Sep 21, 2011 at 12:05 PM

MISSOULA, Montana — The Shelby Farms Greenline is seven miles long. Imagine riding it 607 times and adding mountains, storms, headwinds, sunburns, butt-sores, and passing trucks. That's what it is like to bike across the country on the 4,246-mile TransAmerica Trail.

Thousands of people do it every year, and many of them stop here at the Adventure Cycling Association, which is sort of the unofficial Hall of Fame, library, and national museum of cycling.

The greats are immortalized in black-and-white pictures on the walls. They include:

Frank Lenz, 25, who in 1892 rode 4,587 miles cross-country in 107 days on a single-speed bike. The combined weight of his bike and gear was 110 pounds. His trip around the world was cut short two years later when he is believed to have been killed by bandits in Turkey.

Ole Hartwick, a probate court judge in Minnesota, who rode 135,000 miles between 1895 to 1934, wearing a suit and tie on his way to work for much of that mileage. His sturdy Iver Johnson bike hangs above his portrait.

Richard Joseph Redman of Memphis, who rode from Memphis to Portland, Oregon, in 1994 although he had never been on a bicycle until he was 17 years old. "I've wrecked a great number of times," he says in his account.

Billy Montigny, who completed his 13th solo cross-country trip this summer. And Benjamin Horne, who did it last year on a unicycle "to dispel the belief that unicyclists are only performers." And Fred and Barbara Seymour, both 77, who did it last year on a tandem bike. And Lukas Held, who delayed the last leg of his trek to the West Coast Monday to have his portrait made here and said the Blue Ridge Mountains were harder to climb than the Rockies. He rode east to west to save the best for last.

"It's like one highlight after another," he said.

There are three main bike routes across the country. The TransAmerica from Oregon to Virginia, the Southern Tier from California to Florida (a mere 3,085 miles), and the Northern Tier from Washington to Maine (the longest, at 4,286 miles).

Teenagers, including Memphians Philip Pomeroy and Anthony Siracusa, have done it. They completed their trip in 2003 in six weeks when they were 16 years old, assisted by a support vehicle.

"I would do it again in a heartbeat," said Pomeroy, now a graduate student in Knoxville.

Several couples with children have done it, riding either tandems or bikes attached to covered trailers like you see on the Greenline. They have also done it on triple seaters and recumbents.

And then there are the people so extreme they deserve a whole new category, like Greg Siple, who co-founded Adventure Cycling and takes the portrait photos of the parade of visitors. From 1972 to 1975, he and his wife June rode their bikes 18,272 miles from Alaska to Argentina.

"Two years, eights months, and five days with five months off," he said.

Some long riders are "dirtbaggers" who camp and spend as little money as possible; others are "credit-card tourists" who stay in motels and spend $100 a day. They bring dogs, a cat, a mother's ashes, a glass eye for luck, scientific papers, lucky underwear, a violin, a mule deer skull, an inflatable parrot, and adult diapers. They travel solo, in pairs, in small groups, and in guided tours. The granddaddy of tours was in 1976 when 4,000 people biked across America to celebrate the U.S. Bicentennial.

I asked Siple what towns like Memphis should do to get on the biking map.

"Build a network of functional bike paths," he said, adding that a signature project like the Harahan Bridge bike trail over the Mississippi River would definitely help attract national interest. The U.S. Bike Route system, designated by state transportation departments, links rural, suburban, and urban areas.

He believes that the number of people riding cross-country is increasing every year, although nobody is counting. The association's membership is increasing, but the average age is 56 and the younger set seems reluctant to join.

Any TransAmerica rider who shows up here gets a portrait, but be warned that Siple has seen and heard it all. If you want to set yourself apart, try using a unicycle or biking backward or maybe naked.

Wednesday, September 14, 2011

Cairo to Memphis

My Egyptian friend on regime change, 9/11, and our sport.

Posted By on Wed, Sep 14, 2011 at 12:40 PM

For a couple of years, our little group of squash players at Rhodes College had heard that there was a really good player here from Egypt, but we never saw him. Urban myth? We were starting to wonder. Then, two years ago, Mohamad Elmeliegy showed up.

With all due modesty, he explained that he was from a family of squash players in Cairo. His grandfather was a playing partner of Hosni Mubarak before he became president. Mohamad trained with the Egyptian junior national team, four of whom are among the top pros in the world. At the age of 19, he decided to study pharmacy and gave up squash. Playing for fun made no sense. He moved to Memphis on a student visa in 2007.

He was rusty, overweight, and had to borrow a racquet. He was good but not great. Eight years of inactivity will do that to you. What I didn't realize until later was that it was Ramadan and he was fasting from sunrise and sunset.

It took him about a year to get back in shape. Now there is only one player in Tennessee, Rhodes graduate and former European pro basketball player Albert Johnson, who can beat him. Albert dubbed him "the Egyptian Magician." I would add "gentleman" for someone who invents handicaps to keep it close.

This year the strain has been mental, not physical. While Mohamad, 29, completes his doctoral studies in pharmaceutical science, Egypt (and Cairo, where his parents live) has turned upside down. Regime change has put Mubarak in an ordinary jail cell.

"I did not see it coming," he said. "I had this extreme depression that we would not be able to change anything. I saw Mubarak's son preparing to be the next president. I told my wife that if that happens, then we will never go back to our country. The regime was really repressive, and I didn't see a chance of change. But it happened, some way or another. The relationship between Egypt and the United States had something to do with it. The U.S. has influence in Egypt. You cannot kill civilians like Assad is now doing in Syria or Gaddafi is doing in Libya."

During the looting, he feared for the safety of his family.

"When the army went into the streets, that was a big relief. My father and father-in-law were in the streets protecting their own property. The police were the tool by which the old regime was oppressing people. We want the police in the streets to protect the property and the civilians."

His wife Dina has been back since then, but Mohamad says it may be several years before he returns. He plans to do a post-doctoral fellowship and apply for a green card.

"Mubarak's regime is on trial, but very little in terms of how we are running the country has changed. Very few people really know why the revolution happened and what exactly we should do to put Egypt on the right track. We have never known democracy. Egypt has been governed by the military since the pharaohs."

He likes Memphis and estimates that there are at least 15,000 Muslims in the area and four mosques.

"I would say I am a moderate Muslim. I pray five times a day. I fast during Ramadan. But socially I am liberal."

He watched hours of coverage of the anniversary of 9/11.

"It was very touching. I have to ask myself, do I judge all people from one faith for an action that a small faction has done? I am pretty happy that the U.S. is pursuing this anti-terror war.

"The U.S. is the greatest country in the world. The diversity of people speaks of how tolerant it is. I, and almost all my Muslim friends, really feel they belong to this country one way or another. We may differ in opinions here or there, but many of us comfortably call the U.S. home."

He expects to leave Memphis next May. As a competitor and a friend, he'll be hard to replace.

Wednesday, September 7, 2011

Memphis Strikes Again

Does something in the water make local financial firms targets?

Posted By on Wed, Sep 7, 2011 at 11:42 AM

In 2009, an enforcement team of the Securities & Exchange Commission (SEC) raided the Memphis office of Stanford Financial Group and charged that Allen Stanford, now in jail, was running an $8 billion Ponzi scheme. So much for Stanford's sponsorship of the local PGA golf tournament and its "generous" gifts to charities.

In 2010, the SEC charged Memphis-based Morgan Keegan with fraudulently overstating the value of securities backed by subprime mortgages. The case was settled earlier this year for $200 million and a Morgan Keegan executive was banned from the industry for life.

Last week, it was First Horizon's turn to make the national business report in a bad way (see story page 10). The Federal Housing Finance Agency (FHFA), known to none-and-all as the agency charged with conserving taxpayer-backed mortgages, sued 17 financial institutions, claiming they sold $196 billion in overvalued mortgage securities to Fannie Mae and Freddie Mac. First Horizon, with $25 billion in assets, is the small fry in a group that includes Bank of America and Citigroup. Its share of the toxic mortgages is pegged at $883 million. The company says the charges are not true and will defend itself.

If you don't know what Fannie Mae or Freddie Mac are, join the club. This story is all about people tossing around financial jargon and investment products without really undertstanding what was going on.

The important thing is that Stanford is out of business, and Morgan Keegan and its parent company Regions Financial and First Horizon and their investors have lost about 80 percent of their stock market value in four years. The Memphis wealth index has taken a huge hit.

The game that led to the bursting of the housing bubble was Pass the Mortgage. Many of us took out mortgages years ago with a local bank or other lender and watched the loan move to some non-local mortgage aggregrator or "loan servicer." At some point the bundled good and bad mortgages, like sausage packed with beef, fat, and unmentionables, were sold to yield-hungry investors.

The good guys in this story are investigative reporters like Gretchen Morgenson at The New York Times and authors such as David Faber, whose book And Then The Roof Caved In: How Wall Street's Greed and Stupidity Brought Capitalism to Its Knees is cited in the FHFA lawsuits.

It describes the frenzy to create and sell "collateralized debt obligations" at financial firms such as Merrill Lynch. Morgan Keegan and First Horizon created such products.

"In its quest to increase its market share, Merrill Lynch faced fierce competition from an increasing number of market players," Faber wrote. "The push to securitize large volumes of mortgage loans contributed to the absence of controls needed to ensure that the loans conformed."

Federal regulators are already being accused of piling on. In fact, their actions came well after the housing bubble burst in 2007 and bank stocks crashed. Morgenson and Faber and others were writing about it in 2008 and 2009.

Also in 2008, some First Horizon employees sued the company claiming that it "breached its fiduciary duty by continuing to invest [retirement] plan assets in First Horizon stock when it was no longer prudent to do so." They allege that "material information about the company's financial problems had not been disclosed." The lawsuit is pending in federal court in Memphis.

In Memphis, good news about business often gets reported before it happens — Bass Pro Shops and Mayor A C Wharton's campaign claim of 10,000 new jobs. Bad news sometimes doesn't get reported at all. The Commercial Appeal reported the First Horizon story on Tuesday, four days late.

That's where lawyers like Dale Ledbetter come in. Ledbetter, who went to Messick High School with former county mayor Jim Rout and graduated from Rhodes College, represents disgruntled shareholders in Morgan Keegan funds. His nearly 200 clients include ordinary investors, famous athletes, pension funds, and nonprofits. Some of the claims have been settled and others have gone to arbitration.

The former Memphian has no mixed feelings about the travails of firms that are or were pillars of the community. He is organizing another investor meeting this week.

"My commitment is to Memphians whose lives have been altered forever by what this institution has done to them," he said. "These are stories of tears, anguish, of people who can't send their kids to college, of retirements destroyed. Somebody is supposed to be responsible for that. Charitable acts based on ill-gotten gains are not virtuous."

In his spare time, Ledbetter is a magician. Many Memphians wish that someone could conjure up their lost wealth.

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