Tennessee Livestock Auctions

Reported auctions on Monday, July 28, 2008, at Lexington and Unionville

Cattle receipts: 1,183.

Trends: Compared with last week, slaughter cows steady to 2.00 lower.

Slaughter bulls steady.

Feeder steers and bulls steady to 2.00 lower.

Feeder heifers steady.

Slaughter cows boners 80-85 percent lean 51.00-59.00.

Slaughter cows lean 85-90 percent lean 42.50-47.50.

Slaughter bulls 1100-2200 pounds 62.00-72.50.

Feeder steers medium and large 1-2: 300-400 pounds 108.00-124.00, 400-500 pounds 100.00-108.00, 500-600 pounds 98.00-108.00, 600-700 95.00-103.00.

Feeder bulls medium & large 1-2: 400-500 pounds 96.00-102.00, 500-600 pounds 94.00-98.00, 600-700 pounds 85.00-93.00.

Feeder heifers medium and large 1-2 300-400 pounds 87.00-99.00, 400-500 pounds 92.00-105.00, 500-600 pounds 91.00-103.00, 600-700 pounds 90.00-96.00.

GM whomps Toyota, but sales still dive
Oil markets: Topped out or just taking a breather?

Court ruling clouds Whole Foods' acquisition of Wild Oats

WASHINGTON — Whole Foods' long-running effort to acquire its rival organic supermarket chain Wild Oats isn't completely out of the legal woods yet.

A three-judge federal appeals court panel on Tuesday overturned a lower-court ruling from last year that allowed Whole Foods Market Inc. to acquire Boulder, Colo.-based Wild Oats Markets Inc.

The 2-1 ruling sends the case back to the lower court for further consideration, but it doesn't halt Austin, Texas-based Whole Foods' integration of the Wild Oats chain or require that the deal be undone.

However, if the district court ultimately rules in favor of the Federal Trade Commission, which sought last year to block the deal, it could disrupt Whole Foods' efforts to combine the companies.

Whole Foods spokeswoman Kate Lowery said the company is disappointed with the decision and is "evaluating its legal options," which include asking all 10 judges on the appeals court to review the case.

Jeffrey Schmidt, director of the FTC's Bureau of Competition, said the agency was pleased by the ruling.

The FTC argues that the transaction would stifle competition by combining the two leading organic supermarket chains and lead to higher prices.

Whole Foods contends that competition from conventional supermarkets such as Safeway Inc. and Kroger Co., which are selling increasing amounts of organic food, keeps prices low.

The agency sought a preliminary injunction to temporarily block the deal so it could hold its own administrative proceedings to determine whether the transaction violated antitrust laws.

But Judge Paul Friedman of the U.S. District Court for the District of Columbia sided with Whole Foods in a ruling last August, and the companies then closed the acquisition.

Regulators usually throw in the towel if they fail to secure a preliminary injunction, because of the difficulty of unwinding a deal once it's complete.

What makes the Whole Foods case unusual is that the FTC has pressed its case, antitrust experts say.

While the district court is unlikely to block the merger, it may decide to order the divestiture of as many as 18 stores where the combined companies face little or no competition, said Jane Willis, an antitrust lawyer with Ropes & Gray in Boston.

"It's difficult to unscramble the egg, but there are other various remedies," Willis said in an interview.

"If Whole Foods does not want to continue paying high litigation fees, they might even go to the FTC and propose a divestiture plan."

FTC officials complain that the burden of proof imposed by Friedman was too high.

The appeals court ruled that the district court hadn't given enough weight to the FTC's evidence that conventional supermarkets aren't close competitors to the organic chains and therefore won't keep their prices low.

The FTC only needs to show that it probably would prove its case to secure the preliminary injunction, the appeals court said.

The lower court "underestimated the FTC's likelihood of success," Judge Janice
Rogers Brown wrote for the Court of Appeals for the D.C. Circuit.

Judge says case unique

Judge David Tatel, in a concurring opinion, said the case is "unique" because the lower court can no longer grant a preliminary injunction now that the two companies are combining operations.

Instead, the district court could halt further integration of the companies or take similar steps, Tatel wrote. But he and Rogers also wrote that the lower court should take the fact that the acquisition has been closed into account.

Judge Brett Kavanaugh, in dissent, wrote that "the FTC's case is weak and seems a relic of a bygone era when antitrust law was divorced from basic economic principles."

Veronica Kayne, a former FTC antitrust official and now an attorney at Haynes & Boone in Washington, said the appeals court's decision could make it easier for the government to obtain preliminary injunctions blocking future transactions.

Whole Foods, which operated 194 stores before the deal, purchased the 110-store Wild Oats for $565 million.

A lawyer for Whole Foods said in April that the company had already sold 35 of Wild Oats' stores and closed 12 more.

Another third of the remaining Wild Oats stores have been converted to Whole Foods outlets.

Shares of Whole Foods rose 17 cents to $22.20 in afternoon trading.

Restaurant group accountant criticizes state for failure of workers’ comp fund
Ethical business practices may pay off in higher selling price

College graduates can't put degrees to work

When Kenny Lyons graduated seven months ago with degrees in finance and real estate from the University of Mississippi, he had plans to work as a broker raking in lucrative commissions at a real estate firm.

Instead, in an economy weakened by severe blows dealt by both banking and real estate, Lyons finds himself waiting tables at Nashville's Watermark Restaurant, earning about $35,000 a year — not bad, but hardly the hefty post-graduation paycheck he may have been hoping for.

"It's definitely frustrating," said Lyons, 23. "People ask me what I'm doing now. And, you know, I'm waiting tables. That's not exactly what you want to say once you graduate college."

The declining job market is taking its toll on college graduates like Lyons.Job prospects haven't looked this bad in at least five years, some economists said, as companies are cutting back on positions. Unemployment in Tennessee stands at 6.5 percent, a full percentage point above the national average.

"It's going to get worse," said Bill Fletcher, director of Middle Tennessee State University's Career and Employment Center. "Those who are having the most trouble are those who are just entering the job search."

Vanderbilt University and Middle Tennessee State University students landed fewer jobs by graduation compared with a year ago, career center officials said. And jobs in banking, where college graduates once commanded good starting salaries, have cut entry-level positions, analysts said.

Companies nationwide said they are offering 17 percent fewer entry-level jobs to graduates this year compared with the previous year, according to the online employment database MonsterTRAK. One silver lining is that the anticipated average starting salary for 2008 graduates is $39,500, up from last year's average of $36,000, MonsterTRAK said.

In Nashville, fewer jobs are being added to employer payrolls. The area added 7,440
jobs during the first half of 2008, a marked contrast to the 26,020 added during the same period in 2007, according to the latest Tennessee state labor report.

"You have to think with the unemployment rate rising, if they haven't found a job now, it's not going to get any easier," said MTSU economist David Penn, who called this the worst job market for graduates since 2003. "It's going to get more difficult."

Not all schools have reported declines. University of Tennessee-Knoxville, among other schools, said it has not seen an impact on its students at this point.

For his part, Lyons hasn't given up. He has made about 30 inquiries for jobs at banks or as a broker at real estate firms. He estimates that he's been turned down at least 10 times because of a lack of openings, but Lyons says he doesn't count those as rejections.

Instead, he chalks them up to networking experiences, setting aside notes he has prepared before interviews to revisit later.

"I've had a little interest, but nothing ever panned out to a job offer so far," Lyons said. "It's pretty unfortunate, the timing."

Debts grow; jobs shrink

The lack of jobs comes at a time when more college students are taking on debt to pay for the rising costs of higher education. About 42 percent of the state's graduating students carry student loans, with Tennessee's average student loan debt at $19,549 in 2006, according to a report by New York-based Demos, a public policy research and advocacy organization.

In the last five years, tuition rates in the U.S. have climbed 35 percent, with the average at a four-year public university costing $5,836, the report said.

On top of that, people ages 18 to 24 carry an average of $2,305 in credit card debt, Demos said.

Eric Williams, a 2007 graduate of Tennessee State University, has racked up several thousand dollars in credit card debt. He accumulated most of it in his senior year, he said, thinking he could pay it off once he got a job.

But the tightening job market has left the computer-science major still searching for a job in his field. He applied for 50 jobs, mostly in computer programming at companies like IBM and Raytheon Co., but employers said he didn't have enough work experience.

So, he settled for a part-time job answering customer service calls for SunTrust Bank. Instead of earning at least $40,000 a year as a computer programmer, Williams, 24, now earns half that.

"There was a time a bachelor's was all you needed," Williams said.

Meanwhile, Richard B. Wilhite, who graduated from Middle Tennessee State University in 2007, is stuck at the same job he had while in school — selling apparel for "346" Brooks Brothers at CoolSprings Galleria in Franklin.

"For a while there, I was upset about it," Wilhite said. "I just kind of came to accept the fact that's what I have to do to survive."

According to data from the Economic Policy Institute, a Washington, D.C.-based think tank, the wage premium on a bachelor's degree — the difference between what a worker holding a bachelor's degree earns versus someone with a high school diploma — has stayed relatively flat since 2001.

Workers carrying bachelor's degrees earn an average of $26.51 an hour, compared with workers with high school diplomas, who earn $15.01 an hour, according to the institute's data.

Employers get choosy

Meanwhile, some employers are becoming more selective about the degrees they require, making it more difficult for those with just a bachelor's to compete, said Lawrence Mishel, the institute's president.

"Employers are requiring more credentials, in part, because they can get people with those credentials without paying a whole lot of money," Mishel said. "Getting a college degree is no longer a surefire recipe for growing wages and good benefits."

As a result, more college graduates are considering graduate school as a way to gain more education and wait for better job conditions. In addition, test preparation companies said they are seeing an uptick in enrollment to prepare for graduate school admissions exams.

Patrick Saale graduated in May from the University of Tennessee-Knoxville with a major in finance, which typically commands an average salary above $41,700 a year. Saale thought he'd land a job as a home lending officer, but months before he graduated, the housing market declined and national banks began cutting positions.

"Within a semester of graduating, all that happened — bam, I'm stuck in it," said Saale, who lives in Kingston Springs. "I couldn't really help that I picked finance. … It scared the hell out of me."

Saale said even his two finance-related internships didn't help him land a job. Instead, he plans to begin attending Vanderbilt University's Owen Graduate School of Management this fall to earn a master of science in finance, as he waits out the tough market and gains more skills.

But even a graduate degree doesn't guarantee a job. Joi Chatman, who graduated with a master's in business administration from Belmont University in December, said she applied for a job in brand management at Macy's in Nashville earlier this year, never to hear back. Ditto for the job she applied for as a T.J. Maxx clerk to earn extra cash.

Analysts said college graduates might have a hard time getting part-time work because employers fear graduates will leave for greener incomes once landing their ideal job.

"I didn't get an interview," Chatman, 30, said. "I didn't get a chance."

College students try hand at marketing to college students
Tennessee to help build biofuel plant

Bankrupt investor's Brentwood home to sell for $1.55 million

The Brentwood home of bankrupt stock broker Michael J. Park, whose investors are demanding to know where their millions have gone, will be sold Aug. 29 for $1.55 million, according to a filing made by the trustee Monday in U.S. Bankruptcy Court in Middle Tennessee.

The price is slightly less than the $1.7 million he and wife Jill paid for the house in November of last year, according to property records.

The buyer is L&F Trust, which was not listed as a registered business by the Tennessee Secretary of State's office. Trustee Sam Crocker could not be reached Monday.

Crocker is working out a deal with Park's wife to allow her to move into the couple's less expensive second home in Brentwood in exchange for the rights to sell the million dollar house at 133 Woodward Hills Place, according to Park's lawyer, John McLemore.

The Woodward Hills home is in a gated subdivision in Davidson County, but it has a Brentwood mailing address.

McLemore said not working out a deal with Jill Park could delay the sale by more than a year and wouldn't guarantee the rights to sell the house because of the type of ownership the couple had.

Jill Park would move into the couple's 8203 Alamo Road home in Brentwood, which the couple bought for $307,000 in 1997, according to property records.

McLemore has advised Park not to speak to the media. He was hospitalized for attempting suicide three weeks ago after filing for bankruptcy protection and sending a note to clients saying some of their accounts had no current liquid value. Park has since been released from the mental hospital and is staying with a friend, McLemore said.

Update Tuesday 3:45 p.m.:

Trustee Sam Crocker said he did not strike a deal with Jill Park and that she is allowed to live in the house on Alamo Road while the ownership rights get worked out later. In the meantime, she will be paying the mortgage, utilities and upkeep on the house, which will benefit the estate, he said.

Crocker said creditors of Park so far say they are owed more than $10 million and that Park was using the money, at least in part, to fund his lifestyle, including a large down payment on the $1.5 million house and three Mercedes vehicles.

Brentwood securities firm is shut down

Commercial pre-sales start at Starwood

You heard Sting play there. You enjoyed Coldplay from the lawn. Now, developers are hoping you'll shop and live on the site of the now-defunct Starwood Amphitheatre in Antioch.

Pre-sales and leasing have started for the commercial side of things — a planned 421,000-square-foot development for retail, offices and restaurants with a major anchor store such as a Target or Wal-Mart at the site.

Later on, the developer, Vastland Starwood Development LLC, plans to add 250 townhomes with garages and an average selling price of around $150,000. Vastland Realty Group bought the property for $4.2 million last year.

The $100 million project on 65 acres is dubbed Starwood Commons and should be completed three years after nabbing the major anchor, according to the project's development consultant, Ken Renner, who also is an affiliate broker at Crye-Leike Realtors.

Renner said Vastland is in negotiations with potential anchors, but he wouldn't name them.

The developer is billing the project as a "modern alternative" for the aging retail centers in Hickory Hollow and Antioch.

It might seem the absolute worst time to start a mixed-use commercial and residential development, given the slowing economy, but some developers see things otherwise.

Competing developer David McGowan, who is building Lenox Village off Nolensville Road, said there's still demand for good commercial space from retailers. "There are a lot of rooftops and a lot more coming,'' he said. "That's what retailers want. They follow the rooftops."

McGowan speculated that a Wal-Mart, SuperTarget, Kohls, Home Depot or Lowe's would be a perfect anchor for the development, which sits at the intersection of Murfreesboro Pike and Hobson Pike.

It makes sense to build the housing later, McGowan added.

"All things considered, this is not the best time to do housing. There is an oversupply of housing. Maybe in a few years, there will be a good demand."

The Starwood Commons developers plan to do commercial sales first and put off the housing until later. Renner said that was part of an agreement with Metro Nashville to get the project approved, basically promising to build the commercial infrastructure before starting the homes.

Vastland's other projects include the 650,000-square-foot Glenbrook North Shopping Center in Hendersonville, the $45 million St. Martin Square Luxury Condominiums in Brentwood and the 500-acre Mansker Farms in Hendersonville.

As for Starwood Commons, R. Chris Magill Architects and Civil Site Design Group worked on the site plan. Pre-sales and leasing will be handled by Vastland Realty Group.

Bells Bend debate widens
Demonbreun Street development proposal gets support

Frist family looks to China for new hospital venture

Members of Nashville's Frist family, which helped start the for-profit hospital chain HCA Inc., are launching a company to take the U.S. system of managing and operating hospitals to China.

China Healthcare Corp., which will be based in Nashville, said it has an initial agreement with a city southeast of Shanghai to build and operate a hospital that would replace an existing location.

The startup would own a 70 percent stake in the joint venture, while the government of Ningbo would own the remaining 30 percent. It's unclear at this early stage how much the company would invest in the deal.

The agreement requires approval from the Chinese ministries of health and commerce, a process that, on average, takes up to nine months, said Chuck Elcan, president of China Healthcare and son-in-law of HCA co-founder Dr. Thomas F. Frist Jr. Frist is an adviser to China Healthcare and a co-investor in the venture, which is separate from HCA, the nation's largest private operator of hospitals.

"We see an opportunity to manage hospitals like they are here in the U.S.," Elcan said. "But we may get into this and decide it's too big a risk. If it works, we'll see if there's opportunities to grow through building or acquiring more hospitals."

China Healthcare is launching as the Asian nation expands its state-run insurance programs for residents and makes improvements to health-care services whose quality and availability can vary widely between rural and urban areas.

"The government will allow private sector participation where it is appropriate," said Tsung-Mei Cheng, a health policy analyst based in Princeton, N.J.

Project faces obstacles

Elcan, who spent the past five years as an executive vice president with HCP Inc., running the California-based health-care real estate investment trust'smedical office division out of Nashville, said the general acute care hospital planned for China would serve private-pay patients and people whose health-care costs are paid for by the Chinese government.

He acknowledges obstacles, including a language barrier and a heavily regulated Chinese health-care system. China Healthcare has a Chinese partner that would be involved in operations there if the deal to build the 500- to 600-bed hospital that would replace the current 150-bed facility were approved, he said. Profits or losses would be shared with the company's government partner.

Hamed Khorsand, an analyst with research firm BWS Financial in Los Angeles, said companies such as China Healthcare would have to make gradual changes to the way a hospital would be operated to minimize conflicts with Chinese culture.

China Healthcare would not be the first U.S. health-care operator to enter the Chinese market.

Julie Chen, an analyst at CRT Capital in Stamford, Conn., said that other companies have been able to secure approval for such ventures from Chinese authorities in large part because of the relationships they worked to develop inside the country.

Chen cited how executives of Bethesda, Md.-based Chindex International were able to obtain approval for its network of hospitals and clinics, which target diplomats, expatriates and wealthy Chinese, by gaining an understanding of Chinese business culture and practices after doing business there for more than 20 years.

"It's going to be an interesting business model," she said, adding that the success of China Healthcare would depend in part on how well the company differentiates its hospital from other Chinese public hospitals.

Managers’ remarks decide family-care discrimination cases
Startup executives find niche in pathology

Blogs can be worthwhile for companies, if they're done right

What do Bill Marriott, chairman and CEO of Marriott Hotels; Jonathan Schwartz, CEO and president of Sun Microsystems; and Mark Greiner, senior vice president of office furniture maker Steelcase, have in common? They are all corporate bloggers.

Blogs, an abbreviation of Web logs, no longer are the province only of teens sharing stories, political junkies or conspiracy theorists. Sophisticated businesspeople are using blogs to spread their companies' stories. In fact, according to Social Text, more than 11 percent of Fortune 500 companies have corporate blogs. That's up from 4 percent just three years ago.

The Web site thenewpr.com counted 277 corporate blogs written by CEOs or others in top leadership positions.

So why are companies and their top-ranked people spending time and money on this very personal kind of writing?

The reason is that blogs can be quite effective. They can generate buzz, they can answer criticism, and they can help an organization build relationships with customers, prospects, shareholders and employees.

"Blogs, because they get updated frequently, also boost a company's ranking in search engines," says John Cass, author of Strategies and Tools for Corporate Blogging.

Start by reading

Since search is such a powerful tool today, increasing your organic search results is reason enough to blog. But you must do your research before you type the first sentence of your first blog posting.

Sean Howard, an innovation consultant in Toronto, suggests that companies start not by writing, but by reading. Check out other blogs in your industry. Research what your customers are saying about you and your competitors in online communities.

Once you've decided to start your company blog, who should write it? Some believe it must be a high-ranking person in the company. Others think blogging is just another job for a public relations staffer, and some have elevated the role to a new corporate suite position, chief blogger.

Whoever the author, communications skills and the dedication to frequent postings are a necessity.

Mark Young, chairman of Western Creative, a Detroit-based marketing company, advises corporate executives on blogging.

"If you say, 'Check in every Tuesday and Friday,' " there'd better be something there (to read), or people are going to write you off," Young says.

Intel's Heath Buckmaster used the company blog to engage readers and solicit feedback in a post titled "Do Corporate Blogs Really Matter?" He wrote, "This blog exists only if you stay interested … so what do you want to hear about?"

Bill Marriott closes each of his postings with, "I'm Bill Marriott, and thanks for helping me keep Marriott on the move." That's a very nice way to solicit customer feedback and thank employees for their service.

Rex Hammock, founder of Hammock Inc., a content marketing and media firm in Nashville, was a very early blogger, starting in August 2000. He says his Rexblog.com "curates news about media, community and technology for people who are not geeks."

In addition to that personal blog, Hammock's corporate site contains three more:

• Custom Media Crafts provides insights on targeted, single-sponsor media units that Hammock publishes for clients.

• Hammorati is a blog with news and information on the company.

• The Team Hammock blog covers the community involvement of the company and its employees.

Margarita Bauza of the Detroit Free Press recently posed this question to CEOs: To blog or not to blog? If that is the question, what is your answer? The ones who answer yes — and play the blogging game well — give their companies another important voice in the world of marketing.

Matchmaker for artists, sponsors always looks for the perfect fit
College students try hand at marketing to college students

Bells Bend debate widens

The developers behind a dense commercial and residential district proposed for Bells Bend pushed ahead with their plans Friday, even as planners put off deciding whether to support the project.

Development consultant Tony Giar ratana and other representatives for the project, called May Town Center, filed papers Friday with the Planning Department seeking to build a city-style neighborhood on more than 1,400 acres next to the Cumberland River.

The move opens a new front in the debate over Bells Bend.

It came only hours after the city's Planning Commission decided not to vote on a new plan that would guide development in the area because of significant opposition to the project from neighbors, environmentalists and downtown advocates.

After hearing four hours of debate on the matter Thursday night, commissioners decided to put off their deliberations. The commission will hold a separate meeting within the next few weeks to discuss and vote on the plan.

But the filing raises the possibility that May Town Center's developers, the May family, could push their proposal to a Metro Council vote even if commissioners don't pass the new plan.

Until now, developers have focused on seeing that plan pass because it would change the rules to make it easier to create a dense project on the Mays' property.

But Giarratana, a prominent developer who has been hired by the Mays to represent them, said the filing was meant to complement the debate, not go around it.

"There are legitimate questions that need to be answered that will be addressed formally and as expeditiously as possible," he said. "There's no attempt to circumvent the process. This is the process."

At issue is the shape of development in Bells Bend, an agricultural district across the Cumberland River from West Nashville and Bellevue.

A large group of neighbors wants to restrict development in the area, which they say is one of the last, large green spaces near downtown Nashville. Meanwhile, the Mays and some other Bells Bend residents want to allow for more development in the area, saying Davidson County is losing out to the suburbs because it lacks places to build new offices.

Land-use plan drafted

Over the last several months, the Planning Department staff has drafted a land-use plan that would steer development in Bells Bend. The plan, which was presented Thursday to the Planning Commission for approval, would tighten conservation through most of the bend while permitting the May Town Center to be built, under certain conditions.

Regardless of the outcome, the Mays would need to present their proposal to the commission a second time before construction could start.

The land-use plan and May Town Center proposal would have to be approved by the Metro Council.

Giarratana declined to say Friday whether he would withdraw the zoning petition if the new land-use plan got defeated. But in an interview earlier this week, he said he'd try to push the project to a Metro Council vote, no matter how the plan's fate turns out at the Planning Commission.

Bells Bend developer studies new bridge site

U.S. turns away from decades of deregulation

WASHINGTON — The housing and financial crisis convulsing the U.S. is powering a new wave of government regulation of business and the economy.

Federal and state governments alike are increasingly hands-on in their effort to deal with failing businesses, plunging house prices, worthless mortgages and soaring energy prices. The steps add up to a major challenge to the movement toward deregulation that has defined American governance for much of the past quarter-century since the "Reagan Revolution" of the early 1980s. In fact, some proponents today of a bigger oversight role for government are Republican heirs to the legacy of President Reagan.

On Thursday, the government's role in policing the financial markets took center stage at a House Financial Services Committee hearing. In testimony there, Securities and Exchange Commission Chairman Christopher Cox said the SEC should be given more power to regulate the parent companies of investment banks.

New York Fed President Timothy Geithner described the need for policymakers to be particularly vigilant, noting the entire regulatory structure should be re-evaluated. "You have to be prepared to look at everything," he said.

Both men testified how government regulation can be strengthened without stifling financial innovation.

Loans provide leverage

Already, the Federal Reserve has dialed up its scrutiny of Wall Street investment banks, placing officials inside the giant firms and weighing in on their capital requirements, after taking the unusual step of offering tens of billions of dollars in emergency loans. The Fed also has agreed to lend money to Fannie Mae and Freddie Mac, potentially giving the agency more oversight of the two giant housing-finance companies as well.

At the same time, state utility commissions are re-establishing control over power companies that they ceded during earlier waves of deregulation. The Education Department is taking a step toward nationalizing the market for student loans, after private lenders abandoned that business.

The debate over Washington's hand in the economy is at the heart of the presidential campaign. Both major-party candidates are endorsing proposals to create new, Federal Reserve-style commissions to limit greenhouse-gas emissions and decide how to spend billions of dollars on energy-efficient technology.

"There's a backlash against the laissez-faire, 'isn't-it-wonderful-how-creative-markets-are' viewpoint," said former Fed Vice Chairman Alan Blinder, a Democrat. "Markets are creative, but sometimes the creativity leads to strange and dangerous directions."

Alabama Sen. Richard Shelby, the top Republican on the Senate Banking committee, noted the shift in power away from markets but worries about the result. "It's in the wrong direction, from my point of view," he said.

Public opinion is shaping the response. By a 53 percent-to-42 percent margin, Americans want government to "do more to solve problems," according to a Wall Street Journal/NBC News poll released last week. A dozen years earlier, respondents opposed government action by a 2-to-1 margin.

There is a possibility the shift will be temporary. Kevin Hassett, a conservative economist at the American Enterprise Institute, said there have been other times when an era of activist government appeared to be dawning, but didn't. After the savings-and-loan system collapsed in the 1980s, the government spent $125 billion seizing failed S&Ls and selling off their loans. But that didn't augur a return of bigger government. President Clinton's effort to create a universal health-care system in the 1990s flamed out.

Even if activism is on the rise, it doesn't mean a rollback of decades of deregulation of businesses ranging from airlines to trucking to telecommunications. Those moves have lowered the cost of goods and services across the economy.

The degree of change will depend on who occupies the White House next January. Sen. Barack Obama, the presumed Democratic candidate, has talked about a sharp increase in taxes on wealthy Americans, and a windfall-profits tax on oil companies. Republican rival Sen. John McCain would cut taxes on corporations.

Still, powerful industries are facing greater pressure for regulation than they've seen in a generation because of concerns about the safety of the products. Drugmakers are being pressed by congressional Republicans and Democrats alike, who want stricter oversight by the Food and Drug Administration, and new regulations that would mandate tougher safety standards and import controls.

In the case of the food industry, the food processors and other companies — fearing a public backlash — have been urging Washington to ratchet up its oversight of imported foods and ingredients, reversing the industry's usual hands-off approach. While the Bush administration hasn't been willing to go as far as the processors want, Florida recently imposed requirements on tomato growers for annual inspections, among other measures.

Fed responds forcefully

The bigger role for government is being driven in part by fallout from the housing crisis. The beating suffered by financial institutions has required the kind of quick, large-scale financial intervention that only the Federal Reserve can provide. At the same time, the success of the Fed in recent years at whipping inflation and limiting the depth of recessions has had the side effect of enhancing the reputation of government agencies. That's prompting politicians to try to use that model to solve other problems.

It all adds up to more government activism, but an activism that relies more heavily on unelected bureaucrats rather than elected lawmakers. In coming years, the big issue will be "where should we draw the line between the political and the technocratic," said Blinder, the former Fed vice chairman.

This nuanced view is reflected in the proposals of the presidential candidates. Obama wants a big push in spending on bridges, ports, railroads and other infrastructure, but worries about politicians doling out the money according to political whim. (That danger is also a longtime concern of McCain.) To insulate the spending, he would create a $6 billion bank patterned on the Federal Deposit Insurance Corp., which has five members whose terms are staggered to try to assure political independence.

McCain has said he is open to a bailout of General Motors Corp., if it were threatened with bankruptcy amid falling sales and high costs, and wants to direct federal funds to develop new-generation automobile batteries and electric cars. "There's always a basic issue about what is the way to effectively harness private markets," said McCain policy chief Douglas Holtz-Eakin.

Cycles have long history

The struggle between markets and the government is as old as the country itself. Founding Father Alexander Hamilton pushed for higher tariffs to protect nascent U.S. manufacturers, saying he wanted to preserve "a monopoly of the domestic market." That directly clashed with the get-the-government-off-our-back agrarianism of Thomas Jefferson.

Since then, various crises have sent the pendulum swinging back and forth. The handling of the financial panic of 1907 — when a private individual, banker J.P. Morgan, bailed out a floundering U.S. economy — stirred so much political outrage on the left that in 1913 the government created the Federal Reserve to run the financial system. The Depression-era collapse of markets led to the birth of a slew of new agencies, including the Securities and Exchange Commission and the Federal Deposit Insurance Corp., which regulated and remade American-style capitalism.

Disgust at bungling government policies that by 1980 produced a combined rate of inflation and unemployment of 20 percent — the "misery index" — led to the election of Ronald Reagan. He rolled back regulation and antitrust enforcement as a way to free market forces from the shackles of government.

The movement started by Reagan has taken several hits. The 2001 terror attacks led to the nationalization of airport workers and the creation of the elephantine Homeland Security Agency, bucking decades of privatization of government functions. The corporate-accounting scandals early this decade that leveled energy trader Enron and communications giant WorldCom led to the Sarbanes-Oxley law in 2002, which reversed the pattern of the prior two decades of easing regulation of U.S. companies. Among that law's many provisions, chief executives had to accept legal responsibility for the accuracy of their firms' financial statements.

Former House Republican Speaker Newt Gingrich, who captained the Republican takeover of Congress in 1994 on a "small-government" platform, figures that any surge in government activism is bound to be short-lived because bureaucrats will blunder. "It's very dangerous to assume that some skill at managing the money supply — as the Fed has done — will lead to bureaucratic skills greater than any country possesses," he said.

Powers may expand

Dealing with global warming may augur a further expansion of government power. The leading proposal in Congress would cap emissions of greenhouses gases by industries and allow them to buy and sell emission permits.

The legislation garnered 48 votes in the Senate in a June procedural measure, leaving it a dozen short of the 60 needed to get a vote on the bill. Both presidential candidates have made emissions-trading systems a centerpiece of their environmental platforms, all but assuring another congressional effort after the election.

"Markets are groping" for guidance, said Fred Morse, a senior adviser to the U.S. solar-power subsidiary of Spanish utility Abengoa SA. "You need government to lay out a policy."

Inflation’s rapid climb rattles economy

Olympics ads push a global theme

MILWAUKEE — Some ads preach unity and togetherness. Some celebrate the spirit of athleticism.

For many advertisers this year, their Olympics spots in the U.S. are more about humanity and athletes and less about national pride. They're also making less mention of host country China.

It's a big business advertising for the Olympics. This year's games in Beijing, which get under way next month, will draw in viewers from around the world, representing a big chance for advertisers to showcase their products.

Many, including Nike Corp. and McDonald's Corp., say this campaign will be their biggest yet.

But this time around, there's a slumping U.S. economy to contend with — so advertisers are being more cautious, experts say. There's also the fear that mentioning China too much could lead to negative associations with the brands, should problems develop at the Olympics.

From Visa Inc.'s "Go World" campaign to unifying themes from Coca-Cola Co. and McDonald's, major sponsors are calling for harmony and avoiding boasts of patriotism for any one country.

A major spot by Coca-Cola, called "Yao and LeBron-Unity" features animated versions of the two basketball stars, Chinese native Yao Ming and American LeBron James, facing off in a basketball duel. They pull in people and things associated with their home countries, such as cowboys for James and pandas for Yao as they face off.

But when they both snag a Coke, they high-five and all is good.

"In this kind of divided time it just feels right for the brand and right for Coca-Cola," said Katie Bayne, chief marketing officer for the company's North American division.

China's issues touchy

The big question for U.S. advertisers is how do they acknowledge China in their domestic advertisements, or do they bother at all, said John Sweeney, an advertising professor at the University of North Carolina at Chapel Hill's School of Journalism and Mass Communication.

They'll want to associate themselves with the games, but may be wary of the Beijing connection, he said.

There are human rights issues, worries about political protests and potential efforts by the Chinese government to stifle spectators and media covering the events.

There's also the earthquake earlier this year in Sichuan province that left nearly 70,000 people dead and 5 million homeless.

All seems to be fine now, Sweeney said, but who knows what will happen as the Olympics approach.

"If the negative stuff re-emerges as sort of the framework hanging around the Olympics, it's going to be a very tough marketing environment," he said.

But companies are going full steam ahead.

Visa is focusing on athletes and the glory of the Olympics in its "Go World" campaign.

In years past, the company had taken less of a global approach, said Kevin Burke, Visa's head of global consumer marketing. But he said the current campaign, developed last fall, sought to include both past and current athletes from the U.S. and other countries.

Tone has changed

Four years ago at the last summer Olympics, Visa's most well-known ad featured champion Michael Phelps swimming from Greece — the site of those games — to the Statue of Liberty in a piece called "Lap."

The tone is different this year. In the flagship ad, called "Come Together," actor Morgan Freeman talks about how the games bring people together, despite their differences.

Images of athletes in rich sepia tones stream as Freeman says: "We don't always agree. But for a few shining weeks we set it all aside and we come together to stand and cheer and celebrate as one. We forget all the things that make us different and remember all the things that make us the same."

Burke said this year's campaign — which features Phelps; gold medal-winning gymnast Kerri Strug; Bob Beamon, who has held the Olympic record for the long jump since 1968; and others from countries including Ukraine, Ethiopia, South Africa and Nigeria — wasn't designed to reflect anything that's going on in the world. He said viewers like its message of togetherness.

"When we shared it with consumers, they really enjoyed the fact it wasn't just a celebration of U.S. athletes. It was a celebration of all athletes," Burke said.

Togetherness is theme

Coca-Cola's ads continue the company's campaign called "The Coke Side of Life" and their theme is to connect the world through a Coke, Bayne said. Another ad features animated birds from around the world collecting straws and assembling their own Olympic stadium, a model of the one in China, which is nicknamed the bird's nest. They come together, in all their different colors, and watch the opening ceremonies from inside their nest.

McDonald's has a television spot airing now called "The More We Get Together" that juxtaposes a nursery-song rhyme against competitive moments with athletes of varied races and colors, none wearing national symbols.

"The more we get together the happier we'll be," the ad says.

Mary Dillon, chief marketing officer for McDonald's in North America, said the company wanted to play up the universal themes of its fast-food restaurants, which are found in more than 100 countries.

"In Athens, the last summer Olympics it was about the Olympic tradition. Really this time we're really trying to bring it up a notch," she said. "The Olympics is all about bringing people together and we're looking at ways of bringing it to life."

Tourists considered

Advertisers could also be taking a more global approach to advertising in the U.S. to appeal to the foreign tourists flocking here now because of the weak dollar, said Michael Roberto, a management professor at Bryant University Smithfield, R.I. Anything too patriotic could turn these tourists — and their euros — off, he said.

"Those are the kinds of people who are most likely to buy American consumer products when they go back to their home countries. Companies are perhaps concerned about the image they present," Roberto said.

But advertisements in China are boasting with national pride. Why? Because companies are trying to capture the attention of consumers in a market where retail spending is growing at more than 20 percent per year.

An ad by McDonald's called "Open Door" features Chinese athletes training in their sports, such as gymnastics, cycling and badminton, and workers making food at McDonald's. It ends with the athletes, in bright red track suits, eating burgers.

The Olympics advertising in China focuses on home-grown stars, not only Yao Ming, but others who are likely unknown to foreign fans but well-loved by the Chinese: hurdler Liu Xiang, diver Guo Jingjing, soccer player Ma Xiaoxu and table tennis legend Deng Yaping.

The tone of the ads is often rousing, with a focus on winning glory for China and its people.

"The applause of 1.3 billion people" says one television spot for Chinese sports product maker Li Ning, while flashing triumphant images of the always-dominant pingpong squad.

A recent campaign by Adidas shows individual Chinese athletes shot in color, held aloft by crowds drawn in black and white.

Word-of-mouth advertising doesn’t just happen; one must work at it

Tennessee to help build biofuel plant

A pilot project of the University of Tennessee and a private company to create ethanol from switchgrass could begin producing biofuel by next year, a fledgling effort that leaders hope will make the state a leader in alternative fuel production.

Gov. Phil Bredesen and UT President John Petersen on Wednesday announced the public-private initiative to develop so-called "cellulosic ethanol" on Capitol Hill. The project relies in part on more than $70 million in state funds as well as federally funded research from Oak Ridge National Laboratories.

The state has invested in the project, Bredesen said, "because of a strong belief that we in Tennessee are very well positioned to be a leader in alternative fuels."

"We have the right conditions, we have the right climate and resources to grow large quantities of biomass, we have the agricultural community, we also have the scientific and research communities in our universities and laboratories," the governor said.

Cellulosic ethanol is different from corn ethanol, a subsidized, decades-old industry.

Cellulosic ethanol is distilled from plant biomass such as leaves and stalks; regular ethanol uses corn kernels.

Switchgrass is increasingly seen as a more sustainable biofuel source, but there's no infrastructure for refining it yet.

The project's announcement comes amid growing doubts nationally about corn ethanol as an alternative fuel source.

Food shortages and high prices around the globe, which have resulted in violence and political instability in some counties, are blamed in part on the increasing dedication of cropland to corn ethanol rather than food consumption.

Congress changes view

Members of Congress have begun to re-evaluate their views on corn ethanol after years of approving federal subsidies.

Earlier this week, Rep. Bart Gordon, a Tennessee Democrat, chairman of the House Science and Technology Committee, wrote in an energy policy briefing: "we need to expand biofuels to nonfood materials, such as cellulosics."

Bredesen said he believes that corn-based ethanol "is a dead end." Cellulosic ethanol has much greater potential but requires public investment because of the higher costs and more complex technology.

"I think it's a great example of how you put a little venture capital on the table and get some markers down, and things happen," he said.

Amani Elobeid, an associate scientist and ethanol analyst at the Center for Agriculture and Rural Development at Iowa State University, said that there is now no commercial production of switchgrass-based ethanol in the country and that crops would have to be subsidized.

She said that switchgrass doesn't necessarily solve all of the problems associated with corn ethanol and that it's too soon to know how the cellulosic ethanol industry will evolve.

The project will create a pilot-scale biorefinery in Vonore, Tenn.

DuPont Danisco Cellulosic Ethanol LLC, a joint venture of DuPont and Denmark-based Genencor, will build the plant. Initially, the plant will make fuel from corn leaves and stalks but will change over to switchgrass.

Toyota will build Prius in Miss.
Volkswagen plant decision expected July 15

Shoney's vendor files bankruptcy

Diesel fuel prices put a Nashville food distributor on its knees this week, with the Chapter 11 bankruptcy protection filing of Commissary Operations Inc., a longtime Shoney's restaurants vendor.

Commissary Operations, Inc., which goes by the name of COI Food Service, said in filings this week in U.S. Bankruptcy Court in Middle Tennessee that a heavy capital investment last year, a run up in fuel prices and the demise of bankrupt restaurant Roadhouse Grill, Inc., all combined to push the company over the financial edge.

Florida-based Roadhouse had owed COI "several million" dollars and ceased all operations this year, according to the filing.

COI, which employs more than 700 people, is a major vendor for Shoney's restaurants and, in fact, was created by Shoney's executives, who bought the restaurant's commissary in 2001.

Many of them are still running COI, such as Daniel Staudt, interim president during the bankruptcy, and Lloyd Baldridge, Jr.

Dan Bigelow, the vice president of marketing for Shoney's, said he didn't expect the bankruptcy filing to affect operations of the existing restaurants. Shoney's has other food distributors, as well, officials said.

COI's lawyer, Glenn Rose, said the company would continue to operate and meet its obligations to restaurant operators after an emergency hearing in bankruptcy court Wednesday.

"The company has reached out to their customers and told them it will continue to provide good service,'' said Rose, an attorney at Harwell Howard Hyne Gabbert & Manner in Nashville. "It has a plan in place to deal with the fuel crisis."

Rose said the company has managed to come up with $22 million in bankruptcy financing from its lender, Bank of America.

COI had earlier defaulted on its loan agreement with Bank of America, which signed a new agreement with COI in March and reduced its access to credit by $2 million.

COI has 3 warehouses

"Over the last few months, the debtor has started the process of reducing the number of restaurant concepts that it supplies in order to improve route profitability and adjust to increased fuel costs so that it could return to profitability," Baldridge said in a court filing.

COI said it had between $50 million and $100 million in assets and liabilities.

Top creditors include Ryder Trans Services in La Vergne, which is owed $2.3 million, New City Packing Co. in Aurora, Ill., and Coca-Cola USA in Atlanta.

COI, which serves restaurants mostly east of the Mississippi River, has three warehouses, including one in Nashville, one in Ripley, W. Va., and one in Tifton, Ga.

Restaurant group accountant criticizes state for failure of workers’ comp fund

Investor doesn't plan takeover of Gaylord

A Texas billionaire who over the past week and a half spent $82 million to increase his stake in Gaylord Entertainment Co. to 14.1 percent of the company declared Monday that he does not intend to buy the hotel chain — at least for now.

In a filing with the Securities and Exchange Commission, Robert B. Rowling's Irving, Texas-based TRT Holdings indicated that the purchases were made for investment purposes. The disclosure was required after TRT pushed its holdings of Gaylord stock past 5 percent.

Ben Silverman, director of research at InsiderScore.com, said the filing left the door open for Rowling, who owns Omni Hotels, to enter into a strategic partnership with Gaylord. But it could also be that Rowling simply "identified an investment in a space he's familiar with and saw that it was undervalued," Silverman said.

Gaylord's stock closed up 6 percent at $29.98 a share in trading on the New York Stock Exchange on Monday.

Silverman said it's been hard to read what Rowling has in mind for Gaylord, since he has a limited record of investments, despite being listed as No. 49 on the 2007 Forbes 400 list and ranking as the fifth-wealthiest person in Texas. Rowling's assets are estimated to be worth $6.4 billion.

In addition to Omni, Rowling owns a majority share of privately held Gold's Gym and has made sizable investments in Pogo Producing Co., a Texas oil company, and in Guaranty Financial Group Inc., an Austin, Texas-based savings and loan company.

Is joint venture possible?

On Friday, a Gaylord spokesman confirmed that the company had had no contact with Rowling. But when company spokesman Brian Abrahamson was asked that question again on Monday, he declined to comment.

TRT representatives, meanwhile, were unavailable for comment.

Citi analyst Joshua Attie said one possible outcome is that TRT will become a joint venture capital partner, allowing Gaylord to accelerate unit growth and reduce its leverage, according to a report from The Associated Press.

For investors, Silverman said Rowling's stock purchases could signal a couple of things: one, that somebody may be trying to buy the company on the cheap, which would be a negative for long-term investors, or that the purchases help validate Gaylord's business model.

Based on Monday's SEC filing, it appears that Rowling owned nearly 5 percent of Gaylord's shares before May 9. Ownership over 5 percent would have triggered disclosure requirements through the SEC. Rowling's purchases now make him Gaylord's largest shareholder.

After hitting its 52-week low on July 14 at $19.30 a share, Gaylord's stock has risen nearly 40 percent through Monday's closing on Wall Street. But those prices remain sharply lower from where the stock has been over the past year. Shares hit a 52-week high of $59.89 on Aug. 9, 2007.

Fresenius merger shows appeal of generic-drug makers
AT&T will offer cable in 56 cities

Restaurant group accountant criticizes state for failure of workers' comp fund

The Tennessee Restaurant Association's accountant is accusing the state of failing to act quickly enough to save the association's workers' compensation fund, which has cost restaurants in the state millions and embroiled them in a bitter, costly legal dispute.

The state Department of Commerce and Insurance had information as early as 2003 that the fund, which paid injured restaurant workers' claims, had a $450,000 deficit and probably couldn't stay afloat, according to a court motion filed this month by the accountant, William "Larry" Shores of Orlando, Fla. Shores said the audit, which he wrote, was filed with the state detailing the problems.

The state failed to act until the end of 2005, two years later, when the accountant wrote another audit questioning the fund's ability to continue "as a going concern," Shores said in his motion for summary judgment filed July 9 in Davidson County Chancery Court.

The state Department of Commerce and Insurance said Monday that although the audit questioned the trust's ability to survive, the audit went on to describe actions the trust fund board took that could improve the trust's situation. The 2002 audit wasn't filed with the state until August 2003, and the subsequent audit for the year 2003 showed the trust was in the black.

The state is suing Shores and the administrator of the fund, a company run by the former chief executive officer of the Tennessee Restaurant Association, James "Ronnie" Hart. Hart stepped down earlier this year amid the ruckus. He could not be reached Monday.

The state accused Hart of mismanaging the workers' compensation fund and dipping into reserves without proper approval. Hart has said that he never intended to hurt anyone and that changing business conditions were at fault for the fund's demise.

As for Shores, the state says he miscalculated the extent of the fund's losses. Shores denies those claims.

"The Tennessee Department of Insurance never contacted Shores regarding these matters,'' he said in the court motion filed by attorney Clint Woodfin of Knoxville. "In spite of these warnings, there was no regulatory action taken by the Tennessee Department of Insurance until Shores again questioned the ability of TRA to continue as a going concern sometime in late 2005."

State liquidated fund

The state Department of Commerce and Insurance liquidated the workers' compensation fund in 2005. The state is in the midst of trying to collect more than $6 million from Tennessee restaurants that were members of the trust.

Randy Rayburn, who owns the Sunset Grill and Midtown Cafe in Nashville, said he will have to pay the state about $85,000 to cover his portion of the broke trust fund, not counting attorneys' fees, and all of that comes at a time of declining sales for his restaurants.

"It's quite a burden this year,'' he said.

Rayburn, who is on the Tennessee Restaurant Association board but was not on the board for the trust fund, said association management continued to assure him that everything was fine with the fund as late as early 2006.

"As a purchaser of workers' compensation insurance from the TRA trust, we were never advised in writing or orally by anyone as to the financial challenges of the trust until the trust was shut down in December 2005,'' he said.

Ex-bank official files lawsuit over firing

Banks' earnings plummet

Banks reported huge profit declines in the second quarter, raising questions about how long and how miserable a financial sector slump could last.

But bargain hunters and short sellers helped drive up the price of bank stocks on Wall Street on Tuesday, despite the gloomy earnings news, analysts said.

"It was an awful quarter,'' said FTN Midwest Securities Corp. analyst Jeff Davis in Nashville. "Every bank that reported today had dismal earnings."

The Nashville area's largest banking company, Regions Financial Corp., reported a 55 percent decline in profits in the second quarter to $206.4 million, or 30 cents per share. That was below Wall Street's expectations.

And Regions set aside more than $300 million to cover bad loans. But Regions' stock increased by $1 a share and closed at $11.40 in New York Stock exchange trading despite the credit woes.

The company blamed home building, condominiums and home equity loans, mostly in Florida, for its poor results.

"We think it is prudent to plan for no real improvements until 2010,'' Regions Chairman, President and Chief Executive Officer Dowd Ritter said in a conference call. He said it was hard to predict the depth and extent of the "current down cycle."

Birmingham, Ala.-based Regions also said it would slash its dividend from 38 cents to 10 cents per share, effective for dividends payable on Oct. 1, to save money and strengthen its capital position.

Regions officials said the bank has put a moratorium on land and condominium loans, revalued its home equity loan portfolio and put its most experienced bankers in the special asset department, which deals with problem loans.

Elsewhere among big banks, perhaps the biggest loser was Wachovia, the nation's fourth-largest bank, which said it lost $8.86 billion in the second quarter because of charges and reserves for bad mortgage loans.

The Charlotte-based bank on Tuesday cut its dividend for the second time this year and said it would eliminate 10,750 jobs.

Analysts not surprised

"Wachovia's news isn't isolated. I think there is still a structural issue with U.S. banks," said Russell Walker, a risk management professor at the Kellogg School of Management at Northwestern University. "Many of the banks, including Wachovia, are still facing challenges."

Still, Wachovia's stock finished a winner in Tuesday trading, climbing 27 percent to $16.79 per share, as the company's CEO promised major expense trimming.

Wachovia's problems stem largely from its acquisition of mortgage lender Golden West Financial Corp. in 2006 for roughly $25 billion at the height of the nation's housing boom. With that purchase, Wachovia inherited a deteriorating $122 billion portfolio of Pick-A-Payment loans, Golden West's specialty, which let borrowers skip some payments.

Bank of America, also based in Charlotte, reported profits fell 41 percent to $5.76 billion, or 72 cents per share in the second quarter on Tuesday. Analysts on average expected a profit of 53 cents per share. The stock price climbed 13 percent to $32.35 per share in trading on the New York Stock Exchange.

Some analysts said the increase was fueled by a developing recognitions "that the bank's problems, although large, can be contained,'' bank analyst Richard Bove of Ladenburg Thalmann & Co. said in a note to investors. "More importantly, it is beginning to be understood that the bank has formidable sources of revenues that can pay for a great deal of losses."

Loan hurt SunTrust

Meanwhile, Atlanta-based SunTrust Banks Inc., said its second-quarter earnings fell 21 percent due to a sharp increase in its loan-loss provision and a decline in net interest income. Its stock climbed 16 percent to $39.66 per share.

Analysts said the real worry now is whether a softening economy will start to cause problems for commercial loans. Davis said he believes bank real estate losses will taper off by the second half of 2009, but a further contraction of the U.S. economy could put banks in a bad position.

"Is that going to happen? I don't know,'' Davis said. "We haven't seen, at least not yet, commercial loans melt down. The American business community is not very leveraged. Consumers are leveraged and government is leveraged. So, we think businesses will be OK."

Ex-bank official files lawsuit over firing
Fresenius merger shows appeal of generic-drug makers

Metro Council may come to Music Row landowner's aid

The Metro Council may try to intervene in the seizure of a Music Row business owner's property, under a bill now being readied for debate.

The council's attorney has been asked to draw up a measure that would stop eminent domain proceedings against Joy Ford, the owner of a small record label and music publishing business at 23 Music Circle E.

The measure is being discussed as two council members, Michael Craddock and Jim Gotto, lobby colleagues to step in on Ford's behalf.

Last month, the Metropolitan Development and Housing Agency, the city's chief redevelopment agency, started proceedings against Ford in a Nashville court, arguing that her building can be considered blighted because it lies within a redevelopment zone.

"It's the wrong thing to do," Craddock said of the eminent domain request. "You don't even have to search your conscience on this one."

A possible Metro bill would thrust the council into the debate over what to do with one of the last properties yet to be rebuilt within a redevelopment zone created a decade ago to spark urban renewal on the northern end of Music Row.

Ford has turned down offers from six firms to buy her property, which is home to her music business, Country International Records. She and her husband started the company in the early 1980s.

Earlier this year, she rejected an offer of $900,000 from MDHA to buy the site.

A blight characterization gives the city the power to seize Ford's building and transfer it to a developer, Houston-based Lionstone Group, that plans a pair of commercial and residential towers there.

Because the city charter gives MDHA the power to start eminent domain proceedings on its own, eliminating the district itself is the only way some Metro Council members think they could stop the agency, said Craddock and two other council members who have considered the matter.

"I'd feel a little different about this if it had to come to the Metro Council," Craddock said. "But we've got a board that doesn't answer to anyone."

Some would oppose bill

Support for the proposal is far from unanimous among council members, however.

Some council members contacted Tuesday said they would have to see the bill before they could say whether they would vote for it. Meanwhile, one member, Metro Councilman Rip Ryman of Goodlettsville, said he would oppose it.

Ryman said the council shouldn't be involved in eminent domain debates. He said the practice of eminent domain is "there for a purpose," and the council shouldn't tie MDHA's hands. "I think they've been more than fair with that lady out there," Ryman said. "They offered her a pretty good proposal."

Rock ‘n’ roll camp helps girls band together
Demonbreun Street development proposal gets support

Nissan leaves behind a big hole

Williamson County may be celebrating, but for downtown Nashville, it's time for a reluctant goodbye.

As Nissan North America moves its offices out of the AT&T Building to a flashy new headquarters in Cool Springs, many who live and work downtown are beginning to rue the loss of a company that had quickly left its mark on the city center when it moved in two years ago.

The automaker's departure means that nearly half of the city's biggest skyscraper is about to be emptied, with no one certain how long it might take to find a new tenant. The vacancy also comes as downtown tries to adjust to a slowing economy and the addition of two new office buildings — one completed near the Ryman Auditorium and another rising south of Broadway near the Schermerhorn Symphony Center.

On top of that, downtown is losing an employer that brought in 1,500 workers and contractors, all of whom gave the area a boost as they dined out, bent their elbows at local bars or took up residence in condos and apartments.

"They've been a really good group to have there in the mix," said Ron Gobbell, a downtown architect, resident and past chairman of The District, downtown's main business association. "They will be missed."

Nissan occupied 280,000 square feet of the AT&T Building, the distinctive, twin-spired skyscraper at Third Avenue North and Commerce Street. Its offices took up the third floor through the 15th floor, space that it took over two summers ago, after BellSouth decided to reduce its presence in the building.

(BellSouth has since been acquired by AT&T, which continues to occupy the 16th to the 30th floors.)

Nissan swept in only a few months after BellSouth started its consolidation, quickly plugging a hole before it could really be felt.

The Japanese automaker had already decided to sell its regional headquarters in Southern California and move to Middle Tennessee in late 2005 when it began shopping for a large block of office space that it could use until its new headquarters was built in Cool Springs. Those gleaming new offices will be dedicated later this week, and several hundred workers have already moved in.

Putting Nissan in downtown's AT&T Building was a quick fix that helped everyone in 2006.

Such good fortune is unlikely to fall on the downtown area twice, said Mark Woolwine, one of the brokers with CB Richard Ellis responsible for leasing the space that Nissan is vacating.

This time around, CB Richard Ellis is approaching a wide variety of companies, including other downtown tenants whose leases are up, suburban firms that might consider a move into Nashville and major companies outside the region that could open a Nashville office.

"Nissan was a unique event," Woolwine said. "It's like anything else. We're looking at all kinds of users."

Other buildings open

Brokers also have to contend with a slower national economy that has made companies wary of putting a lot of money into real estate deals — even those as seemingly simple as signing a lease for new office space.

"Downtown overall will weaken, certainly, over the next six to 12 months," said Whit McCrary, a principal with Colliers Turley Martin Tucker. "Companies are feeling the economy."

On top of that, the AT&T Building faces more competition.

One block away, the SunTrust Plaza building opened last winter, adding 300,000 square feet to the downtown office market. That building is almost filled, but most of its tenants have come from other downtown towers that, like the AT&T Building, are now looking for renters.

Meanwhile, construction is under way on a 500,000-square-foot tower called the Pinnacle at Symphony Place. That building won't be completed for another 18 months, but it, too, is trying to sign up tenants.

Filling the AT&T Building "is a very high priority, and it's something we've actively been thinking about since the day Nissan moved into the building," said Janet Miller, chief economic development and marketing officer for the Nashville Area Chamber of Commerce.

Tower has advantages

The AT&T Building, however, is not without its charms.

In addition to being the city's tallest building, it's one of downtown's most state-of-the-art. The tower's floors average about 20,000 square feet apiece, a size that companies favor these days because it gives them flexibility. And because it was built for a telecommunications firm, its floors can be lifted up, making it easy to install information technology equipment.

The AT&T Building also has its own food court, private parking garage, security desk and conference centers. And, with a quoted price of $19 a square foot, it's actually cheaper to rent than the average office building in Cool Springs, Brentwood, Midtown or Green Hills.

Brokers and economic development officials are marketing the building for a wide variety of uses, including call centers and regional headquarters.

"I'd love to see another company like Nissan, a corporate headquarters, that is going to bring in another group of well-paid urbanites," said Gobbell, the downtown architect. "But I have no clue whether that's feasible or not."

Condo builder bucks market

Nashville will keep all of its Starbucks

Nashville Starbucks aficionados can breathe a sigh of relief, but Murfreesboro residents didn't dodge the coffee bean.

None of the Seattle-based retailer's Music City locations will be part of the chain's plans to close 600 underperforming stores nationwide, according to a list of store closures posted on the company's Web site.

But Starbucks will close 13 stores in Tennessee, including two Murfreesboro locations near Stones River Mall, according to the company's list.

Others to be shuttered in the state include three stores in Memphis and one in each of the following cities: Jackson, Chattanooga, Knoxville, Oakland, Collierville, Bartlett, Harriman and Covington.

Starbucks said it would take "significant steps" to place affected employees into available positions at nearby stores.

Customers cut back

Starbucks announced earlier this month that it would close 19 percent of its U.S. company-owned stores opened in the past two years. The stores were considered underperformers and were not expected to be profitable in the future, the company said.

Starbucks sales and earnings have declined as cash-strapped consumers facing record gasoline prices pull back on buying gourmet coffee and other luxuries.

The world's largest coffee-shop chain provided a complete list of the hundreds of stores slated for closure. The stores are in 44 states and Washington, D.C., and include 88 in California, 59 in Florida and 27 in Minnesota.

Regis Corp. will close 160 salons in fiscal 2009

Tennesseans find creative ways to adapt to tough times

Gas prices reached a record of $4 per gallon in Nashville last week. Inflation nationally has risen to its highest level in 17 years. And wage hikes aren't keeping pace with the steady drumbeat of rising prices on everything from eggs to energy.

Nashville residents, pinched by the changes, are coming up with innovative solutions to cut their own costs or earn a little extra money. Middle-class families no longer covet those mammoth SUVs. Car pooling is suddenly in fashion. And some residents are making huge lifestyle changes — moving closer to their jobs or taking jobs closer to home.

The end result may be to fundamentally change the way many Middle Tennessee residents live their lives or even reshape the cities in which they live. Here are some of the ways consumers are adjusting to the soaring cost of living and sluggish income growth.

Move closer to work

Suburban living has less of an appeal to Hermitage resident Lori Casteel nowadays, especially after she figured out she and husband Mike spent $1,200 in gas in April.

The culprit: driving her daughter back and forth to a private school in Nashville. Plus, the total commute sometimes reached four hours, counting the time it took running errands in town.

So now, the Casteels have signed a contract to buy a house in East Nashville that will be closer to their daughter's school. Both husband and wife work out of their homes, so job location wasn't an issue.

"It's not because our situation is dire,'' Lori Casteel said. "It's not that we're not making our bills. I just don't see the need to pay that much for gas. I have a family. There are better things for me to spend my money on than gasoline."

Realizing that home prices are higher in East Nashville than in Hermitage for the same amount of space, the couple decided to spend a little more for a three-bedroom Craftsman bungalow with an office than what they paid for their Hermitage home six years ago. That 3,200-square-foot home in Hermitage cost $226,000.

Still, more than money was part of the equation.

"Our time has a value on it,'' Casteel said. "Whatever choices I can make to better control our situation, I can do that. We don't have to sit back and be forced to pay whatever fuel prices are."

Mandy Wachtler, a broker with Pilkerton Realtors in Nashville and the president of the Greater Nashville Association of Realtors, said she has seen an increase in the number of clients trying to move closer to town because of gas prices.

Two clients in La Vergne hope to move to Nashville. Another living in southern Davidson County wants to move closer to the downtown area.

"It's not necessarily an inexpensive thing to do,'' said Wachtler, who advises clients they can estimate paying 7 percent of the purchase price in fees, insurance and other closing costs.

But she thinks she's seeing the beginning of a trend, especially with developers building thousands of condo units in and around downtown Nashville.

"We may get a slowdown, but for the most part, people are wanting to come back to the city," she said.

Share resources

Gayden Fite doesn't want to buy a new home, but she does want to reduce her gasoline consumption, in part because she'll feel better about her impact on the environment.

The 62-year-old recently replaced a 12-year-old Honda Accord with a Toyota Prius, which cost $25,000 and has leather seats.

She estimates her new Prius is getting 45 or 46 miles per gallon, saving her about $140 per month on gasoline with gas prices hovering around $4 per gallon.

"I really made a decision that I wanted the immediate savings versus the long-term savings,'' Fite said of her car purchase. "Obviously when you finance your car, some of your savings is going to be eaten up in debt service.

"I feel better about getting better gas mileage, being a little greener, and using less gasoline and being better on the environment."

Plus, Fite is car pooling with a colleague from work. Fite drives about 30 miles each
way from her home in Kingston Springs to her job as the clinical director of a residential facility for adolescents in Nashville.

Fite and her car-pool buddy, a nurse, stay flexible about each other's schedules. If one has to stay an hour late at work, the other can find some work to do in the meantime. Or if one has a dental appointment late in the afternoon, the other will head home early, too.

Others are making similar decisions.

The Metropolitan Transit Authority, Nashville's bus system, has seen an 11 percent increase in trips in the fiscal year that ended in June.

Sales of compact cars have climbed compared with last year, while truck and SUV sales are falling, according to automobile research company Edmunds.com. Sales of the Toyota Prius soared 70 percent last year to 181,221 vehicles, the company said.

All of the changes are leading to falling gasoline consumption in the United States. Consumption has dropped 3 percent from July of last year, according to the federal government's Energy Information Administration. That is a significant number, according to economists.

In fact, the decline runs counter to years of progressively increasing consumption. Economists attribute the slowdown to high gas prices and a weaker national economy.

The federal government's Energy Information Administration projects gas prices may fall a bit by the end of the year, but will average $3.89 per gallon nationally through next year. Many believe such high gas prices will continue to keep Americans cutting back at the pump.

Get a closer job

Rosalyn Davis didn't want to move closer to work. She wanted her job to come to her.

The 51-year-old Madison woman took a job working for her sister, in part so she could be closer to home. Davis went to work at her sister's restaurant, The Veggie Cafe in East Nashville. Previously, she had been commuting to a job at Vanderbilt University Medical Center.

"It takes me 10 minutes to get to work now, when it used to take me 30" minutes, she said.

Davis may not be coming out ahead financially, because her new job pays about $11 per hour versus the $14 per hour she made at Vanderbilt.

"I knew my pay would be lower,'' she said. "But I knew I wanted to do this."

Share grocery costs

Motivated by inflation, Tim Mitchell, a 42-year-old who is married with three children, is trying to trim his grocery bill and his neighbors' as well.

He and his wife, Sheila, have started making discount bread-shopping trips for themselves and neighbors in Old Hickory in recent months. It works like this: Whoever plans to be near the Colonial bread store on Gallatin Pike takes orders from three neighbors and makes a shopping trip on behalf of the group.

A recent trip found them stocking up on 10 loaves of bread at 80 cents per loaf, six bags of bagels and hamburger and hot dog rolls.

The bread comes from the local Colonial Bakery in Nashville, which is owned by Sara Lee Corp.

The store, a longtime Nashville discount option, reports a sales increase of about 25 percent to 30 percent so far this year compared with a year earlier.

Make the best of it

With low interest rates hurting many retirees who depend on income from investments, such as bank certificates of deposit, Jackie Andrews has devised a way to fight back.

Every month, she calls more than 30 local banks and asks each one for its best offer on a CD. She compiles the results in a chart. About a dozen friends call her to find out where the best rates are. About six or eight friends do so regularly.

"I've had fun with it,'' she said.

Andrews, 77, has the personal phone numbers of client representatives, bypassing the toll-free numbers of many banks and saving time. She prefers this method to going online at a computer and checking Web sites that aggregate CD offers from a variety of banks.

She also prefers dealing with banks that have a local presence.

"For myself, for my friends, they want to hand someone a check and receive the CD in their hand,'' she said. "They don't want to do it any other way."

What's the best deal she found recently? It was at Wachovia. The bank last week was offering 4 percent for a seven-month CD or 4.25 percent for a 12-month CD. That deal isn't better than the rate of inflation, but it's better than nothing, Andrews said.

$4 gas may pale next to winter’s heating oil bills
Tennessee retailers feel pinch as shoppers cut back

Tennesseans find creative ways to adapt to tough times

Gas prices reached a record of $4 per gallon in Nashville last week. Inflation nationally has risen to its highest level in 17 years. And wage hikes aren't keeping pace with the steady drumbeat of rising prices on everything from eggs to energy.

Nashville residents, pinched by the changes, are coming up with innovative solutions to cut their own costs or earn a little extra money. Middle-class families no longer covet those mammoth SUVs. Car pooling is suddenly in fashion. And some residents are making huge lifestyle changes — moving closer to their jobs or taking jobs closer to home.

The end result may be to fundamentally change the way many Middle Tennessee residents live their lives or even reshape the cities in which they live. Here are some of the ways consumers are adjusting to the soaring cost of living and sluggish income growth.

Move closer to work

Suburban living has less of an appeal to Hermitage resident Lori Casteel nowadays, especially after she figured out she and husband Mike spent $1,200 in gas in April.

The culprit: driving her daughter back and forth to a private school in Nashville. Plus, the total commute sometimes reached four hours, counting the time it took running errands in town.

So now, the Casteels have signed a contract to buy a house in East Nashville that will be closer to their daughter's school. Both husband and wife work out of their homes, so job location wasn't an issue.

"It's not because our situation is dire,'' Lori Casteel said. "It's not that we're not making our bills. I just don't see the need to pay that much for gas. I have a family. There are better things for me to spend my money on than gasoline."

Realizing that home prices are higher in East Nashville than in Hermitage for the same amount of space, the couple decided to spend a little more for a three-bedroom Craftsman bungalow with an office than what they paid for their Hermitage home six years ago. That 3,200-square-foot home in Hermitage cost $226,000.

Still, more than money was part of the equation.

"Our time has a value on it,'' Casteel said. "Whatever choices I can make to better control our situation, I can do that. We don't have to sit back and be forced to pay whatever fuel prices are."

Mandy Wachtler, a broker with Pilkerton Realtors in Nashville and the president of the Greater Nashville Association of Realtors, said she has seen an increase in the number of clients trying to move closer to town because of gas prices.

Two clients in La Vergne hope to move to Nashville. Another living in southern Davidson County wants to move closer to the downtown area.

"It's not necessarily an inexpensive thing to do,'' said Wachtler, who advises clients they can estimate paying 7 percent of the purchase price in fees, insurance and other closing costs.

But she thinks she's seeing the beginning of a trend, especially with developers building thousands of condo units in and around downtown Nashville.

"We may get a slowdown, but for the most part, people are wanting to come back to the city," she said.

Share resources

Gayden Fite doesn't want to buy a new home, but she does want to reduce her gasoline consumption, in part because she'll feel better about her impact on the environment.

The 62-year-old recently replaced a 12-year-old Honda Accord with a Toyota Prius, which cost $25,000 and has leather seats.

She estimates her new Prius is getting 45 or 46 miles per gallon, saving her about $140 per month on gasoline with gas prices hovering around $4 per gallon.

"I really made a decision that I wanted the immediate savings versus the long-term savings,'' Fite said of her car purchase. "Obviously when you finance your car, some of your savings is going to be eaten up in debt service.

"I feel better about getting better gas mileage, being a little greener, and using less gasoline and being better on the environment."

Plus, Fite is car pooling with a colleague from work. Fite drives about 30 miles each
way from her home in Kingston Springs to her job as the clinical director of a residential facility for adolescents in Nashville.

Fite and her car-pool buddy, a nurse, stay flexible about each other's schedules. If one has to stay an hour late at work, the other can find some work to do in the meantime. Or if one has a dental appointment late in the afternoon, the other will head home early, too.

Others are making similar decisions.

The Metropolitan Transit Authority, Nashville's bus system, has seen an 11 percent increase in trips in the fiscal year that ended in June.

Sales of compact cars have climbed compared with last year, while truck and SUV sales are falling, according to automobile research company Edmunds.com. Sales of the Toyota Prius soared 70 percent last year to 181,221 vehicles, the company said.

All of the changes are leading to falling gasoline consumption in the United States. Consumption has dropped 3 percent from July of last year, according to the federal government's Energy Information Administration. That is a significant number, according to economists.

In fact, the decline runs counter to years of progressively increasing consumption. Economists attribute the slowdown to high gas prices and a weaker national economy.

The federal government's Energy Information Administration projects gas prices may fall a bit by the end of the year, but will average $3.89 per gallon nationally through next year. Many believe such high gas prices will continue to keep Americans cutting back at the pump.

Get a closer job

Rosalyn Davis didn't want to move closer to work. She wanted her job to come to her.

The 51-year-old Madison woman took a job working for her sister, in part so she could be closer to home. Davis went to work at her sister's restaurant, The Veggie Cafe in East Nashville. Previously, she had been commuting to a job at Vanderbilt University Medical Center.

"It takes me 10 minutes to get to work now, when it used to take me 30" minutes, she said.

Davis may not be coming out ahead financially, because her new job pays about $11 per hour versus the $14 per hour she made at Vanderbilt.

"I knew my pay would be lower,'' she said. "But I knew I wanted to do this."

Share grocery costs

Motivated by inflation, Tim Mitchell, a 42-year-old who is married with three children, is trying to trim his grocery bill and his neighbors' as well.

He and his wife, Sheila, have started making discount bread-shopping trips for themselves and neighbors in Old Hickory in recent months. It works like this: Whoever plans to be near the Colonial bread store on Gallatin Pike takes orders from three neighbors and makes a shopping trip on behalf of the group.

A recent trip found them stocking up on 10 loaves of bread at 80 cents per loaf, six bags of bagels and hamburger and hot dog rolls.

The bread comes from the local Colonial Bakery in Nashville, which is owned by Sara Lee Corp.

The store, a longtime Nashville discount option, reports a sales increase of about 25 percent to 30 percent so far this year compared with a year earlier.

Make the best of it

With low interest rates hurting many retirees who depend on income from investments, such as bank certificates of deposit, Jackie Andrews has devised a way to fight back.

Every month, she calls more than 30 local banks and asks each one for its best offer on a CD. She compiles the results in a chart. About a dozen friends call her to find out where the best rates are. About six or eight friends do so regularly.

"I've had fun with it,'' she said.

Andrews, 77, has the personal phone numbers of client representatives, bypassing the toll-free numbers of many banks and saving time. She prefers this method to going online at a computer and checking Web sites that aggregate CD offers from a variety of banks.

She also prefers dealing with banks that have a local presence.

"For myself, for my friends, they want to hand someone a check and receive the CD in their hand,'' she said. "They don't want to do it any other way."

What's the best deal she found recently? It was at Wachovia. The bank last week was offering 4 percent for a seven-month CD or 4.25 percent for a 12-month CD. That deal isn't better than the rate of inflation, but it's better than nothing, Andrews said.

CoolSprings Galleria plans 200,000 square-foot expansion

Retail sales are dismal. The housing market is struggling. And CoolSprings Galleria is expanding.

Defying a soft economy, the million-square-foot suburban mall in Cool Springs said Friday that it would build a 200,000-square-foot open-air shopping center on its parking lot, with the first phase to open in 2011.

The news did little to surprise local real estate agents or developers, who said retailers are becoming choosier about locations and favoring busy shopping hubs such as Cool Springs. Plus, open-air shopping centers with sidewalks and outdoor patio seating at restaurants have become more popular than enclosed malls, both for retailers and shoppers.

"This is something we have wanted to do for a very long time, mainly because major retailers come to us and want to be part of CoolSprings Galleria and we have not had space for them,'' said mall marketing director Dana Katterjohn.

The CoolSprings Galleria, which is owned by Chattanooga-based CBL & Associates Properties Inc., has a 99 percent occupancy rate, better than the company's average of 94 percent. That makes it nearly impossible to bring in new retailers, Katterjohn said.

She declined to name any tenants that are in discussions with mall officials, and said no deals had been signed.

Retail experts said CoolSprings Galleria would lose out on potential sales by not building.

Katterjohn said Nordstrom Inc. is among the retailers that had talked previously to CBL officials, "but space was an issue." Instead, Nordstrom announced earlier this year that it would open in the fall of 2010 at The Mall At Green Hills in Nashville.

"They're reacting to demand,'' said Jimmy Granbery, the chief executive officer of H.G. Hill Realty, which developed the Hill Center at Green Hills. "Somebody wants in out there. They're not going to build that many square feet and not have demand."

The news follows the completion of other open-air centers in the Nashville area that were hatched years ago — including the now full Hill Center at Green Hills — and the Streets of Indian Lake in Hendersonville, which opened this spring.

Open-air centers popular

Granbery said open-air centers, sometimes called lifestyle centers, are more popular with retail tenants because they tend to be cheaper. There aren't huge indoor areas to air condition and clean.

Granbery said that it typically takes about two years to develop a project of that size and that mall owners are giving the economy time to improve with as much as a three-year development window.

"I think they're saying, we're sort of banking on the fact the economy is a little better in three years," he said.

He didn't think the mall would have any trouble getting financing.

CBL & Associates is one of the nation's largest mall operators.

"If you're trying to finance a spec mall in Detroit, Michigan, or a 100-lot subdivision in the Panhandle (Florida), you might have trouble,'' Gran bery said. "But if I try to finance a Publix deal in Nashville, Tennessee, I'll have no trouble."

The first phase of the development, which will feature retailers and restaurants, is scheduled to open in 2011, possibly on the Mallory Lane side of the mall. The exact size and location of the first phase have not been determined, mall officials said. No parking will be lost because parking decks will be created.

The development, to be called The District at CoolSprings Galleria, will feature smaller anchors than Macy's and Dillard's, restaurants and walkways.

Economy is less a factor

Construction of commercial property has slowed nationwide because of the economy and a credit crunch that has made it difficult for developers to finance new projects.

Malls and other shopping centers in areas such as Cool Springs are a little less affected by a decline in sales in an economic downturn because residents have more discretionary income, said Peter Compton, a real estate economist with research firm Portfolio & Property Research Inc. in Boston, who tracks Nashville.

He doesn't consider the expansion plans at CoolSprings Galleria a response to the planned opening of Nordstrom in Green Hills, but expects the expanded offerings to appeal to shoppers who visit both malls.

Franklin resident John Liu likes the idea of more open-air shopping at CoolSprings Galleria, adding that he expects to spend more time in the mall area.

"For Cool Springs to remain viable, they really must expand, and they have the perfect opportunity right now,'' he said. "With the opening of the Nissan corporate headquarters, there will be an influx of people and businesses that can support the additional retail in Cool Springs."

Regis Corp. will close 160 salons in fiscal 2009
Tennessee retailers feel pinch as shoppers cut back