Tag Archives: sale

UT Report: TVA Sale Could Mean Multiple Buyers

KNOXVILLE, Tenn. (AP) — A new University of Tennessee report finds that if the federal government decides to go ahead with divesting the Tennessee Valley Authority, the public utility could be broken up among several private power generators in the region.
The study conducted by the school’s Howard H. Baker Jr. Center for Public Policy was released on Monday. It finds that it would be unlikely that the Federal Energy Regulatory Commission would approve the sale of the entire TVA to a single company.
President Barack Obama’s 2014 budget proposal calls for a strategic review of the TVA, the nation’s largest public utility with 9 million customers in seven states from Virginia to Mississippi.
The TVA was created in 1933 to control flooding and bring electricity to rural Appalachia.

Corker Doubts TVA Sale Idea Viable

The idea of selling the Tennessee Valley Authority is continuing to get bad reviews from Republicans in Tennessee’s Congressional delegation, reports the News Sentinel.
In the 2014 budget submitted to Congress, the Obama Administration said it “intends to undertake a strategic review of options for addressing TVA’s financial situation, including the possible divestiture of TVA, in part or as a whole.”
In a written statement, U.S. Sen. Bob Corker said Thursday that “While unfortunate but true, TVA as a going concern today is probably worth less than its debt and its rates have become increasingly less competitive, so if the goal is deficit reduction, I doubt this idea gains much traction.”
In the past, Corker has been critical of how TVA is run, focusing particular attention on the board nominees submitted by Republican and Democratic presidents.
In October, Corker said that “On most days in Washington, I fear the federal government is going to destroy TVA”, adding that “I’ve wondered if the governors wouldn’t care more” about the agency and provide better oversight and leadership.
…The idea of a TVA sale also drew fire on Thursday from U.S. Rep. John J. Duncan, Jr., of Knoxville.
“This proposal is part of a Presidential budget that has received very bad reviews and is not likely to go anywhere,” Duncan said in a statement. “It is also something that has been proposed in the past and been determined to be a very bad idea.”

White House Eyes Sale of TVA

President Obama may want to rid the federal government of TVA, reports the Chattanooga TFP.
The president’s fiscal 2014 budget request, released today, includes a section called “Reform TVA.” It describes in detail the Tennessee Valley Authority’s “impact to the federal deficit.”
“Reducing or eliminating the federal government’s role in programs such as TVA, which have achieved their original objectives and no longer require federal participation, can help put the nation on a sustainable fiscal path,” reads the passage.
Mentioning TVA’s debt constraints, the administration appears poised to undertake a thorough review of the federally owned utility’s finances.
That includes “the possible divestiture of TVA, in part or as a whole,” according to the budget.

Note: Sen. Lamar Alexander rushed out a news release on the subject. It’s below.

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Gore Defends Sale of TV Network to Al-Jazeera

By Erik Schelzig, Associated Press
NASHVILLE, Tenn. — Al Gore, who takes aim in his new book at the corporate media for “suffocating the free flow of ideas,” on Tuesday defended the sale of his television channel to Al-Jazeera.
The Qatar government-owned news network earlier this month struck a deal to buy Current TV, the cable news network co-founded by the former vice president. The price tag was $500 million.
Gore told The Associated Press that he had no reservations about selling the channel to Al-Jazeera, which has won U.S. journalism prizes but has been criticized by some for an anti-American bias. The new owner plans to gradually transform Current into a network called Al-Jazeera America.
“They’re commercial-free, they’re hard-hitting,” he said in a phone interview. “They’re very respected and capable, and their climate coverage has been outstanding, in-depth, extensive, far more so than any network currently on the air in the U.S.”

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State Lost $475,000 in Sale of Home to Steve Jobs’ Shell Company

The State of Tennessee took a bath when it sold the former University of Tennessee Health Science Center chancellor’s home to a shell company set up by Apple, Inc. founder and CEO Steve Jobs, losing $475,000 in the sale.
Further from Marc Perrusquia:
The loss had little to do with Jobs, however, and more to do with a decision to liquidate chancellor housing across the UT system – just as the biggest recession in 70 years was dawning.
“No corners were cut. No special deals were done,” said Chloe Shafer, real estate compliance director for the Tennessee Department of General Services, which sold the home at 36 Morningside Place on behalf of UT.
“I don’t know why they picked the worst time in the real estate market.”
More precisely, the decision came in 2007, shortly before the housing bubble burst. The UT Board of Trustees decided that providing homes to campus chancellors had become too expensive.
“There’s a better use for those dollars. That was the general feeling,” said Charles M. “Butch” Peccolo, UT chief financial officer.
In the process of trying to sell the chancellor’s home in Memphis, the market crashed. Yet the state stuck with the decision to liquidate the home even as bids failed to materialize and a series of appraisals showed its value plummeting, according to records maintained by the Department of General Services in Nashville.
The state bought the home for $1,325,000 in 2005 when Alice Owen, wife of then-chancellor Bill Owen, complained about a previous house that served as the chancellor’s residence.
After the Owens moved into 36 Morningside, they used more than $28,000 in tax dollars on improvements including $4,500 for an interior decorator consultation, $4,500 for a plasma TV, and $11,854 in shelving, lighting and rewiring. Much of the spending didn’t follow UT’s protocols, and Owen subsequently reimbursed the school.
An appraisal in October 2007 valued the home at $1.3 million. The home’s estimated value fell to $1.1 million in a subsequent appraisal in October 2008.
Over time, offers came in for hundreds of thousands less than the state wanted. Deals fell apart. And the market continued to plummet.
Then in early 2009 the state was contacted by George Riley, a Los Angeles attorney who represents Apple. In a span of eight days that March, Riley signed a sale contract with the state and helped set up a shell company, LCHG, LLC, that would protect Jobs’ privacy. On March 26, 2009, the firm closed the deal, buying the home for $850,000 “as is.”
“We always knew it was a law firm and they were buying the property for someone else. But we didn’t know who they were buying it for,” Shafer said.
Peccolo, the UT financial officer, said the decision to liquidate chancellors’ residences affected only the Memphis and Knoxville campuses. The home at UT-Martin was on campus and was converted to an alumni house, and the one at UT-Chattanooga is owned by a foundation, he said.
The state still is trying to sell the UT president’s home in Knoxville, an 11,000-square-foot home with a tennis court on 3.4 acres. Appraisals on the property have fallen from as much as $3.75 million in 2009 to $2.15 million this year.

UT President’s Home Unsold, Even at $2.5M Bargain Price

The Knoxville house that five former University of Tennessee presidents called home has sat empty for more than two years since being put up for sale in March, 2010, reports the News Sentinel.
The listing price of the 11,400-square-foot house was cut nearly in half a year after the property was put on the market — from the original $5 million asking price to the current $2.9 million price tag.
The home is on the list for discussion during the University of Tennessee’s Board of Trustees Finance and Administration Committee meeting at 3:30 p.m. June 20 in the Hollingsworth Auditorium on the Agricultural campus. The full board’s meeting will take place the following afternoon at 1:30 p.m.
…The university spends $25,000 annually to maintain the home and its three-acre waterfront property.
Stafford said the university will continue to maintain the house and “any further determinations will depend on discussion by the committee.”
Real estate agent Jim Ford, with Coldwell Banker Wallace & Wallace, said he has shown the house to 24 interested “lookers” — most of whom were local to Knoxville — since the house went on the market. He has had two offers in the past two or three months, neither of which the university accepted.

Record Sale of State Bonds Scheduled ($584 million)

News release from state comptroller’s office:
With its high credit ratings just reaffirmed, the State of Tennessee plans to sell an estimated $584 million worth of bonds next week – the largest sale in the state’s history.
Some of the bond proceeds will be used to pay for new capital projects and infrastructure, including economic development grants for Volkswagen in Chattanooga, Wacker Chemie in Bradley County, Hemlock Semiconductor in Clarksville and Electrolux in Memphis. Those projects are expected to create 4,650 new permanent jobs, plus thousands more construction jobs and jobs in related industries.
The proceeds will also finance improvements to various state-owned buildings and properties across Tennessee, including a new research building for the University of Tennessee-Knoxville campus, a new library for the University of Tennessee-Chattanooga campus, a prison in Bledsoe County, renovations to the Supreme Court building and other state office buildings in Nashville and a new driver license center in Memphis.
Bonds will also be issued to refund (refinance) outstanding bonds to take advantage of low interest rates. Over time, the refunded bonds could save the state up to $10 million in interest costs.
The sale includes both taxable and tax-exempt bonds. Tennessee buyers must pay federal taxes on the taxable bonds, but they are not required to pay the state’s Hall Income Tax on interest earnings.
“This sale represents an excellent opportunity for people to buy Tennessee bonds,” Comptroller Justin P. Wilson said. “The major rating agencies have reaffirmed, once again, that our state is financially well-managed and therefore has strong credit-worthiness. I’m pleased that these bonds will be used to pay for a variety of needs our citizens have, including economic development projects that will create badly-needed jobs. Also, this sale represents an opportunity for us to save taxpayer money by capitalizing on low interest rates.”
Earlier this week, two of the major New York bond rating agencies – Fitch and Moody’s Investors Services – reaffirmed Tennessee’s AAA rating, which is the highest rating available. The third major agency, Standard and Poor’s, reaffirmed Tennessee’s AA+ rating, the second highest rating available. Among other factors used in determining the ratings, the agencies praised Tennessee for its sound financial management practices, low debt burden, well-funded pension plan and adequate reserves. The rating agencies expressed some concerns about a possible reduction in federal funding and the overall health of the economy – factors which are largely beyond the state’s control.
The bond sale will be held from Oct. 11-13. More information about the sale is available at www.buyTNbonds.com. The state is using an aggressive strategy to market the bonds. Senior staff members taped a presentation to provide investors with an overview of the bond offering. The web site provides information on the brokerage firms participating in the sale, as well as instructions for first-time investors on how to purchase bonds, a link to the preliminary official statement and the taped investor presentation.
The previous record for a state bond sale was $389.635 million in 2009.

Former UT President’s House Now More Affordable ($2.9M instead of $5M)

KNOXVILLE, Tenn. (AP) — University of Tennessee officials hope slashing the price of an historic mansion that was once home to several UT presidents will make it more palatable for purchase.
The price of the 11,400-square-foot Georgian-style mansion was cut from $5 million to $2.9 million in March, a year after it first went on the market in a cost-cutting move.
UT is spending $25,000 per year to maintain it and paying newly-hired president Joe DiPietro a $20,000 allowance in lieu of living there.
Real estate agent Jim Ford told The Knoxville News Sentinel he hopes the mansion is “going to sell to somebody wanting to buy a piece of history.”
Any bids on the property have to be approved by the UT Board of Trustees and the State Building Commission.