I certainly-appreciated the opportunity to meet with you and Mr. Kim McDowell today, and I am glad you now understand that we have been working to accommodate TVA's March 14, 1991 letter, while trying to protect the interests of our lender and the TVA. to again emphasize that our strongest preference is to keep TVA, I want either the Purchasing Division or others, in Occupying, if not the whole building, at least the 161,000 feet the building, currently under lease. extension immediately. I am prepared to execute such a lease То However, as we discussed, I have an obligation to the lender and to my equity partners to address the prospect that TVA will vacate the CST II even though the lease would remain in effect. that end, I have been working with PEP to provide tenants for the space as well as upgrading the building. I am looking forward architectural plans by the World Trade Center and Partners for to showing you the preliminary Economic Progress to upgrade the space, and I sincerely hope this will influence TVA's decision to remain in the building. The newspapers and people within TVA have pointedly made me aware of TVA's plans to vacate CST II for Warehouse Row on many occasions. Knowing the great amount of vacant space in various buildings around town and TVA's consolidation of offices into the office complex, I was working to avoid having a vacant building. As I explained, I have entered into a cashflow lease with PEP/WTC, both non-profit organizations who, in effect, have no real current source of funding, nor a present realistic prospect of paying rent. Hopefully their stature in the community will allow me to attract other otherwise reach. tenants to the building who I would not Mr. David Gentry Page Two As bad as it sounds, there are tenants who will not lease space in a building with a government tenant. PEP/WTC as private organizations can attract those tenants as well as give me the opportunity to make first contact with visiting businesses. from As you know our experience with the Summit office Building, while there was money from TVA under the lease to pay debt service, the loan was called because there were no tenants in the building. I cannot afford to have another vacant building where the only recourse would be a Chapter 11 filing. I believe this opportunity could be the best of all.worlds for TVA, PEP/WTC and me. If TVA releases approximately 60,000 square feet of space without reducing the total payments to the lender, TVA can remain in the 60,000 square feet of space. If TVA moves out I will sublease the space for $6.90 per square foot as agreed in the March 14, 1991 letter. Again, under the lease, a sublease does not reduce payments to the Lender. Nevertheless, I want to do everything possible to persuade TVA to exercise its lease options after August, 1996. I will present TVA a draft lease amendment to finalize our agreement of March 14, 1991, but at the same time, TVA has no real deadline to Move out of the space; and, furthermore, if on expiration of the current lease, TVA decides to retain space in the CST an excess of the 101,000 square feet, TVA will be able to Lease space from PEP/WTC. In summary, I am using my money, backed by parking garage revenues to upgrade the space allowing TVA to remain or 'not remain in the 60,000 square feet of space. I am looking forward to our meeting on Wednesday, September 30 at 2:00 p.m. to review the preliminary architectural drawings. Sincerely, 26.12 Franklin L. Haney |