As to our ability to operate a department sotre, that would be satisfactory to your community, we refer you to the local Chamber of Commerce, the Bank of Maryville, or any of our thousands of satisfied customers here in Blount County, where we have operated for the past thirty years. Should you look with favor on our proposition, we will be glad to hear from you. Very truly yours, 4. Sam Shainberg's Dry Goods Store Mr. C. M. WINFREY, Oak Ridge, Tennessee. D. W. PROFFITT. NOVEMBER 28, 1949. DEAR MR. WINFREY: Pursuant to our conversation with you this past Friday, we herewith make our proposal for lease to operate department store at Oak Ridge in the premises now occupied by Taylor Department Store. General terms of our proposal are as follows: 1. Term of Lease: Five years, with option for renewal of five additional years. 2. Rental: Four percent of sales. Guarantee $32,000 per annum. 3. Renegotiate priviliges to be guaranteed us in the event working population decreases twenty-five percent from present level of employment, and in event subsequent plans in Oak Ridge permit additional department stores to locate in Oak Ridge. We believe that we could successfully operate this store and render the kind of service that the citizens of Oak Ridge would demand and require from a department store. We have had years of experience operating such stores, and at the present time are operating several units of a similar caliber. We would, of course, be very happy to have you come down to Memphis and inspect some of these stores. As far as Oak Ridge is concerned, should we be successful in negotiating the lease with you, we would plan the following program for the store: 1. Expenditure of approximately $100,000 for fixtures, which we believe would allow us to completely air condition the store. 2. Carry an inventory of approximately $250,000. 3. Establish a pricing system that would be competitive with Knoxville and consistent with good merchandising principles, which is something the present operator is not doing. 4. Generally operate this store in the same manner as we do where competition is intense, advertising very liberally and furnishing customer services such as delivery, credit facilities and other necessary items. We understand that you are receiving proposals for the leasing of this store up to December 15. We would like for you to advise us how soon after December 15 we can expect word from you as to whether or not you are interested in our proposal. Our reason for this is that we have several other propositions under consideration, and, of course, if we will be successful in getting this unit, it will somewhat influence our plans regarding the others. Yours very truly, SAM SHAINBERG DRY GOODS COMPANY, Mr. C. M. WINFREY, 5. Wender DECEMBER 14, 1949. Concession Department, Roane-Anderson Company, Oak Ridge, Tennessee. DEAR MR. WINFREY: Confirming our conversation of the 14th, we wish to place a bid for the store building now occupied by Taylor's Oak Ridge Corporation, in Jackson Square. We will pay as rental for said building, heat, and warehousing, six percent of gross cash sales, and cash collected on accounts, and on all credit sales and audit to be made of our books at the expiration of our lease and rent to be paid on all accounts considered good. We will guarantee a minimum rental of $40,000 per year. The lease will run for a period of five years, with an option of renewing same for five years additional, with a clause stating that if the population is substantially reduced, or the AEC should substantially reduce the employment in the plants, to such an extent that it would be impossible to operate under the minimum rental we are paying that our lease could be renegotiated. Also in case the Master Plan is carried out and the principal trading area is moved, and Jackson Square becomes a minor trading area, that our lease could be renegotiated. If our bid is accepted, we will install, at our own expense, an adequate air conditioning cooling system, to be installed and ready for use in year of 1950. Also we will make every effort to purchase the fixtures from Taylor's that are usable, and add additional factory built fixtures to add to the appearance of the store, but if unsuccessful in purchasing these Taylor's fixtures we will purchase and install new, up to date, factory built fixtures. We feel that the volume of this store, by proper management and adequate stocks, can be greatly increased. We plan to utilize all the floor space of the building for displaying and selling merchandise, and in order to do this, we would, of necessity, need additional warehouse facilities, which we would expect to be furnished under this lease. Most of the departments of Taylor's are being operated under sublease; some of these departments are not selling the volume of merchandise that should be sold from the department. This is due in some respects to lack of capital, management, and business experience. If our bid is accepted, practically all the departments will be operated by us. It is our plan to carry complete lines of merchandise, and to operate generally along the same lines as big city department stores, offering for sale merchandise of quality covering all price ranges. We would, of course, expect the interior of the building to be painted before our tenancy begins. We plan to operate under the name of Wender's Department Store, a partnership composed of J. J. Wender, Nell Perkins Wender, Mrs. Joe E. Rogers, J. J. Wender, Jr., and C. M. Wender, and will operate under the personal management of J. J. Wender. Enclosed you will find financial statements of the above-named parties. We will furnish adequate capital to make this a successful operation. Thanking you in advance for all past courtesies, we remain Very truly yours, ROANE-ANDERSON COMPANY, WENDER'S DEPARTMENT STORE. 6. Mercantile DECEMBER 13, 1949. Commercial Realty Building, P. O. Box 456, Oak Ridge, Tennessee. (Attention: Mr. C. M. Winfrey.) DEAR MR. WINFREY: In accordance with our previous conversation, we understand that you are asking for bids for the operation of a department store in the premises now occupied by Taylor's in Oak Ridge, Tennessee. We are enclosing herewith copy of our latest financial report. We would like to suggest that if a contract were awarded to us for operating a department store in Oak Ridge we would operate this store under the same policy that we operate any other of our stores. We would like to call your attention to the basic policies of our company. These are enumerated in some detail in the attached financial statement. Our company operates quite differently from the average or typical department store and in order that you may be fully acquainted with them, we are repeating here the comments which we made in our annual statement, copy of which is attached. First, we believe in pricing our goods to meet the competition of the stores in our localities which sell at the lowest prices for comparable values. It is our experience that generally speaking, and with some exceptions, the chain stores are the businesses which do sell at the lowest prices in our communities. The result of following this low-price policy is that the mark-up percentage for our company (mark-up percentage is meant the profit spread or difference between cost and the retail price put on goods for sale) is definitely lower than that of department stores in general as evidenced by mark-up figures published by such sources as Harvard University Graduate School of Business Administration and National Retail Dry Goods Association (NRDGA). Selling goods at low prices cannot be continued profitably unless goods are bought advantageously as is done by successful chain stores. This requires centralized buying and to a considerable extent centralized merchandising and planning. Our company has been perfecting for some years now the organization necessary to operate in this manner. Finally, to compete in prices with chain stores, and still operate profitably, operating expenses must be kept lower than those of the average department store (again referring to published figures from generally recognized sources). We would be interested in operating a store in Oak Ridge on the following basis: 1. Rent: 2% of sales. 2. Lease: One five-year lease and five-year options. 3. Fixtures: On a long-term lease we would be willing to install our own fixtures; in connection with the installation of any fixtures we would reserve the right to remove such fixtures at the end of the lease. 4. Taxes: We understand there are no real-estate taxes. 5. We understand there is no insurance to be carried by us on the building. 6. We understand there are no real-estate assessments against the building. 7. We understand that the owner (Government) would pay for any building alterations and any further building repairs would be made by the owner. 8. We understand the owner will furnish all utilities, including heat, light, water, and so forth. 9. We would want to reserve the right to sublease the whole or any part of the store. In this connection we might point out that it is the policy of our company to operate practically all of our own departments. The only major department which we sublease is the milinery department; in some of our stores we do have leased photo studies, jewelry repair, shoe repair, etc. 10. Fire clause if the building were damaged by fire we understand the owner will repair or rebuild. Furthermore, if more than fifty percent of the building were destroyed, we wish the privilege of cancelling the balance of the lease. If you are interested in the above tentative proposal, we would be glad to sit down with you and discuss it in some detail. Very truly yours, EXHIBIT 4 F. K. BRADLEY, Vice President. (Referred to on p. 43) JANUARY 23, 1950. To: Walter J. Williams, Director of Production, Washington. POLICY AND PROCEDURE FOR SELECTION OF AWARD OF COMMERCIAL LEASES AT CS:RF Since approval was obtained from the Commission in Washington on the Oak Ridge Office's commercial leasing program at Oak Ridge, the following policy and procedure has been used and is presently being used as a guide by the Agent and the Commission at Oak Ridge. GENERAL POLICY It will be the policy of the Oak Ridge Office to require sufficient advertising to secure the maximum practical coverage and the best possible proposal. The advertising, although designed to arouse interest on the part of persons or organizations who might be induced to submit proposals, usually will be informal in character. Formal invitations, detailed specifications, and formal bid openings are not considered necessary or practicable where building sites, buildings, or space in buildings are to be leased. Unlike the letting of construction contracts, we will have no predetermined specifications as to exactly what must be done by applicants. The invitation will contain a brief description of the premises available and the general features of the lease form which will be acceptable to the landlord. Within this general framework, different applicants may desire to submit a wide range of proposals, adapted to the kind of businss each is engaged in, and adapted to his business practices and policies. The investments to be made in buildings or improvements may vary widely between different applicants, and there is good reason for not restricting them within any narrow limits by detailed specifications. Similarly, the size of the stock of goods to be carried, the number of employees to be maintained, and other features of the business to be conducted are not susceptible of detailed specifications. In order to be eligible, applicants may be required to show satisfactory qualifications with respect to financial ability and previous experience in the business. From those so qualifying, selections is made on the basis of the highest financial return to the government for the type of operation best suited to meet an apparent community demand. In determining the highest financial proposal involving percentage leases, consideration will be given not only to the percentage of gross offered but also to the anticipated gross volume of business, in order to estimate the rent return in dollars. As long as there is a scarcity of available commercial buildings, it may be necessary, when leasing government-owned buildings, to consider the additional factor of community need. For example, if it were determined that for a particular kind of merchandise the community is adequately serviced by stores supplying high-priced lines, and there is a community need for a store or stores handling low-priced lines of that merchandise, we would consider only those applicants who would furnish the low-priced lines. Similarly, if there is a greater need for plumbers than electricians we would reject offers by electricians for the space involved. Where this factor of community need is considered important it will normally be taken care of by limiting the offering to the particular type of business needed. However, any person wishing to submit a proposal beyond these limits certainly has the right to do so, although at the outset the Agent, consistent with normal real estate practice, would in all probability not take this bid into final consideration unless there were extenuating circumstances. The factor of community need will not be as significant where lessees are constructing their own building, although the choice of sites available will be limited to some extent by the requirement of the Master Plan. 1. Solicitation of Proposals-Authorization to Lease.-The Agent is authorized to lease government-owned land and buildings within the unrestricted area of Oak Ridge for commercial and other uses (except housing and manufacturing) subject to the approval of the Commission. The authority to arrange for leases of specific properties, for the occupancy by lessees of government-owned buildings and/or government land, is given when the specific properties, either improved or unimproved, have been assigned to the administration of the Agent by the Commission. Requests to enter into leases for premises not assigned to the Agent is made to the Commission when profitable usage is indicated. a. The Agent clears with the Commission informally any proposed usage of government-owned premises which might conflict with the Master Plan or contemplated zoning restrictions. b. In specific locations where a single type usage is desirable (service station, department stores, garages, hotels, theatres, etc). (The Agent advertises for and solicits proposals for this type of usage only.) c. Where the property to be leased is suitable for varied types of usage, the Agent does not place restrictions upon usage in advertising for or solicitation of prospective tenants. The Agency may, however, direct its advertising to particular types of tenancy by using, for example, the phrase "suitable for ladies" wear, men's wear or specialty shops, etc." in the advertisement. d. A community need for a specific type of service or merchandising may also be sufficiently urgent to limit the solicitation and advertising of the Agent to that category. e. At the present time the Oak Ridge Office will not authorize the Agent to execute any lease without the prior approval of the Washington Staff which falls within one or more of the following categories: (1) the lease is to be awarded without advertising for competitive proposals; (2) the lease is to be awarded other than to the responsible applicant making the highest financial return to the government for the type of operation best suited to meet an apparent community demand; (3) the lease poses any significant policy questions; (4) the lease contains any terms which vary substantially from the approved lease form; and (5) a lease with federal, state, or local public agencies at nominal rental or with a nonprofit organization at reduced rental. 2. Advertising Procedure.—The advertising media to be used is decided upon and the copy prepared by the Agent, the following general procedure being used: a. Newspaper advertising: Space in building, and land available for the construction of buildings, or other usage, is always advertised in one or more newspapers and notices placed in the Oak Ridge Post Office, except in unusual cases. The extent of such newspaper advertising is governed by the size and importance of the location to be leased. By way of illustration, a strategically located retail space suitable for a department store operation is advertised in at least one of the leading Knoxville newspapers. Except in unusual cases, recognized trade journals will also be used as a medium for advertising the premises to be leased. If the space is in a secondary retail category location and relatively small in size, advertising is limited to newspapers published locally or in nearby communities. In every case, the amount of newspaper advertising is determined by weighing its advantages against the attendant expense on a sound businesslike basis. The advertisement is designed to give sufficient information regarding the premises to enable prospective applicants to determine if they desire to make further investigation of the available property. b. Other solicitation methods: Whenever newspaper or trade journal advertising is used, this is supplemented by verbal or written solicitation of proposals from all parties known to be interested. It should be kept in mind that in accordance with customary commercial leasing practice, responsible tenants are usually obtained through direct contact and solicitation rather than through public advertising. c. A complete confidential record of all solicitation of or inquiries from interested parties is maintained by the Agent in the form of memoranda to the files, copies of correspondence and résumés of telephone conversations, and a summary is transferred to the Commission in condensed form and/or by attachments to the final letter of recommendation from the Agent. d. All previously interested parties, as well as those responding to the advertisements, are furnished all requested information available. This may be in verbal or written form as indicated by request for same. If more than casual interest is shown by the inquirer, special emphasis is placed by the Agent on the importance of a personal inspection of the property advertised and the Oak Ridge community in general, since the specific information usually requested is so broad in character and so diversified that it does not lend itself to a general specification sheet but must be based on the individual inquiry. 3. Applications from Interested Parties.-Applications are issued in triplicate to interested parties by the Agent together with an instruction sheet indicating the method of properly executing the application and the type of application required by the Agent. a. Upon receipt of an applicant from an interested party, it is opened immediately, time stamped and processed by the Agent. The Agent then checks references, analyzes the proposal, and obtains all missing information or clarifies ambiguous statements in the application prior to the deadline established for receiving applications (in the event a deadline is established). Particular attention is given to clarification of applications, in view of the fact that the method of leasing government premises in Oak Ridge and local conditions differ substantially from those normally encountered in other communities. b. Applications are kept in a highly confidential separate file for the particular location involved and are not available to anyone other than those responsible for the work involved including the negotiators or department head in charge of the particular negotiation. 4. Selection of Applicant.-As a basis for determining the most acceptable proposal received, the Agent employs the following procedure and policy: a. All proposals are carefully analyzed in the light of the information contained therein. This includes information gathered from other sources, i. e., references, confidential bank information Dun and Bradstreet reports (special, if necessary), Chamber of Commerce reports, inspection of other operations conducted by the applicant, etc. This information is then coordinated and reduced to a comparison sheet for study by the negotiator or negotiators involved, including the rental manager and the division manager at a division staff meeting. In the event complete accord is not reached in this meeting, the entire analysis is reviewed by the Agent's Project Office prior to a final decision. The Agent recommends that the award be made to the responsible applicant whose proposal, in their expert opinion, represents the highest financial return to the government for the type of operation best suited to meet an apparent community demand. Other factors include, primarily, an evaluation of each applicant's experience, reputation, financial stability or resources, and ability to perform the tenant's obligations under the proposed lease. Consideration may also be given to an evaluation of his probable efficiency of operations and attainment of volume of sales and quality of services, amount of investment in the premises and business, extent of risk assumed, character of business, and such other factors as the public interest and fair and equitable dealing may require. b. The recommendation of the Agent sets forth the reasoning for the selection of the most qualified applicant offering the best rental return, and is forwarded to the Commission for approval. |