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File No. 70-7572
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 4 (POST-EFFECTIVE) TO
FORM U-1 APPLICATION
UNDER
THE PUBLIC UTILITY HOLDING COMPANY ACT OF 1935
_____________________________________________________
CENTRAL POWER AND LIGHT COMPANY
539 N. Carancahua Street
Corpus Christi, Texas 78401-2431
(Name of company filing this statement and
address of principal executive office)
_____________________________________________________
CENTRAL AND SOUTH WEST CORPORATION
(Name of top registered holding company parent)
_____________________________________________________
Shirley Briones
Treasurer
Central Power and Light Company
539 N. Carancahua Street
Corpus Christi, Texas 78401-2431
Stephen J. McDonnell
Treasurer
Central and South West Corporation
1616 Woodall Rodgers Freeway
Dallas, Texas 75202
Joris M. Hogan
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005
(Names and addresses of agents for service)
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Central Power and Light Company, a Texas corporation ("CPL") and an
electric utility subsidiary of Central and South West Corporation ("CSW"), a
registered holding company under the Public Utility Holding Company Act of
1935, as amended (the "Act"), hereby requests authority to lease to
nonaffiliated third parties excess space in the headquarters office building
owned by CPL in Corpus Christi, Texas. Such request is being made by the
filing of this Amendment No. 4 (Post-Effective) to Form U-1 Application, File
No. 70-7572, to amend and restate said Application as follows:
Item 1. Description of Proposed Transaction.
By order dated April 13, 1989 (HCAR No. 24863) (the "1989 Order"),
the Securities and Exchange Commission (the "Commission") authorized CPL to
lease to nonaffiliated third parties (i) approximately 23,400 square feet of
excess space on the first two floors (built for commercial and retail uses) of
its corporate headquarters building, owned by CPL and located at 539 N.
Carancahua Street, Corpus Christi, Texas (the "Headquarters Building"), (ii)
approximately 17,800 square feet of excess space on the third and fourth
floors, in the basement and on the roof of the Headquarters Building and (iii)
space in one of its former office buildings pending eventual sale of the
building. Since the issuance of the 1989 Order, there have been certain
developments with respect to the current and proposed leases of excess space
to nonaffiliated third parties. The leases to Tower II Ltd. of space on the
first two floors have been terminated by mutual consent of Tower II Ltd. and
CPL, and minor portions of those floors have been leased directly by CPL to
retail and commercial tenants (the "Retail Leases"). A new lease has been
entered into with Gulf Coast Federal Credit Union, which has been leasing
space on the fourth floor pursuant to the 1989 Order (the "New Credit Union
Lease"). A new lease has been entered into with Enron Oil & Gas Company
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("Enron"), subject to receipt of the authorization requested hereby (the
"Enron Lease"), and a new lease (the "Western Geophysical Lease") is proposed
to be entered into with Western Geophysical Company, a division of Western
Atlas International ("Western Geophysical"). CPL hereby seeks authorization
for the Retail Leases, the New Credit Union Lease, the Enron Lease and the
Western Geophysical Lease.
The Retail Leases consist of the following leases: (a) A lease to
James G. Munoz, doing business under the name "James'Z", of 504 square feet on
the second floor, for a base rent of $504 per month and for a term commencing
on April 11, 1994 and terminating on April 10, 1997. (b) A lease to Donna
Gray, doing business under the name "The Jewelry Box", of 403 square feet on
the second floor, for a base rent of $375 per month and for a term commencing
on April 1, 1993 and terminating on November 30, 1996. The lease provides
that The Jewelry Box shall be the only jewelry store in the building. (c) A
lease to NightRider Overnite Copy Service, a division of Alco Standard Corp.,
of 1,429 square feet on the second floor, for a base rent of $1,639.77 per
month and for a term commencing on April 1, 1993 and terminating on September
30, 1997 (pursuant to an option to extend the term of the lease that has been
exercised by the tenant). The lease also granted to the tenant an option and
a right of first refusal to lease an additional 1,000 square feet of space,
which tenant has elected not to exercise. At the time of exercise of the
option to extend the term of the lease, CPL paid to the tenant the lump sum
amount of $7,145 and paid to Chase Consulting Group a real estate brokerage
commission in the amount of $1,514.18. (d) A lease to Pedus Building
Services, Inc. of 233 square feet on the second floor, for a base rent of $262
per month and for a term commencing on October 15, 1993 and terminating on
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October 14, 1998. The lease provides that it may be cancelled by CPL upon 60
days' prior notice and will be cancelled without penalty upon termination by
CPL of its contract with the tenant for the tenant to provide janitorial
services for the Headquarters Building. (e) A lease to Village Travel Inc.,
doing business under the name "Sanborns Travel Services", of 725 square feet
on the second floor, for a base rent of $725 per month and for a term
commencing on April 1, 1993 and terminating on August 31, 1996. The base
rents provided for in the Retail Leases are subject to increase in accordance
with the escalation of certain costs.
The New Credit Union Lease is of 3,303 square feet on the fourth
floor, for rent of $3,135 per month and for an initial lease term commencing
on May 1, 1993 and terminating on April 30, 1996. The lease grants to the
tenant the option to extend the term of the lease for up to four additional
terms of three years each. The rent payable during each of such terms would
be 90% of the then fair market rental value for like space as determined by an
independent real estate brokerage firm.
The Western Geophysical Lease would cover up to 6,000 square feet
on the fourth floor, for rent of up to $6,000 per month plus increases
reflecting increases in the Consumer Price Index for the Houston, Texas area.
The term of the lease would be five years, with two options to renew for three
years each at the then rental rate. The lease would also provide for
improvements to the space, either in the form of a tenant finish allowance or,
more likely, a landlord buildout on mutually agreeable terms. CPL would pay a
real estate brokerage commission of up to $14,400 to Berney Seal Co. in
connection with entry into the lease.
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The Enron Lease covers 34,954 square feet of space on the eighth,
tenth and eleventh floors of the Headquarters Building. CPL has undertaken to
use reasonable efforts to substitute a like amount of space on the ninth floor
for the 2,406 square feet of space on the eleventh floor that is initially to
be leased to Enron (the "Swing Space"). Such space to be leased on the
eighth, ninth, tenth and eleventh floors (including the Swing Space) is
referred to as the "Subject Space". The Enron Lease consists of a Lease
Agreement, dated September 16, 1994, with Enron, as supplemented by a letter,
dated September 22, 1994, from CPL to Enron. The obligations of CPL under the
Enron Lease are subject to and conditioned upon receipt by CPL of all required
governmental and regulatory approvals, including the authorization of the
Commission requested hereby. The term of the Enron Lease is for five years,
commencing on November 1, 1994 and ending on October 31, 1999, unless certain
improvements to the Subject Space have not been completed or all required
governmental and regulatory approvals have not been received by November 1,
1994. In the case of such a delay, the term of the Enron Lease will commence
when such improvements have been completed or such approvals have been
obtained and will end five years thereafter.
The rental payments due under the Enron Lease are $30,584.75 per
month, equivalent to an annual rental rate of $10.50 per square foot of "net
rentable area" as defined in the Enron Lease. The rental payments are subject
to increase in accordance with increases in a specified Consumer Price Index.
The Enron Lease also provides for a grant by CPL to Enron of a "tenant finish
allowance" of $325,072.20 or $9.30 per square foot of net rentable area for
the purpose of constructing improvements to the Subject Space. This allowance
is payable as work on improvements to the Subject Space is performed and, to
the extent not expended on improvements, shall be credited to rent due under
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the Enron Lease. Under the Enron Lease, CPL is to pay a brokerage fee to
Enron Property Company, an affiliate of Enron, of $73,403.40 or 4% of the
gross rental due over the term of the Enron Lease. Such fee is payable within
ten days after the date the Enron Lease becomes effective. The Enron Lease
shall become effective on the date on which all necessary governmental and
regulatory approvals, including the authority requested hereby, have been
received. CPL believes that the rental payments, the tenant finish allowance
and the brokerage fee provided for in the Enron Lease, taken together, will
result in net rental payments that are at or near market rates for space
comparable to the Subject Space.
CPL has also agreed to give Enron a right of first refusal to lease
any additional space on the ninth floor or eleventh floor of the Headquarters
Building that might become available for lease during the term of the Enron
Lease. Such provisions as to additional space are in addition to and
independent of the provisions governing the Swing Space. Any lease of such
additional space would be for the remaining unexpired term of the Enron Lease,
at an annual rental rate per square foot equal to the rate to be paid under
the Enron Lease. The lease would also provide for a tenant finish allowance
per square foot equal to the allowance to be paid under the Enron Lease, but
proportionately reduced to reflect the portion of the term of the Enron Lease
that will have then expired. In all other respects, the lease of such
additional space would be on the same terms and conditions as are contained in
the Enron Lease. The Enron Lease contains other terms relating to the Subject
Space, such as the provision of building and utility services, parking spaces
and a meeting room by CPL and the maintenance of certain insurance coverage by
Enron, that CPL believes to be customary for commercial leases of this nature.
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In addition to the foregoing arrangements under the Enron Lease,
CPL and Enron are negotiating the terms of a supplement to the Enron Lease
covering the lease of approximately 3,100 square feet of space on the fourth
floor, and approximately 1,000 square feet on the first or second floor, to
Enron. The terms would be similar to those set forth in the Enron Lease,
except that the term of such lease of additional space might be less, possibly
for as little as twelve months, and there might be a reduced or no tenant
finish allowance for such space.
Set forth below is information relating to the present and proposed
occupancy of the Headquarters Building.
CURRENT OCCUPANCY
Number of Square Percentage
Occupant Feet Occupied of Total
- -------- ---------------- ----------
CPL 182,989 68.9%
Credit Union and
Retail Lease Tenants 6,597 2.5
Vacant 76,000 28.6
------- -----
265,586 100.0%
OCCUPANCY WITH ENRON
OCCUPYING EIGHTH, TENTH
AND A PORTION OF THE
ELEVENTH FLOOR
Number of Square Percentage
Occupant Feet Occupied of Total
- -------- ---------------- ----------
CPL 182,989 68.9%
Enron 34,954 13.2
Credit Union and
Retail Lease Tenants 6,597 2.5
Vacant 41,046 15.5
------- -----
265,586 100.0%
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OCCUPANCY WITH ENRON
OCCUPYING EIGHTH, NINTH
AND TENTH FLOORS AND
VACATING ITS PORTION
OF ELEVENTH FLOOR
Number of Square Percentage
Occupant Feet Occupied of Total
- -------- ---------------- ----------
CPL 170,772 64.3%
Enron 48,822 18.4
Credit Union and
Retail Lease Tenants 6,597 2.5
Vacant 39,395 14.8
------- -----
265,586 100.0%
OCCUPANCY WITH ENRON
OCCUPYING EIGHTH, NINTH AND
TENTH FLOORS, APPROXIMATELY 3,100
SQUARE FEET ON THE FOURTH FLOOR AND
APPROXIMATELY 1,000 SQUARE FEET ON
THE FIRST OR SECOND FLOOR,
WESTERN GEOPHYSICAL OCCUPYING
APPROXIMATELY 6,000 SQUARE
FEET ON THE FOURTH FLOOR
Number of Square Percentage
Occupant Feet Occupied of Total
- -------- ---------------- ----------
CPL 165,991 62.5%
Enron 52,922 19.9
Credit Union and
Retail Lease Tenants 6,597 2.5
Western Geophysical 6,000 2.3
Vacant 34,076 12.8
------- -----
265,586 100.0%
All rental payments from nonaffiliated third parties for excess
space in the Headquarters Building are, and in the future will be, accounted
for as rent from property devoted to electric operations. Excess space in the
Headquarters Building has been available since the time of the 1989 Order.
Additional space has become available due to: the termination of the lease
with Tower II Ltd.; a program of destruction of obsolete records and files and
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storage outside of the Headquarters Building of other records and files; the
purchase of more compact new equipment and the sale of older and more bulky
surplus equipment; a reduction in the number of employees of CPL; and a
program to compress space usage by employees and their departments.
Item 2. Fees, Commissions and Expenses.
Fees and expenses to be paid or incurred in connection with the
proposed transaction are estimated as follows:
Holding Company Act filing fee .................. $ 2,000*
Counsel fees:
Milbank, Tweed, Hadley & McCloy
New York, New York ............................ 4,000
Miscellaneous and incidental
expenses including travel,
telephone and postage ......................... 500
-------
TOTAL ...................................... $ 6,500
=======
_______________
* Actual amount.
Item 3. Applicable Statutory Provisions.
Sections 9 and 10 of the Act and Rule 23 under the Act are
applicable to the leasing of excess office space by CPL to nonaffiliated third
parties. To the extent any other sections of the Act or rules thereunder may
be applicable to the proposed transactions, CPL hereby requests appropriate
orders thereunder.
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Item 4. Regulatory Approval.
No state regulatory authority and no federal regulatory authority,
other than the Commission under the Act, has jurisdiction over the proposed
transaction.
Item 5. Procedure.
CPL requests that the Commission issue and publish no later than
October 7, 1994, the requisite notice under Rule 23 with respect to the filing
of this Application, such notice to specify a date not later than October 31,
1994, as the date after which an order granting and permitting this
Application to become effective may be entered by the Commission and the
Commission enter not later than November 1, 1994, an appropriate order
granting and permitting this Application to become effective.
No recommended decision by a hearing officer or other responsible
officer of the Commission is necessary or required in this matter. The
Division of Investment Management of the Commission may assist in the
preparation of the Commission's decision in this matter. There should be no
thirty-day waiting period between the issuance and the effective date of any
order issued by the Commission in this matter, and it is respectfully
requested that any such order be made effective immediately upon the entry
thereof.
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Item 6. Exhibits and Financial Statements.
Exhibit 1 - Lease Agreement, dated September 16, 1994, between CPL
and Enron, together with letter, dated September 22,
1994, from CPL to Enron (previously filed).
Exhibit 1A - Lease Agreement, dated October 4, 1993, between CPL and
Gulf Coast Federal Credit Union.
Exhibit 1B - Lease Agreement, dated April 4, 1994, between CPL and
James G. Munoz.
Exhibit 1C - Lease Agreement, dated November 1, 1991, between CPL
and Donna Gray.
Exhibit 1D - Lease Agreement, dated September 28, 1992, between CPL
and NightRider Overnite Copy Service, a division of
Alco Standard Corp.
Exhibit 1E - Lease Agreement, dated October 15, 1993, between CPL
and Pedus Building Services, Inc.
Exhibit 1F - Lease Agreement, dated August 1, 1991, between CPL and
Village Travel Inc.
Exhibit 1G - Lease Proposal, dated October 17, 1994, from CPL to
Western Geophysical Company, a division of Western
Atlas International.
Exhibit 2 - Preliminary Opinion of Milbank, Tweed, Hadley & McCloy,
counsel to CPL and CSW (previously filed).
Exhibit 3 - Proposed Notice of Proceeding (previously filed).
Exhibit 4 - Financial Statements of CPL and CSW, as of June 30,
1994 (previously filed).
Exhibit 5 - Final or "Past Tense" opinion of Milbank, Tweed, Hadley
& McCloy, counsel to CPL and CSW (to be filed with
Certificate of Notification).
Item 7. Information as to Environmental Effects.
The proposed transaction does not involve major federal action
having a significant effect on the human environment. To the best of CPL's
knowledge, no federal agency has prepared or is preparing an environmental
impact statement with respect to the proposed transaction.
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S I G N A T U R E
- - - - - - - - -
Pursuant to the requirements of the Public Utility Holding Company
Act of 1935, the undersigned company has duly caused this amendment to be
signed on its behalf by the undersigned thereunto duly authorized.
Dated: October 28, 1994
CENTRAL POWER AND LIGHT COMPANY
By: SHIRLEY BRIONES
Shirley Briones
Treasurer
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INDEX OF EXHIBITS
EXHIBIT TRANSMISSION
NUMBER EXHIBITS METHOD
- ------- -------- ------------
1 Lease Agreement, dated September 16, 1994, ---
between Central Power and Light Company
("CPL") and Enron Oil & Gas Company ("Enron"),
together with Letter, dated September 22,
1994, from CPL to Enron (previously filed).
1A Lease Agreement, dated October 4, 1993, SE
between CPL and Gulf Coast Federal Credit
Union.
1B Lease Agreement, dated April 4, 1994, between SE
CPL and James G. Munoz.
1C Lease Agreement, dated November 1, 1991, SE
between CPL and Donna Gray.
1D Lease Agreement, dated September 28, 1992, SE
between CPL and NightRider Overnite Copy
Service, a division of Alco Standard Corp.
1E Lease Agreement, dated October 15, 1993,
between CPL and Pedus Building Services, Inc.
1F Lease Agreement, dated August 1, 1991, SE
between CPL and Village Travel Inc.
1G Lease Proposal, dated October 17, 1994, SE
from CPL to Western Geophysical Company, a
division of Western Atlas International.
2 Preliminary Opinion of Milbank, Tweed, ---
Hadley & McCloy, counsel to CPL and
Central and South West Corporation ("CSW")
(previously filed).
3 Proposed Notice of Proceeding (previously ---
filed).
4 Financial Statements of CPL and CSW, as of ---
June 30, 1994 (previously filed).
5 Final or "Past Tense" opinion of Milbank, ---
Tweed, Hadley & McCloy, counsel to CPL and
CSW (to be filed with Certificate of
Notification).
