Notes - Week of Feb. 28

Steve:

Working on transition of phone operators into our group. Fast tracking their
physical relocation onto EB level 4.
Working with ECM and RARC on Enron Field Parking Garage project. Have been
advised that Joe Sutton or Jeff Skilling will have to approve DASH. May
require a meeting with one or other to explain. I'm scheduled to meet next
Wed. with Billie Birge of Sports Authority and Bob McClaren of Astros to
discuss Garage deal and get Sports Authority support. We have kicked off the
design team to finish construction documents, having shut down work for last
6 months, in order to meet our proposed May 1st construction start.
Finalising lease amendment with Trizec Hahn to add another 30,000 sq. ft. of
space in Three Allen Center (short term 2 year deal). The proposed space has
already been sold internally. Gene Humphrey's group and George Wasoff's
purchasing team will be main occupants.
Finalising sublease with Azurix to obligate them to 3 floors of Three Allen
Center throughout balance of our six year term. They have asked for rights
to keep the Allen Center Garage "reserved" parking spaces for Rebecca Mark,
Bazelides, and Amanda Martin. Our response is that they can keep reserved
stalls until such time as Azurix's Board of Directors is no longer controlled
by Enron. At that time we may require they give up these reserved stalls and
if so, be given reserved spaces in basement of Three Allen Center building
(perceived as slightly less desirable). Reason being that the Allen Center
Garage "reserved" parking spaces came to Enron as a result of the original
Enron Building lease in '85. The three floors of office space they occupy in
Three Allen Center is not significant enough to command reserved Allen Center
Garage stalls. However we will review next year once Enron Center's new
garage is complete and we find that demand for reserved Allen Center Garage
spaces is not strong. If this is case, they can have spaces through 5 year
balance of their sublease - regardless of Enron's ownership position with
Azurix .
Azurix's use of Enron's aircraft is still an open issue (time share agreement
has expired last month and Azurix is currently not using our planes). Azurix
definitely does not want to take a partial ownership position in any planes
but is asking to continue the "time sharing" relationship in which we can
only recover 30-40% of our gross cost, depending on plane used. They are
proposing to cap usage around 100 hours per year, i.e. $500K gross cost which
equals a discounted cash out cost to them of $150-200K. We've asked them to
put it in writing and we will review with Enron management.
Mike Hicks and I are meeting with Don Hawkins next week (reports to Kurt
Huneke) to better understand Asset Management's expectations of Corporate
Security. E-mailed Control Risk our list of preferred Security Contractors
and asked for their input.
Representatives with Hines and design team are in Italy this week negotiating
granite purchase for Enron Center. Henry Terech is representing Enron.
We've completed testing of LCD monitors in elevator cabs, using wireless
transmitter. All went well and we will finalise hard implementation costs
next week. Understand pilot testing of "BackWeb" software on our LAN is
underway. Initial report from Phillipe's IT team is that they are very
impressed with software's capabilities and no problems encountered that
impair LAN systems.

- Bill