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Seven Days

Thursday, July 25
Republican Gov. Don Sundquist says Republican candidate Van Hilleary would be a "horrible governor." Tell us something we don't know, guv. He also says he'll be voting for Jim Henry in the Republican gubernatorial primary. We're guessing Henry wishes Don had kept it to himself.
A federal judge orders a local coffee company to stop all sales and shipments until it pays all moneys it owes its employees. It isn't JFG. Repeat. It isn't JFG. It's OK to get up in the morning.

Friday, July 26
A virtual host of candidates for statewide office, including prominent Republicans, fail to show up for the Tennessee Conservative Union's Reagan Day Dinner. Some had to stay in Washington for the congressional vote on the neo-fascist Department of Homeland Security. They are excused by the TCU—except for Jimmy Duncan, who voted against the new department.

Monday, July 29
The News-Sentinel reveals that a psychologist whose license was revoked recently for abusing his position by having sexual relations with patients has advertised his services are available for "pastoral counseling." Who does he think he is, a Catholic priest?

Tuesday, July 30
Mass transit in Knoxville gets a big boost when a U.S. Senate committee approves $3.4 million to start construction of a new central bus station in downtown. Simultaneously, Mayor Victor Ashe says he has learned that TDOT intends to pave over Hardin Valley for the "Orange" route of the new beltway around Knoxville. It's just TDOT's way of showing the U.S. Senate who's the real boss of transportation in Tennessee.

Wednesday, July 31
Thousands of young athletes converge on Knoxville for the AAU Junior Olympics. TDOT immediately puts them to work on the new beltway.

Knoxville Found

(Click photo for larger image)

What is this? Every week in "Knoxville Found," we'll print the photo of a local curiosity. If you're the first person to correctly identify this oddity, you'll win a special prize plucked from the desk of the editor (keep in mind that the editor hasn't cleaned his desk in five years). E-mail your guesses, or send 'em to "Knoxville Found" c/o Metro Pulse, 505 Market St., Suite 300, Knoxville, TN 37902.

Last Week's Photo:
Last week's Knoxville Found elicited guesses of virtually every bowling alley in the city. But this pin designates the now-defunct Palace Lanes on Chapman Highway in South Knoxville. We could give you lots of history about the place, but you get that from us all the time. So, instead, we'll just say that circa 1984, we and a gang of our drunken college mates, including a fellow who happened to be blind, went bowling at the Palace Lanes. As it turned out, the blind fellow was a much better bowler than most of us. So we made him the designated driver for the rest of the evening.

Our first correct respondent, Randy Neal of Maryville, wasn't among our number that festive evening. He remembers Palace Lanes as the place where, when he was a youngster, his "more well-to-do friends used to have birthday parties." To assuage some of the bitterness Randy no doubt still feels about not being invited to those parties, he receives a copy of the novel Perma Red by Debra Magpie Earling. It's a "love-crossed saga about a young woman coming of age under perilous circumstances." She probably didn't get invited to the rich kids' bowling parties, either.

Meet Your City
A calendar of upcoming public meetings you should attend

MARKET SQUARE DEVELOPMENT MEETING
Monday, Aug. 5
5-7 p.m.
Watson's Building, Market Square
A public presentation of plans for Market Square and Krutch Park, following up on last month's design charette. Among the presenters will be Stroud Watson, Mike Fowler and other members of the Kinsey Probasco team.

CITY COUNCIL
Tuesday, Aug. 6
7 p.m.
City County Bldg.
Main Assembly Room
400 Main St.
Regular meeting.

MPC PUBLIC WORKSHOP
Tuesday, Aug. 6
7 p.m.
Riverdale Methodist Church
7117 Kodak Road
The workshop topic is conserving natural and historic resources along the French Broad River corridor in Knox County. It will include an overview of the MPC background study.

METROPOLITAN PLANNING COMMISSION
Thursday, Aug. 8
1:30 p.m.
City County Bldg.
Main Assembly Room
400 Main St.
Historic zoning overlay for the Sprankle Building is on the agenda.

The End of the Haggle?
McDealership comes to Knoxville

It's not the best of news for the people who own and operate Knoxville's used-car businesses. CarMax, a publicly traded chain of super-sized used-car lots, is opening a location in Knoxville's Turkey Creek commercial development in November. The CarMax dealership will employ 150 people and contain about 400 cars on a 10-acre site, making it right off the bat one of the largest dealerships in East Tennessee.

CarMax operates differently from the traditional used-car dealership. It buys, sells and trades cars of all makes and models, giving customers a chance to test drive vehicles made by Dodge, Ford, Toyota, Honda and every other car company at one location. It adheres to a strict no-haggle policy. CarMax salespeople are salaried and, although they get bonuses based on the number of vehicles they sell, they do not receive commission based on the value of the car that they sell.

The company even publishes on the Internet the price of every car that it is selling at each of its 40 locations. If you want to buy a car that is sitting at a CarMax lot in Atlanta, the company will have it shipped to a CarMax dealership near you.

When CarMax was first organized by Circuit City Stores a decade ago, many industry observers said it might revolutionize the used-car business the same way Home Depot took out most mom-and-pop hardware stores. That hasn't really happened, as the used-car industry is still dominated by locally owned dealerships. In fact, even in its home base of Richmond, Va., the national chain still only has about 8 percent of the local used-car market.

Nevertheless, CarMax has racked up impressive sales numbers everywhere it has gone. The company is on target to have $3.6 billion in revenue this year—which means that each of its 40 retail locations sells an average of $90 million worth of cars per year. "There is no evidence that CarMax is enlarging the market, so I would suspect that everywhere CarMax goes it is taking dollars away from existing used-car dealers," says Sharon Zackfia, an analyst with Chicago-based William Blair & Co. who follows the company.

This will be the second location in Tennessee for CarMax, which invaded the Nashville market three years ago and has stores as far west as California. News that CarMax is coming has spread fast among Knoxville's used-car dealers, most of whom have heard bits and pieces about the national chain during the last few years. "It's new competition, and it will affect our business just like all new competition," says Don Campbell, the owner of Rice Automotive's three Knoxville area dealerships. But Campbell says he is not worried about the size of a CarMax dealership. "Cars are expensive things, so the sheer sales numbers don't really mean much to me," he says. "Our sales are between $60 and $70 million. It's not the number of cars you sell, it's the gross profit that matters."

Scott Clark, used-car manager for the Neill Sandler Lincoln Ford Mercury dealership on Alcoa Highway, says he knows a little about CarMax from reading articles in Automotive News and other publications. He says that having CarMax to compete against will create quite a challenge, but he still thinks that customers will be better served by buying cars from locally owned dealerships. "I guess the question that people have to ask themselves is, assuming the price is the same, whether they would rather do business with a local company like us or a national company like CarMax," he says. "But in some ways I agree with some of the ideas behind the way CarMax does business. We are very up front here and try to give the customer a lot of information so that they can make a wise decision."

Clark says he can't imagine a dealership where salespeople aren't paid on commission, since he has never worked at one. He says that he can see the appeal of a no-haggle policy. But he says that in his experience, many customers actually prefer to haggle.

"There is a part of me that says that no one likes to go back and forth and haggle over the price," he says. "But believe it or not, you will find a lot of time that when it comes down to it, a lot of customers who say that they don't want to haggle really want to haggle. I don't know why. Maybe it's because it makes them feel as if they have won if they can talk the price down."

—Bill Carey

No Reservations
Hotels play along with Junior Olympics

As Knoxville gets ready for the estimated 35,000 people who are coming to the 2002 Junior Olympic Games, one aspect of the event has gone smoother than it did when the city hosted the event nine years ago: the hotel reservations. But it wasn't cheap—it cost Knoxville's hotels over a quarter of a million dollars.

Back in 1993, the Knoxville Convention and Visitors Bureau tried to coordinate hotel reservations for all the people who came to the Junior Olympics. According to the organizers of this year's event and some of Knoxville's hotel owners, there were reports that the process didn't go as smoothly as hoped. A few visitors complained about price gouging. Some hotels complained about large numbers of last-minute broken reservations.

This time, the CVB and the Sports Corp. formed a housing committee that ran the hotel reservation process as a tighter ship. The committee farmed out the hotel reservation process to Reservations Plus, a firm based in Hampton Roads, Va. They asked each hotel operator to come up with rates for Junior Olympics visitors and to allow the Sports Corp. to publish those rates on the Internet for all participants to see ahead of time. They also asked every hotel operator in Knoxville to agree not to make hotel reservations for people coming to the Junior Olympics, but to refer all such calls to the call-in service operated by Reservations Plus (1-866-TENN-4-ME).

"There were a lot of reasons the housing committee did it this way," says Sports Corp. spokeswoman Cindy Prince. "One was to see that people were staying as close as possible to the venues that they wanted to see."

Prince said that the decision to use an out-of-town firm to do the reservation business—a contract worth about $260,000, based on an average nightly per room rental rate of $70—was driven by the fact that Reservations Plus had so much experience. "This is a very specialized field, and they had managed reservations for the Junior Olympics before," she says. "Just the software that they use costs like $50,000."

Under the system, Reservations Plus keeps 8 percent of the hotel room charge and tacks on a $10 per reservation fee that goes back to the Sports Corp. (money that is used to help defray the cost of putting on the Junior Olympics). For example: In the case of a family reserving a $100 hotel room for four nights, Reservations Plus gets 8 percent of the $400 bill, or $32. The Sports Corp. gets $10, and the family is also charged sales tax and hotel-motel tax.

People who booked hotel rooms through the reservation system had their choice of 70 hotels. Booking agents were instructed to place visitors near event locations.

The use of a centralized reservation system is not uncommon in the world of event planning. "It's done a lot, especially in situations where you have a large event taking place in a small or medium-sized market that is not used to having a large event," says Terry Clements, director of visitor development for the Nashville Convention and Visitors Bureau. "It can really make things go smoother and be used to help defray the cost of an event. But the hotels have to all agree to play along."

The use of a centralized reservation system means that hotels in Knoxville have been forbidden to try to market themselves individually to participants. However, the hotel owners and operators contacted by Metro Pulse said that they preferred that infringement to the hassle of dealing with thousands of phone inquiries. "Any time you are dealing with tens of thousands of people coming to town there are going to be glitches, but this worked out very well," says Ken Knight, general manager of the Radisson Summit Hill. Knight said that he has set aside 125 rooms of his 197-room facility for the Junior Olympics and said that they were "pretty much all gone at this point."

Walter Wojnar, the general manager of the 293-room Holiday Inn Downtown, also said that the reservation system had worked well and that the Junior Olympics had proven to be "a good piece of business" for his hotel. But he said that he was a little disappointed when he realized that most of the 35,000 visitors are only staying for three or four nights of the two-week event.

"It is by no means a uniform pickup," he says. "We have a lot of peaks and valleys. A lot of teams are coming just for specific events and then leaving. And a lot of families are planning to stay just for as long as their child's team is eliminated from the competition, and then they plan to leave after that."

An estimated 48,000 hotel-room nights are expected to be rented in the Knoxville area during the Junior Olympic Games, which starts this weekend and runs through Aug. 11. The chief sponsor of the event is Proffitt's, which is giving a single sandal to each of the 15,000 participating athletes in an attempt to lure them and their families to the Proffitt's store at the West Town Mall, where they can get the matching sandal for free.

The Junior Olympic Games are happening at more than two dozen locations throughout Knoxville. Five events—karate, taekwondo, table tennis, cheerleading and wrestling—are taking place at the new Knoxville Convention Center downtown. However, several of the events are being staged at local public schools such as Bearden High School (baseball) and Heritage Middle School (basketball). According to Prince, it's up to school booster clubs or PTAs to organize their own concessions, and each school organization gets to keep the profits.

—Bill Carey