If We Had a Hammer

Vice President Al Gore awarded the Veterans Administration a Silver Hammer award for government efficiency in constructing a Houston regional office facility three years ago, gushing, "Thanks for building a government that works better and costs less." The Veep obviously wasn't aware at the time how badly the agency had botched its transition to the building.

Federal documents reveal that the VA soaked taxpayers for $6 million in rent over the last three years for a Houston building it had already vacated and left empty. Response to a Houston Press Freedom of Information request to the General Services Administration showed the details.

The VA signed a lease construction contract in May 1993 with developer Rick McCord for temporary custom-built Houston quarters for its regional administrative office, until Congress could appropriate funds for a permanent facility next to the VA Hospital. VA officials had determined that the agency could not remain in its old office building after the Occupational Safety and Health Administration documented deplorable interior conditions that were hazardous for occupants.

In a letter to the Press, GSA spokesman R.G. Hubbard explained that the VA contracting officer solicited competitive bids to lease and construct a temporary facility. The winner was located at 8900 Lakes of 610, on the South Loop near the Astrodome, and the 115,500-square-foot building went up. Because it was designed for exclusive use by the VA, the GSA required the agency to sign a Unique Agency Occupancy agreement making it totally responsible for fulfilling the terms of the five-year lease. The VA committed to pay $2,073,225 annually in rent for the five years, or until the building could be sublet to another agency or company.

Unfortunately, the VA's permanent regional headquarters went up faster than expected. The agency moved in May 1995, leaving it holding the bag on the empty freeway location. After the VA vacated, McCord sold the leased building to a Boston real-estate investment trust, and it was then resold to the Houston-based Ward Group. According to Hubbard, neither new owner showed any inclination to let the VA negotiate out of its contract. The rent was reduced by $74,000 a year, leaving the annual tab for the empty building at just under $2 million.

Hubbard says GSA tried to interest four other government entities and several private companies in the vacated offices, but "the location was not compatible" for the four agencies, and the private-sector firms never followed through with contracts. Thus, the lease finally expired May 14 -- after the VA had spent $5,997,915 in rent in the three years after it had moved.

The current owner of the building, Terry Ward, disputes Hubbard's version and claims he tried to staunch the flow of government money. Ward says that last year he found a new tenant and tried to get the VA to negotiate to buy out the lease to save taxpayers $500,000.

"I ended up writing five senators to try to get somebody's attention, 'cause I was willing to let them do a discount buyout, and I couldn't get anywhere," says Ward. "I tried for eight months to get somebody with the VA to talk to me about saying, 'Hey, how about saving a half-million dollars, and pay me off at a 50-percent discounted rate?' "

The rental debacle isn't the only questionable expenditure incurred in building the new regional headquarters. VA Spokeswoman Becky Wolfe says that, once in the new building, employees who smoked complained that it did not include a comfortable area where they could indulge their habit. Wolfe says officials at VA national headquarters ordered the construction of an additional $20,000 air-conditioned kiosk at the Houston facility to accommodate smokers, a policy somewhat contradictory to the Surgeon General's warning that smoking is a health hazard.

Perhaps Vice President Gore should take his Silver Hammer and knock some sense into certain bureaucratic skulls.

-- Tim Fleck


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