[Federal Register Volume 62, Number 62 (Tuesday, April 1, 1997)]
[Notices]
[Pages 15567-15569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-8136]
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DEPARTMENT OF VETERANS AFFAIRS
Enhanced-Use Lease of Property at the Department of Veterans
Affairs Medical Center in Atlanta, Georgia
AGENCY: Department of Veterans Affairs.
ACTION: Notice of Designation.
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SUMMARY: The Secretary of the Department of Veterans Affairs is
designating the Department of Veterans Affairs Medical Center in
Atlanta, Georgia, for an Enhanced-Use lease development. The Department
intends to enter into a long-term lease of real property at the Medical
Center with the Development authority of DeKalb County for the purpose
of collocating administrative office space for its Veteran Benefits
Administration Regional Office onto such property and for other ``in-
kind'' consideration.
FOR FURTHER INFORMATION CONTACT: Brian A. McDaniel, Office of Asset and
Enterprise Development (189), Veterans Health Administration,
Department of Veterans Affairs, 810 Vermont Avenue, NW, Washington, DC,
20420, (202) 565-4307.
SUPPLEMENTARY INFORMATION: 38 U.S.C. Sec 8161 et seq., specifically
provides that the Secretary may enter into an Enhanced-Use lease, if
the Secretary determines that at least part of the use of the property
under the lease will be to provide appropriate space for an activity
contributing to the mission of the Department; the lease will not be
inconsistent with and will not adversely affect the mission of the
Department; and the lease will enhance the property. This project meets
these requirements.
Approved: March 21, 1997.
Jesse Brown,
Secretary.
Notice of Designation and Intent to Execute an Enhanced-Use Lease With
the Development Authority of Dekalb County (Georgia) (Enhanced-Use
Lease Report) for the Collocation of a VBA Regional Office at the VA
Medical Center, Atlanta, Georgia
Notice
Pursuant to the provisions of 38 U.S.C. 8161, et seq., ``Enhanced
Use Leases of Real Property,'' this serves as notice that the Secretary
of the Department of Veterans Affairs (``the Department'') intends to
designate approximately six (6) acres (``the Parcel'') and other
property under the jurisdiction and control of the department on the
campus of the Atlanta VA Medical Center for development under the terms
of an Enhanced-Use lease. The Parcel is located in the northwest corner
of Clairmont Road and Southern Lane, adjacent to the VA Medical Center,
Atlanta, DeKalb County, Georgia.
Further, it is the Department's intent that after conclusion of
successful negotiations with the Development Authority of DeKalb County
(``Authority''), to enter into an Enhanced-Use lease of the Parcel with
the Authority. Such lease will include a requirement for collocation of
the Department's Veterans Benefits Administration Regional Office in
Atlanta as well as potentially other VA and non-VA uses on the Parcel.
The Authority, acting pursuant to its statutory responsibilities, may
provide financing for the development and select a developer with the
approval of the Department. The developer will construct and operate
the development which will include both VA and non-VA uses.
This Notice and Report will be supplemented by a subsequent Report
to be made not less than 30 days prior to the closing of a development
agreement between the Department, the Enhanced-Use lessee (the
Authority) and the developer. The Report will provide updated
information with respect to the matters contained herein.
Background and Rationale
Under the provisions of 38 U.S.C. 8161, et seq., the Secretary is
authorized
[[Page 15568]]
to lease Department-controlled real property to private or other public
entities over a term not to exceed 35 years, so that the property will,
in part, provide space for an activity contributing to the mission of
the Department. As consideration for the lease, the Secretary is
authorized to accept facilities, services, money, or other ``in-kind''
consideration.
The Department intends to use its Enhanced-Use leasing authority as
a means to obtain office space (``VARO Space'') for its Regional Office
activities in Atlanta, Georgia, as well as for other potential
Department activities. The Regional Office is now located in a
privately-owned office building leased by the General Services
Administration. The currently occupied space is located approximately 7
miles from the VAMC Atlanta campus. By use of the Enhanced-Use lease,
the Department would lease, on a long-term basis (35 years), all or a
substantial portion of the Parcel to the Authority. The Authority, in
turn, would competitively select a developer who will finance, design,
constrict, manage and operate a mixed-use office complex that would
include the VARO Space requirement and non-VA uses. While such uses
would need to be further defined, it is intended that both VA and non-
VA uses will be developed and operated pursuant to local construction
and land use development requirements, to the extent practicable. Any
non-VA uses would also be required to be compatible with mission and
operations of the VARO and the adjoining VA Medical Center. Depending
on the value of the subject parcel and market opportunity for the non-
VA uses, the developer would provide office space to the VARO at
favorable terms, as well as other ``in-kind'' consideration.
Description of Enhanced-Use Lease Provisions
The Department proposes to lease the site through an ``Enhanced-Use
lease'' to the Authority for a term consisting of up to thirty-five
(35) years under such terms and conditions as authorized in the
Department's Enhanced-Use leasing authority. The terms of the
arrangement will generally be as follows:
Under the Enhanced-Use leasing authority, it is the Department's
intent to lease, on a long-term basis (up to 35 years), the Parcel to
the Authority, an instrumentality of DeKalb County. Participation by
the Authority will permit the project to obtain lower cost financing
than if financed through commercial sources. Under this arrangement,
the Authority will lease the Parcel from the Department for the purpose
of selecting a developer and thereafter assigning its interest to such
developer. The Authority may provide financing to the developer who
would construct both VA and non-VA uses. Any provided financing would
be through ``revenue bonds'' issued by the Authority. The Department
shall retain approval of the selection of the developer and of the
development plan. Should the Authority be subsequently unable or
chooses not to participate, the Department intends to select a
developer/lessee through a solicitation process.
The selected developer will be responsible for the development of
the Parcel in accordance with the parameters in the Enhanced-Use lease
and an approved development plan. In addition, the developer will be
responsible for the financing, design, construction, operation and
maintenance of the VARO Space. The VARO Space would then be provided
for use by the Regional Office on a ``lease-back'' arrangement for a
certain duration on such terms and conditions as agreed upon by the
parties. Such terms will include provision of VARO Space including
costs such as parking and the VARO Space tenant build-out will be
reflected in the rent proposed by the developer.
In return for the development rights permitted under the Enhanced-
Use lease and the lease-back of VARO Space, the developer will provide
fair consideration to the Department. Such consideration may be in the
form of cash, or in the form of in-kind consideration, such as a
favorable lease-back rent, discounted operation and maintenance costs,
or the provision of goods, services or benefits to the Department,
including construction, repair, maintenance, remodeling, or other
physical improvements of Department facilities, or the provision of
office, storage, or other usable space. The amount and type of
consideration to be provided by the developer will depend on the value
of the land involved. The developer would be legally and financially
responsible for the operation, maintenance, and repair of any
properties and improvements placed under its control by reason of the
Enhanced-Use lease.
In addition to the VARO Space, the Enhanced-Use lease will contain
provisions allowing for a defined amount of non-VA development. Such
development shall be constructed and operated at the developer's own
risk and expense. Such additional development shall, to the extent
practicable as determined by the Department, be required to comply with
local laws and other requirements pertaining to construction, use and
occupancy. Further, any non-VA uses would also be required to be
compatible (and not inconsistent) with the mission and operations of
the VARO and the adjoining VA Medical Center. At the conclusion of the
Enhanced Use lease, all of the improvements on the site will become the
property of the Department.
Public Hearing
On September 9, 1996, a public hearing was held at The Pete Wheeler
Auditorium on the campus of the Atlanta VA Medical Center. The public
hearing began at 7:00 p.m. and concluded at approximately 9:00 p.m.
Department representatives at the meeting included Mr. Gary Hickman,
Director, VARO Atlanta; and Dr. Bailey Francis, Acting Director, VAMC
Atlanta. The Department received very strong positive response from:
Mr. Pete Wheeler, Commissioner Georgia Department of Veterans Affairs;
Mr. John Gwisdak, State Veterans of Foreign Wars; Mr. Robert Morris,
Georgia Department of Veterans Services, and other veterans on the
basis that such proposal will result in VARO Space that will correct
existing space deficiencies, as well as provide better access and
parking for disabled veterans, compared to the existing VARO leased
space or the new Atlanta Federal Center (AFC) controlled by the U.S.
General Services Administration (GSA). These speakers noted that a VBA
Regional Office move to the AFC would result in an inefficient and
counterproductive VARO office layout, a corresponding substantial
increase in VARO's payments to GSA, and inadequate parking and access
for disabled veterans who would be visiting the VARO.
Benefits cited by these speakers with respect to the proposed
collocation were the potential for improving timeliness in VARO claim-
processing, and the potential for financial savings as a result of the
``Enhanced-Use'' of the Parcel, and the prospect for obtaining VARO
Space at lower costs than by other methods thus, alleviating budget
problems. Mr. David Chesnut, General Counsel to the Authority,
expressed support for the project. Mr. Chesnut noted that such proposed
collocation would result in increased employment within DeKalb County,
will further the Authority's objectives for sustained, planned growth
of economic opportunities within the County, as well as promote the
general welfare of the local community and the State. Mr. Chesnut
expressed the Authority's position that it was prepared to participate
as an Enhanced-Use lessee.
[[Page 15569]]
Also speaking at the public hearing were members from adjacent and
nearby neighborhood organizations. While some acknowledged the
potential benefits of collocating VARO services to veterans, other
speakers expressed concerns as to the potential size and intensity of
the Enhanced-Use development and any corresponding adverse impacts on
traffic, lighting, storm water run-off, as well as on other
environmental and community issues or resources. The VARO Director
provided assurances that the Department will undertake appropriate
environmental reviews of any proposed development and that such
development will, to the extent practicable, comply with local
requirements pertaining to land use, construction and occupancy. In
addition, the Director, VARO Atlanta, expressed a willingness to work
with the organizations so that the local community can have input into
the overall planning of the development.
Summary of Cost-Benefit and Other Economic Factors in Support of
the Enhanced-Use Lease
In analyzing the cost-benefit and economic aspects of obtaining the
VARO Space by means of an Enhanced-Use lease, the Department examined
the life-cycle costs to the Government of this approach in comparison
with leasing the subject space.
The analysis revealed that an Enhanced-Use lease with the Authority
appears to be the most cost-beneficial option. Input into this analysis
for lease costs was derived using similar criteria from various
sources. For instance, assessment of market opportunities was derived
from an appraisal of the subject Parcel conducted by an independent
appraiser; and private sector lease and construction costs were based
on industry surveys.
Information received from the commercial sector supporting this
analysis include: (1) the current upswing in the commercial leasing
market in Atlanta makes commercial leasing with no residual value to VA
economically unattractive; (2) demand and development costs for
administrative office space and for other uses in the sub-market in
which the Parcel is located; (3) non-VA use in the development will
result in a broader allocation of development costs among its user/
tenants, thus resulting in lower costs to the Department; and (4)
access to lower cost financing through the Authority than what would be
typically available through commercial sources will result in lower
development expenses and corresponding charges passed to the users/
tenants including the Department.
Description of How The Proposed Lease Will--
(1) Contribute cost-effectively to be consistent with and not
adversely affect the mission of the Department.
The Department anticipates that, using an Enhanced Use lease, it
would obtain its VARO Space at a lower cost and in a shorter time
period than could be realized through ``traditional'' VA construction
or commercial leasing.
The Enhanced-Use lease will be consistent with and not adversely
affect the mission of the Department by providing both benefits and
medical services on a single campus resulting in increased convenience
to veterans receiving services from a Regional Office, as well as the
VA Medical Center.
(2) Affect services to veterans.
The Enhanced-Use lease provides that the developer must design,
construct, operate and maintain space for exclusive use by VBA on the
Parcel, thus providing significantly enhanced service to veterans
through the convenience of collocation with the VA Medical Center. In
addition, development of the Parcel for VBA Space will provide for
adequate parking and access for disabled veterans who would be visiting
the VARO. Finally, any financial benefits gained as a result of lower
lease-back rates for VBA Space and/or income stream from private non-VA
development has the potential to fund services to veterans not
currently provided and/or expanding services currently in existence.
[FR Doc. 97-8136 Filed 3-31-97; 8:45 am]
BILLING CODE 8320-01-M
