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Capital Asset Management: Tools and Strategies for Decision Making: Conference Proceedings (2001)
Federal Facilities Council (FFC)

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Signed lease agreements include:

    1. A regional office building and mixed-use development constructed on 20 acres on the grounds of a VA complex in Houston, Texas. The developer constructed the 140,000-square-foot building, and space was leased to the VA at heavily discounted rates. The developer was also allowed to build a small retail and services project and a second medical office that are leased to private sector tenants. In return the VA receives a share of the developer's lease revenue. The VA estimates a net savings of $17.7 million in construction costs and reduced operation and maintenance costs, and the VA receives revenues.

    2. A 22-acre surplus property in Indianapolis, Indiana, leased to the state of Indiana for use as a mental health facility. The project allowed the VA to consolidate two facilities into one while meeting current out-patient health care needs and reducing operating costs. The VA estimates it obtained $15.7 million in financial benefits and $5 million per year in operational savings, while providing better service to veterans.

    3. A 35-year ground lease at a VA hospital in Indianapolis, where Beverly Enterprises, Inc., is to open a 94-bed skilled nursing facility serving both the VA and the local community. The VA closed a nursing home in this area. The beds at the Beverly facility will be available to VA patients when construction is completed. The VA estimates more than $40 million in net present-value savings over the term of the lease in discounted rates for VA patients.

    4. A 124-unit single-room-occupancy center built in Vancouver, Washington. The VA leased two acres of land to a local housing agency, which financed, designed, built, and operates the center. The VA obtains priority placement for up to 62 homeless veterans at no cost. Projected net-present-value savings in construction and reduced operation and maintenance costs are more than $20 million.

    5. A 188,000-square-foot office building built by a redevelopment authority on 6 acres owned by the VA in Atlanta, Georgia. The arrangement allows the Veterans Benefit Administration to lease space at half the market rate for comparable space.

    6. A cogeneration plant on VA property in Johnson City, Tennessee, that offers significantly discounted energy rates to the agency. The developer also provides energy to an adjacent state university, and other customers. The developer will complete $3 million in energy-related improvements throughout the VA campus. The VA will realize net-present-value savings of more than $36 million in construction and reduced operation and maintenance costs.

The enhanced-use leasing authority has been extended four times. In 1999, the VA's enhanced-use leasing authority was extended for 10 years. The VA is now allowed to lease properties for the sole purpose of generating revenues to improve services to veterans. The lease term was increased to as much as 75 years, and the VA was authorized to make capital contributions to joint ventures on agency properties.

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