Inspector General investigating bids for Wilmington VA Clinic

Inspector General investigating bids for Wilmington VA Clinic
Inspector General has completed investigation of bidding process for VA Clinic that led to exceedingly high rent payments to private company. (Source: WECT)

NEW HANOVER COUNTY, NC (WECT) - The Inspector General for the Department of Veteran's Affairs is investigating the bidding process for the Wilmington VA Clinic.

During the course of an investigation last year, WECT uncovered a private landlord is getting nearly $300,000 a month in rent under the terms of a 20-year lease for that clinic.

Congressman Walter Jones has been following this issue since our first articles were published. Commercial real estate brokers told WECT that the rate the VA is paying for the Wilmington clinic is about twice the going rate for prime medical real estate in the Wilmington area.

After pressing for answers, Jones learned that six different companies submitted bids to build the 80,000-square-foot clinic for the VA. But Jones was told in a letter from the VA they were "prohibited from releasing the cost proposals submitted by offerors in response to the requirements of a solicitation for a competitive proposal."

Congressman Jones has expressed concern to us and to the Inspector General that this information is protected by law.

"This is unfortunate as the taxpayers have no option to know whether the VA accepted the best offer. I understand there are considerations other than price, but taxpayers should have access to what offers (the specific dollar amounts and details) were submitted to ensure any decision by a federal agency is in their best interest," Jones wrote in his letter to the Inspector General requesting a review of the bidding process for the Wilmington VA Clinic.

"I am considering legislation to allow taxpayers and/or members of congress some access to this information," Jones continued, noting "the federal government works for the taxpayers."

Jones also asked the Inspector General to review and comment on the fact that the land selected for the clinic is owned by the New Hanover County Airport Authority. That choice may have driven up the price for the clinic.

The LLC that owns the clinic is paying the Airport Authority $217,000 a year, or $18,000 a month, for use of the land where the clinic sits.

According to Airport Director Julie Wilsey, the airport land was donated to New Hanover County by the federal government after World War II, with the stipulation that it be used for aviation purposes. It had previously been used as a military training facility.

The FAA dictates the land must be leased for fair market value, regardless of the tenant. Responding to the irony that a publicly funded organization for veterans is now having to pay hundreds of thousands of dollars a year to have access to land that used to belong to the government, Wilsey says the airport authority has no choice about the rental rate under federal guidelines.

Wilmington NC VA, LLC has a 50-year lease for the land underneath the Wilmington VA Clinic. Over the course of that lease, it will cost about $11 million dollars for use of the land alone. When the lease expires, the land reverts back to the airport.

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