PURPOSE OF S. 1718

Mr. WOLF. The purpose of the bill (S. 1718) is to authorize and direct the Administrator of General Services to convey to the city of Cheyenne without monetary consideration approximately 30 acres of surplus property which is a portion of a tract of land containing approximately 600 acres which was donated to the United States in 1932 for a VA hospital.

Approximately 518 acres of the original 600-acre tract have since been reconveyed to the city of Cheyenne as follows: Pursuant to the authority contained in the act of June 29, 1948 (62 Stat. 1104) as amended by the act of June 15, 1956 (70 Stat. 288) approximately 431 acres were conveyed to the city without consideration. In July 1955 the VA reported to GSA a 90.2-acre portion of the site as excess property which included the 30 acres identified in S. 1718. This property was determined to be surplus to the needs of the Federal Government in November 1955. In February 1959, 60.2 acres of this tract were conveyed to the city by GSA for public airport purposes, without consideration, under subsection 13(g) of the Surplus Property Act of 1944 (50 U.S.C. App. 1622(g)). Another 27 acres were conveyed to the city, without consideration, for park and recreation purposes by the Administrator of Veterans' Affairs pursuant to the act of November 8, 1965 (79 Stat. 1304).

GSA is opposed in principle to the enactment of legislation which has for its purpose the disposition of specific properties to public bodies or to others on monetary terms less favorable to the Federal Government than are provided for under existing laws of general application. We consider that a former owner who has voluntarily donated property to the Federal Government has been adequately compensated through the development of the property by the Government for the purpose for which the donation was made and through realization of such direct and indirect benefits as may have resulted from such development. Inasmuch as the VA facility at Cheyenne was constructed on property donated by the city, we believe that the objectives of the donation have been accomplished.

The subject 30 acres is surplus to the requirements of the Federal Government and is available for disposal pursuant to the Federal Property and Administrative Services Act of 1949, as amended, or other applicable statutes.

In accordance with our normal practice, our regional office in Denver would notify the appropriate State, county, and city officials of the availability of the property. The city could then purchase the property without restrictions at fair market value, or at public discount if the property is to be used for special purposes such as park and recreation, historic monument, public health or education, or public airport.

GSA AGREED TO AWAIT COMMITTEE ACTION

Administrator Robert L. Kunzig advised Chairman McClellan on May 1, 1969, that GSA would take no action to dispose of this property until the committee has an opportunity to consider the bill or

until the end of the 1st session of the 91st Congress, whichever occurs first.

This concludes the prepared portion of my statement, Mr. Chair

man.

Senator ALLEN. Senator Metcalf.

Senator METCALF. If you do put this property up for sale, I understood from Senator Moss and Congressman Wold that it was going to be used for industrial development, or commercial development.

Mr. WOLF. At one time, sir, the Public Building Services of GSA was considering the use of this property in an exchange for property in Denver for Federal requirement. However, in view of the opposition of the local citizenry, this has now been reconsidered, and it is no longer involved in such an exchange.

COST TO CITY OF CHEYENNE

Senator METCALF. How much will it cost the city if you put it up under normal General Services Administration surplus procedures? Mr. WOLF. So that they could use it for anything whatever? Senator METCALF. Yes.

Mr. WOLF. It would be in the area of $150,000.

Senator METCALF. And how much would it cost if they bought it for park and recreation?

Mr. WOLF. Fifty percent of that, or $75,000.

Senator METCALF. So what we are talking about is $75,000?

Mr. WOLF. Yes. Which of course we would give them very good credit on.

Senator METCALF. I understand.

I have no further questions.

Senator ALLEN. I have no questions.

Go ahead with the other testimony.

Mr. WOLF. The other bill that I have here is the one you have not touched on as yet, sir. And that is S. 2114.

PURPOSE OF S. 2114

Senate bill 2114 would direct the Administrator of General Services to convey to the State of Hawaii, for use for low-rent public housing purposes or airport development, certain portions of the John Rodgers veterans' housing area and the Manana veterans' housing area. Payment by the State to the United States would consist of the sum of the original acquisition cost of the land to the United States, plus an amount equal to the current fair market value of improvements existing on such lands.

On May 29, 1962, and December 19, 1961, respectively, the Department of the Navy reported to GSA as excess property, pursuant to the Federal Property and Administrative Services Act of 1949, 63 Stat. 377, as amended, 16.561 acres of land at the John Rodgers veterans' housing area and 23.008 acres at the Manana veterans' housing area. These lands include former military barracks which have been converted to low-cost dwellings and have been occupied under license by the Housing Authority of the State of Hawaii. According to the re

ports of excess, the total of 31.341 acres described in the bill were acquired by the Government at a cost of less than $30,000. The estimated fair market value of the structures is negligible. However, the land probably has a current value in excess of $3 million. The properties have been determined to be surplus to the needs of the Federal agencies. The above-cited Property Act and related statutes authorize disposal of surplus real property for certain public uses, including parks and recreation, health, education, airports, historic monuments, and wildlife conservation, either without consideration or at a substantially reduced monetary consideration. There is no law of general application that would provide a price discount for public housing purposes. Section 203 (e) (3) (H) of the Property Act, as amended (40 U.S.C. 484 (e) (3) (H)), authorizes the negotiated disposal of surplus property, subject to obtaining such competition as is feasible under the circumstances, to a State, territory, possession, political subdivision thereof, or tax-supported agency therein, without restriction as to use, if the estimated fair market value of the property and other satisfactory terms of disposal are obtained by negotiation. We have no information concerning circumstances that would warrant conveyance of the surplus property referred to in S. 2114 to the State of Hawaii on terms and conditions less favorable to the Government than are provided for in laws of general application.

GSA is opposed in principle to the enactment of special legislation which has for its purpose the disposition of specific properties on monetary terms less favorable to the Government than are provided for in laws of general application.

GSA OPPOSED TO S. 2114

GSA is opposed in principle to the enactment of special legislation which has for its purpose the disposition of specific properties on monetary terms less favorable to the Federal Government than are provided for under existing laws of general application. We are therefore opposed to enactment of S. 2114.

PROPOSED AMENDMENT TO THE BILL

If, however, your committee favorably considers this bill, it is suggested that an additional sentence be added to section 2 reading substantially as follows:

The 14.78-acre tract at Manana is the remaining acreage of the 23.008-acre tract reported excess exclusive of certain property already disposed of and 5.556 acres the negotiated sale of which to the Hawaii Housing Authority is pending.

This, Mr. Chairman, concludes this portion of my testimony. Senator METCALF. You are talking about $3 million?

Mr. WOLF. Yes, sir.

Senator METCALF. And the use is a public housing use?

Mr. WOLF. The bill would provide either for public housing or for a public airport.

Senator ALLEN. They would have a right, then, to transfer this property in return for other property, is that correct?

Mr. WOLF. That is correct, under the bill, yes, the bill does provide an opportunity for the State to exchange the property. We would not

want to see that, because if this philosophy were adopted generally any surplus property, although not suitable for what they want, could be obtained by discount, and then exchanged for something that would serve their purpose.

Senator ALLEN. But I believe the bill provides, though, that any property obtained in exchange would be subject to the same restriction, does it not?

Mr. WOLF. Yes, is does.

NEGOTIATIONS PENDING WITH HAWAIIAN HOUSING AUTHORITY

Senator ALLEN. These negotiations that are pending there with the Hawaiian Housing Authority on 52 acres, approximately, what is the status of those negotiations?

Mr. WOLF. We have advised the State that as soon as our appraisal is completed we will begin talking to them. Our appraisal is under review at the present time.

Senator ALLEN. Did you not say that you had agreed to take no action until the end of this Congress or this half of the Congress? Mr. WOLF. Yes, sir, we have. However, Senator Inouye has agreed to our proceeding on this 512 acres.

Senator ALLEN. Would it interfere with your negotiations to state approximately the valuation that you place on this 51/2 acres? Is it valued proportionately to valuing the whole tract at $3 million?

Mr. WOLF. I couldn't answer that, sir. I have no information on the estimate in the appraisal.

Senator ALLEN. Under existing law could GSA convey this to the State of Hawaii without consideration as an administrative decision? Mr. WOLF. For public airport purposes, yes; under 13(g) of the Surplus Property Act of 1944, unless it is determined to be industrial. Senator ALLEN. But not for low-rent housing?

Mr. WOLF. That is right.

TRANSFER PURSUANT TO EXISTING LAW

Senator ALLEN. What would be the procedure, then, under existing law to transfer it to the State?

Mr. WOLF. The State would have to buy it at fair market value. And that is what they plan to do on this 51/2 acres.

Senator ALLEN. Was a similar bill introduced in the last Congress, or is this new legislation?

Mr. WOLF. There was a similar bill. I am not sure if it was exactly the same, but it was similar.

Mr. BARTH. It has been, I guess, over the last 6 years-this is about the third or fourth in a series affecting these two tracts, and one other tract which has subsequently been disposed of.

Mr. WOLF. The first bill was introduced in January 1965.

Mr. SHRIVER. That bill was for about 131 acres.

Mr. WOLF. Yes; it was for three properties.

ORIGINAL COST OF LAND

Senator ALLEN. You say the original cost of this land was around $30,000?

32-417-69-7

Mr. WOLF. Yes; less than $30,000.

Senator ALLEN. Who was the original seller? Who conveyed it to the Government? From whom was it purchased?

Mr. WOLF. I don't know.

Mr. BARTH. It was acquired by the Navy under condemnation procedures back in the early forties.

Senator ALLEN. From private owners?

Mr. BARTH. I think so, sir. I couldn't tell you for sure.

Senator ALLEN. On this $3 million valuation on the tract, the two tracts, has the appraisal of that amount been made?

Mr. WOLF. Just a rough estimate. We do not have a full appraisal. Senator ALLEN. That would be, according to my arithmetic, around $100,000 an acre. In my hometown-a small lot would be a fourth of an acre. And that would be about $25,000 per building lot. Is it on the main street of Honolulu ?

Mr. WOLF. Senator, the value of land in Honolulu has completely skyrocketed. We know that you can't even buy a house, they don't put them on the market. And industrial properties are not sold, they are leased, because of the value of the property. This valuation in my opinion is not out of line for Hawaiian properties.

Senator ALLEN. Do you know where it is with respect to the business district?

Mr. WOLF. The John Rodgers housing area is adjacent to the Honolulu National Airport. I do not know exactly where Manana housing area is located.

Mr. BARTH. It is near Pearl Harbor.

Senator ALLEN. And what was the purpose, the use to which it was put prior to being declared surplus?

Mr. WOLF. It was barracks, military housing.

Senator ALLEN. And it has been declared surplus?
Mr. WOLF. Yes.

Senator ALLEN. The soldiers are no longer there?

Mr. WOLF. No, sir. It is under permit right now to the Housing Authority of Honolulu, and they are using it for low-cost housing, they have converted the barracks into low-cost housing.

Senator ALLEN. What would be the attitude, on the 50-percent formula on the bill if it was not conveyed without cost, what would be the attitude of the GSA on the sale at 50 percent of the appraised value?

Mr. WOLF. At the present time there is no law of general application that provides for it. So it would be really a consideration that is not available to other communities for the same purpose.

Senator ALLEN. I believe that answers my question.

I believe that is all on that.

(Statement of Senator Inouye and letter to chairman of subcommittee follow:)

STATEMENT OF HON. DANIEL K. INOUYE, U.S. SENATOR FROM THE STATE OF HAWAII

Mr. Chairman, I appreciate the opportunity to testify before your committee in support of S. 2114, a bill I introduced and have worked on for several years with officials of the State of Hawaii and other