Subsequently, VA identified 30 vacant buildings that were no longer  needed to meet veterans’ health care needs. VA’s Management of 30 Vacant Buildings in Its Great Lakes Network

VA has negotiated Enhanced-Use Leases for 10 vacant buildings and is  negotiating Enhanced-Use Leases for 3 buildings. VA  currently has no disposal plans for the other 9 buildings. VA is negotiating an Enhanced-Use Lease with Catholic Charities of  Chicago for 3 vacant buildings at the Hines VA hospital in Chicago. Four buildings have been demolished, and 4 others will be demolished. This  building will be demolished in order to construct a surface parking lot for  a new spinal cord injury/blind rehabilitation center. Obstacles to Alternate Use or Disposal of 9 Vacant Buildings

Despite the efforts of network officials, the lack of interest in 9 of VA’s  vacant buildings has been an obstacle to finding alternate uses for these  buildings. This is because  proceeds that are received from the sale of real property must be  deposited into the VA Nursing Home Revolving Fund, which is only to be  used for the construction of nursing homes. As a result, VA would prefer to  pursue Enhanced-Use Leases, which will allow VA to use revenue to meet  the overall health care needs of veterans. As the CARES process is completed in the 20  remaining networks, costs associated with an increasing number of  unneeded buildings that will be identified will grow. Recommendation for Executive Action

To ensure that the newly developed CARES model for managing excess  buildings will provide an effective decision-making tool that could be used  in the other networks, we recommend that the Secretary of Veterans  Affairs conduct a pilot test of the model in the Great Lakes network and  make modifications, if needed. Appendix I: Scope and Methodology

To assess the Department of Veterans Affairs’ (VA) efforts to manage  unneeded, vacant buildings, we obtained information from the Great Lakes  network on the number of such buildings, the cost to maintain the  buildings, and its efforts to find alternate uses for the buildings.
Why GAO Did This Study

The Department of Veterans Affairs (VA) has changed from a hospital-based system to primary reliance on outpatient care. As a result, VA expects that the number of unneeded buildings will increase. Veterans' needs could be better served if VA finds ways to minimize resources devoted to these buildings. VA must have an effective process to find alternate uses or dispose of unneeded property. In August 2002, VA completed a pilot test for realigning its health care system in the Great Lakes network. The pilot identified 30 buildings that are no longer needed to provide health care to veterans. VA is currently studying how to realign assets in its 20 remaining networks. GAO was asked to review VA's management of unneeded buildings in its Great Lakes network.

What GAO Found

The Great Lakes network has developed or implemented alternative use or disposal plans for 21 of the 30 unneeded, vacant buildings. VA has leased 10 of the buildings to the Chicago Medical School and is negotiating a lease for 3 buildings with Catholic Charities of Chicago. Four buildings were demolished, and 4 buildings will be demolished in order to construct new facilities or to expand an existing cemetery. The network identified three obstacles that hinder alternative use or planning for the remaining buildings: (1) VA has been unable to find organizations interested in using the vacant, unneeded buildings due primarily to their location or physical condition; (2) VA may spend more to demolish buildings than it would spend to maintain the buildings as is; and (3) VA is reluctant to transfer disposal responsibility for the buildings to the General Services Administration, primarily because (a) VA would incur costs for environmental and other requirements that could exceed potential savings through avoidance of routine maintenance costs, and (b) any proceeds may only be used for the construction of VA nursing homes.