A-96852, AUGUST 9, 1938, 18 COMP. GEN. 144

A-96852: Aug 9, 1938

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IMPROVEMENTS - APPROPRIATION AVAILABILITY WHERE THE PROPOSED ALTERATIONS TO A LEASED BUILDING FOR ADAPTING THE QUARTERS TO SPECIAL USES ARE NOT REPAIRS. THE COST OF WHICH IS REQUIRED UNDER THE LEASE TO BE BORNE BY THE LESSOR. IS AS FOLLOWS: IN OCTOBER 1935 THE RESETTLEMENT ADMINISTRATION (NOW KNOWN AS THE FARM SECURITY ADMINISTRATION) ENTERED INTO LEASE NO. WHICH WAS HOUSED IN THE RIZIK BUILDING. INASMUCH AS THE SOIL CONSERVATION SERVICE AND THE WEATHER BUREAU WERE IN NEED OF ADDITIONAL SPACE. IT WAS DECIDED TO RENEW THE LEASE FOR THE FISCAL YEAR 1939 AND APPORTION THE SPACE AMONG THE THREE BUREAUS ABOVE MENTIONED. UNDER THIS ARRANGEMENT THE SOIL CONSERVATION SERVICE WAS ALLOTTED THE SECOND AND THIRD FLOORS.

A-96852, AUGUST 9, 1938, 18 COMP. GEN. 144

LEASES - ALTERATIONS, REPAIRS, AND IMPROVEMENTS - APPROPRIATION AVAILABILITY WHERE THE PROPOSED ALTERATIONS TO A LEASED BUILDING FOR ADAPTING THE QUARTERS TO SPECIAL USES ARE NOT REPAIRS, ETC., THE COST OF WHICH IS REQUIRED UNDER THE LEASE TO BE BORNE BY THE LESSOR, NOR SUCH AS FOR CONSIDERATION AS AN ALTERATION, IMPROVEMENT, OR REPAIR OF THE LEASED PREMISES WITHIN THE EXPENDITURE LIMITATIONS OF SECTION 322 OF THE ECONOMY ACT OF JUNE 30, 1932, AS AMENDED BY ACT OF MARCH 3, 1933, 47 STAT. 1517, AND DO NOT CONSTITUTE AN IMPROVEMENT PERMANENTLY ATTACHED TO THE REALTY WHICH MAY NOT BE READILY REMOVED UNDER THE LEASE AUTHORIZATION WITHOUT DESTROYING THE USEFULNESS OR DAMAGING THE PROPERTY, APPROPRIATED FUNDS OF A GOVERNMENT AGENCY, OTHERWISE AVAILABLE FOR THE PURPOSE, MAY BE CONSIDERED AVAILABLE FOR REIMBURSING THE NATIONAL PARK SERVICE FOR THE COST OF THE ALTERATIONS--- IN THIS CASE, THE INSTALLATION OF SPECIAL EQUIPMENT FOR PHOTOGRAPHIC LABORATORIES, ETC.

ACTING COMPTROLLER GENERAL ELLIOTT TO THE SECRETARY OF AGRICULTURE, AUGUST 9, 1938:

YOUR LETTER OF JULY 28, 1938, IS AS FOLLOWS:

IN OCTOBER 1935 THE RESETTLEMENT ADMINISTRATION (NOW KNOWN AS THE FARM SECURITY ADMINISTRATION) ENTERED INTO LEASE NO. ER-RA-356 WITH THE NATIONAL SAVINGS AND TRUST COMPANY, TRUSTEE, FOR THE RENTAL OF THE ENTIRE SECOND, THIRD, FOURTH, AND FIFTH FLOORS AND THE STOREROOM ON THE L STREET SIDE OF THE FIRST FLOOR IN THE RIZIK BUILDING, LOCATED AT 1737 L STREET NORTHWEST, CONTAINING 15,983 SQUARE FEET OF NET FLOOR SPACE, AT AN ANNUAL RENTAL OF $10,800. IN MAY OF THIS YEAR THE FARM SECURITY ADMINISTRATION NOTIFIED ME THAT ALL OF THIS SPACE WOULD NOT BE REQUIRED AND THAT THEY PROPOSED TO ALLOW THE LEASE TO EXPIRE ON JUNE 30, 1938. AT THE SAME TIME THEY REQUESTED THE REAL-ESTATE OFFICER OF THIS DEPARTMENT TO NEGOTIATE FOR THE RENTAL OF APPROXIMATELY 4,000 SQUARE FEET OF SPACE FOR THE PHOTOGRAPHIC SECTION OF THE FARM SECURITY ADMINISTRATION, WHICH WAS HOUSED IN THE RIZIK BUILDING. INASMUCH AS THE SOIL CONSERVATION SERVICE AND THE WEATHER BUREAU WERE IN NEED OF ADDITIONAL SPACE, WHICH COULD NOT BE FOUND IN A GOVERNMENT-OWNED BUILDING, AND THE LEASE COVERING THE BUILDING AT 1737 L STREET NORTHWEST CONTAINED A 30-DAY RENEWAL CLAUSE, IT WAS DECIDED TO RENEW THE LEASE FOR THE FISCAL YEAR 1939 AND APPORTION THE SPACE AMONG THE THREE BUREAUS ABOVE MENTIONED. UNDER THIS ARRANGEMENT THE SOIL CONSERVATION SERVICE WAS ALLOTTED THE SECOND AND THIRD FLOORS, THE WEATHER BUREAU THE FOURTH FLOOR, AND THE SPACE ON THE FIRST FLOOR, AND THE FARM SECURITY ADMINISTRATION THE FIFTH FLOOR OF THE RIZIK BUILDING.

INASMUCH AS THE SOIL CONSERVATION SERVICE HAS BEEN NOTIFIED BY THE DIVISION OF GOVERNMENT SPACE CONTROL, NATIONAL PARK SERVICE, TO VACATE THE SPACE IT NOW OCCUPIES ON THE EIGHTH FLOOR OF THE PRINTCRAFT BUILDING IN ORDER THAT THE ACCOUNTS AND DEPOSITS DIVISION OF THE TREASURY DEPARTMENT MAY OCCUPY IT AND THEREBY CONSOLIDATE SOME OF ITS ACTIVITIES IN THAT BUILDING, THIS DEPARTMENT DECIDED TO ALLOT THE SECOND AND THIRD FLOORS OF THE RIZIK BUILDING TO THE SOIL CONSERVATION SERVICE WHICH WOULD AT THE SAME TIME PROVIDE THE SOIL CONSERVATION SERVICE WITH THE ADDITIONAL SPACE IT NEEDS FOR THE EXPANSION OF ITS PHOTOGRAPHIC AND INFORMATION SECTIONS. THE WEATHER BUREAU WAS ALSO URGENTLY IN NEED OF ADDITIONAL QUARTERS AND THE RIZIK BUILDING IS LARGE ENOUGH TO ACCOMMODATE THE THREE UNITS--- PHOTOGRAPHIC SECTION OF THE FARM SECURITY ADMINISTRATION, PHOTOGRAPHIC AND INFORMATION SECTIONS OF THE SOIL CONSERVATION SERVICE, AND A PORTION OF THE HYDROLOGICAL DIVISION OF THE WEATHER BUREAU. A SURVEY OF THE SECOND AND THIRD FLOORS OF THE RIZIK BUILDING WAS MADE AND AN ESTIMATE OBTAINED FROM THE NATIONAL PARK SERVICE OF THE COST OF INSTALLING ON THESE FLOORS CERTAIN EQUIPMENT NECESSARY FOR CONDUCTING THE WORK, SUCH AS PARTITIONS, DARK ROOMS, SINKS, ETC. THE COST WAS ESTIMATED AT $6,700.00 AND AN ORDER, ON A REIMBURSABLE BASIS, WAS EXECUTED BY THE SOIL CONSERVATION SERVICE AND DELIVERED TO THE NATIONAL PARK SERVICE IN JUNE, AND IT IS UNDERSTOOD THAT SOME WORK WAS DONE DURING THAT MONTH.

THE NATIONAL PARK SERVICE NOW APPEARS TO BE SOMEWHAT IN DOUBT AS TO WHETHER THEY HAVE AUTHORITY TO PERFORM THIS WORK AND SEEK REIMBURSEMENT FOR SAME FROM THE DEPARTMENT OF AGRICULTURE, IN VIEW OF THE LIMITATION IN THE ECONOMY ACT WHICH PERMITS THE EXPENDITURE OF NOT MORE THAN 25 PERCENT OF THE FIRST YEAR'S RENT FOR IMPROVEMENTS TO A RENTED BUILDING. OBJECTION WAS ANTICIPATED FROM THE NATIONAL PARK SERVICE IN VIEW OF THE FACT THAT THE SOLICITOR OF THIS DEPARTMENT HAD BEEN CONSULTED INFORMALLY AND HAD ADVISED THAT IN HIS OPINION THE WORK CONTEMPLATED WAS OF A TEMPORARY NATURE, THAT THE PHOTOGRAPHIC LABORATORIES COULD BE REMOVED WHEN THE LEASE WAS TERMINATED, AND THIS DEPARTMENT UNDERSTOOD THAT THE NATIONAL PARK SERVICE WAS PROCEEDING WITH THE WORK.

THE PHOTOGRAPHIC SECTION OF THE FARM SECURITY ADMINISTRATION IS NOW LOCATED ON PARTS OF THE SECOND AND FOURTH FLOORS OF THE RIZIK BUILDING, AND IT IS DESIRABLE, FOR THE PROPER UTILIZATION OF THE SPACE IN THIS BUILDING, TO CONSOLIDATE ITS WORK ON THE FIFTH FLOOR. IN ORDER TO DO THIS, IT IS ESTIMATED THAT IT WILL REQUIRE AN EXPENDITURE OF APPROXIMATELY $5,000 TO EQUIP THE FIFTH FLOOR AS A PHOTOGRAPHIC LABORATORY. IF THE FARM SECURITY ADMINISTRATION IS REQUIRED TO MOVE ITS PHOTOGRAPHIC SECTION FROM THE RIZIK BUILDING, THE SAME EXPENDITURE WOULD BE NECESSARY IN THE SPACE SELECTED ELSEWHERE.

IT IS BELIEVED TO BE TO THE BEST INTERESTS OF THE DEPARTMENT TO HOUSE THESE THREE UNITS IN THE RIZIK BUILDING BECAUSE (1) THE PHOTOGRAPHIC SECTION OF THE FARM SECURITY ADMINISTRATION IS ALREADY LOCATED IN THE BUILDING; (2) THIS BUILDING IS WITHIN A SHORT DISTANCE OF THE WEATHER BUREAU AND IT IS DESIRABLE AND NECESSARY TO HAVE THE WEATHER BUREAU EMPLOYEES WITHIN A REASONABLE DISTANCE OF THE MAIN OFFICE OF THE WEATHER BUREAU, WHICH IS LOCATED AT 24TH AND M STREETS, AND (3) THE SECOND AND THIRD FLOORS OF THIS BUILDING WILL PROVIDE THE ADDITIONAL SPACE NEEDED BY THE SOIL CONSERVATION SERVICE.

THE NATURE OF THE EQUIPMENT, PARTITIONS, AND OTHER ADDITIONS TO BE INSTALLED ARE WHOLLY TEMPORARY AND SOLELY FOR THE SPECIAL PURPOSES TO WHICH THE SPACE IS TO BE DEVOTED. IT WILL BE NOTED, MOREOVER, THAT UNDER THE LEASE IN ITS ORIGINAL FORM THE SPACE WAS TO BE USED EXCLUSIVELY FOR OFFICE PURPOSES. IT IS OUR BELIEF THAT IF THE SPACE IS NOW USED FOR OTHER THAN OFFICE PURPOSES, WITH THE CONSENT OF THE LESSOR OF COURSE, THAT SUCH TEMPORARY INSTALLATIONS AS ARE NECESSARY TO FIT THE PREMISES FOR USE AS A LABORATORY ARE NOT TO BE CONSIDERED AS ALTERATIONS OR IMPROVEMENTS TO THE PREMISES BUT IN THE SAME CLASS AS ANY REMOVABLE EQUIPMENT WHICH THE DEPARTMENT MAY PLACE IN RENTED PREMISES FOR ITS SPECIAL PURPOSES. MOREOVER, IT WILL ALSO BE NOTED FROM THE LEASE THAT THE ONLY WORK AGREED BY THE GOVERNMENT TO BE DONE ON THE LEASED PREMISES WAS TO CONSIST ONLY OF MINOR REPAIRS, THE LESSOR OTHERWISE TO MAINTAIN THE BUILDING.

IF THE FUNDS OF THIS DEPARTMENT CANNOT BE EXPENDED FOR THE TEMPORARY INSTALLATION OF THE EQUIPMENT NECESSARY TO THE OPERATION OF THESE PHOTOGRAPHIC LABORATORIES IN THIS PARTICULAR RENTED SPACE, IT WILL BE NECESSARY TO DISCONTINUE THIS IMPORTANT PHASE OF THE OPERATION OF THE DEPARTMENT, AS NO SPACE IS AT THIS TIME AVAILABLE IN GOVERNMENT-OWNED STRUCTURES AND IT IS IMPOSSIBLE TO LOCATE PRIVATELY CONTROLLED SPACE WHICH IS SO EQUIPPED AS TO MAKE POSSIBLE THE CONDUCT OF THESE NECESSARY PHOTOGRAPHIC OPERATIONS. IT IS BELIEVED THAT THE INSTALLATION OF THE SPECIAL EQUIPMENT REQUIRED FOR THE OPERATION OF PHOTOGRAPHIC LABORATORIES REPRESENTS A PARTICULAR NEED NOT CONTEMPLATED WITHIN THE RESTRICTIONS IMPOSED BY THE ECONOMY ACT, AND THAT THE EXPENDITURE OF PUBLIC FUNDS FOR THIS ESSENTIAL PURPOSE IS PERMISSIBLE.

AN EARLY DECISION IN THIS MATTER WILL BE APPRECIATED.

PARAGRAPH 6 OF THE LEASE PROVIDES AS FOLLOWS:

THE LESSOR SHALL FURNISH TO THE GOVERNMENT, DURING THE OCCUPANCY OF SAID PREMISES, UNDER THE TERMS OF THIS LEASE, AS PART OF THE RENTAL CONSIDERATION, THE FOLLOWING: THE LESSOR AGREES THAT IT WILL COMPLY WITH ALL THE MUNICIPAL ORDINANCES, REGULATIONS, AND STATUTES RELATING TO BUILDINGS AND THEIR EQUIPMENT IN THE DISTRICT OF COLUMBIA; THAT IT WILL DISCHARGE AT ITS OWN EXPENSE ALL TAXES, DUTIES, OR CHARGES LEVIED OR TO BE LEVIED ON SAID PREMISES DURING SAID TERM, EXCEPT WATER RENTS, GAS AND ELECTRIC CURRENT CHARGES; THAT IT WILL MAKE ALL REPAIRS TO SAID BUILDING DURING THE TERM OF THIS LEASE OR EXTENSION THEREOF DUE TO FAULTY CONSTRUCTION OR ORDINARY WEAR AND TEAR, AND WILL MAINTAIN IN EFFICIENT WORKING CONDITION ALL ELEVATORS, PLUMBING, LIGHTING, AND HEATING APPARATUS, INSOFAR AS THE SAME MAY BECOME DEFECTIVE THROUGH ORDINARY WEAR AND TEAR OR WITHOUT FAULT OR NEGLIGENCE ON THE PART OF THE GOVERNMENT OR ITS AGENTS OR EMPLOYEES, EXCEPTING MINOR REPAIRS TO WINDOW AND DOOR GLASS, ELEVATORS, ELECTRIC LIGHTING, HEATING, AND PLUMBING EQUIPMENT WHICH SHALL ,AS A PART OF THE CONSIDERATION OF RENTAL, BE MADE BY THE GOVERNMENT AT ITS OWN EXPENSE. IT IS FURTHER AGREED THAT THE DIRECTOR OF THE NATIONAL PARK SERVICE, DEPARTMENT OF THE INTERIOR, WASHINGTON, DISTRICT OF COLUMBIA, SHALL BE THE SOLE JUDGE AS TO WHETHER THE NEEDED REPAIRS ARE DUE TO NEGLIGENCE OR FAULT ON THE PART OF THE AGENTS OR EMPLOYEES OF THE GOVERNMENT AND ALSO TO DETERMINE WHETHER NEEDED REPAIRS ARE TO BE CLASSED AS MINOR REPAIRS TO BE MADE AT THE EXPENSE OF THE GOVERNMENT. IT IS ALSO AGREED THAT THE GOVERNMENT SHALL NOTIFY THE LESSOR OF ANY REPAIRS WHICH SHOULD BE MADE AT THE EXPENSE OF THE LESSOR AND, IF SUCH REPAIRS ARE NOT MADE WITHIN PERIOD OF TIME WHICH THE GOVERNMENT CONSIDERS TO BE REASONABLE, THE LATTER WILL BE AUTHORIZED TO MAKE SUCH REPAIRS AND CHARGE SAME TO THE LESSOR, AND IF SUCH CHARGE IS NOT PROMPTLY PAID, THE GOVERNMENT SHALL BE AUTHORIZED TO DEDUCT THE AMOUNT OF SUCH CHARGES FROM THE AMOUNTS DUE THE LESSOR AS RENTAL UNDER THE TERMS OF THIS LEASE.

THE RIGHTS OF THE GOVERNMENT TO MAKE ALTERATIONS, ATTACH FIXTURES, AND ERECT ADDITIONS, ETC., ARE SET OUT IN PARAGRAPH 8 OF SAID LEASE AS FOLLOWS:

THE GOVERNMENT SHALL HAVE THE RIGHT, DURING THE EXISTENCE OF THIS LEASE, TO MAKE ALTERATIONS, ATTACH FIXTURES, AND ERECT ADDITIONS, STRUCTURES, OR SIGNS, IN OR UPON THE PREMISES HEREBY LEASED (PROVIDED SUCH ALTERATIONS, ADDITIONS, STRUCTURES, OR SIGNS SHALL NOT BE DETRIMENTAL TO OR INCONSISTENT WITH THE RIGHTS GRANTED TO OTHER TENANTS ON THE PROPERTY OR IN THE BUILDING IN WHICH SAID PREMISES ARE LOCATED); WHICH FIXTURES, ADDITIONS, OR STRUCTURES SO PLACED IN OR UPON OR ATTACHED TO THE SAID PREMISES SHALL BE AND REMAIN THE PROPERTY OF THE GOVERNMENT AND MAY BE REMOVED THEREFROM BY THE GOVERNMENT PRIOR TO THE TERMINATION OF THIS LEASE, AND THE GOVERNMENT, IF REQUIRED BY THE LESSOR, SHALL, BEFORE THE EXPIRATION OF THIS LEASE OR RENEWAL THEREOF, RESTORE THE PREMISES TO THE SAME CONDITION AS THAT EXISTING AT THE TIME OF ENTERING UPON THE SAME UNDER THIS LEASE, REASONABLE AND ORDINARY WEAR AND TEAR AND DAMAGES BY THE ELEMENTS OR BY CIRCUMSTANCES OVER WHICH THE GOVERNMENT HAS NO CONTROL, EXCEPTED: PROVIDED, HOWEVER, THAT IF THE LESSOR REQUIRES SUCH RESTORATION, THE LESSOR SHALL GIVE WRITTEN NOTICE THEREOF TO THE GOVERNMENT THIRTY DAYS BEFORE THE TERMINATION OF THE LEASE.

WITH RESPECT TO PROPOSED IMPROVEMENTS TO RENTED PREMISES IT HAS BEEN HELD THAT WHERE THE EQUIPMENT IS SUCH THAT IT IS NOT PERMANENTLY ATTACHED TO THE REALTY AND READILY MAY BE REMOVED THEREFROM AS PROVIDED FOR UNDER PARAGRAPH 8 OF THE STANDARD FORM GOVERNMENT LEASES WITHOUT DESTROYING THE USEFULNESS OR DAMAGING THE PROPERTY, SUCH PURCHASES AND INSTALLATIONS FROM PUBLIC FUNDS APPROPRIATED FOR THE EXPENSES OF THE SERVICE OR PROJECT INVOLVED ARE AUTHORIZED. SEE 5 COMP. GEN. 696; 14 ID. 97, AND DECISIONS THEREIN CITED. WHERE, HOWEVER, THE PROPOSED IMPROVEMENTS ARE IN THE NATURE OF PERMANENT IMPROVEMENTS TO THE LEASED PREMISES; THAT IS, IMPROVEMENTS PERMANENTLY ATTACHED TO THE REALTY AND NOT READILY REMOVABLE THEREFROM WITHOUT DAMAGE TO THE PROPERTY AND/OR EQUIPMENT, THE GENERAL RULE IS THAT THE INSTALLATIONS ARE NOT AUTHORIZED. SEE 5 COMP. DEC. 478; 2 COMP. GEN. 607; 14 ID. 97.

IN THE CASE UNDER CONSIDERATION IT APPEARS THAT THE PROPOSED ALTERATIONS TO ADAPT THE QUARTERS FOR PARTICULAR USES ARE NOT REPAIRS, ETC., THE COST OF WHICH IS REQUIRED UNDER THE LEASE TO BE BORNE BY THE LESSOR. IT IS ALSO UNDERSTOOD THAT THE ALTERATIONS ARE REQUIRED FOR ADAPTING THE QUARTERS TO SPECIAL USES SO THAT THE MATTER IS NOT ONE FOR CONSIDERATION AS AN ALTERATION, IMPROVEMENT, OR REPAIR OF THE LEASED PREMISES WITHIN THE PURVIEW OF SECTION 322 OF THE ECONOMY ACT OF JUNE 30, 1932, 47 STAT. 412, AS AMENDED BY THE ACT OF MARCH 3, 1933, 47 STAT. 1517.

IN THE CIRCUMSTANCES I HAVE TO ADVISE THAT IF THE INSTALLATION OF THE EQUIPMENT AS PROPOSED DOES NOT INVOLVE IN FACT AN IMPROVEMENT PERMANENTLY ATTACHED TO THE REALTY UNDER THE RULE, SUPRA, THERE WOULD APPEAR NO LEGAL OBJECTION TO CHARGING PUBLIC FUNDS UNDER YOUR DEPARTMENT, OTHERWISE AVAILABLE FOR THE PURPOSE, FOR THE COSTS OF INSTALLING SPECIAL EQUIPMENT FOR PHOTOGRAPHIC LABORATORIES, ETC., AS STATED IN YOUR LETTER.