Veterans Administration Land Transfers to Medical Schools:

Propriety and Impact

HRD-77-105: Published: Jun 3, 1977. Publicly Released: Jun 3, 1977.

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The Veterans Administration's (VA) attempted transfer of North Chicago VA Hospital land to the University of Health Sciences/Chicago Medical School did not comply with regulations. The law requires most federal agencies to report to the General Services Administration all federal land which they do not need. It can then be used by other federal agencies or disposed of. The proposed North Chicago VA Hospital transfer involves about 87 acres of land, appraised at $1,740,000. In its attempt to transfer the land, VA, contrary to established procedures, attempted to restrict the future disposition of its so-called surplus North Chicago land to use by the university. VA stopped the transfer when it realized it would not be permitted, and began actions to lease the land, on a long-term basis, to the university.

The proposed lease arrangement would prevent the government from determining if the transfer were appropriate, and other eligible and interested educational institutions and local public agencies would have little chance to compete for the land. The Department of Health, Education and Welfare (HEW) determined that the university's proposed relocation would be in "probable" violation of the Civil Rights Act of 1964. If the proposed relocation is determined by HEW to be in violation of the act, the university could be deterred from relocating, and the VA affiliation with the school could be permanently damaged. In awarding a health-manpower-training grant to the university in 1975, VA did not assure that the school's proposed program was consistent with state and local policies, plans, and programs. If the relocation does not take place, the purposes for which the grant was awarded may not be achieved.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: If the university does not relocate, the VA should act quickly to protect its investments in facilities, equipment, and personnel and its other efforts to convert the hospital into a teaching hospital. The Administrator of Veterans Affairs should: (1) make sure that the VA complies with federal property disposal regulations; (2) establish regulations and procedures to guarantee that any long-term land leases between VA and its affiliated schools are proper and reflect the highest and best use of otherwise excess federal land; (3) if the university does not relocate, protest VA investments in the hospital as a teaching hospital; and (4) guarantee that VA-sponsored programs are properly coordinated with state and local planning agencies as required.

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