B-173882, APR 21, 1972, 51 COMP GEN 660

B-173882, APR 21, 1972, 51 COMP GEN 660

LEASES - AGREEMENT TO EXECUTE LEASE - FEDERAL PROJECT STATUS - RELOCATION EXPENSES TO "DISPLACED PERSONS" TRAILER PARK TENANTS WHO WERE NOTIFIED TO VACATE ONLY AFTER THE GOVERNMENT SIGNED AN AGREEMENT TO LEASE THE BUILDING TO BE CONSTRUCTED ON THE VACATED LAND, ARE "DISPLACED PERSONS" AS A RESULT OF FEDERAL AND FEDERALLY ASSISTED PROGRAMS WITHIN THE CONTEMPLATION OF THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970, AND THE TENANTS ARE ENTITLED TO RELOCATION EXPENSES AND ASSISTANCE UNDER THE ACT SINCE THE LEASE TRANSACTION AMOUNTS, IN EFFECT, TO A FEDERAL LEASE -CONSTRUCTION PROJECT, EVEN THOUGH THE FIVE POINT CRITERIA ESTABLISHED TO DETERMINE A BUILDING IS "IN EXISTENCE" - TITLE; DESIGN; CONSTRUCTION FINANCING; BUILDING PERMIT; AND A FIXED COMPLETION DATE - TO ASSURE COMPLIANCE WITH THE APPROPRIATION PROHIBITION CONCERNING THE PAYMENT OF RENTAL ON LEASE AGREEMENTS FOR SPACE IN BUILDINGS ERECTED FOR THE GOVERNMENT, HAD NOT BEEN MET, THE FINANCING ARRANGEMENT NOT HAVING BEEN COMPLETED AS OF THE DATE OF ISSUANCE OF THE SPACE SOLICITATION.

TO THE ACTING ADMINISTRATOR, GENERAL SERVICES ADMINISTRATION, APRIL 21, 1972:

FURTHER REFERENCE IS MADE TO YOUR LETTER OF AUGUST 17, 1971, IN WHICH YOU REQUEST OUR DECISION AS TO WHETHER IN THE CIRCUMSTANCES DESCRIBED, THE TENANTS OF THE TEMPLE TRAILER VILLAGE, ALEXANDRIA, VIRGINIA, ARE ENTITLED TO RELOCATION EXPENSES AND ASSISTANCE UNDER THE UNIFORM RELOCATION ASSISTANCE AND REAL PROPERTY ACQUISITION POLICIES ACT OF 1970 (RELOCATION ACT), PUBLIC LAW 91-646, 84 STAT. 1894. BY LETTER DATED AUGUST 31, 1971, MR. HENRY H. KREVOR, ATTORNEY FOR A NUMBER OF THE TENANTS OF THE TRAILER PARK, PRESENTED HIS VIEWS ON THE ENTITLEMENT OF THE TENANTS TO RELOCATION ASSISTANCE UNDER THE ACT. BY LETTER DATED SEPTEMBER 15, 1971, WE REQUESTED YOUR VIEWS ON THE POINTS PRESENTED BY MR. KREVOR. THE VIEWS OF THE GENERAL SERVICES ADMINISTRATION (GSA) WERE FURNISHED US BY LETTER DATED OCTOBER 15, 1971, FROM MR. HUGH H. BRISTER, ASSISTANT GENERAL COUNSEL, PUBLIC BUILDINGS DIVISION (GSA). IN A LETTER TO US DATED OCTOBER 26, 1971, MR. KREVOR COMMENTED ON MR. BRISTER'S LETTER.

AS DESCRIBED BY GSA THE FACTS GIVING RISE TO THE QUESTION PRESENTED ARE HEREINAFTER SET FORTH. ON JUNE 30, 1971, GSA ACCEPTED AN OFFER MADE BY THE JOINT VENTURE OF HUBERT N. HOFFMAN AND THE AMERICAN TRAILER COMPANY, INC., TO LEASE ABOUT 480,000 SQUARE FEET OF SPACE IN A BUILDING LOCATED IN ALEXANDRIA, VIRGINIA. THE OFFER WAS MADE IN RESPONSE TO A SOLICITATION FOR OFFERS (SFO) FOR SPACE IN THE GENERAL AREA OF ALEXANDRIA. THE SPACE OFFERED BY THE JOINT VENTURE IS IN A BUILDING WHICH, YOU STATE, MEETS THE CRITERIA PRESCRIBED IN THE SFO FOR QUALIFYING AS A BUILDING UNDER CONSTRUCTION, ALTHOUGH ACTUAL CONSTRUCTION HAD NOT STARTED. THE SITE OF THE BUILDING IS A 12 1/2 ACRE AREA OWNED BY AMERICAN TRAILER COMPANY, INC., WHICH FOR SEVERAL YEARS HAS BEEN OPERATED AS A MOBILE HOME OR TRAILER PARK IDENTIFIED AS TEMPLE TRAILER VILLAGE. THE TRAILER COMPANY ENTERED INTO A JOINT VENTURE AGREEMENT ON OCTOBER 6, 1967, WITH HUBERT N. HOFFMAN TO DEVELOP THIS 12 1/2 ACRES, ALONG WITH AN ADJOINING 12 1/2 ACRES OF LAND OWNED BY HOFFMAN, FOR COMMERCIAL OFFICE BUILDINGS AND OTHER RENTAL SPACE. THE BUILDING IN WHICH THE LEASED SPACE IS OFFERED IS IN FURTHERANCE OF THAT AGREEMENT. GSA STATES THAT THE GOVERNMENT'S LEASE WILL COVER ONLY THE OFFICE SPACE IN THE BUILDING AND THAT THE OWNER PUBLICLY ANNOUNCED THAT THE REMAINING SPACE IN THE BUILDING WILL BE AVAILABLE FOR COMMERCIAL TENANTS. MR. KREVOR STATES, HOWEVER, THAT THE SPACE NOT BEING USED BY THE GOVERNMENT FOR OFFICES, WILL BE USED FOR SERVICES TO SUPPORT THE GOVERNMENT EMPLOYEES, SUCH AS A CAFETERIA. PRIOR TO GSA'S ACCEPTANCE OF THE OFFER, THE OFFEROR ADVISED THAT ALTHOUGH CONSTRUCTION OF THE BUILDING HAD NOT YET STARTED, SITE PREPARATION WORK HAD BEGUN ON APRIL 1, 1971. GSA WAS ALSO INFORMED THAT THE OWNERS OF TRAILERS IN THE TEMPLE TRAILER VILLAGE WERE NOTIFIED IN EARLY JULY THAT THE TRAILER PARK WOULD BE CLOSED AND UTILITIES DISCONTINUED AFTER AUGUST 31, 1971.

MR. KREVOR, WHO REPRESENTS A NUMBER OF UNIDENTIFIED OWNERS OF THE TRAILERS PARKED IN THE TEMPLE TRAILER VILLAGE, IS SEEKING RELOCATION ASSISTANCE AND EXPENSES FOR HIS CLIENTS FROM GSA, ASSERTING THAT THE RELOCATION ACT IS APPLICABLE IN THIS SITUATION, SINCE HE CLAIMS THAT THE BUILDING WOULD NOT BE CONSTRUCTED IF THE GOVERNMENT HAD NOT SIGNED A LEASE THEREFOR. GSA, HOWEVER, IS OF THE OPINION THAT THE TENANTS OF TEMPLE TRAILER VILLAGE ARE NOT ENTITLED TO PAYMENTS OF RELOCATION EXPENSES AND RELOCATION ASSISTANCE UNDER THE RELOCATION ACT. THE PURPOSE OF YOUR SUBMISSION IS TO RESOLVE THIS DIFFERENCE OF OPINION BETWEEN GSA AND THE OCCUPANTS OF TEMPLE TRAILER VILLAGE.

THE PURPOSE OF TITLE II OF THE RELOCATION ACT IS "TO ESTABLISH A UNIFORM POLICY FOR THE FAIR AND EQUITABLE TREATMENT OF PERSONS DISPLACED AS A RESULT OF FEDERAL AND FEDERALLY ASSISTED PROGRAMS IN ORDER THAT SUCH PERSONS SHALL NOT SUFFER DISPROPORTIONATE INJURIES AS THE RESULT OF PROGRAMS DESIGNED FOR THE BENEFIT OF THE PUBLIC AS A WHOLE." SECTION 202 OF THE RELOCATION ACT PROVIDES THAT WHENEVER THE ACQUISITION OF REAL PROPERTY FOR PROGRAM OR PROJECT UNDERTAKEN BY A FEDERAL AGENCY IN ANY STATE WILL RESULT IN THE DISPLACEMENT OF ANY PERSON ON OR AFTER THE EFFECTIVE DATE OF THE ACT, THE HEAD OF SUCH AGENCY SHALL MAKE A PAYMENT TO SUCH DISPLACED PERSON FOR HIS MOVING AND RELATED EXPENSES. SECTION 203 OF THE ACT PROVIDES THAT IN ADDITION TO PAYMENTS OTHERWISE AUTHORIZED BY TITLE II, THE HEAD OF THE FEDERAL AGENCY SHALL MAKE AN ADDITIONAL PAYMENT WHICH CANNOT EXCEED $15,000 "TO ANY DISPLACED PERSON WHO IS DISPLACED FROM A DWELLING ACTUALLY OWNED AND OCCUPIED BY SUCH DISPLACED PERSON FOR NOT LESS THAN 180 DAYS PRIOR TO THE INITIATION OF NEGOTIATIONS FOR THE ACQUISITION OF THE PROPERTY." SECTION 204 OF THE RELOCATION ACT WHICH IS ENTITLED "REPLACEMENT HOUSING FOR TENANTS AND CERTAIN OTHERS," STATES THAT "IN ADDITION TO AMOUNTS OTHERWISE AUTHORIZED BY THIS TITLE, THE HEAD OF THE FEDERAL AGENCY SHALL MAKE A PAYMENT TO OR FOR ANY DISPLACED PERSON DISPLACED FROM ANY DWELLING NOT ELIGIBLE TO RECEIVE A PAYMENT UNDER SECTION 203 WHICH DWELLING WAS ACTUALLY AND LAWFULLY OCCUPIED BY SUCH DISPLACED PERSON FOR NOT LESS THAN 90 DAYS PRIOR TO THE INITIATION OF NEGOTIATIONS FOR ACQUISITION OF SUCH DWELLING."

SECTION 205 OF THE ACT CONTAINS PROVISIONS FOR RELOCATION ASSISTANCE ADVISORY SERVICES.

FOR THE PURPOSES OF THE RELOCATION ACT THE TERM "DISPLACED PERSON" IS DEFINED IN SECTION 101(6) AS MEANING:

*** ANY PERSON WHO, ON OR AFTER THE EFFECTIVE DATE OF THIS ACT, MOVES FROM REAL PROPERTY, OR MOVES HIS PERSONAL PROPERTY FROM REAL PROPERTY, AS A RESULT OF THE ACQUISITION OF SUCH REAL PROPERTY, IN WHOLE OR IN PART, OR AS THE RESULT OF THE WRITTEN ORDER OF THE ACQUIRING AGENCY TO VACATE REAL PROPERTY, FOR A PROGRAM OR PROJECT UNDERTAKEN BY A FEDERAL AGENCY, OR WITH FEDERAL FINANCIAL ASSISTANCE; ***

ONE OF THE POINTS OF CONTENTION BETWEEN GSA AND MR. KREVOR CENTERS ON THE ENTITLEMENT OF TRAILER OWNERS TO ASSISTANCE UNDER THE RELOCATION ACT. THIS DISAGREEMENT REVOLVES AROUND A STATEMENT IN MR. BRISTER'S LETTER TO US THAT THE DISCUSSION IN MR. KREVOR'S LETTER OF AUGUST 31, 1971, RELATING TO ESTABLISHING MOBILE HOMES AS DWELLINGS FOR ENTITLEMENT PURPOSES "OMITS THE ESSENTIAL PREREQUISITES FOR ENTITLEMENT IN SECTION 203 OF PL 91-646." GSA REPORTS THAT THE ESSENTIAL PREREQUISITES ARE SET FORTH ON PAGE 10 OF HOUSE REPORT NO. 91-1656, WHICH STATES, IN PERTINENT PART, AS FOLLOWS:

TO QUALIFY FOR ANY PAYMENT UNDER THIS SECTION, A DISPLACED PERSON MUST MOVE FROM A DWELLING OWNED AND OCCUPIED BY HIM FOR NOT LESS THAN 180 DAYS BEFORE INITIATION OF NEGOTIATIONS FOR THE ACQUISITION OF THE PROPERTY. THE DWELLING MAY BE A SINGLE FAMILY BUILDING, A ONE-FAMILY UNIT IN A MULTI -FAMILY BUILDING, A UNIT OF A CONDOMINIUM OR COOPERATIVE HOUSING PROJECT, OR ANY OTHER RESIDENTIAL UNIT, INCLUDING A MOBILE HOME WHICH EITHER IS CONSIDERED TO BE REAL PROPERTY UNDER STATE LAW, CANNOT BE MOVED WITHOUT SUBSTANTIAL DAMAGE OR UNREASONABLE COST, OR IS NOT A DECENT, SAFE AND SANITARY DWELLING; ***

GSA STATES:

IN THE PRESENT CASE THE GOVERNMENT IS NOT ACQUIRING THE MOBILE HOME "DWELLING". THE "TENANTS" HAVE NO INTEREST IN THE LAND OTHER THAN A SHORT TERM RIGHT TO PARK FOR A STATED FEE. NO SHOWING OR CLAIM HAS BEEN MADE THAT THE TRAILERS ARE REAL PROPERTY OR CANNOT BE MOVED.

IN REPLY MR. KREVOR STATES THAT THE ACT DOES NOT REQUIRE THAT THE GOVERNMENT ACQUIRE THE MOBILE HOME, OR THAT THE MOBILE HOME BE REAL PROPERTY, OR THAT THE OWNER OF THE MOBILE HOME OWNS OR HAS ANY PARTICULAR INTEREST, OTHER THAN LAWFUL OCCUPANCY, IN THE SITE OF THE PROJECT FOR WHICH HE IS DISPLACED. MR. KREVOR ADDS:

IT IS PARTICULARLY IMPORTANT TO NOTE IN THIS REGARD THAT THE OWNER OF A MOBILE HOME WHO OCCUPIES RENTED SPACE IS AN OWNER OF A DWELLING WITH RESPECT TO THE PHYSICAL FACILITY, AND A TENANT WITH RESPECT TO THE SITE; AND THESE FACTORS MUST BE TAKEN INTO ACCOUNT IN DETERMINING THE BENEFITS TO WHICH HE MAY BE ENTITLED UNDER THE ACT.

AS A PRACTICAL MATTER, OWNERS AND RENTERS OF MOBILE HOMES ARE ELIGIBLE FOR ASSISTANCE UNDER THE ACT TO THE SAME EXTENT AS IF DISPLACED FROM TRADITIONAL HOUSING. ***

WE UNDERSTAND INFORMALLY FROM GSA THAT, IN ITS LETTER, IT WAS DISCUSSING THE ENTITLEMENT OF CERTAIN TRAILERS UNDER SECTION 203, AND THAT IT WOULD PROBABLY AGREE THAT OWNERS AND RENTERS OF MOBILE HOMES WHO ARE "DISPLACED PERSONS" AS DEFINED BY SECTION 101(6) WOULD BE ENTITLED TO THE BENEFITS OF THE RELOCATION ACT. IN THIS REGARD, IT APPEARS TO US THAT IN THE CIRCUMSTANCES DESCRIBED IN THE COMMITTEE REPORT BENEFITS WOULD BE IN ACCORDANCE WITH SECTION 203 FOR REPLACEMENT HOUSING FOR HOMEOWNERS, AND IN THOSE CIRCUMSTANCES WHERE THE TRAILERS CAN BE MOVED AND RELOCATED, BENEFITS WOULD BE PAYABLE UNDER SECTION 204 FOR REPLACEMENT HOUSING FOR TENANTS AND CERTAIN OTHER HOMEOWNERS. RELOCATION ASSISTANCE ADVISORY SERVICES UNDER SECTION 205 WOULD APPEAR TO BE AVAILABLE IN EITHER CIRCUMSTANCE.

IN REGARD TO WHETHER THE BENEFITS OF THE RELOCATION ACT ARE APPLICABLE TO THE INSTANT CIRCUMSTANCES, IT IS GSA'S POSITION THAT THE WORDING OF PUBLIC LAW 91-646 MAKES IT CLEAR THAT THE ACQUIRING OF TITLE TO REAL PROPERTY IS, GENERALLY, THE KEY TO ITS APPLICATION. GSA STATES THAT THE RELOCATION ACT IS APPLICABLE TO THE GOVERNMENT'S LEASING TRANSACTIONS ONLY IN REGARD TO SPACE ACQUIRED BY CONDEMNATION RESULTING IN DISPLACEMENT OF AN OCCUPANT OF SUCH SPACE AND - INSOFAR AS PERTINENT HERE - TO LEASE CONSTRUCTION OF BUILDINGS WHICH HAVE RECEIVED CONGRESSIONAL APPROVAL PURSUANT TO THE LANGUAGE, FIRST INCLUDED IN THE INDEPENDENT OFFICES APPROPRIATION ACT, 1963, PUBLIC LAW 87-741, 76 STAT. 728, AND INCLUDED IN ALL SUCCEEDING ANNUAL GSA APPROPRIATION ACTS, WHICH PROVIDES:

NO PART OF ANY APPROPRIATION CONTAINED IN THIS ACT SHALL BE USED FOR THE PAYMENT OF RENTAL ON LEASE AGREEMENTS FOR THE ACCOMMODATION OF FEDERAL AGENCIES IN BUILDINGS AND IMPROVEMENTS WHICH ARE TO BE ERECTED BY THE LESSOR FOR SUCH AGENCIES AT AN ESTIMATED COST OF CONSTRUCTION IN EXCESS OF $200,000 OR FOR THE PAYMENT OF THE SALARY OF ANY PERSON WHO EXECUTES SUCH A LEASE AGREEMENT: PROVIDED, THAT THE FOREGOING PROVISO SHALL NOT BE APPLICABLE TO PROJECTS FOR WHICH A PROSPECTUS FOR THE LEASE CONSTRUCTION OF SPACE HAS BEEN SUBMITTED TO AND APPROVED BY THE APPROPRIATE COMMITTEES OF THE CONGRESS IN THE SAME MANNER AS FOR PUBLIC BUILDINGS CONSTRUCTION PROJECTS PURSUANT TO THE PUBLIC BUILDINGS ACT OF 1959.

GSA CONTENDS THAT GOVERNMENT LEASE TRANSACTIONS, ASIDE FROM SPACE ACQUIRED BY CONDEMNATION AND ASIDE FROM LEASE CONSTRUCTION PROJECTS APPROVED BY THE APPROPRIATE CONGRESSIONAL COMMITTEES, ARE NOT FEDERAL PROGRAMS OR PROJECTS, BUT RATHER ARE CONSTRUCTION PROJECTS BY THE OWNER FOR HIS OWN PURPOSES. GSA CONTENDS THAT IN THE GOVERNMENT'S NORMAL LEASING TRANSACTIONS, THE LANDOWNER IS NOT DEPRIVED OF HIS OWNERSHIP NOR IS HE DISPLACED, BUT RATHER HE IS VOLUNTARILY CHANGING THE USE OF HIS LAND.

IN SUPPORT OF ITS POSITION GSA STATES THAT IT HAS CONTINUOUSLY AND UNEQUIVOCALLY TESTIFIED BEFORE CONGRESSIONAL HEARINGS ON PROPOSED RELOCATION ASSISTANCE BILLS THAT THE PROPOSED LEGISLATION SHOULD NOT BE, AND WAS NOT CONSIDERED BY GSA TO BE, APPLICABLE TO GOVERNMENT VOLUNTARY LEASING TRANSACTIONS. GSA STATES THAT IT HAS TAKEN THIS POSITION BECAUSE IT IS CONCERNED NOT ONLY WITH THE GENERAL APPLICATION OF THE RELOCATION ACT TO LEASE TRANSACTIONS, BUT THAT IT WAS PARTICULARLY CONCERNED THAT IF TITLE III OF THE ACT WAS DEEMED TO BE APPLICABLE TO SPACE LEASE TRANSACTIONS, GSA'S LONG ESTABLISHED CUSTOM AND PRACTICE OF OBTAINING SPACE BY SOLICITING OFFERS FROM LESSORS TO OBTAIN THE MOST FAVORABLE RENTAL FOR THE GOVERNMENT WOULD HAVE TO BE REVISED TO REFLECT THE REQUIREMENT IN SECTION 301 THAT THE GOVERNMENT MUST PAY AT LEAST THE APPRAISED VALUE OF THE INTEREST IT IS OBTAINING IN THE LAND.

THE GENERAL QUESTION AS TO WHETHER THE PROVISIONS OF THE RELOCATION ACT ARE APPLICABLE TO GOVERNMENT LEASING TRANSACTIONS IN ANY OR ALL CASES OTHER THAN SPACE OBTAINED BY CONDEMNATION AND GOVERNMENT LEASE CONSTRUCTION PROJECTS APPROVED BY THE APPROPRIATE COMMITTEES OF THE CONGRESS AS PROVIDED FOR IN GSA'S ANNUAL APPROPRIATION ACT IS NOT BEFORE US AND WE EXPRESS NO OPINION THEREON. RATHER, THE ISSUE BEFORE US IS WHETHER - UNDER THE FACTS AND CIRCUMSTANCES INVOLVED HERE - THE TENANTS OF THE TEMPLE TRAILER VILLAGE ARE "DISPLACED PERSONS" WHO HAVE MOVED FROM REAL PROPERTY OR HAVE MOVED THEIR PERSONAL PROPERTY FROM REAL PROPERTY, AS THE RESULT OF THE ACQUISITION OF SUCH REAL PROPERTY, IN WHOLE OR IN PART, FOR A PROGRAM OR PROJECT UNDERTAKEN BY A FEDERAL AGENCY, AND IF SO, WHETHER THEY ARE ENTITLED TO THE BENEFITS OF THE RELOCATION ACT.

MR. KREVOR STATES THAT THE SUBJECT BUILDING WOULD NOT BE CONSTRUCTED AND HIS CLIENTS WOULD NOT BE DISPLACED IF IT WERE NOT FOR THE AGREEMENT WITH GSA TO ACQUIRE A LONG-TERM LEASEHOLD INTEREST IN THE BUILDING WHEN CONSTRUCTED. HE STATES THAT IT IS CLEAR THAT "THE DEVELOPERS DID NOT INTEND TO CONSTRUCT A BUILDING FOR THEIR OWN PURPOSES OR FOR SPECULATION, AND THAT THE SITE OWNER DID NOT INTEND TO REQUIRE OCCUPANTS TO MOVE IN THE ABSENCE OF A PRIOR AGREEMENT WITH GSA." MR. KREVOR CONTENDS THAT IF GSA HAD NOT ENTERED INTO THE LEASE, THE AMERICAN TRAILER COMPANY WHICH OWNS THE LAND AND WHICH IS THE LANDLORD OF THE TEMPLE TRAILER VILLAGE, WOULD NOT HAVE ISSUED A NOTICE TO VACATE TO THE TENANTS OF THE VILLAGE. FURTHER CONTENDS THAT:

*** GSA'S APPROVAL OF THE LEASE AGREEMENT NECESSITATED AND PROMPTED THE DISPLACEMENT OF THE VILLAGE RESIDENTS. CLEARLY, THIS IS GOVERNMENT ACTION WITHIN THE SCOPE OF THE UNIFORM ACT, AT LEAST IN THE ABSENCE OF INTERVENING FACTS ESTABLISHING THAT IMMEDIATELY PRIOR TO THE GOVERNMENT'S APPROVAL OF THE LEASE AGREEMENT ON JUNE 30, 1971, THE PROPOSED-LESSOR HAD INTENDED TO PROCEED WITH THE PROMPT ERECTION OF THE BUILDING, IRRESPECTIVE OF ANY LEASE AGREEMENT WITH GSA.

IN FURTHER SUPPORT OF HIS POSITION, MR. KREVOR REFERS TO A STATEMENT REPORTED IN A LOCAL NEWSPAPER AS WELL AS HIS OWN CONVERSATIONS WITH THE PRESIDENT OF THE AMERICAN TRAILER COMPANY, WHICH OWNS THE LAND AND OPERATES THE TRAILER PARK, AND CONCLUDES THAT THE AMERICAN TRAILER COMPANY DELIBERATELY FAILED TO GIVE ANY NOTICES TO VACATE UNTIL GSA HAD AGREED TO ACQUIRE THE LEASEHOLD INTEREST, AND THAT THE BUILDING WOULD NOT BE BUILT IN THE ABSENCE OF SUCH AGREEMENT. HE STATES THAT FOR THE PURPOSES OF THE RELOCATION ACT, THE QUESTION IS NOT WHETHER PRIOR COMMITTEE CLEARANCE IS REQUIRED TO ENTER INTO THE LEASE, BUT RATHER WHETHER THE GOVERNMENT OR THE DEVELOPER CAUSED THESE PERSONS TO BE DISPLACED.

IT IS GSA'S POSITION THAT THE INSTANT SITUATION CONSTITUTES A VOLUNTARY LEASE TRANSACTION AND THAT "THE FACT THAT THE GOVERNMENT NEEDED SPACE AND THE LESSOR OFFERED SPACE IN ITS BUILDING DOES NOT MAKE THE CONSTRUCTION OF THE BUILDING A FEDERAL PROJECT." GSA STATES THAT THE BUILDING WAS PLANNED FOR CONSTRUCTION BY THE OWNER FOR ITS (THE OWNER'S) OWN PURPOSES AND THAT SUCH PURPOSE MAY HAVE BEEN FOR SPECULATION IS OF NO CONSEQUENCE, SINCE IT WAS THE LANDOWNER'S DECISION TO CHANGE THE USE OF HIS LAND THAT CAUSED HIM TO REQUIRE HIS TENANTS TO MOVE FROM THE LAND. GSA FURTHER STATES THAT "THE SITUATION IS NO DIFFERENT FROM A LESSOR REQUIRING A TENANT TO MOVE TO MAKE ROOM FOR ANOTHER TENANT, WHICH IN THIS CASE HAPPENS TO BE THE GOVERNMENT."

IN SUPPORT OF ITS POSITION, GSA NOTES THAT ITS BASIC STATUTORY AUTHORITY IN SECTION 210(H)(1) OF THE FEDERAL PROPERTY AND ADMINISTRATIVE SERVICES ACT OF 1949, AS AMENDED, 40 U.S.C. 490, AUTHORIZES THE LEASING OF SPACE NECESSARY FOR THE ACCOMMODATION OF FEDERAL AGENCIES IN BUILDINGS "WHICH ARE IN EXISTENCE OR TO BE ERECTED BY THE LESSOR FOR SUCH PURPOSES." THEY POINT OUT THAT THE PROVISION IN THE APPROPRIATION ACT, QUOTED ABOVE, IS CLEARLY LIMITED TO BUILDINGS WHICH ARE "TO BE ERECTED BY THE LESSOR FOR SUCH AGENCIES" AND THAT ITS AUTHORITY TO LEASE SPACE IN EXISTING BUILDINGS HAS NOT BEEN AFFECTED.

GSA CONTENDS THAT FOR THE PURPOSES OF ITS STATUTORY AUTHORITY, A BUILDING NEED NOT BE AVAILABLE IMMEDIATELY FOR OCCUPANCY, BUT RATHER THAT THE BUILDING WILL QUALIFY AS AN EXISTING BUILDING IF THE SPACE THEREIN WILL BE AVAILABLE FOR OCCUPANCY WHEN IT IS NEEDED BY THE GOVERNMENT. GSA STATES THAT:

*** WE BELIEVE THAT FOR THE PURPOSES OF OUR STATUTORY AUTHORITY A BUILDING UNDER CONSTRUCTION BY AN OWNER FOR HIS OWN PURPOSES, INCLUDING SPECULATION, WITH A FIXED COMPLETION DATE COMPATIBLE WITH THE GOVERNMENT'S NEED IS CERTAINLY CONSIDERED TO BE IN EXISTENCE FOR LEASE PURPOSES. THE PERCENTAGE OF COMPLETION OR CONSTRUCTION PROGRESS IS IMMATERIAL AS LONG AS THE AVAILABILITY DATE COINCIDES WITH THE SPACE NEED. IT LOGICALLY FOLLOWS, APPLYING THE FACTORS OF COMPATIBILITY OF AVAILABILITY DATE AND NEED DATES AND THE BUILDING BEING INTENDED FOR THE OWNER'S PURPOSES, THAT BUILDING CONSTRUCTION IN THE PHYSICAL SENSE NEED NOT HAVE BEGUN IN ORDER FOR A BUILDING TO BE CONSIDERED "IN EXISTENCE." IN THIS CONNECTION GSA DEVELOPED THE 5-POINT CRITERIA, WHICH ARE HEREINAFTER LISTED, FOR APPLICATION WHERE CONSTRUCTION IN THE PHYSICAL SENSE HAD NOT STARTED. REGARD THESE CRITERIA AS A VALID TEST AND THEIR APPLICATION AS CONSISTENT WITH OUR STATUTORY AUTHORITY.

WE CONSIDER THAT THE WELL ADVERTISED AND CONTINUING USE OF THIS 5 POINT CONCEPT NATIONWIDE BY GSA COMMENCING IN 1964 WITHOUT OBJECTION ESTABLISHES THROUGH CUSTOM AND USAGE ITS ACCEPTABILITY AS AN AUTHORIZED METHOD OF SPACE PROCUREMENT.

IN ITS REGULATIONS OR INSTRUCTIONS AND IN THE SUBJECT SOLICITATION, GSA DEFINES BUILDINGS "WHICH ARE TO BE ERECTED BY THE LESSOR FOR SUCH AGENCIES" TO EXCLUDE NEW BUILDINGS, OR EXTENSIONS OR ADDITIONS TO EXISTING BUILDINGS THE CONSTRUCTION STATUS OF WHICH, ON THE DATE OF ISSUANCE OF THE SOLICITATION, MET ALL OF THE FOLLOWING CONDITIONS:

I. TITLE TO THE SITE WAS VESTED IN THE OFFEROR OR HE POSSESSED SUCH OTHER INTEREST IN AND DOMINION AND CONTROL OVER THE SITE TO ENABLE STARTING CONSTRUCTION.

II. DESIGN WAS COMPLETE.

III. CONSTRUCTION FINANCING FULLY COMMITTED.

IV. A BUILDING PERMIT FOR CONSTRUCTION OF THE ENTIRE BUILDING, EXTENSION OR ADDITION HAD BEEN ISSUED.

V. ACTUAL CONSTRUCTION IS CURRENTLY IN PROGRESS OR A FIRM CONSTRUCTION CONTRACT WITH A FIXED COMPLETION DATE HAS BEEN ENTERED INTO.

AS YOU KNOW, OUR OFFICE REVIEWED A NUMBER OF LEASES ENTERED INTO BY YOUR AGENCY UNDER THE ABOVE-MENTIONED FIVE-POINT CRITERIA. ESSENTIALLY, WE FOUND THAT GSA, THROUGH DISCUSSIONS AND LETTERS, MADE ITS SPACE REQUIREMENTS KNOWN TO PRIVATE DEVELOPERS INTERESTED IN CONSTRUCTING BUILDINGS THAT WOULD BE LEASED TO THE GOVERNMENT. IT APPEARS THAT WHEN FIRST CONTACTED, NONE OF THE DEVELOPERS STUDIED HAD A BUILDING UNDER CONSTRUCTION (EITHER FOUNDATION OR STRUCTURAL WORK) OR HAD MET GSA'S FIVE CONDITIONS UNDER WHICH IT CLASSIFIED BUILDINGS AS BEING UNDER CONSTRUCTION; AND THAT GSA DID NOT ISSUE ITS SOLICITATIONS FOR OFFERS UNTIL AFTER IT DETERMINED TO ITS SATISFACTION THAT AT LEAST ONE OF THE DEVELOPERS HAD MET THE FIVE CONDITIONS.

THUS, WE HAVE SOME DOUBT THAT THE MANNER IN WHICH GSA ASSURED ITSELF THAT THE FIVE CONDITIONS WERE MET WAS SUFFICIENT TO ASSURE COMPLIANCE WITH THE APPROPRIATION PROVISION. BASED ON ALL THE FACTS AND CIRCUMSTANCES DISCLOSED BY OUR REVIEW, WE ARE OF THE OPINION THAT THESE TRANSACTIONS - AT LEAST IN THOSE CASES WHERE NO SUBSTANTIAL FOUNDATION OR STRUCTURAL WORK HAD BEEN PERFORMED AS OF THE DATE OF THE ISSUANCE OF THE SFO - AMOUNT, IN EFFECT, TO GOVERNMENT LEASE CONSTRUCTION PROJECTS FOR THE PURPOSES OF THE RELOCATION ACT.

IN ANY EVENT, IN THE INSTANT CASE, IT IS OUR VIEW THAT THE PROPOSED BUILDING DID NOT MEET THE FIVE-POINT CRITERIA AS OF THE DATE OF THE GSA SOLICITATION, I.E., AS OF DECEMBER 31, 1971, AND THUS, CANNOT QUALIFY UNDER GSA'S CRITERIA AS A BUILDING IN EXISTENCE. WHILE IT IS POSSIBLE AS ALLEGED BY MR. KREVOR - THAT MORE THAN ONE OF THE FIVE-POINT CRITERIA WERE NOT MET BY THE BUILDER, IT IS CLEAR TO US THAT AT LEAST ITEM III OF THE CRITERIA - WHICH REQUIRES CONSTRUCTION FINANCING TO BE FULLY COMMITTED ON THE DATE OF ISSUANCE OF THE SFO - WAS NOT MET. THE COMMITMENT LETTER DATED OCTOBER 19, 1970, FROM THE UNITED VIRGINIA BANK TO THE JOINT VENTURERS STATES:

IN ACCORDANCE WITH OUR CONVERSATION OF THIS DATE REGARDING A CONSTRUCTION LOAN, WE AGREE TO MAKE YOU A $17,000,000 CONSTRUCTION LOAN SECURED BY AN OFFICE BUILDING CONTAINING APPROXIMATELY 500,000 SQUARE FEET OF NET RENTABLE AREA, TO BE ERECTED ON THE PROPERTY KNOWN AS TEMPLE TRAILER VILLAGE, CITY OF ALEXANDRIA, VIRGINIA. THIS COMMITMENT IS PREDICATED UPON THE FOLLOWING:

1. TRIPLE "A" TENANT.

2. SUCH OTHER REQUIREMENTS THAT ARE NORMAL TO OUR CONSTRUCTION LOAN LENDING POLICIES AND PRACTICES.

IN OUR VIEW, THIS FINANCIAL ARRANGEMENT, WHICH IS CONTINGENT UPON THE SIGNING OF A LEASE BY A TRIPLE "A" TENANT, CANNOT BE SAID TO AMOUNT TO FULLY COMMITTED CONSTRUCTION FINANCING. THE FIVE-POINT CRITERIA MUST BE MET ON THE DATE OF ISSUANCE OF THE SFO WHICH WOULD BE PRIOR TO THE GOVERNMENT'S SIGNING A LEASE FOR THE BUILDING. IN THIS CASE, THE CONSTRUCTION FINANCING WOULD NOT BE, AND WAS NOT, FULLY COMMITTED UNTIL THE TRIPLE "A" TENANT - HERE THE UNITED STATES - ENTERED INTO A LEASE OF THE BUILDING OR AT LEAST, AN AGREEMENT TO LEASE. IN THIS SAME CONNECTION WE ALSO NOTE THAT IT WAS NOT UNTIL AFTER GSA SIGNED THE AGREEMENT TO LEASE THAT THE OWNERS OF THE TRAILERS IN TEMPLE TRAILER VILLAGE WERE, IN EFFECT, NOTIFIED BY THE LESSOR TO VACATE.

SINCE ON THE DATE OF ISSUANCE OF THE SFO THERE WAS NOT MET AT LEAST ONE OF THE FIVE CONDITIONS PRESCRIBED BY GSA FOR CONSIDERING A PROPOSED BUILDING AS ONE NOT "TO BE ERECTED BY THE LESSOR" FOR THE GOVERNMENT, THE PROPOSED BUILDING MUST BE CONSIDERED A "BUILDING TO BE ERECTED BY THE LESSOR" FOR THE GOVERNMENT. THUS, IT APPEARS TO US THAT THE SUBJECT TRANSACTION AMOUNTS, IN EFFECT, TO A GOVERNMENT LEASE CONSTRUCTION PROJECT FOR THE PURPOSES OF THE RELOCATION ACT.

IT IS CLEAR THAT PERSONS DISPLACED BY FEDERAL LEASE-CONSTRUCTION PROJECTS ARE ENTITLED TO BENEFITS UNDER THE RELOCATION ACT. THIS IS ADMITTED BY GSA WHICH HAS ALWAYS TAKEN THE POSITION THAT THE RELOCATION ACT IS APPLICABLE TO LEASE-CONSTRUCTION PROJECTS WHICH ARE TO BE CONSTRUCTED AT AN ESTIMATED COST IN EXCESS OF $200,000 AND WHICH HAVE RECEIVED THE APPROVAL OF THE APPROPRIATE COMMITTEES OF THE CONGRESS AS PROVIDED FOR IN THE VARIOUS ANNUAL GSA APPROPRIATIONS ACTS. GSA TAKES THIS POSITION BECAUSE IT REGARDS THE LEASE CONSTRUCTION OF BUILDINGS APPROVED IN THE SAME MANNER AS PUBLIC BUILDINGS PROJECT AS ANALOGOUS TO THE TYPE OF LEASE CONSTRUCTION EMPLOYED BY THE FORMER POST OFFICE DEPARTMENT AND THE HOUSE COMMITTEE REPORT ON THE RELOCATION ACT REGARDS PERSONS DISPLACED AS THE RESULT OF POST OFFICE LEASE-CONSTRUCTION PROJECTS AS BEING ENTITLED TO BENEFITS UNDER SUCH ACT. IN DISCUSSING THE DEFINITION OF THE TERM "DISPLACED PERSON" IT IS STATED IN HOUSE REPORT NO. 91-1656 (PAGE 4) THAT:

IT IS IMMATERIAL WHETHER THE REAL PROPERTY IS ACQUIRED BEFORE OR AFTER THE EFFECTIVE DATE OF THE BILL, OR BY FEDERAL OR STATE AGENCY; OR WHETHER FEDERAL FUNDS CONTRIBUTE TO THE COST OF THE REAL PROPERTY. THE CONTROLLING POINT IS THAT THE REAL PROPERTY MUST BE ACQUIRED FOR A FEDERAL OR FEDERAL FINANCIALLY ASSISTED PROGRAM OR PROJECT. FOR EXAMPLE:

(B) POST OFFICE DEPARTMENT WITNESSES BEFORE THE COMMITTEE CALLED ATTENTION TO THE FACT THAT ALTHOUGH THE DEPARTMENT'S CONSTRUCTION REQUIREMENTS INVOLVE ABOUT 1,000 BUILDINGS ANNUALLY, THE POSTAL BUILDING PROGRAM, AS SUCH, ACCOUNTS FOR ONLY A FEW CONSTRUCTION SITES EACH YEAR. OCCASIONALLY, THE DEPARTMENT ACQUIRES THE SITE AND TRANSFERS IT TO THE SUCCESSFUL BIDDER FOR CONSTRUCTION AND LEASE BACK TO THE DEPARTMENT. MOST CASES, HOWEVER, BUILDING SITES ARE OBTAINED THROUGH THE DEPARTMENT'S LEASING AUTHORITY. USUALLY, THESE SITES ARE CONTROLLED THROUGH AN OPTION PROCEDURE WITH TITLE NEITHER VESTING IN OR PASSING THROUGH THE POST OFFICE DEPARTMENT. INSTEAD, THE OPTION IS ASSIGNED TO A SUCCESSFUL BIDDER WHO BECOMES THE OWNER OF THE LAND, AND THE DEPARTMENT'S LONG-TERM LESSOR. SOME OF THESE SITES ARE FOR LARGE POSTAL FACILITIES TO BE CONSTRUCTED IN METROPOLITAN AREAS WHERE THE ONLY AVAILABLE AND SUITABLE LAND IS OCCUPIED BY NUMEROUS LOW-INCOME INDIVIDUALS AND FAMILIES, AND BY SMALL BUSINESSES.

IT MAKES NO DIFFERENCE TO A PERSON REQUIRED TO MOVE BECAUSE OF THE DEVELOPMENT OF A POSTAL FACILITY, WHICH METHOD THE POSTAL AUTHORITIES USE TO OBTAIN THE FACILITY, OR WHO ACQUIRES THE SITE OR HOLDS THE FEE TITLE TO THE PROPERTY. SINCE THE END PRODUCT IS THE SAME, A FACILITY WHICH SERVES THE PUBLIC AND IS REGARDED BY THE PUBLIC AS A PUBLIC BUILDING, ANY PERSON SO REQUIRED TO MOVE IS A DISPLACED PERSON ENTITLED TO THE BENEFITS OF LEGISLATION.

BASED ON THIS DISCUSSION IN THE COMMITTEE REPORT, WE AGREE WITH GSA THAT LEASE-CONSTRUCTION PROJECTS APPROVED BY THE APPROPRIATE CONGRESSIONAL COMMITTEES ARE FEDERAL PROJECTS FOR THE PURPOSES OF THE RELOCATION ACT.

AS INDICATED ABOVE, IT IS OUR VIEW THAT THESE TRANSACTIONS - INCLUDING THE ONE INVOLVING THE TEMPLE TRAILER VILLAGE - AMOUNT, IN EFFECT, TO GOVERNMENT LEASE CONSTRUCTION PROJECTS, NOTWITHSTANDING THAT THE FIVE POINTS WERE NOT COMPLIED WITH. HOWEVER, AS WE STATED IN OUR DECISION OF MARCH 17, 1972, B-171958, WE DO NOT PROPOSE TO INITIATE ANY QUESTION (IN THE CONTEXT OF THE ISSUES DISCUSSED HEREIN) WITH RESPECT TO PAYMENTS UNDER EXISTING LEASES WHERE THERE WAS NOT COMPLETE COMPLIANCE WITH THE FIVE POINTS. ACCORDINGLY, SINCE THE RESIDENTS WERE REQUIRED TO MOVE TO MAKE WAY FOR A BUILDING TO BE ERECTED ON THE TRAILER PARK PROPERTY FOR THE PRIMARY USE OF THE FEDERAL GOVERNMENT, IT IS OUR VIEW THAT THE BENEFITS OF THE RELOCATION ACT, INCLUDING PAYMENT OF RELOCATION EXPENSES THEREUNDER, SHOULD BE MADE AVAILABLE TO THOSE OCCUPANTS OF TEMPLE TRAILER VILLAGE WHO OTHERWISE QUALIFY FOR SUCH BENEFITS.