Proposed Sale of Federal Land to the Columbia Hospital for Women

GAO discussed proposed legislation that would authorize the sale of government-owned land in the District of Columbia to the Columbia Hospital for Women for $12 million. GAO noted that: (1) an appraisal prepared for GAO in October 1988 determined the land's fair-market value to be $20 million and an independent appraisal estimated the value at $9 million, but the independent appraisal did not follow federal appraisal standards; (2) an April 1991 Hospital appraisal estimated the land's value, with a deduction of $3 million for zoning related costs, at $13 million, while an October 1991 GAO appraisal estimated the land's value at $18 million; (3) since any difference between the sale price and the fair-market value of the land constitutes, in effect, a subsidy for the promotion of health care, the proposed legislation would require the Hospital to provide services to high-need areas in the city; (4) while the Hospital was generally in comparable or better financial condition than the industry as a whole, its financial condition deteriorated somewhat in 1990; (5) GAO was unable to completely assess how the proposed health resource center would affect the Hospital's financial viability because Hospital officials did not provide all the needed information; and (6) since the costs for the proposed center represent a significant financial undertaking for the Hospital, the government should provide for the land's reversion if the Hospital is unable to build the center.