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Mr. Gray. Privately owned sites?

Mr. LEHNE. We contacted the Virgin Islands Governor's office and they took us around and showed us the sites available in the community.

Mr. Gray. Did you look at some of the Redevelopment Land Agency fill projects down there where land is going to be available and close to the dock where you would have access to water transportation and close to highways?

Mr. LEHNE. We looked at those facilities, but we were told the land was not available.

Mr. GRAY. How much time did you spend in actually looking at the different sites, not to be personal, but to get an idea as to how much of an evaluation really went into each site?

Mr. LEHNE. I think I was in the Virgin Islands a total time of something like 4 days and that includes visits to St. Croix and St. John, also.

Mr. GRAY. And you are telling this committee you did consider other sites?

Mr. LEHNE. Yes; I did. Mr. Gray. Can you tell this committee why you decided to give a verbal option for a lease instead of going back to New York and doing in the Virgin Islands what you are doing in other places, using condemnation and taking the site ?

Why lease instead of purchase ?

Mr. LEHNE. This decision as you know, as you well documented in February or March of last year, at that time we had expected this facility would have been built, but under contract.

I mean there have been delays as you indicated in the Planning Commission in getting approval for the building.

The people in the Virgin Islands did not like the original design.

They have been modified to make them perhaps more adaptable to the community.

Mr. Gray. What I said was you came back following a 4-day stay in the Virgin Islands and decided you should take a lease, because according to a copy of the report I have here, the instruction to the New York office was to lease, not to buy.

Why did you choose to spend $35,000 a year for a small 3-acre tract instead of paying $300,000 or $400,000 for the land?

Mr. LEHNE. The land was not for sale.
Mr. GRAY. Neither was the land you took in Carbondale for sale.

Mr. LEHNE. We do not like to use condemnation unless it is a last activity.

Mr. GRAY. Why did you use it on us?
Mr. LEHNE. I was not here.
Mr. GRAY. I am talking about the Department.
Mr. LEHNE. I do not know, sir.

Mr. GRAY. Well, it is the policy of the Department to make one call on the owners and if that one call results in a refusal of the owner to sell, it immediately goes to the Justice Department and the U.S. attorney for condemnation.

You cite me one location where you visited an owner more than once or twice. I have never found one.

Mr. LEHNE. That I, personally?
Mr. GRAY. I am talking about your realty division.

You always go to condemnation if you cannot reasonably get together with the owner who says I refuse to sell.

Mr. LEHNE. It is not after one visit.

Mr. GRAY. Well, I can get affidavits in the case of Carbondale and I am talking about the department. One 5-minute visit with the owners. Do you want to sell ? No. Well, then, condemnation.

That is what happened in New York also.
Mr. LEHNE. I cannot answer that. I was not here.

Mr. GRAY. You can answer my question as to why you chose a very high $35,000-a-year lease on a small 3-acre tract instead of buying it outright.

In 10 years you could own that site for what you are going to pay and you have a 45-year lease now.

Mr. LEHNE. We have options to buy. Mr. GRAY. And each year it goes up by 5 or 10 percent of course; no telling how many hundreds of thousands of dollars when you do get ready to buy it.

I just wonder why the hasty decision on meeting in the Virgin Islands instead of coming back and thinking this out rationally because the memorandum you sent to the New York office was dated the day after you got back and it says in accordance with my verbal commitment go down and sign this up.

Mr. LEHNE. I do not quite believe this is a fair statement of my memorandum.

Mr. GRAY. I will be glad to show you copies if I can find it here.
Mr. LEHNE. I would

like to see it. Mr. GRAY. Anyway, your memorandum to the New York office is dated prior to your letter to GSA to withdraw.

Mr. LEHNE. We had discussions with GSA before I went there.

Mr. Gray. Your discussions, according to your memorandum from your own files said you talked to Commissioner Sampson about getting funds but not about withdrawing from the project.

Mr. LEHNE. What we have been attempting to do is get commitments as you heard this morning.

Mr. GRAY. Right.

Mr. LEHNE. Whether or not buildings are going to be included in certain fiscal year programs and we have been attempting to ask those questions, I have personally to Mr. Sampson. I asked the Commissioner when he was here before and the mail has to be moved. The operational people want a facility to move the mail.

Mr. GRAY. Well, I am still not able to get a definite answer to my question.

Mr. LEHNE. Would you restate it, then?

Mr. GRAY. I would just like to know why the taxpayers are going to be saddled with a 45-year lease with $35,000-a-year lease on the land and a $125,000 lease on the building when it is your policy to purchase property. If you could not get an owner to sell you condemn it.

Mr. LEHNE. In February and March of 1970 we did not have the Postal Reorganization Act. We did not have the funds that we could own our building the way we have now. The operations people had an urgent need for having the building built. This is why it was decided to lease the building at that time. If the decision were being made today we would probably do our best to own that building.

Mr. GRAY. General, I will put in the record here a letter dated May 15, almost a month after your return from the Virgin Islands, with a verbal commitment for that land, a letter signed by Postmaster General Blount asking for permission to withdraw from the Charlotte Amalie project.

Now, remember, that is almost a month after you were down in April. It says inasmuch as this project, this is Mr. Blount speaking, has a low priority on your construction schedule, and yet GSA tells me they had it in the 1972 fiscal year budgets, and our space requirements have increased considerably-remember 16,000 is considerable, their space requirements have really increased since the approval of the prospectus—your site is inadequate and the site you took was 3 acres and you took an option on 31/2 and we therefore plan to proceed with the construction of a new lease facility, but will retain a station either in the existing or new building, the new Federal building to be constructed by GSĂ.

That is a month after you visited and took an option on the lot.

I just wonder what would have happened had the Commissioner written back and said, no, we have already socked the taxpayers for $100,000 in design and if we take you out of the building, you are going to occupy 90 percent of the building, that is going to cost $100,000 more. We are not going to let you off. Congress says it wants a multipurpose facility. We are not going to do it. You would really be embarrassed, would you not?

Mr. LEHNE. I think I heard you, Mr. Gray.

Mr. GRAY. Without objection, there will be submitted for the record, as Exhibit 9, the letter from the Postmaster General dated May 15, 1970, to Mr. Robert L. Kunzig, Administrator for GSA. (The document follows:)

EXHIBIT 9

THE POSTMASTER GENERAL,

Washington, D.C. May 15, 1970. Hon. ROBERT L. KUNZIG, Administrator of General Services, Washington, D.C.

DEAR MR. KUNZIG : Reference is made to Mr. Chapman's letter of May 4, 1970, relating to the Post Office Department's plans for participating in the proposed joint GSA-POD projects in Augusta, Georgia, Manchester, New Hampshire and Charlotte Amalie Virgin Islands.

The arrangements with respect to our participation in these projects as set forth in your letter is substantially in accordance with the understanding reached between Mr. Lehne and Mr. Sampson in their meeting held on April 22, 1970. This understanding may be summarized as follows:

Augusta-In view of the fact that GSA will include construction funds in your 1972 fiscal year budget request, POD will continue to rely on this new building to meet our postal requirements in Augusta.

Manchester-Since this project has a low priority on your construction schedule, and no site has been acquired, POD is withdrawing from participation and will plan to meet our postal requirements independently, either by the construction of a Postal Public Building or a leased facility.

Charlotte Amalie-Inasmuch as this project also has a low priority on your construction schedule, and our space requirements have increased considerably since the approval of the prospectus, your site is inadequate to accommodate the

total space needs. We therefore plan to proceed with the construction of a new leased postal facility, but will retain a station either in the existing or in the new Federal building to be constructed by GSA. We shall furnish you our space requirements for this station at an early date. Sincerely yours,

WINTON M. BLOUNT. CHARLOTTE AMALIE, ST, THOMAS, VIRGIN ISLANDS—Post OFFICE, COURTHOUSE

AND FEDERAL OFFICE BUILDING Prospectus approved : Senate September 20, 1966; House October 6, 1966. Total estimated project cost: $6,376,000.

Fiscal year Funds appropriated : Site

$10,000 Design

255, 000 Construction

1968

[blocks in formation]

Site: Size and location–77,537 Sq. Ft.: A portion of barracks yard renewal project (parcel G); Status of Acquisition-Completed September 5, 1968.

Building area : Gross—–102,500 Sq. Ft. Net_78,300 Sq. Ft. 34% of space for postal use.

Status of design: Design stopped in August 1970 at tentative stage due to post office withdrawal; region 2 was authorized on July 2, 1971 to negotiate A/E contract for reduced project.

Date of postal withdrawal: May 15, 1970.
Remarks: Reduced project and revised prospectus being developed.

FUNDED FOR SITE AND DESIGN-UNFUNDED FOR CONSTRUCTION AND MANAGEMENT

AND INSPECTION

Project.-Charlotte Amalie, St. Thomas, Virgin Islands, post office, courthouse, and Federal office building; city population: 13,000.

Prospectus approved.--Senate, September 20, 1966; House, October 6, 1966.

Project need and description.—The Post Office and Customhouse, constructed in 1938, the District Court building, constructed in 1864, and its annex, constructed in 1941, are inadequate and obsolete. The postal space situation is extremely critical in that the U.S. Postal Service occupies about one-third of the space required for efficient mail handling. Charlotte Amalie is located in the Virgin Islands on the southern side of the Island of St. Thomas.

The proposed project provides a reinforced concrete or steel frame structure on special foundations with four stories, penthouse, part basement, brick and special face stone trim, flat composition roof, elevators, airconditioning, one courtroom, postal maneuvering area, exterior parking for about 125 vehicles, and a vehicle maintenance building as a separate structure on the site. Gross area of buildings, square feet.

102,500 Net area of building, square feet..

78,300 Percent of net area to gross, percent-

76 Estimated site, design, and review cost :

Site cost (exchange expenses only) (funded fiscal year 1968)--- $10, 000 Design and review cost (funded fiscal year 1968).

255, 000

Total site, design, and review cost---

265, 000

Estimated construction cost :
As of October 1972..

5, 698, 000 Cost per gross square foot--

55. 59 Estimated management and inspection cost:

Funds will be requested under sites and expenses at the time construction funds are requested.--

413, 000

6, 376, 000

77, 537 30, 623 (")

172

Estimated total project cost-----
Construction capability for contract award.—Undetermined.
Site data :

Total site size, sq. ft.
Building area, sq. ft----

Cost of site per square foot--
Building population..
Building occupants :

U.S. Postal Service, sq. ft. (34 percent)-----
U.S. courts (including attorney/marshal), sq. ft. (25 percent)-
Department of the Interior, sq. ft. (9 percent).
Other agencies (7), sq. ft. (17 percent).
Vehicle maintenance facility, sq. ft. (4 percent)--
Other service and custodial areas, sq. ft. (5 percent).
Reserve for expansion, sq. ft. (6 percent).

23, 000 17, 275

6,025 11, 850 2, 800 3, 280 3, 770

Net assignable area of buildings, sq. ft.--.

68,000 Government-owned space for release, sq. ft

25, 399 Rented space for release, sq. ft----

3, 683 Annual net rental of rented space for release--

$21, 407 1 Exchange.

These data indicate the status of the currently approved project as of December 31, 1970. The U.S. Postal Service no longer intends to participate in this project, and a review of Federal space requirements in this community is being made. If this review determines that a revised project is required, a new authorization will be sought.

Mr. LEHNE. The site we have taken is 312 acres and we carefully tried to evaluate whether that additional site that GSA owned could be expanded or not.

We came to the conclusion, both organizations, it could not be expanded.

Mr. GRAY. General, I have been there. I have seen the site. I have looked at it before our committee approved it and it faces the Caribbean on one side and it has land on three sides around it.

There is absolutely no reason why you could not have condemned the land to get all you need for that site, absolutely none and it has approximately a gross of 172,500 square feet now. The original plan for the GSA building for your needs and their needs would only be 102,000 square feet.

Mr. LEHNE. The building is that way, but the land is 177,000 square feet.

Mr. GRAY. But there is plenty of room to acquire additional land and you did not have to go a mile and eight-tenths up the road.

I have a picture and even the topography is not good.

Mr. LEHNE. If I can say, sir, the point you are making quite a bit of today is we have changed our operational characteristics.

The operational characteristics are the mail processing facility should be on the outskirts of the town. They should not be in the center of town where they create a lot of traffic jams.

68-528-7148

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