VA Locked in 20 Year Lease Paying Double the Market Value For Clinic

A NBC affiliate in North Carolina, WECT, broke a story about what the VA is paying in rent to lease a clinic in Wilmington, Delaware.

According to the station, the VA is locked into a 20 year lease with Summit Smith Healthcare Facilities. The monthly rent for the clinic is set at almost $300,000, which means that taxpayers are going to foot a $68 million bill for a facility that they aren’t going to own at the end of the deal.

The clinic had been partially unusable for three months because of plumbing issues that were contaminating the clinic’s water, prompting the station to request details on how much the VA was paying in rent.

According to commercial real estate brokers, the rate the VA is paying for the clinic is twice the going rate for a prime medical office space in Wilmington.

It took two months before the station’s request was answered, but they eventually received the information that they were looking for.

The copy of the lease signed by the VA shows that while the operating expenses of the clinic are included in the rent, interior utilities and interior janitorial services were not included in the monthly fee the VA pays.

The services that fall under the operating expenses are supposed to include maintaining all of the building equipment and system, which includes mechanical, electrical, and plumbing.

Even though the terms of the lease require Summit Smith to cover the operating expenses, the VA paid an additional $928,000 in a lump sum payment to help Summit Smith cover operating expenses.

The station also noticed that the lease did not cover any of the medical equipment or furniture, which they thought was part of the reason they VA was paying so much in rent.

In addition to the rent that the VA is paying for the facility, it is also paying $18,000 a month to rent the space beneath the facility that is owned by the airport authority.

The lease the VA signed for the land underneath the facility is for 50 years, which comes out to $11 million. The VA also won’t own the land after the lease expires.

Congressman David Rouzer, who has expressed his concern over the high rent that the VA is paying for the facility, also requested a copy of the lease. After receiving a copy, he responded with the following statement:

“The VA’s high rent payments for the Wilmington Clinic are just another example of the lack of common sense demonstrated as well as the taxpayer dollars wasted by the federal government. It is unacceptable that taxpayers are forced to pay double the fair market price to lease this facility, and it’s particularly shameful that a number of our veterans are not even able to use this facility right now — forcing them to find care at non-VA facilities or drive the long distance to the Fayetteville VA Hospital. Our veterans, their families and all of us as taxpayers deserve better. My office will continue to work with the House Veterans Affairs Committee as they conduct their official investigation regarding these matters, and we will continue to be a strong voice on behalf of the veterans and taxpayers of Southeastern North Carolina to ensure that these matters are resolved properly.”