Senator GORE. Mr. Chairman, if Dr. Humphreys would yield- Senator GORE. I think that the two institutions who have indicated an interest are both private in character, both worthy of consideration but Senator RANDOLPH. Lesser student bodies-would they be much lesser student bodies? Senator GORE. Much lesser and not contiguous to this property. The uniqueness of the situation is that here is a university unable now adequately to accommodate the students already enrolled who are literally spilling out over the inadequate campus. I do not wish to derogate the institution in any way. I think it may be a compliment to the institution that it has attracted so many students, but it is almost a hazard to drive through the campus. It is very crowded; 14,000 students is a lot of human beings. Senator RANDOLPH. Yes. Senator GORE. And it is anticipated Senator RANDOLPH. Plus the faculty members. Senator GORE. Well, we do not count them. Senator RANDOLPH. How many members on your staff, if I may interrupt? Dr. HUMPHREYS. We have about 700 faculty members and the supporting positions bring our total employment up to over 1,100 people. Senator GORE. So you see what we have. And this is an adjoining property on which there are buildings which have already depreciated, already fulfilled their usefulness. I do not propose, Mr. Chairman. to be a realtor I built a few small structures. I would say if a realtor wished to buy this property for development-if a realtor wished to buy this property for development-he would much prefer to buy it without the buildings with them; they have served their purpose. Senator RANDOLPH. That is evident; yes. Senator GORE. They have served the purpose for which they were constructed, and an actual sale of the property at public auction would probably result in a larger price without the buildings than with them. So the Morse formula here has minimal, if any, application since, No. 1, the land was donated in the first place by the city and the county, and the buildings, in the second place, are of no value. However, as Dr. Humphreys has said, because of the inadequacy of funds and the time element involved in constructing new buildings he could make temporary use of these buildings. It seems to me that with all of the emphasis that our government has upon education and our attention to the needs of education this temporary use would be regarded as a fortuity rather than to let it operate as a hindrance to the acqusition of this property for a very worthy and needed purpose. Senator RANDOLPH. Well, Senator Gore, you underscore the immediate need for Memphis State University. You nowise disparage the requests from other institutions. But I think your position woud be one that would be recognized as a valid one. Senator GORE. Thank you, Mr. Chairman. Senator RANDOLPH. Yes. Senator GORE. It is because of this unique character and this urgent need that Senator Baker and I felt justified in asking the committee to approve this exception to the rule. Senator BAKER. If the chairman will permit, and if Senator Gore would yield for a moment, I would like to add this in the nature of a summary appraisal of the situation, Mr. Chairman. First of all, regardless of junior status in regard to length of service, it does not take long to ascertain that Senator Morse has strong and well-defined positions on a number of issues, this being one of them. The situation, though, that motivates Senator Morse's so-called formula is not without merit. It is, as I understand it, simply to prevent the disposition of Federal assets as a mark of the sudden generosity of the Congress or of the executive branch, either. But this is not the situation we have here. And as I tried to make clear in my testimony, what we are doing now by S. 619 is fighting time. We simply cannot afford to wait for 2 years because in the course of 2 years we are going to find that Memphis State is in an intolerable position. We are going to find that these buildings which were built as semitemporary structures during World War II have deteriorated to the point where they do not even have any temporary salvage value. We are going to find the very real prospect that this land which is available and the only available land for the orderly expansion of a 14,000-student public institution is under the threat of preemption and forever may be removed from the public domain. This would add immeasurably to the cost of providing the space otherwise. We are going to find that the orderly growth and immediate accommodative moves of Memphis State will be thwarted. I in no way speak in derogation of the ambitions or aspirations of either of the other two institutions that would like to have this property, but we are really dealing with two things, it seems to me. We are dealing, first, with the obvious: Immediate justification to recognize the exigencies of time and circumvent and short circuit the 2 years that would be required if we followed the usual course of proceedings. This is the first point, it seems to me, that we need to consider and which I think this testimony abundantly supports. Then, second, I think we need to consider, after we have solved that problem who ought to have the property. I have no doubt in my own personal judgment but that the case that will be made for Memphis State will be so obviously meritorious and compelling that we can defer udgment on a selection. But I am far more interested in establishing the necessity, the urgency, and the immediate requirement for an allowable exception to the so-called Morse formula in this respect. Of course, the formula is further subject to valid exception on the proposition that the largest part of this property first came by a public contribution from the same sector of the population, that is, Shelby County and Memphis, which is now asking that it be returned for another public purpose. If we deal in questions of value, we might consider the original acquisition price, which was zero. So while we might apply the formula, we might still thus justify the necessity for this action sought by Senator Gore and supported by me in this pending legislation. I thank you for the opportunity to add that summary. Senator RANDOLPH. Since we are meeting today in the Public Works Committee room, as you know, Senator Gore and Senator Baker, we are constantly considering the cost-benefit ratio when we think in terms of flood control projects and other public works proj ects. I would say the cost-benefit ratio is very high in the case of S. 619. Senator GORE. Thank you. Senator RANDOLPH. A dollar spent would return more than the hundred cents involved. It will be my hope that Senator Morse, already cognizant of this problem, will also wear two hats, as it were: Not only the author of the Morse formula but also the chairman of the Subcommittee on Education of the Labor and Public Welfare Committee. I would rather have him wear that hat as he considers S. 619 than the Morse formula hat. Senator Ralph Yarborough, we are very gratified that you are here. I knew that you had wanted to be here today. Senator YARBOROUGH. Mr. Chairman, I regret very much my lateness, but I had another committee meeting this morning. Senator RANDOLPH. Thank you, Senator, for coming in. Senator YARBOROUGH. Thank you for the privilege of being here. Senator RANDOLPH. Dr. Humphreys, I have no further questions or comments to make in reference to your testimony. You have been very persuasive in telling the story of the need-the urgent need, is that correct? Dr. HUMPHREYS. Very urgent, sir, and we do appreciate the opportunity of presenting this problem to you, the time that you have given us and some of our interested citizens, and the very able representation by our two very distinguished Senators. It has been very gratifying that we have had this opportunity to appear before you. Senator RANDOLPH. Thank you, sir. Senator YARBOROUGH. Dr. Humphreys, I will try not to let my friendship with your great senior Senator and the fact it is his bill sway me in my consideration of the bill, nor my feelings of friendship for your fine university. I had the privilege of being on your campus as a guest in 1964 during a matter of national interest at that time. I am very grateful for the hospitality shown me by your school and, of course, will give this very friendly consideration Dr. HUMPHREYS. We hope you come back. Senator YARBOROUGH. I want to assure you that as ranking majority member on the Educational Subcommittee of the Senate I have no prejudice against institutions of higher learning receiving consideration from the Government. I have been the coauthor of virtually every higher education bill of this Congress for 9 years. Dr. HUMPHREYS. I am aware of this. Senator RANDOLPH. It is very important that we have the statement from the representative of the Veterans' Administration, and here to help us in our consideration of this measure is Howard Bernstein. Mr. Bernstein, please come forward with your associates and identify yourself and your colleagues for the record. We would appreciate your testimony very much. TESTIMONY OF HOWARD BERNSTEIN, ASSISTANT GENERAL COUNSEL, THE VETERANS' ADMINISTRATION; ACCOMPANIED BY WHITNEY ASHBRIDGE, ASSISTANT ADMINISTRATOR FOR CONSTRUCTION; AND DENNIS W. DINNEEN, CHIEF, REAL ESTATE DIVISION Mr. BERNSTEIN. Thank you, Mr. Chairman. For the record, I am Howard Bernstein, Assistant General Counsel, and on my right is Mr. Whitney Ashbridge, the Assistant Administrator for Construction, Veterans' Administration, and on my left is the Chief of the Real Estate Division, Mr. Dennis W. Dinneen. Senator RANDOLPH. I am sorry. I did not realize there were three of you. You have identified your colleagues? Mr. BERNSTEIN. Yes, I have, for the record. Senator RANDOLPH. You may proceed, Mr. Bernstein. Mr. BERNSTEIN. Thank you. As you know, this bill would direct the Administrator of Veterans' Affairs to convey not later than the end of 1970 without consideration to the State of Tennessee for the use of Memphis State University all right, title, and interest in some 145 acres of land with improvements which presently constitute the VA Hospital Reservation at Memphis, Tenn. Pursuant to the second section of the bill, the Administrator would be authorized to convey the tract or portions thereof earlier than that time under conditions outlined in the bill. There is provision under the bill for reversion if the land is ever used for other than educational purposes. In August of 1946, the then War Department had transferred to the Veterans' Administration approximately 146 acres with 121 buildings and structures thereon, and we currently operate a 1,000-bed general hospital on the property. The bill states, as you know, that the property was conveyed by local authorities. Our records do not verify it. We are not challenging it; however, we understand that the War Department records will support that statement. Senator RANDOLPH. 1,100 beds? Mr. BERNSTEIN. Currently in our hospital. Senator RANDOLPH. Are those occupied? Mr. BERNSTEIN. Yes, sir. We are moving out to a new hospital Senator RANDOLPH. But at present? Mr. BERNSTEIN. This very moment? Senator RANDOLPH. Yes. Mr. BERNSTEIN. I assume substantially; sir, yes. Mr. BERNSTEIN. Yes. Senator RANDOLPH. Is there a time that you could set when the movement to the new facility will be undertaken? Mr. BERNSTEIN. I believe I will come to that, sir, in just one moment. Senator RANDOLPH. Oh, pardon me. Mr. BERNSTEIN. We anticipate that the new VA hospital I mentioned, which is approximately 7 miles from our present location, will be activated in late summer or early fall of this year. At that time the land and buildings will be declared excess to our needs. Our principal interest in S. 619, Mr. Chairman, is to insure that any portion of the tract coveyed under section 2(b) which is the portion permitting a partial transfer before the total transfer, that any land so conveyed is not used in a manner inimical to the proper and effective operation of our hospital on the remaining portion of the tract. We feel that the section of the bill provides adequate authority to safeguard the Government's interest in this respect. We have suggested in our report that in view of the Administrator of General Services responsibility under public law for disposal of public property your subcommittee may desire his views on S. 619. Insofar as we are concerned, we would have no objection to favorable consideration of the bill by your committee. As you know, the Bureau of the Budget has advised us that while there is no objection to the report the VA has submitted, the Bureau believes that unless there are circumstances of which it is not aware, the property in question should be disposed of under existing provision of law for the following reasons they furnished us. First, it appears that substantial improvements exist on the property. Second, the Bureau understands the property has not yet been declared excess to the General Services Administration, and therefore there has been no opportunity to determine whether it is actually excess to the needs of the Federal Government. And, third, if it is actually determined that the property is excess to those needs, it could be made available for donation for public educational uses under the provisions of the existing law. That, Mr. Chairman, completes our statement. We are here to answer questions within our knowledge. Senator YARBOROUGH (presiding). Can the Veterans' Administration provide the subcommittee with some estimate of current value of the property in question? Mr. BERNSTEIN. Senator Yarborough, the VA does not maintain such information, but in anticipation of such a question Mr. Ashbridge here has been able to obtain some information which I am sure he would be happy to furnish you at this time. Senator YARBOROUGH. If he will, please. Mr. ASHBRIDGE. We checked with the Federal Housing Authority, Memphis, and obtained from Mr. Chisholm their estimate of the current value of this real estate. At the corner of Getwell Street and Park Avenue, they have a very valuable corner there which he thought would be worth something in the neighborhood of $100,000 for about 80,000 square feet or, say. $1.25 a square foot. He thought that the 200-foot-deep strip of land along Park Avenue and Getwell Street would be worth something in the neighborhood of $0.75 a square foot, and that the remainder of the tract would have its highest and best use in town housing. The estimated value of that is in the neighborhood of $15,000 or $20,000 an acre, or, say, around $0.40 a square foot. Now, using these figures, we figure that the corner would be worth about $100,000. The strips along the two exterior boundaries would be worth $420,000, and the remainder of the property about $2.25 million, bringing the entire value of the real estate up to approximately $2.75 million. |