Feds give County 90 days to decide on VA ownership

Government moves slowly except when it is in a hurry, and what to do with the former Veterans Administration Hospital in Miles City is a perfect case.

After nearly two decades of inaction, the federal government is now giving Custer County 90 days to take possession of the buildings, or they will be sold at public auction.

In the late 1990s, with the Veterans Administration having shut down the VA Hospital, leaving only a small rest home and clinic in the five-story building, a VA Redevelopment Task Force was created to try to find a new use for the hospital and grounds.

To that end, Congress passed legislation in 2000 specifically allowing the conveyance of the Miles City Veterans Affairs Medical Complex to Custer County. The local task force provided input on the legislation, which dealt with several VA facilities that had been or were to be abandoned.

Gary Cridland, a member of the Task Force, said that while the legislation was passed by Congress in 2000, over the past 16 years, the VA itself was “not supporting” of the effort. “They haven’t encouraged anything to happen,” said Cridland.

Until now.

On Thursday VA officials from Washington, D.C. and Helena met with Miles city officials, the Custer County commissioners, a representative from Miles Community College, Mike Coryell of the Miles City Area Economic Development Council, and Cridland. The meeting in Custer County’s Emergency Operations Center in Miles City was held without giving required public notice.

At the meeting, Kelli Witt, a VA real estate specialist who described herself as “tasked with the disposing of the VA property,” told commissioners the agency is now “committed to disposing of the property.”

“We have our own timeline,” Witt told the gathering. That timeline requires the county to come up with a plan within 90 days to assume ownership of the VA complex .  If the county does not assume ownership, the VA will transfer the property to the General Services Administration.  The GSA will auction the property to the highest bidder.

David Eyre, Capital Asset Manager for the VA Rocky Mountain Network (VISN 19), emphasized that if the complex goes to public auction, neither the city nor the county can “dictate ownership.”  

The concern was that the building could end up like the 1960 Holy Rosary Hospital high rise, which was damaged by a salvage company that then abandoned the building, leaving it to taxpayers to complete demolition. 

No matter what the county decides, Witt said the VA would be “out by 2018.”  She stated that the VA would like to “continue our presence” in a smaller capacity “for at least five years.”  Witt said the VA would pay fair market value rent to the owner of the building, if possible.

A properly noticed public hearing about the proposal will be held on Tuesday, Sept. 6 at Miles Community College, according to Kevin Krausz, chairman of the board of county commissioners.  The scheduling for that meeting is currently being arranged.

Kalilen J. Collette, chief engineer for engineering and facilities management of VA Montana, explained that the VA model of care no longer includes long-term care facilities, such as the community living center that now exists in the Miles City building. He said elderly or disabled veterans now enter facilities “with a treatment plan and an exit plan.” While they will provide hospice care, the VA does not intend to keep providing long-term care facilities.

The new plan is for “restorative care” so that veterans can be returned to their home.  Collette said that veterans live longer when they are cared for outside of a facility like the rest home.  The movement away from long-term care facilities to home care has been in place since 1995.

Eyre said that the plan is to no longer admit residents and slowly convert the facility from double occupancy units to single occupancy units until there is no longer a need.

Allen Kelm, City of Miles City utilities director, had questions about a similar facility in Colorado, which was addressed in the same legislation.  That facility at Fort Lyon was transferred to the state of Colorado and is now part of the Colorado prison system.  He sought contact information with the people who dealt with that transfer to learn what worked and what was a problem for them.

State Legislator Ken Holmlund had questions about the rent paid by current tenants, such as Victory Insurance, OneHealth, and the Miles City Police Department.  He wanted to know how rent compared to expenses.

Robert Voltz, capital asset manager for the VISN 19, said that between utilities and other maintenance, the facility currently costs about $500,000 to manage per year but that figured is based on the facility “not (being) used to full capacity.”

Mike Coreyll asked if a cost analysis had been done and it had not.  

Jim Arneson, who manages the building for the VA, said that the building had been maintained, the asbestos removed, and a high pressure boiler replaced with a modern low-pressure boiler. He said hot water lines and irrigation systems have been upgraded, and other work kept current.

However, the living quarters associated with the complex, according to Collette, were mothballed but “needed new roofs” and some interior work after walls “were ripped open” when asbestos was being removed.  The water lines are drained and minimum heat is supplied to prevent water access from freezing.

Eyre pointed out that, if the county assumed ownership, the county could subdivide the living units out of the main property and sell.  There are two duplexes, one four-plex, and a single-family dwelling.

Witt did specify that the VA would not warranty the condition of the facilities, nor would the facility revert to the VA if the county took ownership and then decided they did not want it. “You will have to do your due diligence,” Witt said, noting the county must conduct its own property inspection.

If the VA complex is deeded to the county, there are almost no requirements pertaining to building use or disposal.  If another government entity acquires the building, there are considerable restrictions.  If it is sold at public auction, the owner can do whatever he or she wants with the complex.