In the News

The Department of Veterans Affairs has added another layer of oversight into how lease contracts are awarded after the deal for the planned outpatient health care center project in Butler Township fell apart, the VA said.

The General Services Administration is now looking at all leases, “regardless of the size or scope ... for review and delegation,” VA spokeswoman Genevieve Billia said.

Westar Development Co. beat out five other companies in May 2012 to build the $75 million outpatient center, which would earn it an average of $7.6 million annually renting it back to the VA over 20 years.

The project collapsed after the VA Inspector General's office became concerned that Westar had misrepresented itself during the bidding process, including claiming it was veteran-owned, and may have had ties to a businessman who was sentenced to federal prison on racketeering, bribery and fraud charges unrelated to the Butler project.
Westar officials denied any wrongdoing in the bidding process.

The Inspector General questioned whether the VA properly investigated whether Westar was a responsible vendor, according to a memo from the financial watchdog agency. The VA stopped work on the project on June 21, 2013, and on Aug. 19, 2013, terminated the Westar lease.

The VA said last year that it would award another bid, using other bids previously submitted, and hoped to grant a lease and development contract in the spring. However, the VA has not announced a developer or site for the project.

Billia said both would be picked at the same time. “These changes (in the bidding process) may extend the typical leasing time lines as the VA is working with GSA on a project-to-project basis,” Billia said.

The GSA did not return messages seeking comment.

Earlier this month, representatives of Pittsburgh-based Oxford Development told Butler Township commissioners the company has an option to buy the nearly 16-acre Deshon Woods site adjacent to the VA's Butler Township campus, where Westar had planned to build the outpatient center. If Oxford isn't picked to build the facility, the company said, it won't buy the land from Westar.

“The fact that we're still having a conversation about this could be a positive sign that the project's still alive,” said Ken Kalberer, health systems specialist for the VA Butler Healthcare campus. “I'm looking at this as a positive thing for our veterans.”

The delays haven't changed the local VA's strategy of addressing immediate safety and maintenance issues at the more-than-75-year-old building a new outpatient center would replace, Kalberer said. Maintenance and upkeep would not include any major renovations or expansion while the local VA awaits word about the outpatient center.

Rep. Mike Kelly, a Butler Republican, said he's working with fellow Rep. Mike Coffman, R-Colo., on plans to hold a hearing in the Butler region on the problems with awarding the lease. Coffman sits on the House Committee for Veterans Affairs.