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Holdup on V.A. Hospital Transfer to Gulfport, Armed Forces Retirement Home to be Rebuilt

By Keith Burton and Perry Hicks – GulfCoastNews.com

Filed 12/01/06    Updated Links 12/11/07
Updated: 2/18/08   Updated: 2/5/09

The sprawling Katrina-wrecked campus that was the Gulfport Veteran Administration Hospital will not be turned over to the city this month as expected. GulfCoastNews.com has learned that there is a delay in turning over the 90 acre VA property to the City of Gulfport – property that some developers are anxiously waiting to get their hands upon.

There is also another piece of federal property in Gulfport that is in store for major changes. That being the closed Gulfport Armed Services Retirement Home, which is on the beach and also badly damaged by Katrina.

Just this past September, an article published by Sun Herald-owned Journal of South Mississippi Business titled, “VA Property Could be a Plumb for Development,” quoted Hancock Bank CEO George Schloegel saying, “Developers will be salivating over it."

Earlier in July, Gulfport Mayor Brent Warr announced that the beachfront Gulfport VA, which was severely damaged by Hurricane Katrina would be turned over to the city by the federal government in December, but that will not be the case.

“We have had to do a survey for hazardous materials before beginning demolition and we have found some asbestos. It is a very old facility. The asbestos must be removed before it is turned over to the city. The turnover may be delayed,” said VA Media Relations Spokesman Edwin “Tinker” Cassell.

Cassell said the earlier date for turning over the property was made before an environmental assessment had been completed. As of late November, no work to remove the materials has been accomplished, and Cassell says contracts to do the work are not finalized. Cassell told GCN that the property transfer will not happen until the environmental work is completed as well as removing the damaged structures and buildings. This is work that will take months.

Cassell said a final date for transferring the property to Gulfport has not been determined.

Hurricane Katrina only accelerated the closing of the VA hospital. Over the past several years the Veterans Administration has been closing hospitals and consolidating services under what has been called the Capital Asset Realignment for Enhanced Services, or CARES project. CARES was established is a system-wide process to prepare the Veterans Administration for meeting the current and future health care needs of veterans in modern health care facilities.

As part of that plan, each VA property that became included in the program created a Local Advisory Panel, which was ordered to develop a transition plan, hold public meetings, and recommend a process for closure and transferring services. The outcome for the Gulfport VA was to transfer much of its activities to the Biloxi VA and expand its work there with new buildings and assistance from Keesler’s Hospital. The time frame for instituting this change began in 2004 and ended in late 2009, with final activation and demobilization to be complete by mid 2010. But, with hurricane Katrina’s destruction, the time frame was moved forward.

Among the local representatives of the Gulfport VA Advisory Panel back in 2004 when the CARES process got underway in Gulfport, were Biloxi Mayor A.J. Holloway and Gulfport businessman Gene Warr, who is the father of Gulfport’s Mayor Brent Warr.  It is clear that Gene Warr has had an intimate knowledge of the closure of the VA property well before the public became aware of what was happening to the VA and before his son Brent Warr was elected mayor.  (Photo right: Gulfport VA-click on photo to enlarge)                                                                            

According to some sources, Gene Warr’s participation in the CARES group was not known by Gulfport’s previous administration. His son’s victory in the municipal elections in 2005 came later.

In the announcement by Gulfport Mayor Brent Warr about the VA last July, he told WLOX, "Anytime you have a piece of real estate on the Gulf of Mexico of this size with essentially a clean slate, or the opportunity to be a clean slate," the mayor said, "it's just an incredible opportunity."

This “clean slate” is prime land on the beachfront and worth millions and represents an investment of the public’s tax dollars.  Despite the obvious public interest, Mayor Warr has said nothing about the plans for the property except to solicit suggestions from the recently formed Gulf Coast Business Council.

Secret Membership

In contrast the public sector interest in the property, the Gulf Coast Business Council is an unelected private sector group of undisclosed businessmen who seek to exert direct influence on public policy. It is what was once called Coast 21, and counts as members, which can join only by invitation, individuals of such institutions as Hancock Bank, Mississippi Power, the Sun Herald newspaper and others.

But the exact membership of the Gulf Coast Business Council is considered “Proprietary.” GCN sought a membership list from the Gulf Coast Business Council but was told by phone that the members had voted in October to keep the list of members proprietary.

"That's just our policy," said Brian Sanderson, the director of the the council. Sanderson is one of two employees of the group.

Many of the 150 members are from the former Coast 21 group that was well-known for pushing issues that often reflected its interests than public issues. Sanderson says the Gulf Coast Business Council is financed from member's dues. The council currently does not have a web site, although we are told that a web site is under development. The council replaced the Gulf Coast Economic Development Council and Coast 21 as functioning regional organizations.

The Gulf Coast Business Council has been described in news media reports as a lobbying group, but the council has not registered with the state as such, according to David Blount, a spokesman for Secretary of State Eric Clark.

Sanderson says the council is more like an advocacy group, but it's members do directly lobby lawmakers. The council also has ex-officio members that include the board of supervisors and mayors from the three Coast counties. Sanderson told GCN that those individuals are kept informed by direct mail of the council's activities and personal contact. The council's office is currently in the former Harrah's administration building on Seaway Road in Gulfport.

GCN does know, however, that among the members are Gene Warr, and Hancock Bank’s George Schloegel. Warr is involved in a wide range of businesses on the Coast. He owns rental property, operates a real-estate enterprise and owned a clothing store with his son Brent. He is also is active in water utilities such as the East Harrison County Water Utility District, which will service the new Traditions real estate development.

Warr is also a member of the State Ethics Commission, a director on the board for Mississippi Power, and a member of the Mississippi Economic Council. The Mississippi Economic Council is behind the governor’s “Momentum Mississippi” program that is chaired by Mississippi Power’s President Anthony Topazi, who is also a member of the Gulf Coast Business Council. Momentum Mississippi's members have lobbied for economic development incentives before state legislators.

As outlined earlier, Gulfport officials have asked the Gulf Coast Business Council to make recommendations what to do with the property.

In the Gulf Coast Business Journal article, Hancock Holding Co. Vice Chairman and CEO George Schloegel heads a committee that the article said was to come up with at least three alternatives for the property to guide the mayor and city council in deciding how to put the property into use. This is without the public’s input, or public meetings, or what the citizens of Gulfport would like to see. What could happen is that the outcome of the Gulf Coast Business Council’s recommendations will be offered as the “choices” that the public will get to consider, if that.

The Gulfport VA is in east Gulfport and is sandwiched in between an upper middle-income residential area to the west, commercial property to the east, school property to the north, and the Gulf of Mexico to the south. The facility is serviced primarily by U.S. Highway 90 and secondarily by a two - lane street, which splits the property into two parcels of approximately 50 acres to the south and approximately 40 acres to the north. The northern property is largely undeveloped.

Officials with the VA could not provide GCN with an appraisal of what the property is worth, but it is easily in the tens of millions of dollars. But at this point in time, VA officials tell GCN that when the property is transferred to Gulfport, it then is entirely up to the city as to what to do with it. All of this underway without the first effort by Gulfport to involve its citizenry.

Since the beginning of the CARES program to close the VA in Gulfport in 2004, the public has had little information on what is going on at the property and clearly, Gene Warr and his son Mayor Brent Warr have been in the catbird seat on what will happen to the property.

There are also other issues that have to be resolved at the Gulfport VA site. Not all of the buildings will likely be removed. A survey is to be conducted on what should remain, but many of the existing structures will likely be demolished. This site does have some historical buildings that could provide a foundation for future use.

Paying the Way

According to the article in the Journal of South Mississippi Business, Schloegel visited San Francisco earlier this year to explore its Presidio, which was for 218 years an army post for three nations and now a park that was acquired under similar circumstances. The article said that Schloegel and his committee traveled to other similar attractions around the country and considered their uses in preparing their report to the city of Gulfport. The article does not say who paid for these trips in Gulfport’s behalf.

But GCN, in a recent interview with Schloegel, discovered that he paid for the trips “out of my own pocket.”

Schloegel’s committee was to have recommendation to give to Gulfport officials by Thanksgiving, however, in the GCN interview, Schloegel said that the Gulf Coast Business Council has not yet made a formal recommendation, and despite the Journal of South Mississippi Business article, he claims the group is only acting informally to assist the city on what to do with the property. So, what are the results so far?

“We have only two prospects that have expressed an interest in the property and we will be letting the city know what they are and will be trying to get that information to the city,” Schloegel said.

Schloegel did not say who the interests are but he said they are commercial developers. He told GCN that among his concerns was to see the property developed in a way so that it would not become a financial albatross to Gulfport. He said that the Gulf Coast’s Business Council’s work has included preparing a brochure to distribute to potential developers of the property and to help the city with the VA property issue at a time Mayor Warr is distracted from work connected to recovering from the hurricane.

The federal government has approved $36 million for remediation of the VA Hospital in Gulfport and for transfer of possession of the property to the City of Gulfport. There are some stipulations in the property’s use. Schleogel says the property cannot be used as a gaming site.

The closure of the Gulfport Hospital means major changes for the Biloxi VA property. Since the activity was accelerated as a result of Katrina, many of the changes in services in Biloxi are still being worked out. But it is likely going to mean many more buildings at the Biloxi VA, which in turn means more people and traffic out of the Biloxi VA’s only entrance on heavily congested Pass Road at Veterans Avenue.

Gulfport is also the site of another federal property that is seeing a major change over at the Armed Forces Retirement Home that is on beach several miles east of the VA’s property.

Armed Forces Retirement Home

The Armed Forces Retirement Home (AFRH) was also badly damaged by Katrina’s storm surge. The key structure on the property is a eleven story building that housed the resident’s quarters, administrative offices and a small medical facility, in addition to support services for meals and maintenance.

In 2004, Gulfport Mayor Brent Warr, and his father, Gene Warr purchased property on the AFRH-G site fronting the beach highway.  The parcels were initially purchased by the AFRH to allow expansion of the facility.

The property acquired by the Warrs included two large homes on the southeast side of the main grounds.  The homes were in bad repair at the time of their purchase and have fallen into worse shape since the hurricane. GCN has been able to observe very little work taken place on either property.

GCN sought to get information from the AFRH headquarters in Washington as to why the property had been disposed and what was paid for the property, but the AFRH headquarters in Washington, D.C. failed to answer, despite repeated requests with their public information office.  The public records only state the sale price as $10, a common practice done in private sales in order to keep details of the transaction confidential.

The property was subdivided for sale to the Warrs.  Because AFRH Headquarters would not respond to GCN’s repeated requests for information, GCN could not confirm that the property had been transferred directly to the Warrs by AFRH-G officials instead of the customary participation of the General Services Administration (GSA.)

According to GSA, “Typically Executive Branch agencies are required to report excess property
to GSA for disposal.  However, special delegations of authority have been granted by the Administrator of General Services to other agencies for the utilization and disposal of certain real property pursuant to 41 CFR Part 101-47:  Federal Property Management Regulations, 41 CFR Part 101-47--Utilization and Disposal of Real Property as of February 23, 1996.
They are:

·        Sec. 101-47.601 Delegation to Department of Defense.

·        Sec. 101-47.602 Delegation to the Department of Agriculture.

·        Sec. 101-47.603 Delegations to the Secretary of the Interior.

·        Sec. 101-47.604 Delegation to the Department of the Interior, the
Department of Health and Human Services, and the Department of

Even before the hurricane, the Gulfport AFRH was embroiled in repeated controversies about its operation and administration.  News reports talked about resident’s complaints over the home’s management and there were issues that resulted in several investigations and even some talk of closure.

Instead of taking action to prevent the spread of mold within the existing tower, AFRH allowed the facility after the hurricane, to sit while it commissioned a $45 million dollar study, insisting the repair and upgrading of the 11 story residents tower would take 13 years and cost upwards of $610.34 million.

The report’s summary includes 5 options for dealing with the repair, complete rebuild, or abolishment of not just the Gulfport campus, but what was formerly known as the Soldier’s and Airmen’s Home in Washington, D.C.

In a telephone interview with GCN, Mississippi Senator Trent Lott acknowledged that he saw the AFRH report to Congress as designed to close the Gulfport site.  This apparent intent also attracted the attention of Senator Thad Cochran and the particular ire of Representative Gene Taylor.

The GSA tells GCN that the AFRH complex will be completely replaced with new structures once the existing tower is removed. The current schedule is to be finished by 2010, however contracts and plans are still being developed. Last summer, Congress provided $240 million for the work and removed direct AFRH control by stipulating that GSA was to be the construction agent.

Under normal conditions, “excess real property” is first offered to other Federal agencies.  Providing that there are no takers, the next step would be to offer it to local government.  This is how the VA property was transferred to Gulfport.

GCN sought Mayor Brent Warr’s comments about the property issues involving the VA and AFRH sites. Repeated calls to the mayor’s public information officer Kelly Jakubik went unanswered, even after being told by the operator in the mayor’s office that she was in the building. Gulfport has established a policy that all media inquiries with mayor must go through Jakubik’s office.

Update: 2/2/07

Gulfport City Councilmen finally heard the recommendations on what to do with the property Feb. 2. Hancock Bank President George Schloegel told the council that the property is a prime site for development. Schloegel, who was representing the Gulf Coast Business Council, said the site should be developed in a way that benefits the surrounding community and that the city should find a large developer to help guide the 93 acre site's development. There is still no word on when Gulfport will received the site. In a report on WLOX TV, Warr said the site could be turned over sometime in the summer, but offered no specific timetable.

Work on the site to clear the asbestos and removed the destroyed buildings has not yet begun. Gulfport cannot receive the site until after that work is completed.

In addition, Gulfport's PR director Kelly Jakubik is no longer with the city. She reportedly left in mid December, shortly after the GCN report was first published.

Update 2/26/07

The Gulfport City Council approved the hiring of a Master Planner, Feb 21, 2007, to help the city come up with a development plan for the nearly 92 acre VA Hospital site. The Sun Herald newspaper reports that: "

The City Council on Wednesday grudgingly approved a request from City Hall to hire a master planner to begin crafting the future of the Veterans Affairs property on U.S. 90.

The approval allows City Hall to publicly solicit for a development consultant who will fashion a plan for the 92-acre complex, which the federal government has vowed to donate to the city.

City Council President Brian Carriere was one of two votes against the proposal. Carriere was unhappy with wording in the request that allows the soon-to-be creator of the land use and development plan to later bid on construction jobs on the same site.

"To me, it seems like a real conflict of interest," Carriere said.

Mayor Brent Warr said City Hall wants a seasoned developer whose work is well known and someone who is "familiar with the city."

The other opposing vote was made by Councilwoman Ella Holmes-Hines who felt the community's voice would be muffled in the brainstorming, saying public hearings are tucked so far toward the end of the planning method that Joe Public's voice will hardly matter.

As of February 26th, the VA has yet to announce a date for turning the site over to the city despite an announcement by Mayor Brent Warr that the transfer would occur this summer.

Update 2/17/08

Gene Warr is no longer a member of the Mississippi Ethics Commission. He was not reappointed at the end of his term in November, 2007. He had served a four year term.

Update 2/5/09

Warr acquired the property for his home from AFRH, according to his own statements to the Sun Herald, in February 2003. Warr later, in January 2004, filed the deed for the property at the county courthouse.

More Information:

Gulfport Officials Tour VA Property -VA Officials Say Turnover Date Not Established - 10/14/08

Newspaper Echoes Nearly 2-Year-Old GCN Story on Warr's Home Purchase - Sun Herald  10/26/08

Update: Concerns Grow Over Gulfport's Handling of VA Property Transfer - GCN 12/11/07

Transfer of Title of Gulfport VA Hospital to Gulfport Still Months, or More, Away - GCN 7/11/07

VA Could be a Plumb for Development - Journal of South Mississippi Business

What is the Gulf Coast Business Council? - GCN

Gulf Coast Business Council Committee Chairmen - GCN

Gulf Coast Business Council Official Mission Statement - GCN

Armed Forces Retirement Home Tower Likely to be Demolished - GCN

Armed Forces Retirement Home Imploded - GCN

Another Katrina Victim: Fight To Save Gulfport Armed Forces Retirement Home Underway - GCN

Congressmen Inspect Military Retirement Home - GCN

VA's Future Taking Shape - Sun Herald 2/22/07

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