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incumbrance to which the property is now subject, and the city also desires a release from this incumbrance as to the entire tract in order to have a clear marketable title for further development.
In view of its geographical separation from the airport area, parcel C is not affected by the conditions and restrictions in the deed except the provision for reverter in the event of breach of any terms and conditions of the deed. Moreover, the proposed use by the Southern Union Gas Co. is not considered by the Department of the Army to be incompatible with the military requirements of Fort Bliss or Biggs Air Force Base. It would be objectionable, however, if the property was used for purposes which would produce noxious smoke, noise, odor or dust, or if structures were erected thereon exceeding 500 feet in height. Therefore, there would be no objection to releasing the residual interest of the United States in parcel C provided that assurance is obtained that these requirements are met by the city. It is considered, also, that the United States is entitled to monetary reimbursement for the fair market value of the interest released.
Accordingly, the Department of the Army, on behalf of the Department of Defense, would interpose no objection to the bill provided it be amended by adding a new section, as follows:
SEC. 2. The conveyance authorized herein shall be subject to the following conditions:
(a) That the city, in accepting the conveyance, agrees for itself, its grantees, successors, and assigns to forego (1) any use of the property which will be noxious by the emission of smoke, noise, odor or dust, and (2) the erection on the premises of any structure exceeding 500 feet in height above the ground.
(b) That the city shall pay to the United States the fair market value of the property interest conveyed under the first section of this act.
Enactment of this measure will not involve the expenditure of any Department of Defense funds, and the Bureau of the Budget advises that, from the standpoint of the administration's program, there is no objection to the presentation of this report for the consideration of the committee.
This concludes my satement, Mr. Chairman. I have appreciated this opportunity of appearing before the committee and shall be happy to answer any questions you may have on this bill.
Mr. PHILBIN. That is a very fine statement and very clear statement.
Do you have any views about the conditions for the fair market value, what the fair market would be and how the transaction would be carried out?
You heard the testimony of Congressman Rutherford suggesting it be such a nominal consideration. Do you have any comment to make about that?
Mr. Hart. Yes, sir. I have to confirm, to a certain extent, what Congressman Rutherford said. It is our departmental policy, and also the policy of the Bureau of the Budget, that any time the Federal Government is giving up or disposing of an interest in property, we feel that the Government should receive a fair return for it, unless there are extenuating circumstances, which we haven't found in this particular case. So, to that extent it is policy.
Now, as to the value of it, we have made no attempt to estimate this. It is a very complicated appraisal. It would cost us some expenditure of funds. It is industrial property.
I know you gentlemen are well familiar with at least what the approach would be-before and after approach. In other words, what would this property be worth without the restrictions, free and clear, and what would it be worth with them?
When I say "restrictions," I am referring, of course, to the reverter.
It is really the reverter that is being released, in essence, here. That is a technical approach and the appraisers would do it. It may conceivably be nominal. However, we are at the moment not free to say that it would be.
Mr. PHILBIN. You don't have any recommendation regarding that proposal, that the consideration be nominal?
Mr. Hart. Yes, sir. I believe I could speak authoritatively for the Department, that we would prefer to have it fair market value and if it turns out to be nominal, that is fine.
However, the Government's interest would be better protected if the amendment was as written.
As a practical matter, similar type legislation in the past goes even a step further, they generally provide that it will be fair market value as determined by the Secretary of the Army.
In this particular case, in the curtailment of this provision from the rather lengthy, involved provision that was submitted, it was boiled down—and I think it could even be improved by placing there "fair market value as determined by the Secretary of the Army,” and this would be in conformance with legislative precedent as passed in other previous bills.
Mr. Puilbin. So, you would under the terms of your proposal leave it to the Secretary of the Army to establish the fair market value after negotiation with the city of El Paso!
Mr. Hart. Yes, sir; you are correct.
As a practical matter it would be a negotiated situation. However, if you were to insert in our amendment "fair market value as determined by the Secretary of the Army," that would put the onus on the Army, at least we would have to go out and pay for, probably, a contract appraiser, and then we would get with the city officials to determine whether or not it would be agreeable.
Mr. PHLBIN. As a practical matter you intend to negotiate about the matter and try to settle it as best you can, but you want the language which will give you the power to deal with the matter as you believe is to the best interests of the Government.
Mr. HART. This is correct, sir.
Mr. Pulbin. You are satisfied, also, with the promise made by Congressman Rutherford with respect to continuing in effect under the terms of this bill by amendment certain restrictions, that you have referred to, relating to the noise, smoke, odor, dust, etc., and then the limitation on the height of buildings.
Mr. HART. Yes, sir; we have a very valid reason for that.
It is acceptable, as Congressman Rutherford said, to the city and the purchaser.
What we are removing here, which has a value, I might say, while it is not in the deed, it is in this ancillary agreement referred to by Congressman Rutherford, we preface that clause in the agreement by say. ing “will not be used for industrial use."
You know in our reservation we have not asked that it be restricted. We believe this is property for industrial use. We want to eliminate the objectionable type. We have a hospital area. We are surrounded by housing area.
Mr. PIULBIN. I understand what your position is, I think.
Mr. NORBLAD. How far is this parcel C from either Fort Bliss or the Air Force base ?
Mr. Hart. Parcel C is practically adjacent and —
Mr. Hart. Yes, sir. You have a railroad right-of-way, merely in between
Mr. NORBLAD. I see.
Mr. Hart. That Congressman Rutherford showed you. This map illustrates it very rapidly, sir (handed).
We practically surround the area on three sides.
I might say in that area it is not—we have a number of housing units in thereNCO houses, and the Beaumont Hospital area is to the north of this.
That is the reason for the desire not to have the obnoxious smoke and so forth.
Mr. NORBLAD. I realize this will be a difficult question, but if this was a bare piece of property, without any of these complications, owned by one commercial person being sold to another, have you any idea what the value of that real estate would be?
Mr. HART. Well, I have tentative estimates we have received which are horseback, sir.
Mr. NORBLAD. That is all I want.
Mr. Hart. On this parcel C we have been advised the approximate value would be around $850,000.
Now, I think Congressman Rutherford made reference to certain valuations, and I couldn't follow all of those but nevertheless, this is what we would put on.
We know for a fact that the present sale which is being proposed, and which was the initiation for this legislation, to the Southern Pacific Gas Co., is about 81/2 acres being sold for $176,000.
At the time of conveyance our appraisal on that was in the neighborhood of $125,000. So, it has increased in value considerably.
We would say offhand this is—that is not really an official figure. It is our estimate from the fieldMr. NORBLAD. I understand. Mr. HART. Horseback.
Mr. NORBLAD. One other question. I did not hear the first of Mr. Rutherford's statement, unfortunately.
Is there any objection on the part of the city of El Paso to the Section 2 amendments which you propose ?
Mr. Hart. No, sir. They have been agreed to.
Mr. Philbin. Is there any foreseeable future need for use of this property, in your view-in the view of the Army?
Mr. HART. You mean parcel C?
Mr. PHILBIN. Yes. Will the Army have future foreseeable military use for this property?
Mr. Hart. I would think not, sir.
As a matter of fact, it came before the Real Estate Committee early in 1954–55 as excess. We hope not. We would have to buy it from the city again.
Mr. PHILBIN. Mr. Price?
Mr. PRICE. Mr. Hart, why has the Army not objected to the use of the word "direct" the Secretary, in this legislation?
Mr. Hart. Use of the word "direct"?
Mr. PRICE. Yes, we have had that argument many times in the committee, that you do not direct, you authorize the Secretary to do a certain thing.
Mr. Hart. May I speak personally for the moment, not officially for the Department?
I have been in this legislative work for only perhaps 2 years, but I have seen many bills that-particularly on conveyances—that start right off in the enabling clause saying "Secretary of the Army is hereby authorized and directed." Mr. Phillin. That is common legal draftsmanship.
Mr. Price. It has been the more or less consistent policy of this committee not to direct but to authorize.
Mr. PHILBIN. I think in real estate matters we frequently direct.
Mr. Hart. I don't have any other bills here handy. In any event, if this committee was to pass a bill which said the Secretary is authorized, I believe we would have to consider that a mandate, and I don't think we could.
Mr. Price. No, you do not. You can leave the final determination up in the administration body then as to whether they can work out a satisfactory arrangement.
When you direct, you don't do that, you both authorize and direct him to go through with it.
Mr. HART. That is correct.
Mr. PRICE. This is a small bill. We have had this argument on some pretty large measures. I think we should be more or less consistent in the use of it.
Mr. Hart. Of course, we would much prefer, I think it goes without saying, to have discretion in any legislation than a direction. I think the point is well taken, sir.
Mr. PHILBIN. Mr. Stafford ?
Mr. WICKERSHAM. Since this is already owned by the city of El Paso, and it is only a question of the reverter clause, I hope that you are very reasonable and nominal in your assessment of the value, be. cause it is only the reverter clause.
Mr. Hart. Thank you, sir.
Mr. CLANCY. You have estimated the market value of this property is approximately $20,000 an acre, sir.
Mr. Hart. I believe that would be approximately that. I had a rough estimate, I said, of $850,000 for the 41 acres.
Mr. CLANCY. That is roughly $20,000 an acre.
Mr. CLANCY. Does the railroad facility that is adjacent to this property come into play as far as value here?
Mr. Hart. I am certain that the appraiser in considering valuation would consider the availability of rail facilities, particularly in an industrial property that would be the first thing they look for, is transportation facilities, as to roads, water, or rail and, as a matter of fact, this purchaser of the city is proposing, among other things, he is building warehouses to have a railroad spur track, and I am sure that had a very influential effect on him in picking this site.
I think that adds considerably to it.
Mr. PHILBIN. If there are no further questions, thank you very much for your fine testimony.
Mr. HART. Thank you very much.
Mr. PHILBIN. That will conclude the hearings on this particular bill.
(Whereupon, at 11:10 a.m., the committee proceeded to the consideration of other business.)
Mr. PHILBIN. We will take up H.R. 12081, to authorize the Secretary of the Army to convey certain land and easement interests at Hunter-Liggett Military Reservation for construction of the San Antonio Dam and Reservoir project in exchange for other property.
(H.R. 12081 is as follows:)
(H.R. 12081, 87th Cong., 2d sess.)
A BILL To authorize the Secretary of the Army to convey certain land and easement
interests at Hunter-Liggett Military Reservation for construction of the San Antonio Dam and Reservoir project in exchange for other property Be it enacted by the Senate and House of Representatives of the United States of America in Congress a88mbled, That (a) in order to facilitate the construction of the San Antonio Dam and Reservoir project for flood control, water conservation, and public recreation the Secretary of the Army is authorized, upon such terms and conditions as he may deem to be in the public interest, to quitclaim to the Monterey County Flood Control and Water Conservation District of the State of California, a tract of fee-owned land in the eastern part of HunterLiggett Military Reservation adjacent to the San Antonio River, containing approximately eight thousand seven hundred and seventy-five acres, more or less, and to grant to the said district a flowage easement over approximately one thousand one hundred and thirty-five acres of land, more or less, and a road and highway bridge easement over sixty-five acres, more or less, of land in the Ficinity. All mineral rights in the fee-owned land, and a right-of-way for road purposes in a location approved by the Secretary of the Army shall be reserved to the United States.
(b) The conveyance authorized by this Act shall be in exchange for (1) the conveyance to the United States of an exclusive right-of-way for road purposes between Hunter-Liggett Military Reservation and Camp Roberts, California, as approved by the Secretary of the Army, the construction of a tank road and appurtenances in accordance with plans and specifications to be approved by the Secretary of the Army; and the relocation of existing Army facilities located in the areas to be conveyed under paragraph (a) hereof, by the Monterey