My estimate, frankly, on a realistic basis is that the sales might not be completed for a period of approximately 2 years. I mean by this from the beginning to the end presuming there would be a first priority offering, a second priority offering and a subsequent advertising to the high bidder. I believe that each priority offering would take from 5 to 6 months, leaving about a 3- to 4-month period, give or take, for informational purposes, and then leaving a 6- to 8-month period at the end of the time for the units to be offered and advertised to the high bidder. This time scale, of course, could be reduced substantially depending on the interest of the people who secure priorities to move ahead rather rapidly.

But I see no reason why at the most pessimistic the program should take longer than 2 years, and optimistically I think it could be accomplished in a year.

Representative MORRIS. Whatever it is, the subcommittee will direct that you and your staff do everything you can to expedite it and move it along within the bounds of good judgment, and keeping within the regulations and rules.

Mr. ROSER. This is certainly our desire, Mr. Chairman, and we certainly will do so.

Representative MORRIS. If people exercise their first priority, that would lead to a much earlier time of disposal. Is that not correct? Mr. ROSER. This is right.

Representative HOSMER. Will the Chairman yield?

Representative MORRIS. Yes. The gentleman from California.

DESIRE OF OCCUPANTS TO PURCHASE; UNDERSTANDING OF LEGISLATION

Representative HOSMER. Mr. Roser, I would like to get a feel as to the attitude of the occupants at the present time toward some scheme of disposal which would allow them to participate in home ownership first and, second, whether or not the residents of Los Alamos essentially understand what is in this bill? Third, if they do, what is the general feeling about it?

Mr. ROSER. I will try to answer. I think you posed three questions, Mr. Hosmer.

I think there is substantial interest from the occupants of the quadruplexes and the octoplex type units, which are family type-two or three bedroom units-in some form of ownership. This is about 436 units comprising approximately 40 percent of the total number of apartment units which we have. There seems to be a reasonable amount of interest in the purchase of the one bedroom type units which comprise, perhaps, an additional 20 percent of the total number of units. The balance of the units are of a kitchenette, efficiency of non family type comprising approximately 40 percent of inventory. I think there is very little interest in resident ownership here. So I would say that there is a substantial amount of interest in the ownership of approximately 60 percent of the apartment buildings.

I am not sure that the residents do understand the proposed legislation. As a matter of fact, I think I might say they probably do not. This is a very complicated question. There are many facets to it. This is one of the reason I stressed earlier that a very intensive educational and informational campaign is necessary.

We would propose to undertake that in conjunction with the county commissioners, the county government and to bend every effort toward seeing that the residents do not have a clear understanding of what they are getting into before we proceed with the program and at each principal point in the program.

Representative HOSMER. That may leave my third question unanswerable then.

Mr. ROSER. I think this is right. Yes, sir.
Representative HOSMER. Thank you.
Representative MORRIS. Senator Bennett.

LEASES OF APARTMENTS

Senator BENNETT. I have one question for clarification.

At the bottom of page 3 and the top of page 4 you discuss the situation in which a building is divided between ownership and rentals. Take a quadruplex, which is the example that came into my mind. In order to purchase it they have to represent 70 percent of the housing unit's occupants, which means they have to represent three of the four. Mr. PARKS. That is right.

Senator BENNETT. The man who is occupying No. 4 decides he doesn't want to go into the purchase arrangement. I don't know whether things are like this in Los Alamos, but they are in other places. Maybe he isn't too happy with his neighbors or maybe his neighbors aren't too happy with him. Is he in a position, since he occupies No. 4, to more or less demand a lease from the AEC?

Mr. PARKS. Yes, he is.

Senator BENNETT. The AEC then turns that lease over to the group that acquired the other three apartments.

Mr. PARKS. That is correct.

Senator BENNETT. So they could acquire a tenant with whom they are not very happy.

Mr. PARKS. That is right.

Senator BENNETT. And he acquires a landlord with whom he is not very happy.

Mr. PARKS. The commission guarantees his performance of his part of the lease.

Senator BENNETT. For 15 months.

Mr. PARKS. Yes.

Senator BENNETT. And at the end of 15 months he has no protection.

Mr. PARKS. That is right. The situation today though is that he has a 30 day rental arrangement which requires only 30 days notice of termination. So this actually gives that fourth tenant considerable more assurance of continuing occupancy of the unit.

Senator BENNETT. Thank you. I just wanted to get my own thinking straight.

COST OF SPLITTING QUADRUPLEXES

Representative MORRIS. Mr. Parks, what data can you provide for us concerning the cost of splitting the quadruplexes and the time involved to accomplish this? There has been some discussion of this so let's get it on the record.

Mr. PARKS. Our committee was furnished copies of a couple of memoranda prepared in 1963 together with as built charts of the various quadruplexes. We would be happy to make those available for the record. They indicate the physical situation.

Representative MORRIS. Without objection they will be made a part of the record at this point. (See app. 5, p. 162.)

Mr. PARKS. It indicates the physical situation with respect to each type of quadruplex and the conclusion of the engineers was that it would be extremely difficult and costly to separate any of the units in any of the quadruplexes.

Representative MORRIS. Why would it? Is it because they have common heating systems or a common light system?

Mr. PARKS. There are pipes using common walls. There are air vents. The foundations in some cases are nonexistent. These matters were discussed in these memoranda which we will make available. Senator BENNETT. I have another question, Mr. Chairman. Representative MORRIS. The Senator from Utah.

CONDOMINIUMS

Senator BENNETT. As I listened to your testimony, I was listening for the word, "condominium," and it didn't come up until the end of page 6. So apparently there is no thought that you could move under these priorities into a condominium situation. You would have to form a cooperative and then move to a condominium.

Isn't the condominium approach a method of splitting the quadruplexes?

Mr. PARKS. That is a possibility. The reason the committee did not recommend it and I should also say it is very attractive to a number of residents is that it requires the platting of each one of the units in each quadruplex-each multiple housing building. This could be prohibitively expensive for the Commission. This is No. 1.

No. 2 is the commission would have to be the sponsoring or moving party in establishing for the condominium. In the event the Commission had the situation for example of establishing a condominium and selling off only 2 or 3 of the units in the quadruplex the Commission would continue indefinitely as an associate of the three owners in this building. We felt this clearly did not provide for expeditious termination of the Government's interest in the property. It might even end up spotted all over the community with a single interest in a building here and there, and also an interest in the common property in each one of these buildings.

We did feel, however, that the flexibility of the program we provided would make it possible for the purchasers who do wish to have condominium ownership to buy as an individual or as a corporation and then convert the building to condominium ownership.

Senator BENNETT. The condominium requires that there be one single entity

Mr. PARKS. That is correct.

Senator BENNETT. That carries the chief selling responsibility. That is your reason for putting it down at the very end of the process. You establish the single ownership first and let them decide.

Mr. PARKS. That is right.

Senator BENNETT. Thank you very much, Mr. Chairman.

ENTITY ENTITLED TO EXERCISE FIRST PRIORITY; CONDOMINIUM

Representative MORRIS. I want to make sure that we all understand this point and it is clear for the legislative history of the legislation. You do not have to form a cooperative to exercise the first priority in purchase of these buildings. You can form a corporation. It that

correct?

Mr. PARKS. That is correct.

Representative MORRIS. Can you form a partnership?

Mr. PARKS. That is correct.

Representative MORRIS. Can the partnership then proceed to a condominium?

Mr. PARKS. Yes.

Representative MORRIS. Can the corporation then proceed to a condominium?

Mr. PARKS. Yes.

Representative MORRIS. Let's take a hypothetical case

Senator BENNETT. Let me insert one question before you go to your

case.

Can a single individual, who is a tenant, acquire ownership as an individual?

Mr. PARKS. Yes, we mention that in our report.

Senator BENNETT. So he can join these others who may later transfer the property into a condominium.

Mr. PARKS. That is right. With a quadruplex, if two occupants assign their priority interest to a third, they then represent 70 percent of the occupancy of that building, and that individual

Senator BENNETT. Becomes the owner

Mr. PARKS (continuing). Then becomes the owner and can convert it to condominium ownership.

Representative MORRIS. Let's take the hypothetical case now.

Suppose Mr. Parks, Senator Bennett, the gentleman from California, and I live in one of these buildings and met all the priority requirements. I do not wish to exercise my priority. Mr. Parks does not wish to exercise any priority. Senator Bennett does not wish to exercise any priority. Congressman Hosmer does. Can we, under the statute, assign our priority to Congressman Hosmer and he exercise it under the statute?

Mr. PARKS. That is correct. That can be done.

Representative MORRIS. If Congressman Hosmer and I should desire to form a partnership and you and Senator Bennett do not desire to participate, and assign your priorities to us, may we do so?

Mr. PARKS. We could assign our priority, but your partnership-let me tentatively say, yes, because your partnership would then represent at least three or four units

Representative MORRIS. What do you mean? Let's not be tentative now. Can we or can't we? If it is a question you can't answer, explain to me why you can't answer it.

Mr. PARKS. I was just a little worried about a partnership where we would have two. What we had contemplated was a partnership or three in a quadruplex with three individuals wishing to participate in a purchase would represent the priority interest of three of the four units in the quadruplex.

Senator BENNETT. Isn't the basic problem here, Mr. Chairman, if the occupants can assign their priority to a single person, can they assign it to a partnership of two persons?

Mr. PARKS. I am sure the answer is correct.

Representative MORRIS. I want to hear from the counsel of the subcommittee on that point.

Mr. TROSTEN. It would seem to me, Mr. Parks, that if two occupants could assign their priority to a third one and he could then exercise the priority, that one occupant could assign his priority to a partnership consisting of two other occupants and that partnership could then exercise the priority.

Mr. PARKS. I agree. I am sure this is correct.

Representative MORRIS. Let's make it perfectly clear in the report. There is one other step, I think. Among the four of us, I do not desire to participate in any way in the proceedings. Could Mr. Parks and Senator Bennett then assign their priority to Congressman Hosmer and he exercise it?

Mr. PARKS. Yes.

Representative MORRIS. He could exercise it as an individual or in any way he desired to exercise it?

Mr. PARKS. That is right.

Representative MORRIS. Also, if one of you desired to assign your priority to the other two, the other two could exercise it?

Mr. PARKS. Yes, they would be representing three at that point-three of the four.

ABILITY OF STRANGERS TO THE COMMUNITY TO PARTICIPATE

IN PRIORITY PURCHASE

Senator BENNETT. Could I throw a curve at you?

We have the situation last described by the chairman of a single individual who acquires the priorities of enough other occupants so that he has the right to exercise the priority. Can he then form a corporation into which he brings people who are not occupants?

Mr. PARKS. Our committee report provides that the entity that is created must be composed solely of occupants, project people or persons residing in the community. He could not bring strangers in the community into this corporation.

Representative HOSMER. Let me ask this question.

Representative MORRIS. Congressman Hosmer.

Representative HOSMER. Suppose Mr. Stranger seeing an opportunity to acquire some real estate moves to Los Alamos and obtains an assignment of priority. Is that possible under this bill?

Mr. PARKS. An assignment could be made to someone residing in the community.

PRIORITY PURCHASE BY CORPORATIONS

Representative HOSMER. Let's take the corporate stranger, incorporated in New Mexico, with headquarters at Los Alamos, New Mexico. Could it receive the assignment?

Mr. PARKS. We have addressed this in the context of natural persons. We were dealing with residents and occupants. We certainly did not contemplate corporate individuals in the legal sense residing here.