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VA Butler's outpatient center put on hold

| Friday, July 12, 2013, 12:04 a.m.

The Department of Veterans Affairs halted construction of a $75 million outpatient center in Butler while federal officials investigate the prime contractor, the agency confirmed on Thursday.

The stop work order, issued June 21, is “based on the initial findings of an ongoing VA Office of Inspector General investigation of the prime contractor and certain company representatives,” the VA said in a statement. VA officials would not disclose the inspector general's findings.

The prime contractor is VA Butler Partners Co., based in Cleveland and formed within the last year by representatives of Westar Development Corp., which had overseen the project since its infancy, said Ken Kalberer, health systems specialist at the Butler Township VA facility.

Several representatives of VA Butler Partners, including president Sam Calabrese, did not return phone messages.

VA Butler Partners is a “special purpose entity” formed to develop, build and manage the VA Butler Health Care Center for an initial period of 20 years, according to the company's website.

The VA would lease the building from the developer for an average of $7.6 million a year for two decades.

“VA takes these allegations very seriously and will aggressively pursue any and all legal actions necessary. The stop work order provides formal notice to the contractor to cease work on the contract until further notice. VA will continue to evaluate the allegations to determine the appropriate next actions,” the agency said.

Mark Ballesteros, a representative for the VA in Washington, where the Butler project is being overseen, had no further comment.

The work stoppage happened after federal prosecutors in Cleveland indicted a Westar executive in April for mail fraud and related charges, shortly before the groundbreaking in Butler.

Westar said at the time that it fired senior vice president Robert Berryhill after his indictment. It withdrew its request to Butler County for $3.2 million in property tax breaks for the $75 million project. It is scheduled to open in 2015.

“I think the federal government will bring in another contractor,” said Butler County Commissioner Bill McCarrier. He said he was not aware of the stop work order. “The federal government's not going to let that project die.”

Kalberer said he did not know how long the project might be delayed.

“We are working closely with the Office of General Counsel to resolve this,” Kalberer said. “We have confidence that things will be worked out.”

Westar said in April that Berryhill's indictment was tied to accusations that, before he worked at Westar, he stole more than $226,000 from companies involved in the construction of FBI offices in Knoxville, Tenn., and Indianapolis.

Berryhill entered a plea agreement in U.S. District Court in Akron on April 23, according to court records, and is scheduled to be sentenced on July 30. The plea agreement is sealed.

Cleveland attorney Richard Blake, who represents Berryhill in the federal criminal case, said it has nothing to do with the Butler project.

U.S. Rep. Mike Kelly, R-Butler, is aware of the VA investigation but does not know the findings, according to a statement from his office.

“Rep. Kelly has had concerns about the project since the beginning,” the statement said. “Regarding the specific findings, we will give the (inspector general's) office time to do its job and see what it reports.”

Trib Total Media staff writer Jason Cato contributed to this report. Bill Vidonic is a staff writer for Trib Total Media. He can be reached at 412-380-5621 or bvidonic@tribweb.com.

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