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VA terminates lease for Butler facility

| Tuesday, Aug. 20, 2013, 1:19 a.m.

The Department of Veterans Affairs yanked its lease with an Ohio company that was building a $75 million health center for vets in Butler, accusing the firm of “false and misleading representations” during bidding.

The VA ordered work halted in June when it began to uncover problems with the project.

VA spokeswoman Jo Schuda would not say on Monday what the representations were. She said the agency “will aggressively pursue any and all legal actions necessary.”

The VA in a statement accused Westar Development Co. of Aurora, Ohio, of making the false representations during the bidding process. Westar officials could not be reached.

The VA Butler Healthcare Center was scheduled to open in 2015, but the termination of the lease left its future in doubt. The VA broke ground on the center in April.

“At this time, the (VA) is actively pursuing all options ... for the Butler lease as soon as possible,” the statement said.

On June 21, the VA stopped construction because it uncovered “initial findings” about the project and VA Butler Partners Co., a Westar subsidiary, and company representatives. The VA has not revealed what those findings are.

The VA said it notified Westar of the termination of the lease on Aug. 9.

Army Veteran Robert Veselich of the Third District in PA Veterans Advocacy Group said the project was important to area veterans. According to Census numbers, about 16,000 veterans live in Butler County.

“Where does this leave veterans in Butler County?” Veselich, 53, of Jefferson, said. “It was a very, very poor plan to privatize this thing.”

U.S. Rep. Mike Kelly, R-Butler, said he's always had concerns about the lease agreement.

“We're past the time of being patient, and we have to do something,” Kelly said. “It's been difficult getting answers, but we have to keep asking and prodding.”

Westar outbid several companies in May 2012 to construct the center on property adjacent to the VA campus in Butler Township. Westar paid the township nearly $2.4 million for land on which to build the center. It bought land from the adjoining Butler Memorial Park.

The VA agreed to lease the building from Westar for an average of $7.6 million a year for 20 years.

Little work has been done at the site other than grading. Westar had not obtained final approval from PennDOT for traffic upgrades before work stopped.

Butler Township solicitor Larry Lutz said that the township had not been subpoenaed by the federal government for any documents related to the project.

In July, an attorney for former Westar senior vice president Robert Berryhill said that Berryhill met with federal authorities investigating the Butler VA project. Attorney Richard Blake would not disclose what Berryhill said.

Berryhill was sentenced in July to 75 months in federal prison for stealing more than $226,000 from companies involved in construction of FBI offices in Knoxville and Indianapolis, while he was a senior vice president at Carnegie Management and Development Corp. in Cleveland.

Authorities said the accusations against Berryhill while he was with Carnegie were unrelated to the Butler project.

Prior to the groundbreaking, Westar officials were asking for $3.2 million in property tax breaks to cover “unanticipated” development costs, including solving drainage problems, connecting to a power grid and road improvements. Westar subsequently withdrew the request.

Bill Vidonic is a Trib Total Media staff writer. Reach him at 412-380-5621 or bvidonic@tribweb.com.

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