KNOXVILLE, Ia. – This town is tired of waiting for the federal government to decide what to do with its old Veterans Affairs hospital, a sprawling facility that has deteriorated since being put in mothballs a decade ago.

“It’s sad to look at that campus and know what it was, and how great it was in this community,” said Richard Biddle, an Army veteran and retired VA employee who lives next door to the old hospital. “It’s sickening.”

The 151-acre grounds have 39 buildings, some dating to 1905. Many of the brick structures still look stately on the outside, even if their entrances are overgrown with weeds and bushes. Inside is a different story, Biddle has been told by friends who still work for the VA.

“They say it’s really bad," he said. "Water damage everywhere. The floors are buckled, ceilings are falling in everywhere.”

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VA administrators are not letting the public, including journalists, into the buildings. But a federal official acknowledged the truth about the structures during a town-hall meeting last month.

“Most of them are in pretty rough condition,” the official, Dana Hatfield of the General Services Administration, told about 100 Knoxville residents who gathered in the high school auditorium.

The hospital’s red brick buildings and broad, manicured lawns were a centerpiece of Knoxville life for generations. At one time, the campus covered more than 300 acres. It had its own fire department, greenhouse, bowling alley, water tower and golf course.

“It was like its own little city,” Knoxville Mayor Brian Hatch said.

The hospital used to house hundreds of veterans, many of whom were psychiatric patients who stayed there for months or even years. The VA also provided hundreds of solid government jobs. The patient load peaked after World War II, then dwindled as modern psychiatric care shifted away from using such institutions. The VA decided in 2004 to shutter the Knoxville campus and move most of its services to the agency’s Des Moines hospital. Most of that shift was accomplished within a few years.

Biddle said he and his neighbors worry about what might happen next.

“Who’s going to buy it? Are they going to tear it down? Are they going to put a hog processing plant in there? I think that we should have some input and be informed,” he said at the town-hall meeting.

Parade of frustration

Even at half its original size, the hospital grounds cover about 5 percent of Knoxville's total area. As a VA facility, the prime property is exempt from property taxes, making it a major financial drain on city and county governments and the school district.

Local resident Linda Hicks joined a parade of town-hall speakers expressing frustration at the lack of action. “I realize government wheels turn very slowly, with lots of bureaucracy, but it’s really not fair to the people of Knoxville to let this continue in the way that it is. We need to move it forward,” she said.

Gail Graham, central Iowa director of the VA health system, acknowledged to Knoxville residents that it’s important to keep the grounds up while the government tries to decide what to do with the mothballed hospital. Broken windows are being fixed, the grass is being mowed, and snow is being plowed, she said. The VA plans to hire a private security firm to limit vandalism.

“We know that when you drive into Knoxville, this is one of the first things you see,” she said. “And we want to make sure it isn’t an eyesore to you.”

Graham didn’t dispute residents’ contentions that many of the structures are plagued with mold, asbestos, leaking roofs and peeling paint. Graham said the VA can’t afford to spend more than the nearly $2 million per year it’s spending just to do basic maintenance on the facility’s grounds.

However, she said, the VA demonstrated its continued commitment to Knoxville veterans last spring, when it opened a new outpatient clinic in another part of town.

She pledged the old hospital campus would not sit idle much longer. “This is a priority for VA leadership,” she said. “… Our secretary is really determined to take the money we spend on properties we can’t use and make them available to the community, and more importantly take the money we’re spending on these properties and put it back into veterans’ health care.”

Years of marketing

A few years after shuttering the campus, the VA signed a five-year agreement with a local group, the Knoxville Veterans’ Alliance, which was put in charge of trying to find new tenants. That agreement expired last December.

James Washington, a leader of the local group, said in a recent interview that a for-profit college from California showed some interest in the property, as did Des Moines Area Community College and some smaller business. None of those deals panned out.

“We marketed the campus very aggressively," he said. "We just didn’t have success."

Washington said he originally believed that because the property would still be owned by the VA, any tenants would be exempt from property taxes. But the city successfully objected to such an arrangement, contending for-profit businesses must pay their share of taxes.

Mayor Hatch said city leaders were frustrated for years by a lack of communication from the VA, but he said the situation has improved significantly with regular conference calls and meetings. He's grown more optimistic about a solution, but he hesitates to estimate how long it would take or what it would look like. He said the city might be interested in obtaining some of the open land for recreational uses, but it probably isn't in a position to buy any of the buildings and redevelop them.

The federal government is now looking to sell the property relatively quickly to private developers. The VA has brought in specialists from the U.S. General Services Administration, who travel the country disposing of surplus federal property. Jennifer Mollenshott, an agency administrator from Texas, told the town-hall participants they should be optimistic that a sale of the Knoxville campus could be completed within about a year.

“I want you to have hope, please,” she said.

'Just bulldoze the thing'

Several people in the crowd expressed doubts that any developer would buy dozens of falling-down buildings when they could instead buy vacant land that is ready for new construction.

“Why don’t we just bulldoze the thing down and be free of this headache?” one man asked, drawing applause from several others in the crowd.

Mollenshott said the federal government generally sells mothballed properties “as is,” and does not demolish structures. She also said her agency might be willing to split the campus into several parcels, but it isn’t allowed to pay developers to take distressed property off the government’s hands. But she exuded confidence in her ability to find buyers.

“I’ve literally sold a hole in the ground,” she bragged.

Residents said they wished the federal government had shown such resolve years ago. The sore points included the sorry state of a row of brick duplexes, which used to house VA doctors. Those houses, on one of Knoxville's main streets, could have been sold right away and used as private homes, speakers said. But the duplexes' roofs are dilapidated, and the homes are probably beyond repair now, they said.

Hicks said some fellow local residents and veterans remain angry that inpatient services were curtailed, and they still are demanding the VA reopen some of the wards.

“But that horse is out of the barn," she said. "That’s gone, and they’re not going to bring people back here to take care of them. So the best thing for the government and the people of Knoxville is to move forward and get rid of the property."

Knoxville resident Scott Evans recounted how he tried to lease one of the buildings for use as a physical therapy business.

“We wanted to repurpose it, to use those buildings," he told federal administrators. "It would have been cheaper to give the property away than to sit on it for years and then try to sell it. You’re losing money every day that it’s not being used.”

Evans urged government officials to get serious about the issue.

“I hope you’ll move the process on, even though I know the government is not structured that way," he said. "Hopefully now that we’re at this point, where we’re meeting with you and you’re starting to look at it, you’ll look at things without rose-colored glasses and you’ll say, what have we done in the past and what can we do to improve things.”