WV DHHR spent close to $1 million on vacant property

CHARLESTON — The state Auditor’s Office has been investigating why the state canceled an agreement leasing space for DHHR at Middletown Mall on May 31, 2015, and then kept on paying for the office suites.

The state continued making payments on the Fairmont mall property until this past Feb. 28.

State government was paying a combined total of $30,907.34 a month for use of multiple properties at Middletown Mall. The payments went to Pin Oak Properties LLC of Morgantown.

So the total amount the state paid over the years for property that it was no longer using was $989,034.88.

“There are those around the Capitol who like to beat their chest and speak in platitudes when information like this found out, but there is no joy for me or my office,” Auditor J.B. McCuskey said Friday.

“I am very proud of the staff in the Auditor’s Office who uncovered this waste, but saddened to know that the people’s money has been wasted and that money that could have gone to help the neediest of West Virginians went for nothing.

The Auditor’s Office plans to present its findings on Tuesday during a legislative interim meeting of the Government Accountability, Transparency and Efficiency Committee.

MetroNews asked for and received documents relating to the lease agreement through a Freedom of Information request.

The state Department of Health and Human Resources and the Real Estate Division of the Department of Administration did not immediately respond to requests for comment that were submitted via telephone and email.

Pin Oak filed for Chapter 11 bankruptcy in June 2017. DHHR and the Real Estate Division were not listed as creditors, although the state Tax Department was.

This past May 8, as part of the bankruptcy, Middletown Mall was sold to General Acquisitions LLC for $13.7 million.

It also wasn’t immediately clear how the state might be able to recoup the lease money.

The state originally established its lease agreement for office suites at Middletown Mall in 2009. The state then renewed the agreement in 2014 for another five years.

DHHR’s Fairmont offices were moved to a new state office building in 2015.

State Real Estate Division letterhead shows an undated lease termination letter that describes moving out and canceling payments as of May 31, 2015.

It read, “The Department of Administration, Real Estate Division is hereby submitting to you the required written notification of our intent to cancel this lease.”

And it continued, “All state-owned furnishings, equipment, machinery, etc. on the premise were removed in accordance with the terms and conditions of the lease.”

But the checks from the state continued to be sent out.

They continued in May of 2015.

They continued in June of 2015.

Month after month, year upon year, the checks continued to go out for property long since vacated.

The state Auditor’s Office has made a priority of transparency, earlier this year establishing a wvCheckbook.gov site for the public to examine where the state’s money goes.

“We take our constitutional duty to monitor the state’s spending very seriously and will continue to do so in the most competent ways we know how,” McCuskey said.

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