Chapter III:
 
Real Estate and Land Acquisition
 
The United States acquired "rent-free" real estate in Vietnam through the 1950 Agreement for Mutual Defense Assistance in Indochina, or the Pentalateral Agreement, for Free World Military Assistance Forces. Signatories to the agreement were the United States, the Republic of Vietnam, France, Laos, and Cambodia. Although Article IV of the agreement spelled out what real estate the United States would be provided, as late as 1969 the U.S. Embassy's position was not to push for full Vietnamese compliance, based on the belief that the agreement as signed did not provide for, or envision, operations occurring after 1965.
 
As a result of high-level diplomatic discussions in 1965, the government of Vietnam did agree to assume responsibility for all land acquisition, funding for payments, and relocations without directly charging the United States. The cost would be covered by continued American support of the deficit in the Vietnamese budget. The Interior Ministerial Real Estate Committee (IMREC) was established to acquire and provide American and other Free World military forces with unimproved rent-free real estate. Tabulations of owners, amounts of real estate affected by land acquisition, determination of the amounts of indemnification, and actual payments were made by the Vietnamese government without overt American participation.
 
General Westmoreland's staff became the agency for dealing with the Vietnamese government in the acquisition of real estate for allied armed forces in Vietnam. The Director of Construction was after 15 February 1966 responsible to the commander of Military Assistance Command for the performance of these functions. The Navy and Air Force component commanders at Military Assistance Command were directed by General Westmoreland to co-ordinate real-estate functions and activities of all allied forces within their areas of responsibility.
 
An Engineer Division of the MACV J-4 was organized during late April 1965, and a Real Estate Branch within this division came into being on 2 May 1965. The 64th Engineer Detachment (Terrain) was placed under operational control of COMUSMACV, and
[29]
its assets consisting of five officers and five enlisted men were used to establish a Real Estate Branch within the Engineer Division. On 15 February 1966, when the Construction Directorate was established, this same real-estate organization was structured into the directorate and continued discharging the responsibility for co-ordinating all real-estate activities within Vietnam.
 
The Director of Construction, MACV, continued to receive all requests for real estate, except lease requests, to support U.S. and other Free World military forces and transmitted them to the Vietnamese Joint General Staff, which returned them, approved or disapproved, to the requesting component commanders through the MACV staff. The Director of Construction allocated available real estate to elements of allied military forces. He also maintained a central inventory of all leased and rent-free real estate and was responsible for returning Vietnamese-owned property to the government when it was no longer required.
 
The various component commanders were given the responsibility of co-ordinating real-estate transactions for base development in their operational areas. The Commander, 7th Air Force, was responsible for all air bases where the Air Force had the primary mission. The Commander, Naval Forces, Vietnam, managed the I Corps area exclusive of the bases assigned to the Air Force, and the Commanding General, U.S. Army, Vietnam, managed II, III, and IV Corps except for Air Force bases.
 
MACV followed, insofar as possible, the Pacific Army headquarters' regulations for real-estate policy and procedures, which were published in December of 1965. General Westmoreland, as Commanding General, U.S. Army, Vietnam, made the commanding officer of the 1st Logistical Command responsible for the acquisition, recording, reporting, and disposal of real estate for those units assigned or attached to U.S. Army, Vietnam. The USARV Engineer exercised staff supervision for procedures governing real-estate leasing as carried out by 1st Logistical Command. The 1st Logistical Command's responsibility for real estate was continued until April 1968 when Major General William T. Bradley, Commanding General, U.S. Army Engineer Construction Agency, Vietnam (USAECAV), was delegated the responsibility.
 
A Central Real Estate Office (CREO) was established in Saigon to administer leases and act as the repository for master leases. Area real estate offices (AREO's) were established in U.S. Army Support Command logistics areas. Area offices were located in Qui Nhon, Nha Trang, Vung Tau, and Can Tho. Two more offices were set up in Saigon, and one of these was responsible solely for the Headquarters Area Command (the greater Saigon area). Customer con-
[30]
tact, whether for rent-free or leased property, was made with the AREO. The area real estate office processed land-use requests and negotiated leases only when authorized by the Central Real Estate Office.
 
Pacific Army headquarters delegated acquisition approval authority to the Commanding General, USARV, for leasing real estate when the contract was renewable annually and the total annual rental did not exceed $300,000. This authority was redelegated to the 1st Logistical Command and later to the Commanding General, U.S. Army Construction Agency, Vietnam, when he assumed the real-estate mission. The chief of the Real Estate Division at CREO and later at USAECAV headquarters at Long Binh, became a contracting officer for real-estate matters with a $100,000 contract authority, since about 90 percent of the leases cost less than $100,000 annually.
 
Augmented by an office staff of contract employees of the Pacific Architects and Engineers, Inc. (PA&E), the Real Estate Division also received, processed, and made utility payments which averaged about $2 million annually. The division was also responsible for preparation and submission of the reports based on real property and feeder information sent in from contract and military post engineer organizations throughout Vietnam. These reports were the basis of the real-estate inventories maintained at higher headquarters.
 
For a unit to acquire property a unique request system was operated. The unit would initiate a Land-Use Request containing a description of the property and justification for its acquisition. With the request a note of concurrence or rejection was forwarded by the local government official responsible for that area. These officials included province chiefs, district chiefs, mayors of autonomous cities, and military region, base, or unit commanders. The request was then forward to the chairman of the Interior Ministerial Real Estate Committee by Military Assistance Command. Written approval, or a Land-Use Concurrence, from the Vietnamese provided MACV rent-free use of the property as long as the requirement existed.
 
Occupation of real estate without Vietnamese approval created several problems. Primarily the Vietnamese government could not compensate land owners for appropriated land unless requests for land were sent through proper channels. Unless a request went through MACV to the Interior Ministerial Real Estate Committee, no funds were transferred to the property owners.
 
In many instances, real estate was used and developed immediately upon submission of the land-use request based on the con-
[31]
currence of a local Vietnamese official. Yet some of these requests were never acted on by the government, which usually did not have sufficient funds for indemnification. At other times action was deferred because of political influence. Regardless of action, nearly all the land requests stated that upon termination of use and occupancy of the real estate, Military Assistance Command retained the option of removing or abandoning in place any installation on it. Vietnamese government approval further stipulated that when MACV no longer had need of the real estate it would be returned to the Vietnamese armed forces along with all improvements. This difference was never negotiated, and real estate was acquired for air bases, base camps, logistics complexes, and industrial sites for asphalt plants, crushers, concrete plants, and administrative space; easements were also acquired for utilities, roads, and communications cables. Each land-use concurrence varied in size from single office locations to bases like Chu Lai, which was 26 million square meters of cleared land.
 
Initially it had been necessary to obtain concurrences for road improvement projects and new road construction, but with the advent of the MACV Lines of Communications (LOC) program, the Vietnamese government assumed the responsibility of providing real estate for jointly used roads. This took the component commanders out of the real estate acquisition business at least for this program.
 
In support of tactical operations, land-clearing projects required no real-estate action, nor was it necessary to transact for real estate which was occupied during combat operations. Claims arising from the use, occupancy, or damages during and after military operations were handled by the U.S. Army, Vietnam, Foreign Claims Division.
 
Although it had been stated that the Vietnamese government would furnish rent-free the real estate required for support of allied forces, this policy was generally applied only for requirements outside urban areas. In urban areas, particularly for property that was privately owned and already improved, extensive leasing was necessary. At its' peak, the U.S. leasing program had an annual cost of over $20 million.
 
Early MACV and USARV real-estate regulations touched the leasing aspects of the program only lightly. When it became apparent that significant real-estate requirements had to be satisfied by leasing, regulations were published to cover the program. For acquisition of rent-free properties, the Vietnamese government dealt with Vietnamese owners; for acquisition of leased properties, U.S. military personnel negotiated with Vietnamese owners.
 
The necessity of responding to immediate needs for facilities,
[32]
that is, warehousing or hotels for billets, created a sellers market. Unfortunately, there was an acute shortage of military personnel trained in the negotiation of leases. Nevertheless, what the military negotiators lacked in sophistication, they made up for in enthusiasm and responsiveness.
 
Because the situation was urgent, lengthy negotiations could not be conducted, and a highly undesirable condition was aggravated by other critical factors. In many areas, the number of facilities available or usable was extremely limited. Vietnamese standards of living, hence construction standards, were very different from U.S. standards, and American textbooks, manuals, and Army regulations took little cognizance of these differences. Physical security was always in question, and how to deal with the Vietnamese landlords and many other enterprising entrepreneurs not disinclined to take advantage of their tenants was always a problem.
 
This set of circumstances resulted in many hundreds of inadequately researched, poorly written, expensive, and badly documented leases. Yet, the results must be examined in context and should not be seriously criticized. It was remarkable that in spite of the many frustrating problems faced, real-estate personnel met needs in a timely manner.
 
The management of real property, once acquired, necessarily varied depending on the area, the situation, the commander, and the type of properties involved. In addition to rent-free properties, there were at one time over 900 leased properties recorded. They varied in size from large hotels to small individual villas and other facilities like cold storage spaces, warehouses, shops, and piers.
 
The Real Estate Division was extremely limited in its ability to manage real estate. Local commanders had to assume the burden of the task, and so real management became the direct responsibility of the installation co-ordinator, who was usually the senior officer in an area or at an installation. Installation co-ordinator positions were designated by the Commanding General, USARV, as responsible for seeing to the proper use and maintenance of all real estate at an installation. The Real Estate Division did administratively manage all leases and, within its resources, checked all properties, but management of real-estate holdings was made unusually difficult for a number of reasons. There was a great dispersion of property even within the areas serviced by any one area real-estate office. There was difficulty in traveling to properties. There was a lack of properly trained real-estate personnel. And operations were taking place in an inflationary economy. The inadequate local post engineer system was not able to maintain real property records. Requirements to follow Army regulations mainly directed at continental
[33]
U.S. (CONUS) real-estate activities and not modified for combat zone operations were in effect. Poor documentation and inventories resulted from an urgency in acquiring real estate during the buildup. Changes in personnel which occurred because of the twelve-month tour did not contribute to continuity of information. There was a very serious lack of property accountability. As time went on, the Real Estate Division began a review to try to put everything in order. Under the Engineer Construction Agency, the pieces were finally fairly well put together.
 
The agency instituted many improvement programs. A special title search program was started to document all properties. Many leases had been signed with persons who had not been required to prove ownership. Some properties were found to be government-owned, hence their leases were terminated and the properties used on a rent-free basis. Other contracts were terminated with lessors who could not produce a title.
 
Many leases had annual advance payment clauses, and this meant that when they were terminated the Army lost money. There was no procedure by which the United States could bring suit against the Vietnamese lessor for return of advance payments. An intense program was begun, however, to recoup advance payments, and it was amazingly successful considering the Real Estate Division had to rely on persuasion rather than law. Some agreements were signed in which the Army agreed to accept repayment from lessors on an installment plan. One such agreement extended over seven years.
 
Action was taken to renegotiate lease holdings on property for which there was a continued requirement and to reduce advance annual payments to quarterly payments. To keep the status of the changing real-estate picture up to date, to be able to terminate leases, to make payments on a more timely basis, and to increase identification and documentation of real-estate holdings, a program was developed making maximum use of automated data processing. Monthly print-outs were a valuable tool at all levels.
 
Dual leases, or the issuing of two leases for the same piece of real estate, one for the structure and one for the furnishings, were also a problem. The Vietnamese lessor wanted to use dual leases quite simply as a tax dodge. Although in most cases the combined price of the two leases was a fair market price for the property, it required twice as much administrative effort, the legality was highly suspect, and we indirectly contributed to the lessor's tax evasion. In cases where furnished facilities continued to be required, the contract was renegotiated in a single lease. In facilities where furnishings were no longer needed, leases were terminated at savings to the American taxpayer.
[34]
Property accountability was finally improved by transferring responsibility for maintaining the real property record cards from the Real Estate Division to the installation post engineer office. It was then the installation co-ordinator's responsibility to receipt property to the user. A Real Estate Division Utilization Branch was established to inspect leased properties and ensure their proper use. A standard lease form was developed and put into use. A series of standard operating procedures were published and distributed to explain fully real-estate operations in Vietnam. Last, a training program for military personnel was initiated in conjunction with the Office of the Chief of Engineers. Officers selected for real-estate assignments in Vietnam went to the Chief of Engineers' office in Washington, D.C., en route to Vietnam for three days of briefing and study. In Vietnam they were usually assigned to one of the branches in Real Estate Division headquarters for one or two months before going to an area office to become the point of customer contact.
 
In addition to the unusual conditions and unique real-estate aspects involved, there were other special problems. Acquisitions of real estate on which there were gravesites caused serious complications. Although relocation of the graves was a Vietnamese government responsibility, finding descendants was often difficult and relocation slow. Some construction was delayed for extended periods because of gravesites in the construction area. All real-estate actions were guided and influenced by the political and private considerations of the parties involved as well as by military requirements.
 
Our last problem was one of co-ordination. Although the U.S. Embassy rental ceilings established in 1965 were supposedly applicable to all U.S. personnel and agencies in Vietnam, it appeared that only the U.S. military seriously endeavored to comply. Many agencies had a great deal of autonomy and seemed to pay little attention to embassy policy, especially in areas where properties were scarce. Later, between 1968 and 1969, the embassy became more active in controlling interagency competition and developed a working real-estate committee on which most agencies were represented.
 
There were a number of lessons learned as a result of our real estate venture in Vietnam. Certainly the absence of a working, enforceable country-to-country agreement for supplying all real estate on a rent-free basis delayed base development in some instances and resulted in a cumbersome leasing program. Furthermore, our surprisingly rapid buildup combined with a lack of appreciation on some commanders' parts for their responsibilities made it very difficult to predict new or manage old locations accurately. This condition was further aggravated by the paucity of
[35]
experienced real-estate personnel, the use of CONUS-oriented regulations, and the understandable reluctance of units to give up leased civilian facilities.
 
To prevent similar problems in future operations, a single headquarters should be responsible for all real transactions from the start. Specially trained teams must be available to augment planning, and country-to-country agreements must be in effect sometime before the initiation of troop movements.
[36]
page created 15 December 2001

Previous Chapter     Next Chapter

Return to the Table of Contents