[Senate Hearing 105-621]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 105-621


 
                 GSA JURISDICTION IN LOCAL COMMUNITIES

=======================================================================

                             FIELD HEARING

                               BEFORE THE

                              COMMITTEE ON
                      ENVIRONMENT AND PUBLIC WORKS
                          UNITED STATES SENATE

                       ONE HUNDRED FIFTH CONGRESS

                             SECOND SESSION

                               __________

                   FEBRUARY 17, 1998--HELENA, MONTANA

                               __________

  Printed for the use of the Committee on Environment and Public Works


                                


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               COMMITTEE ON ENVIRONMENT AND PUBLIC WORKS

                 JOHN H. CHAFEE, Rhode Island, Chairman
JOHN W. WARNER, Virginia             MAX BAUCUS, Montana
ROBERT SMITH, New Hampshire          DANIEL PATRICK MOYNIHAN, New York
DIRK KEMPTHORNE, Idaho               FRANK R. LAUTENBERG, New Jersey
JAMES M. INHOFE, Oklahoma            HARRY REID, Nevada
CRAIG THOMAS, Wyoming                BOB GRAHAM, Florida
CHRISTOPHER S. BOND, Missouri        JOSEPH I. LIEBERMAN, Connecticut
TIM HUTCHINSON, Arkansas             BARBARA BOXER, California
WAYNE ALLARD, Colorado               RON WYDEN, Oregon
JEFF SESSIONS, Alabama
                     Jimmie Powell, Staff Director
               J. Thomas Sliter, Minority Staff Director

                                  (ii)


                            C O N T E N T S

                              ----------                              

                   FEBRUARY 17, 1998--HELENA, MONTANA

                                                                   Page

                           OPENING STATEMENT

Baucus, Hon. Max, U.S. Senator from the State of Montana.........     1
    Prepared statement...........................................    48

                               WITNESSES

Fine, Colleen, director, Urban Revitalization Agency, Butte, MT..    38
    Prepared statement...........................................    60
Kennedy, Mark, city council member, Billings, MT.................    28
    Prepared statement...........................................    52
Lynch, Hon. Jack, chief executive, Butte-Silver Bow County, 
  Butte, MT......................................................    35
    Prepared statement...........................................    59
McCarthy, Hon. Colleen, mayor, Helena, MT........................    21
    Prepared statement...........................................    50
Nicholson, Alan, Helena, MT......................................    25
    Prepared statement...........................................    56
Pahl, Barbara, regional director, National Trust for Historic 
  Preservation, Denver, CO.......................................    33
    Prepared statement...........................................    63
Peck, Robert A., Commissioner, Public Buildings Services, General 
  Services Administration; accompanied by Paul Prouty, Assistant 
  Regional Administrator, General Services Administration, 
  Denver, CO, and Tanisha Harrison, Contracting Officer, General 
  Services Administration, Denver, CO............................     3
    Prepared statement...........................................    49
Prouty, Paul, Assistant Regional Administrator, General Services 
  Administration, Denver, CO.....................................     7
    Prepared statement...........................................    50
Schultz, Mechelle, Downtown Business Association, Billings, MT...    31
    Prepared statement...........................................    66

                          ADDITIONAL MATERIAL

Letters:
    Armold, Bill.................................................    54
    Baca, Polly..................................................55, 71
    Barthuly, Chuck..............................................    72
    Coxwell, Jonathan............................................    70
    Downtown Billings Association................................    74
    Estrada, Sharon..............................................   106
    Fagg, Harrison...............................................   106
    Fine, Colleen..........................................98, 103, 105
    Foster, Kay..................................................    72
    Harrison, Tanisha............................................    56
    Hawke, Sandra................................................    83
    Johnson, Jack................................................    82
    Kissock, Betty...............................................   106
    Larson, Michael..............................................    84
    McNally, Judy................................................    73
    Moss, Lynda Borque...........................................    81
    Nieweg, Robert...............................................   104
    Nicholson, Alan..............................................    58
    Reavis, Mark...............................................103, 104
    Ringler, Malia......................................58, 59, 87, 105
    Schultz, Mechelle............................................    70
    Taras, Frank.................................................    84
    Thomas, Jerry S..............................................    82
    Watson, Mark S...............................................    55
List, members of the Downtown Billings Association...............    67
Notice, Lease of Federal Building Space, GSA.....................    88
Report, Butte-Silver Bow Historic Preservation Office, Mark 
  Reavis.........................................................    88



                 GSA JURISDICTION IN LOCAL COMMUNITIES

                              ----------                              


                       TUESDAY, FEBRUARY 17, 1998

                                       U.S. Senate,
                 Committee on Environment and Public Works,
                                                        Helena, MT.
    The committee met, pursuant to notice, at 10 a.m. at the 
Lewis and Clark Library, Helena, MT, Hon. Max Baucus presiding.
    Present: Senator Baucus.

  OPENING STATEMENT OF HON. MAX BAUCUS, U.S. SENATOR FROM THE 
                        STATE OF MONTANA

    Senator Baucus. The hearing will come to order. First, I 
would like to introduce a few people. I'll start with probably 
the most important person, Sherron Walstad. Sherron is our 
stenographer here. If we talk too quickly or you can't 
understand somebody, just holler.
    To my immediate left is Tom Sliter. Tom Sliter is the 
minority staff director of the Committee on Environment and 
Public Works. That's the committee of the U.S. Senate that has 
jurisdiction over the public works buildings, GSA. It's also 
the committee that has jurisdiction over most environmental 
issues. But for the purposes of this hearing, we're examining 
the issue of GSA in local communities.
    I'm the senior Democrat on that committee, and that's why 
Tom is here, as the senior member of the Democratic staff.
    On my right is Kathy Ruffalo. Among the various staff on 
the committee, different staff are assigned different 
responsibilities, some environmental issues like clean water, 
air, and so forth. Kathy's responsibility is highways and 
buildings. So the highway bill coming up before the Congress, 
obviously, Kathy is very much involved in that.
    The purpose of this hearing, basically, is to try to 
straighten out some of the confusion that has arisen apparently 
between the GSA and their policies on the one hand and folks in 
Billings, in Helena, and Butte with respect to Federal 
Buildings, and rentals and replacement.
    There are a lot of issues involved. One is the various 
Executive orders that have to do with preference for locating 
buildings in, say, central business areas. Another Executive 
order gives preference for historic buildings or historic 
districts.
    Then there is the question of the best deal for the 
taxpayers, that is, competitive bidding. There are issues of 
seismic retrofits, and how those various factors are weighed in 
deciding what the correct solution should be. For example, 
should the GSA renew a lease at the Federal Building here in 
Helena or should it perhaps look at a different location.
    Another general issue I'd like to explore today is how we 
can better, for lack of a better expression, communicate, or 
understand each other. Public servants like GSA and myself are 
the employees. The public are the employers, and we need to 
assure ourselves that we're doing the very best job possible, 
in this case, particularly GSA, in serving our country, in 
serving the wishes of the people who pay the taxes and who 
elect or unelect us and who elect or unelect presidents who 
have something to do with the General Services Administration.
    So we have to nail that down better. Apparently there's 
been a lot of misunderstanding and miscommunication. It's my 
goal when this hearing is over to clear up some confusion. 
Second, we will set in place a procedure, some kind of a 
follow-up procedure, to resolve these basic issues in Helena, 
Billings, and Butte. The other is procedural--potential issues 
like this that come up in the future--so that people in our 
State feel more comfortable about the way Federal Building 
issues are handled, and are comfortable with the final 
resolution.
    I might also add, for the purposes of our guests from GSA, 
a little history. I'm sure you know a little bit about Helena. 
It's our capital city, but Helena is a very historic city. As 
you know, when you come up Last Chance Gulch, you might ask, 
``What in the world is Last Chance Gulch?'' Well, if you know 
the history of the four Georgians that came here, this was the 
last chance to find gold; and before turning back, ``Oh, what 
the heck. Give it a whack. Give it a try,'' and they did great. 
That started the Gold Rush and eventually led to Helena 
becoming the capital city. With the urban renewal and part of 
that modernization that occurred a couple--20, 30 years ago, a 
lot of buildings, unfortunately, in Helena were removed, and 
the whole downtown area is a lot different now. But we have the 
Federal Building to anchor this section of town. That was part 
of the understanding, that with urban renewal, that the Federal 
Building would be here and that would be in this part of town.
    When the hearing is over, I'd like to take a walk down the 
street and go to various landmarks like the Parrot, have lunch, 
and just explain a little bit of the flavor of Helena I will 
point out the water tower and some of the landmarks that are 
not only famous, but infamous, just to give you a sense of the 
area.
    I'd like to first introduce our first witness, Bob Peck. 
Bob is the Commissioner for Public Buildings in GSA. He's the 
No. 2 man--excuse me, he's the No. 2 person in GSA. We do not 
have the head of GSA with us, but we have the No. 2 person.
    Commissioner Bob Peck has served in many capacities in 
public service. I think I have some of them here. I know he 
worked for Senator Moynihan, as Senator Moynihan's chief of 
staff. That's relevant because Senator Moynihan was once the 
chairman of the Committee on Environment and Public Works and 
very involved in a lot of the buildings that are constructed in 
the United States today.
    He's a graduate of Harvard University's School of Design. 
So he's quite involved in the design of buildings. He's also 
been with the Office of Management and Budget, National 
Endowment for the Arts, involved with development of the 
Communications Commission, and just has a sense of this 
subject, and we're very honored to have him here.
    Bob, why don't you begin, and I'd like you to keep your 
remarks to 5 minutes. Please address the questions that I have 
referred to in my opening remarks.

  STATEMENT OF ROBERT A. PECK, COMMISSIONER, PUBLIC BUILDINGS 
  SERVICES, GENERAL SERVICES ADMINISTRATION, WASHINGTON, DC; 
 ACCOMPANIED BY PAUL PROUTY, ASSISTANT REGIONAL ADMINISTRATOR, 
   GENERAL SERVICES ADMINISTRATION, DENVER, CO, AND TANISHA 
HARRISON, CONTRACTING OFFICER, GENERAL SERVICES ADMINISTRATION, 
                           DENVER, CO

    Mr. Peck. Yes, sir. Thank you, Senator Baucus. Thank you 
for asking me here.
    I will just note that I am accompanied by Paul Prouty from 
Denver. He's our assistant regional administrator there for 
public buildings, so he's in charge of the region. To his right 
is Tanisha Harrison, who is a realty specialist, also in our 
Denver office, who knows more than--both of them know more than 
I do about the specifics of these three instances.
    I'm very happy to be here at your invitation to talk about 
the Public Buildings Program and specifically how we can work 
in partnership with communities here in Montana, as we do 
elsewhere throughout the country.
    I would also note that I have, so far, just driven by the 
downtown. I'm proud to say that when I was a private sector 
real estate attorney and a local preservation attorney in my 
hometown of Washington, DC, I helped create a downtown historic 
district in Washington. So I'm very interested in the problems 
of historic districts and in revitalizing downtowns.
    Just a few points about GSA in general, because it's 
important to put in perspective how we operate our program 
before we get to the community issues, which are very 
important.
    We're sometimes known as ``the government's landlord,'' 
which is not probably the happiest title anybody could have or 
the most user-friendly of names. We prefer to say these days 
that ``We are not your father's GSA.''
    Much has changed about GSA in the past several years around 
the country. We believe we are a model for reinvented 
government. Since the start of this administration--I think 
this is good news--we are about 25 percent smaller by 
employment. We are operating in more streamlined and business-
like ways.
    For example, the Public Building Service, which I head 
nationally, had 10,000 employees in January 1993. By December 
31 of last year we were under 7,500.
    We have a lot of successes to tell the American people 
about what we are doing. We provide Federal agencies, for 
example, with long-distance telephone rates, rates that are 
lower than any business in the United States pays. We have 
airfares when we travel on business that are cheaper than those 
paid by any private businesses as well. We operate our 
government-owned buildings, ac-

cording to independent surveys, at a cost per square foot less 
than that paid by private-sector building owners for comparable 
services.
    In the Public Building Service we have the particular 
opportunity to run like a business. We collect our agent--we 
collect rents from Federal agencies, and we have expenses going 
out. We have a bottom line we can watch.
    Our job is to benefit our direct customers, the Federal 
agencies who have to get work done in a space we provide; and 
more importantly, we have to satisfy our ultimate shareholders, 
the American taxpayers.
    We are giving our customers choice, because they pay us 
rents, they demand services at a fair price. We have told our 
customers a year-and-a-half ago, and something hardly any 
government agency I know of has ever voluntarily done, that 
they don't even need to use our services. If we don't provide 
them with good value and good service, they can go out and 
lease on their own. We have challenged our employees to meet 
that test. So far, I'm happy to say very few agencies have 
chosen to go outside.
    We are a very big business, both nationally and in the 
communities in which we operate. Nationally our budget is about 
$5 billion a year. That's a lot of money by anybody's 
accounting standards.
    More than 90 percent of that money is returned to the 
private sector either as maintenance, cleaning and security 
guard contracts, hiring private-sector architects, engineers 
and construction contractors, or to private building owners 
when we lease space for Federal employees.
    Our lease costs are about $2.3 billion a year nationally, 
and leased space accommodates about half of the Federal 
employees for whom we provide office space.
    In the Public Building Service in the last several years we 
have cut red tape, reduced the time it takes us to act, 
eliminated duplicative management abuse, and empowered our 
employees.
    I have to tell you, in the private sector I have been, as I 
said, a real estate attorney and a commercial mortgage banker; 
and our employees, particularly those who do our leasing and 
property management services, are as good as any private-sector 
employees with whom I've ever worked, the only difference being 
that our people are paid a whole lot less.
    One of the things we have done in leasing is to reduce the 
size of our, what we used to call a standard lease. We used to 
hand a landlord a 50-page lease full of all kinds of government 
gobbledygook. We have trimmed that down to about 11 pages. It's 
no longer a standard. It's a model so that our leasing 
specialists, who are smart people, have the flexibility to cut 
the best deal for the American people and for the Federal 
Government. We had to do this anyway, to streamline our 
business, because the workload has remained almost constant; 
and as I said, we have a lot fewer people to do it with.
    So we are a business-like organization, but we are not a 
business. We are a government agency and we have special 
obligations as representatives of the government and of the 
American people.
    Some of those obligations, like being good citizens in our 
communities, are similar to the obligations voluntarily 
undertaken by the best civic-minded businesses. Other 
obligations are more specific.
    Congress has enacted laws which require us, for example, to 
adhere strictly to new seismic building standards. We are 
required by law to give preference to small businesses that are 
contracting, and to workshops for the blind and severely 
handicapped in our building services, even if it costs us a bit 
more.
    These are all good policies. I think they're supported by 
the American people and they are supported by those of us in 
GSA who have to carry them out.
    Although the procurement laws, the laws that tell us how we 
have to purchase goods and services, have also been 
streamlined, they still hold us to certain procedures which 
require that we get competition in every case we can when we 
solicit for construction, leasing or even maintenance 
contracts.
    Those laws rightly restrict us from situations in which we 
might simply go out and use a single source, a sole source, to 
pay for goods and services. There is a great deal of 
skepticism, you can see, underlying these policies and laws and 
regulations about government employees just going out and 
finding someone they like or whom they find it convenient to do 
business, and not giving other people in the country a fair 
chance to do business with the government or to make sure that 
we get the best price we can for our services.
    With respect to working with communities, again, as 
everyone knows, we have some laws and regulations that govern 
the way we do business. In 1976, Congress passed the Public 
Buildings Cooperative Use Act, which requires us to consider 
historic buildings when we need to acquire space, either by 
purchase, or when we lease space.
    Executive Order 12072 issued by President Carter requires 
us to consider central business areas of cities first before we 
go anywhere else when looking for Federal locations. President 
Clinton reinforced that in Executive Order 13006, which said 
the same thing about central business areas and added the 
requirement that we look first to buildings in historic 
districts or individual historic landmarks.
    In 1996, we took a further step. We established, under our 
administrator, Dave Barram, what we call a Good Neighbor 
Program. Going beyond the Executive orders' location policies, 
we said that we would cooperate with downtown business 
improvement districts where they are established.
    I was particularly pleased with this, personally, because 
as a private citizen in Washington, I was on the city committee 
that helped establish a bid in my hometown of Washington. We 
now have signed agreements with 50 bids in 35 States. We have 
hosted also, on Federal plazas and inside Federal Buildings, 
5,000 community events, things like farmers' markets in 
Chicago, Girl Scout fundraisers, even community plays.
    We recognize that we are a large real estate presence in 
every city and in every community in which we have space. We 
recognize that when we locate our buildings and our leases, we 
can help or harm economic development. This is a difficult 
issue.
    Economic development, as everyone here knows, isn't 
something that's simply done by locating a facility in a 
certain location, although that can help. It's also important 
to make sure the employees in our building can contribute to 
economic development by being located near commercial services 
that they can partake of during the day.
    It's important that when we plan the enhanced security, 
which we are doing in all Federal Buildings since Oklahoma 
City, that we do it in a way that we don't scare off the 
public, nor imprison our employees in our buildings. That's the 
last thing we want to do.
    We need to find locations that work for the community and 
for our agencies, and we need to locate in buildings, I 
believe, that are designed in a way that they enhance the 
visual environment in which they sit.
    This is not terribly new. The Federal Government has 
recognized since the founding of our Nation that where we put 
Federal Buildings and facilities is important. The 
Constitutional Convention, in fact, debated where the capital 
city should be. It was a subject of compromise to put it where 
it is, on the Potomac River in Washington.
    I can tell you that across the Nation, our good-neighbor 
policy has resulted in a great number of successes in location 
decisions. Last year, alone, we renewed over 800 leases in 500 
downtowns across the country.
    We have, in many cases, brought Federal workers back 
downtown who used to be outside the central business area; for 
example, in Atlanta where we opened a new Federal Building last 
year and brought people in from the outskirts of the city.
    It's not always easy, though. We have to balance agency 
requirements. I would note that the Executive orders don't just 
apply to GSA. They apply to all Federal agencies. Yet it is 
also true that Federal agencies sometimes, because of their 
mission requirements, have requirements that make it difficult 
to find buildings downtown that will work for them, that will 
give them good productive space.
    It is our obligation, nonetheless, to urge the agencies 
which we are housing in our buildings to modify their 
requirements if necessary, if feasible, so that they can fit 
into the building they find in historic districts and in other 
downtown locations.
    We need cooperation in our partnership. We need to be 
aggressive, as I say, in challenging agency requirements that 
would unduly restrict considerations of downtowns, and also 
requirements that would restrict us to just one location, 
because the procurement laws frown upon that, as I've noted.
    We also need the cooperation of communities and leaders in 
the communities to help us find locations and sometimes to help 
us resolve the other requirements that we have to make 
locations work; for example, in helping locate amenities, 
making sure that the locations work for our employees.
    Sometimes I quote the great country singer Ernest Tubb, who 
said--although he's from Texas and not Montana--I would note 
Ernest Tubb, of the Texas Troubadours, once said, ``If you want 
to have good neighbors, you've got to be a good neighbor, 
doggone ya.'' So it is a two-way street and is something that 
we need to be a good neighbor just as we need good neighbors 
around us.
    We are eager to be good neighbors. I've seen this program 
work in lots of locations around the country where we can 
satisfy our Federal customer, get the best value for the 
taxpayers, and contribute to the economic development.
    I have to say this. It's not always easy. It's not always 
smooth. I think this hearing is a testimony to the fact it is 
not always smooth, but I know that we can do this. I know that 
we have had successes across the country, and I know we can do 
that in Montana, too.
    I know I will come back after awhile. I just want to make 
you this commitment before Paul speaks, that we are--I'm not 
going to say that every step we have taken in our processes in 
Helena, Billings, and Butte have been the right steps, even 
under our own procedures. I don't have personal knowledge that 
we've done anything that violates any law or regulation either.
    We don't want to play this like lawyers. We want to be 
partners with the communities and we want to make the situation 
work to everyone's advantage. No matter what has happened up to 
this point, I want to give you my commitment that we are going 
to try to forge a partnership in all three of these communities 
to make everybody as satisfied as we can, consistent with our 
obligations. Thank you.
    Senator Baucus. Thank you, Commissioner. I particularly 
appreciate your last statement about your commitment. That's 
basically the point of this hearing, is to make sure we get 
this resolved and resolve any potential future problems as we 
go the best we can. Thank you very much.
    Next, Paul Prouty, who is the Deputy Regional Administrator 
in Denver.
    Paul.

  STATEMENT OF PAUL PROUTY, ASSISTANT REGIONAL ADMINISTRATOR, 
          GENERAL SERVICES ADMINISTRATION, DENVER, CO

    Mr. Prouty. Thank you very much. I am Paul Prouty, the 
Assistant Regional Administrator for the General Services in 
Denver. We manage a six-State Rocky Mountain region. That 
includes roughly 14 million square feet. As Bob says, we're a 
very large real estate services provider. 1.03 million square 
feet of that is in Montana. We invest annually about $7 million 
in rental payments into the State of Montana.
    As Bob said, we are the broker for the Federal agencies. We 
are convinced, as he said, that we have a very talented and 
capable staff. We're very proud of our employees, and we think 
they do a very good job within many constraints.
    We are, as Bob indicated as well, committed to the central 
business areas, to historical buildings, and historical areas. 
However, our business responsibilities require that we satisfy 
our client needs and that we do good business for the 
taxpayers.
    I want to briefly discuss the three actions. I'll give more 
as Bob indicated as well. Neither he nor I were really on the 
front line of these, but we reviewed them very carefully.
    What I'd like to talk about, as he did, is discuss these 
with an eye to the future. There are some things that were 
done--I must tell you, I've been in this job for 6 months. I 
was gone from this region for about 3 or 4 years. However, I 
was in this region as far back as when this building was placed 
in Helena.
    In Helena we have an ongoing project right now. We still 
have an opportunity to work with the locals, and we're 
committed to doing that.
    What we have are a lot of changing agency needs. So right 
now, we have to figure out exactly what the agencies are doing. 
Because of downsizing and the like, agencies are identifying 
requirements that are far different than what they had 10 or 20 
years ago, and we must work within that environment.
    We also have the seismic requirements, which we must meet. 
There are different opinions on what that looks like. We've had 
some independent studies, and we'll continue to work to make 
sure we do that in a fashion that ensures that we meet the 
requirements, but helps us work within the environment of the 
real estate market that we have.
    Also, we have a responsibility to make sure we get the best 
deal for the government. In situations such as Helena where 
there is limited competition, it is very difficult for us to do 
that, but we constantly strive to do that and find 
opportunities in order to get competition to ensure that the 
taxpayers benefit.
    In Helena we're committed to working with the interested 
parties, but we must, in the final analysis, have a good deal 
for the government and we must have a building that meets the 
needs of the tenants and the seismic requirements mandated by 
Congress.
    In Butte, as well, we have an active project, and in that 
one, I must admit we had some false starts. All of us will 
agree with that. We are rather new to the Good Neighbor 
Program, and a lot of those programs we are struggling a little 
bit to develop partnerships that enable that to work; and also 
in that particular case, we have a client in MEPS, Military 
Entrance Processing, that has some unique national requirements 
that we are challenging them to work with us to help satisfy 
the requirements of the community.
    In December, we basically stopped our process and went back 
out on the market with an eye on the historic district to try 
to find specific opportunities that we could make work. There 
are some that are available. We have a commitment from the 
Department of Defense to come with us to Butte, to sit down 
with whomever would like to talk to us to see what we can do, 
with the properties available, in order to make a deal.
    Once again, I think the challenge of Butte is that we must 
have a building that meets the clients' needs, and so far, 
we've not really brought them in to articulate what those are, 
but we are willing to do that and they've agreed to do that as 
well.
    In Billings, because of the pending litigation, we've been 
asked by the U.S. Attorney not to talk about the particulars, 
but there are a few things we can say about Billings.
    That was, once again, a requirement by the agency which 
caused the real estate deal to be extremely difficult. Also, as 
I'm sure everybody is aware, the need for competition was the 
reason that we expanded, ultimately, the delineated area. And 
in the final analy-

sis, there was some savings identified for the taxpayer; but 
without talking about that particular deal, I do want to talk 
about a success story in Billings that I was personally 
involved in where we worked with the city, where the city 
optioned a site which we went out and completed the requirement 
which ultimately placed 14 agencies in the Jamison Building, 40 
percent of which were outside the CBA when we started. It's a 
106,000 square foot building in which we pay rent of $1.3 
million a year.
    So we have shown in the past that we are capable of doing 
deals such as that. They're never easy. We find that especially 
when you get to smaller communities, they're usually more 
challenging, but we have a commitment to develop a partnership.
    We will acknowledge that we haven't done as well as we 
necessarily would like, but we're going to stay after it and 
try to do it in the best interests of the taxpayers and local 
communities. It's a difficult balancing act.
    Senator Baucus. Thank you very much, Paul. I'd like to ask 
you some general questions. Then when you're finished, we're 
going to have some local folks come up and give their 
testimony, and I'll ask them some questions. When they're 
finished, there's a good chance they'll want to bring you back.
    Mr. Peck. We're happy to do that. We're not going any 
place.
    Senator Baucus. I appreciate that. With a view toward 
trying to find out what's going on here, the first sort of 
basic question I have is, how do you generally coordinate with 
local officials? That's the basic question here. What's the 
process, you know? How early on do you consult with them, with 
the people?
    Let's take Helena as an example. How many people from GSA 
have come to visit with Helena, and to what degree do you take 
into consideration Helena's master plan or any master plan a 
community might have, and how much deference do you give to 
their concerns? If you could tell me what's the standard normal 
procedure here, and particularly, with a view to what, in your 
view, happened here in Helena.
    Mr. Peck. First of all, I would note that we do have a 
permanent presence in Helena in our Property Management staff 
in the Helena Federal Building. So, I mean, we do have people 
who live here who know this area.
    Second, in general, here is what we ask our people in 
communities across the country to do, and that is that we are 
always, as Paul noted, hearing from Federal agencies about 
their requirements for new space or for giving up space or 
changes in their missions; maybe they need a different kind of 
space or whatever.
    When that happens and we start coming up with our thinking 
about how we satisfy those requirements, our general rule is 
that a couple of times a year our folks are supposed to be 
talking to the city. When specific--just in general about 
planning, what's happening in your city?
    In fact, last year we announced, but we've not yet carried 
out a more far-reaching plan for getting our folks in touch 
with city planners on an annual basis to work out a plan. So 
there is supposed to be some kind of routine communication 
between our folks and cities.
    Second, when specific requirements come up, we ask our 
people to talk to cities about what this is going to mean for 
leasing or for new building locations, whatever the case may 
be. There are usually two reasons for doing this. One is that a 
lot of cities have economic development offices, and planning 
offices generally know what's available. It's a good, easy step 
to take when you're first doing a survey of what space there is 
around. And, second, generally that's the way we are supposed 
to consult.
    Finally, there are more specific requirements, obviously. 
Since the Executive order says that there is supposed to be a 
central business order of preference, we ask cities what is the 
central business area. We do not establish our own definition 
of a central business area. We get it from the localities.
    I can tell you in large procurements--and then I'll come 
back to Helena--in major metropolitan areas in the country 
where this has come up before, there have been very detailed 
discussions with city officials, in many cases, up to and 
including the mayors of some of the larger cities in the 
country, about what the so-called delineated area for a lease 
is going to be.
    Senator Baucus. What happened in Helena's case? You say the 
general policy is to consult, you know, twice a year. Did that 
happen here?
    Mr. Prouty. Probably not.
    Senator Baucus. Or in Billings or Butte?
    Would you turn on the microphone and identify yourself, 
what your position is, and so forth?
    Ms. Harrison. My name is Tanisha Harrison, and I'm a 
contracting officer and realty specialist for GSA in Denver.
    Regarding the consultation process, I think in some of the 
smaller communities it's more typical, when we have our larger 
requirements that come up, to consult at that time, when we're 
aware of the requirements.
    Senator Baucus. So in this case there was not the 6-month 
consultation.
    Mr. Prouty. I think that's true; and also in Helena there 
is a unique circumstance because we had a renewal that was 
coming due, and because of the seismic deficiencies in the 
building, that caused us not to renew.
    So, basically, we probably would have kept similar housing, 
same building. We had a contract in place which would have gone 
on for another 10 years, which historically, without any 
extenuating circumstances, we probably would have renewed. So I 
think that caught us by surprise as well.
    Senator Baucus. Would it be GSA policy to, nevertheless, 
consult twice a year with communities like Helena, Billings, 
and Butte? Did the policy fall down or what happened?
    Mr. Prouty. I think the answer is yes. It's difficult to 
establish which communities you do that in. As Bob indicated, 
we have a very limited staff. We probably have four to six 
people who have to do this throughout a very large geographical 
area.
    So what we try to do is try to make sure we know when there 
is something going on and where we need to have people. We're 
trying to develop some relationships, and while communication 
is ongoing in some communities, it's still in its infancy. I 
think it's safe to say in this case, we probably didn't do 
that.
    Mr. Peck. Yes, in areas where we have a lot of different 
leases going on, in metropolitan areas where there can be 100 
government leases, there is a need for that sort of continual 
consultation more than in smaller areas where it just doesn't 
come up that often.
    The bottom line, however, is that we do expect consultation 
when an actual lease negotiation is going to be required.
    Senator Baucus. Again, how much before renewal? How much 
time before renewal is it GSA's policy to call up the community 
and say, ``Hey, renewal is coming up down the road and we 
should find out what your desires and wishes are''?
    Mr. Peck. We don't--one of the things I talked about before 
is, we're trying to eliminate as many sort of cookbook 
requirements as we can on our folks. We have a requirement that 
people consult. We don't say it has to be 10 days in advance, 7 
days in advance. It depends on the community.
    Again, as Paul noted, whereas here, the expectation--
suppose this had just gone through, the expectation where you 
were just going to renew the lease in the existing space. There 
might be minimum consultation, just to say, ``Looks like we're 
going to do this.''
    In other cases where you think you're actually going to do 
a solicitation and you have to worry about whether you're going 
to stay, that would be a different thing.
    Like I say, the problem with--and I happen to like real 
estate--the problem with real estate is that every situation is 
different, so we try not to have sort of fixed requirements on 
how much time you have.
    The bottom line--I don't want to evade this--is that we 
expect consultation with the community when we take major lease 
actions and before they are set in concrete.
    Senator Baucus. I understand that. So in the case of 
Helena, Butte, and Billings, are those major lease actions in 
your view?
    Mr. Prouty. Yes, absolutely.
    Senator Baucus. According to your best recollection, how 
far in advance were those communities consulted in a meaningful 
way?
    Ms. Harrison. As far as Billings is concerned, 
specifically, I was the contracting officer for that project, 
and I know that the consultation started well in advance of the 
time that advertisement was ever placed----
    Senator Baucus. ``Well'' means----
    Ms. Harrison. At least 2 to 3 years.
    Senator Baucus. In the case of Helena?
    Ms. Harrison. In the case of Helena, I'm not the 
contracting officer for that project, but I do know that 
consultation started taking place when we realized we had a 
requirement, could not exercise the renewal, and needed to 
establish a delineated area in which to seek--to meet the 
requirements.
    Senator Baucus. So you don't know how far in advance?
    Ms. Harrison. I can't name a certain number of days or 
months, no.
    Senator Baucus. Could you just--one of the key questions is 
a Central Business Area question. In communities like the size 
of Helena, Butte, and Billings, which are a little different 
than Den-

ver, for example, the importance of downtown areas in 
communities like ours is probably more than Denver, because 
it's just such a big city.
    So we have this Executive order. Do you give more weight to 
the Central Business Area Executive order in smaller 
communities than you do in larger ones, all things being equal?
    Mr. Peck. All things being equal, the fair answer is, 
probably we do not, because I will tell you, when I talk to the 
mayors in Denver and Atlanta, they are also quite adamant about 
how important their downtowns are.
    You are absolutely right, however, that what is true in 
those areas is that there are probably other options. If we 
move out of a lease, there are lots of other companies and 
lawyers, accountants, whatever, who are going to be prepared to 
move in, and we're aware that that may not be the case here.
    The flip side of that in small communities is that in the 
downtown area of a larger city there are probably several 
locations in which we can find some space available that we can 
use as competition. Sometimes the problem in smaller 
communities is that we can't get the competition we need, and 
our worry--and we are required--Congress never says, ``Here is 
a law, so start worrying,'' but we are required by law to worry 
about whether we can get adequate competition to make sure we 
get a good, competitive deal.
    In the private sector of real estate, you do the same 
thing. I worked for a law firm that was considering whether to 
move out of its building or stay, and we canvassed the area to 
see if there was some other locations available so that when we 
negotiated with our own landlord and eventually stayed in the 
building, we made sure that that landlord knew that he had to 
come up with a good deal to keep us.
    Senator Baucus. I understand. The point I'm trying to focus 
on is the importance of downtown areas and how much weight you 
give to that. Do you give considerable weight to it or some 
weight?
    Mr. Peck. I'd say huge weight, because the Executive order 
says ``first preference'' unless there is an issue of----
    Senator Baucus. When you decide to extend the boundary, I 
guess under the Executive order, you're required to consult the 
local community. What do you mean--what do you think 
``consult'' means?
    Mr. Peck. Let me start by saying, I think it means--let me 
put it this way. It is more than a pro forma consultation. It 
means a sitting down. It doesn't necessarily mean--we have the 
ultimate responsibility because we are the fiduciary for the 
taxpayers. We eventually have to make a decision about how to 
negotiate the best price for the taxpayers.
    But consultation means you sit down. There is a good give 
and take. If there is eventually--hopefully that produces a 
meeting of the minds. If it doesn't, there needs to be--my hope 
is that at the end of a consultative process, everybody feels 
like they got a fair shot; and even if they disagree, that they 
weren't frozen out of the process.
    Let me make one other point about the weight. I want to be 
clear. We do not go for the lowest bidder on our deals. So it 
is conceivable--and Paul can correct me if I'm wrong--we don't 
say, ``Look for a place in the Central Business Area and look 
for places outside; and if it's outside the Central Business 
Area, but cheaper, we'll go outside.'' We will still award a 
lease----
    Senator Baucus. In this case is it your impression that 
there was meaningful consultation with people in Helena and 
Billings and Butte, not just pro forma? Was it meaningful, in 
your judgment?
    Mr. Prouty. I think the answer is yes.
    Senator Baucus. I don't mean to badger you, but if you can 
outline what happened here in Helena which justifies your 
belief.
    Mr. Prouty. Can I start with Billings and move to Helena?
    Senator Baucus. Fine.
    Mr. Prouty. Billings is something I know something about. I 
mean, I was personally involved. Some of this other stuff 
happened when I was in Boston.
    In Billings, we knew we had a lot of evolving needs in 
Billings, so we went to the city and we had a discussion with 
the city officials which came down to what we thought was a 
wonderful idea, which they would find a site downtown and we 
would option. We would place our tenants in a 14-agency 
consolidation; and at the time we were discussing that they 
would also option a site outside the city limits, the CBA of 
Billings, in order for us to place a requirement that looked 
like it couldn't be placed downtown, and that was BLM. It was a 
two-step process, which we thought was great.
    Because of changing players, changing requirements, 
changing a lot of things, we did the Jamison Building; and then 
we had the next phase of discussion about what we were going to 
be able to do with BLM, what they needed, what requirements 
there were, and how they could be satisfied. It's been a very 
lengthy process with a lot of discussions on buildings.
    In Butte we had discussions, but I think on occasions we 
probably weren't talking to the people we should have been 
talking to, and we acknowledged that we had not done a thorough 
enough job. That's why we backed off and went to the discussion 
phases again. Our bias is toward putting it downtown, I assure 
you.
    Now, in Helena, I don't think we've had ongoing 
discussions, because I think we thought that the requirements 
were pretty much set where they were in this building.
    Senator Baucus. I'm sorry, I don't understand that.
    Mr. Prouty. Well, in Helena we thought we had a continuing 
contract for the Helena Federal Building, and so when the 
seismic requirements caused us to not be able to exercise that 
renewal, everything changed. It wasn't that we anticipated, you 
know, 5 years in advance that something was going to happen. 
That happened in the final analysis, just months before, which 
was May of this year, and now the discussions have been going 
on. We're trying to firm up a short-term deal to figure out 
what we can do. In all cases what we have done, and what we 
continue to do, is challenge the local communities to help us 
find a successful way to satisfy these needs.
    In Billings, right up to the end, we were talking to the 
Mayor to see what it was we could do if the city could 
contribute some, change their zoning, whatever they could do.
    We are looking for the cities to work with us to cause us 
to satisfy the needs of the tenant; which certainly in all 
three cases, the changing needs of the government and tenant 
has put us in a very difficult situation.
    Senator Baucus. What about public versus private meetings? 
Correct me if I'm wrong, but it's my understanding that GSA did 
not want a public meeting, a key point, where GSA could sit 
down and consult with, talk to Helena officials.
    We in Montana pride ourselves on open meetings. It's in our 
State constitution that all meetings with the public deals--or 
public policy and outside people, they're public meetings; but 
I'm told GSA did not want a public meeting. I'm curious what 
GSA policy is on that.
    Ms. Harrison. We had a public meeting in January 1997 here 
regarding this Helena issue, and again, in I believe it was 
October 1997.
    Senator Baucus. Is it true that GSA did not, at one 
meeting, want that meeting to be public?
    Mr. Prouty. I don't know that that's the case. I think you 
need both. I think that sometimes you need to work things out, 
and you certainly need public meetings. If somebody in our 
organization said, ``We prefer not to do public meetings,'' 
that's certainly not the position of our organization today.
    Senator Baucus. So that is not your position?
    Mr. Prouty. It is not our position. We will do public 
meetings.
    Senator Baucus. It's not completely analogous, and I 
probably don't know the factual situation, but in the northern 
part of our State, we have Highway 93, and it's very 
controversial because different people want different designs. 
Some want four lanes, some want five lanes, divided, so forth.
    The Montana Highway Department came up with a certain 
design. Well, a lot of folks up in the Flathead went berserk. 
They didn't like that; and some liked it.
    The best resolution, finally, was painful. It was 
difficult. It took time. It was messy, but they had a lot of 
public meetings, lots. Everybody that was interested came to 
the public meetings; and it took a little time, but they 
eventually came up with a design. It's not perfect, but it's a 
good one that the majority of the people agree with.
    I strongly urge GSA to follow the same approach, because in 
the long run, it's a lot better and a lot less costly and more 
efficient.
    Mr. Peck. I will tell you, I couldn't agree more. First of 
all, I note that I've been a citizen advocate, so I've been to 
a lot of public meetings complaining about having been frozen 
out of the processes. I don't like it.
    There are certain parts in our process where we are 
required to take things inside, but that's only when we're far 
down the line in the negotiation.
    Senator Baucus. When you're looking at the Central Business 
Area matter and boundaries and so forth, do you do your own 
impact studies as to what the economic effects would be if you 
were to move, say, out of downtown to an area with an expanded 
boundary? Do you do your own impact analyses?
    Mr. Peck. Generally, no. If a project, for example, a 
government construction project, if it's large enough that it 
requires an Environmental Impact Statement, often the economic 
aspects will get brought into it; but otherwise, no.
    Senator Baucus. Do you give any weight to those studies 
that the local community might conduct?
    Mr. Peck. Oh, absolutely. Although, like I say, we have 
sort of an absolute requirement to give first preference to the 
downtown in any event.
    Senator Baucus. When you're attempting to get the best 
decision for the American taxpayers, and that obviously usually 
is a bidding process, when you get in a situation like we often 
have, let's say in Helena or some other smaller community where 
it's a lot more difficult trying to find a meaningful 
alternative bid, do you look at comparable rental rates as a 
way to satisfy yourself that sole source would not be--may or 
may not be appropriate?
    I mean, what if the comparable rental rates are about the 
same? I mean, do you still have to go through the extra hoops 
of extending the boundary and trying to get bids, or does that 
depend upon the circumstances in the city?
    Mr. Prouty. It certainly depends on the circumstances. We 
do a lot of independent analysis. We have to generate the 
revenue. So the tenants--if we make a deal, even if it's not a 
good deal, our tenants have some independence of their own, and 
they're not going to pay rates that aren't market rates, so 
we've got to ensure that it's a market rate.
    Having said that, in a situation such as Helena, if it 
satisfies the tenants' needs, certainly we'll look at the 
market rates, but there may not be competition here.
    The next question is, can we make a deal that is 
economically wise for all parties?
    Mr. Peck. Right. And as you know, the laws which frown on 
our going sole source or single source do, nonetheless, and 
they have been reformed in the last couple of years, happily, 
to allow us to make a determination that we're getting a market 
rate. We can note that, and then not go competitive.
    I suspect that some of what's happened here, without 
hashing out the details of the deals right here, I suspect some 
of it, because I trust our folks, has to do with trying to make 
sure that we are being offered a market rate, particularly 
where it looks like we're going to wind up in a sole-source 
situation.
    Senator Baucus. I don't mean to prejudge this, but let's 
say the seismic issue here is resolved, and let's say nobody 
else in Helena is interested, so far as you know, in submitting 
any kind of bid; and let's say the market rates, the rates that 
the lessor is suggesting are comparable, according to studies 
that you show. Why don't you just go ahead and sign a lease? 
Why go through all this?
    Mr. Peck. On that hypothetical, I suspect that's what we 
would do, if in fact the facts bore that out.
    Senator Baucus. Do you know of any alternative lessors or 
owners that want to bid?
    Mr. Prouty. I don't think we do, not within the CBA, no.
    Senator Baucus. Which CBA is that?
    Mr. Prouty. The Helena CBA.
    Senator Baucus. The smaller or the larger?
    Mr. Peck. The city CBA, as opposed to the delineated area. 
We should be clear. When we use that bureaucratic term, it is--
we are required when we go out to lease competition to say, 
``Here is the area we are going to consider for competition. If 
you have a building there and you want to offer it to us, we'll 
consider it.''
    The happiest circumstance is when we all feel comfortable 
saying the Central Business Area is also the delineated area.
    Mr. Prouty. With your hypothetical there are a lot of 
challenges. What we're saying is, we can't assume all the 
economic risk in the deal. There are going to be a lot of 
discussions. You've outlined a perfect world. Seismic is met, 
the numbers are right, everything is fine. I'd like to see that 
deal. That would be great.
    Senator Baucus. How close we are on the seismic retrofit?
    Mr. Prouty. We're at the very beginning.
    Senator Baucus. Beginning?
    Mr. Prouty. Well, I think it's safe to say there are 
disagreements over what's required. We have an analysis. They 
have an analysis. We have to satisfy the needs of the law.
    Senator Baucus. How do we speed this along so that you make 
a proper decision about the seismic retrofit here?
    Mr. Prouty. Well, I'll tell you what the steps are. We need 
to get a short-term agreement. Right now, we're negotiating 
with the lessor and trying to continue to be housed on the 
short term. Then we need to sit down and find out what our 
options are. If that is the only option that's available in the 
CBA, we need to have some very detailed discussions.
    Senator Baucus. I still have a couple more questions, 
because I think we'll get to the heart of the matter with the 
other witnesses.
    One complaint I've heard is that the goal posts are 
changing all the time, different Executive orders or weights on 
Executive orders and different personnel at GSA. I'm not 
intending any harm, but you talk to different people, and it's 
pretty confusing to local officials.
    Have you heard that before? Do you know whether that's a 
problem here and what you can do to help?
    Mr. Peck. I know whereof you speak. No. 1, we do have, as 
I've tried to outline, just by what we've been handed as a 
mission, we have some requirements which can conflict from time 
to time. I think that can be confusing to people, and we're 
obviously doing a balancing act between Central Business Area 
and our economic imperatives. That's one.
    Second, I think people sometimes here, and I've heard this 
before, we ask different questions of different lessors, and 
people aren't quite sure why someone got one question and 
someone else got another question.
    The reason for that is that we've looked at a building, for 
example, and our folks walk through it and say, ``It definitely 
meets our fire access and egress requirements,'' so we don't 
ask any questions about fire. We don't see any problems with 
it.
    In another building, we might. We might start asking 
questions about, you know, ``Under the codes we're going by, it 
looks like you might need to install fire stairs''; something 
like that. So sometimes people can hear different things.
    Finally, this is a large organization. Communication is 
difficult in the best of times. We think we do the best job we 
can telling people what our policies are, how you're supposed 
to go about things. But, again, we have--we also encourage our 
people to use their best business judgment out there, and in 
the interest of time, to not spend every minute of their waking 
hours going back to some manual to find out how to do these 
things, because that results in a very frustrating process for 
everyone.
    So as Paul admitted, we think we have at least some 
instances here where I think people say they're frustrated and 
they've heard different things from different people. I have no 
doubt that's true. What we try to do on most of these projects 
is establish somebody who is the single person in charge.
    Senator Baucus. That was my next question. Is there 
somebody who is in charge? Who is that person?
    Ms. Harrison. We have contracting officers for each 
project.
    Senator Baucus. Is there one person for Helena?
    Ms. Harrison. Yes.
    Senator Baucus. Who would that be?
    Ms. Harrison. The contracting officer for Helena is Malia 
Ringler.
    Senator Baucus. OK. Who would it be for Butte?
    Ms. Harrison. For Butte, it's Malia Ringler as well. For 
Billings, it's me.
    Senator Baucus. I must say I've seen some correspondence 
signed by--what's her name?
    Ms. Harrison. Malia.
    Senator Baucus. Malia Ringler, which is pretty curt.
    Mr. Prouty. We'll do better.
    Senator Baucus. It's really beyond the veil.
    Mr. Peck. I've read some of the correspondence on these 
cases, and I agree with you.
    Senator Baucus. I hope that that does not continue.
    Mr. Prouty. Can I back up to one question?
    Senator Baucus. Which indicates an attitude, frankly, which 
indicates a closed mind. It does not indicate an open mind, 
someone who is really listening to local folks and really 
trying to find a good solution, remembering that GSA are the 
employees. They're not the employer. They're the employees; and 
I just----
    Mr. Peck. Sir, you are absolutely right. One thing I would 
say, and I've said, ``It's not your father's GSA.'' We are 
evolving. We are evolving from a culture--this agency is 50 
years old. We're evolving from a culture where people were 
told, ``You go by the rules. You tell people what the rules are 
and you make them follow them,'' and it is a matter of what 
companies call a cultural change process to try to get people 
to say, ``That's not the way we do business.''
    We used to treat our Federal agency customers, in some 
cases, more harshly than what you've seen in any correspondence 
with the public. That doesn't work either, because we don't 
have enforcement powers over those folks; and certainly with 
our, as I've described it, our ultimate shareholders, the 
American people, we have absolutely no business doing anything 
but being courteous and open.
    Mr. Prouty. In the particular case in Butte, I've had some 
discussions personally to say that we're going to look at the 
market again and we're going to sit down with all the parties, 
and I'm more than happy to be involved. Sandy DiBernardo, who 
is the director, will be involved, and we will find out 
everybody's concern.
    Senator Baucus. This lady--what's her name?
    Mr. Prouty. Malia Ringler.
    Senator Baucus. Malia Ringler. Is she in Denver?
    Mr. Prouty. Yes.
    Senator Baucus. How often does she come to Butte or to 
Helena?
    Mr. Prouty. Lately, a lot.
    Senator Baucus. How often? Or how often before this came to 
a head?
    Mr. Prouty. We have a limited number of realty specialists 
that travel the six-State areas. They go where the action is, 
wherever the projects are. So they generally don't make trips 
up prior to doing the deals, but we have a portfolio office 
that does that. Their job is to go out and----
    Senator Baucus. But she makes the decisions. She's the 
contract officer. She gets the sense, the smell, the taste, the 
feel of what's going on. That's what counts.
    Mr. Prouty. During the process, I'm not sure----
    Senator Baucus. See, one of the problems is, quite 
candidly, a lot of us in Montana feel that the Federal 
Government is too detached. It does not really understand 
Montana very well. We're too far away, whether it's Washington, 
DC, whether it's Denver, the regional offices and so forth. 
There is a lot of, not distrust, but at least confusion, 
misunderstanding and sometimes apprehension and determination 
and so forth.
    Partly it's because the centralized operations in either 
Denver or Washington, DC. and so forth are not the people 
making decisions here. People who live in Colorado, or in 
Denver, don't feel this way nearly as much because they can 
talk to Maria, or Malia, walk in and talk to her and say: 
Malia, we're doing this or that, so on and so forth. We can't 
do that in Montana.
    Frankly, the flight connections between here and Denver 
aren't very good either. It's pretty hard to fly down to 
Denver, and it's expensive.
    So on the other hand, I think there is a greater duty, a 
much greater duty on the part of Federal agency central office 
personnel to get out of Denver and to get out of Salt Lake or 
wherever and get out to where people don't have access to the 
Malias of the world.
    There's a huge, I think, responsibility to do that and go 
out of your way to spend more time, frankly, in the smaller 
communities than in the larger communities. The larger 
communities are going to get to you very easily. They get in 
their airplanes and fly. It's easier. They get better air 
service at cheaper rates. With the airline regulations, we get 
poorer service at more expensive rates.
    I just--I'd like you, frankly, to develop a plan where you 
can inform us that, and it can be Montana, and probably 
nationwide, but particularly for this region, you know, the 
travel schedule or the number of times that your contracting 
officers, that is, the people making decisions, get out of 
Denver, just get out and meet folks, find out what's going on; 
because then you can solve a lot of it with a telephone 
conversation, you know, a few months later. You know the 
person. You know the people. You've had a few beers together. A 
trust starts to buildup a little bit.
    It takes time, but that is part of the problem here. I just 
urge you very strongly, and I want you, if you could, to get me 
a plan, think about it. I don't want you to just agree about 
this, but do something that is meaningful; because we do feel 
we are--we don't have near the access to talk to the Malias of 
the world as do people in larger communities.
    Mr. Peck. Senator Baucus, there is no substitute in any 
business dealing for face-to-face contact. Particularly in real 
estate there is no substitute for being on the ground and 
seeing how things are moving in the community.
    It is a challenge. As I noted, one of the problems is that 
we have downsized. We have restricted budgets. We have a very 
tight budget this year. I made a point of not imposing what was 
recommended to me by some of my green-eyed accountants, that we 
impose a travel restriction, in part, because I said, you know, 
places like this, in the northwestern part of the country, 
where we manage Alaska from Seattle, you know, people would 
never get their jobs done. But I hear you. It is a serious 
issue.
    Senator Baucus. I urge you to shift your budget around a 
little bit. Anyway, one more question and we'll go to the 
witnesses.
    What weight and deference do you give to Federal agencies' 
wishes and the space they want and so forth? How do you prevent 
them from just going through the wish list?
    Mr. Peck. Without divulging--I will tell you that I have--
we have taken it upon ourselves in Washington at times to go to 
the headquarters of Federal agencies in Washington to say, and 
I'm not saying this applies to any of these particular 
instances, but I've gone and spoken to people in very high-
level government and said, ``The requirements that your folks 
have in city or town X or Y are just--what's the polite term--
just don't wash''; and we've gotten support.
    I'm prepared to go up the line and do that. It is obviously 
very difficult, because what happens--take MEPS. I mean, I went 
in the Service. I went through a MEPS. I have my own sense of 
what it takes to go through that kind of a physical exam, but I 
can't--it's very difficult for me to say, ``I know how you do 
your business.''
    On the other hand, what we will do is say, ``You have an 
economic interest, just as we do, in making sure that you get 
the best buy on real estate,'' No. 1; and No. 2, that we 
follow, not necessarily in that order, also that you be 
downtown and be in that historic building.
    You've got to be flexible. I always say McDonald's has 
found a way to locate in historic buildings. They have pretty 
rigid requirements on how they flip burgers and make fries. You 
know, Federal agencies also have to be willing to adapt. There 
are some very contentious discussion that goes on; but as I 
said, it is our obligation to do that.
    Senator Baucus. Who makes the final decision? Let's say GSA 
says, ``This is where we're going. We're going to go to this 
location.'' DOD says, ``No, we have this requirement.''
    Mr. Peck. I can tell you--I have to tell you, in all 
honesty, that I don't know. As a matter of practice--as a 
matter of Federal regulation, GSA has the authority to assign 
an agency to space, so it looks like, in the end, we can do 
that.
    I can tell you of instances in the past, over the past 20 
years where we've tried to exercise that authority, and we have 
about a 500 batting average in actually making good on our 
order.
    I want to tell you, that is a club that we do pull out from 
time to time and say we have that. But like I said, 
particularly with respect to leasing authority, agencies will 
often say, ``Oh, well,'' you know, one way they can get out of 
it is to say, ``We've changed our requirements,'' or ``We've 
decided we don't need to do this.''
    Senator Baucus. That's a good way.
    Mr. Peck. So it does require negotiation.
    Senator Baucus. What appeal is there? Let's say GSA 
decides, ``No, I can't go with competing lots. We're going to 
do something else.'' Is there an appeal process, or does GSA 
say, ``That's it,'' period?
    Mr. Peck. There is, under the Executive order, Executive 
Order 12072 and 13006, there is an informal appellant process 
inside the Government, which there are three cabinet-level 
officers who can take a look at a building location decision 
and try to do an arbitration. We have never yet exercised it. 
It's only been in place--as I say, it's informal--for about a 
year-and-a-half. We've never had to go to it yet.
    I don't know, quite honestly. I'd have to ask our lawyers 
whether it is available to--how it would be exercised; because, 
like I said, we've never had to figure out all the rules.
    Senator Baucus. So once GSA makes a decision, for all 
intents and purposes, that's it? There is no recourse?
    Mr. Peck. In our system, fortunately there is, in instances 
where it goes this far, recourse, by being asked by Congress to 
take a look at it; and quite honestly, this is one of the more 
effective means of appeals that communities have. You know, 
whether it's by letter or by hearing, we've been asked in any 
number of cases to take a second look at some of our decisions.
    Senator Baucus. I've taken a lot of your time, more than I 
intended. I want to thank you very, very much for your help and 
also taking the time and effort to come to Helena; and if you 
would, please, stick around.
    Mr. Peck. We wouldn't miss it.
    Senator Baucus. OK, our panel.
    First, Colleen McCarthy, mayor of Helena; Alan Nicholson, a 
real estate developer in Helena; the Honorable Mark Kennedy, 
council member in Billings; Mechelle Schultz, Downtown Business 
Association, Billings; the Honorable Jack Lynch, chief 
executive, Butte-Silver Bow; Colleen Fine, director of Urban 
Revitalization; and Barb Pahl, regional director, National 
Trust for Historic Preservation.
    I'd like each of you to hold your remarks to 5 minutes, 
please, and if it starts to push 5 minutes, Kathy is going to 
be the timekeeper, and she'll do something when it gets close 
to 5 minutes.
    Also, I'd appreciate it if you could address your remarks 
to solutions and, to some degree, in the context of what you've 
heard GSA say. We'll play this by ear. OK, Colleen?

     STATEMENT OF HON. COLLEEN McCARTHY, MAYOR, HELENA, MT

    Mayor McCarthy. Senator Baucus, I would like to thank you 
and members of the committee for allowing us to be here this 
morning and discuss our experiences with the General Services 
Administration.
    As much as I'll try to keep my remarks to 5 minutes, as I 
was typing this up, I'm afraid I'm going to go a little over 
that. My experience over the past year has been quite 
interesting, and I cannot sum this up in just 5 minutes, but I 
can probably get it down to about nine.
    Senator Baucus. Go ahead.
    Mayor McCarthy. During the past year, we have been 
extremely frustrated----
    Senator Baucus. I hope you're not setting a precedent.
    Mayor McCarthy [continuing]. And concerned with a lack of 
communication, misrepresentation and action by GSA officials. I 
would like to state for the record that those GSA 
representatives currently residing here in Helena and working 
in the Federal Building have been most helpful and 
understanding. Our frustration lies mainly with those 
representatives from the office in Denver.
    I became directly involved in working with the GSA 
representatives regarding the Helena Federal Building lease 
almost a year ago. As mayor, I received a letter informing us 
GSA was considering lease renewal options on the existing 
building.
    During our conversation with GSA officials, it became 
apparent that they would be considering lease options on other 
buildings, and they could possibly locate outside the central 
business district.
    On May 20, 1997, I sent a letter to Polly Baca, regional 
administrator for GSA, advising her the consensus of the Helena 
City Commission was that GSA aggressively pursue lease options 
with the current owner of the existing----
    Senator Baucus. What was the date?
    Mayor McCarthy. May 20.
    Senator Baucus. Of what year?
    Mayor McCarthy. Of 1997, last year. We also clearly stated 
in our letter that if the decision was made to move from the 
current building, that we wanted them to comply with the 
Executive Order 12072, and relocate somewhere within the 
central business district.
    Between the dates of May 20 and August 1, correspondence 
between the Denver GSA office and the city of Helena continued 
through our acting city manager, Troy McGee.
    In late July, city manager McGee received a request from 
Julie Millner asking the city for permission to issue an RFP to 
pursue a warehouse location outside the central business 
district.
    Senator Baucus. Who is Julie Millner.
    Mayor McCarthy. She's one of a myriad of people with the 
GSA folks that we have dealt with, which I think I'll get to 
your point about who is on first base here in just a moment.
    Mr. McGee brought the request to the city commission. The 
request, as Troy presented it to us, was for a storage-type 
building with few offices and minimal employees.
    In the spirit of cooperation and wanting to be a good 
neighbor with the folks at GSA, the city commission granted 
approval for the RFP outside the central business district. 
Months after the approval was granted, we learned that those 
were not the intentions of the GSA.
    Between the time that we granted the approval and around 
September 25, I believe it was, I had a meeting. I was 
requested--I received a request from the GSA office to attend--
if they could come and speak to me privately, as the mayor.
    At that time I told them I didn't make it a habit of having 
private meetings with anyone, actually, and that I wanted to 
bring other city commissioners; and I was asked not to have any 
of the other commissioners come to the meeting with me.
    I then responded saying, I would not meet privately by 
myself, and that the city manager--the then-just-hired city 
manager, Dennis Taylor, and the previous acting city manager, 
Troy McGee, would be attending the meeting with me.
    We met and had a discussion. What the discussion was 
involved with was the GSA came to tell us that they had--they 
felt that they could not find a suitable location within the 
central business district to house the Federal employees, and 
they wanted me to extend the boundary of the Executive order to 
allow them to go out for a show of interest. Outside that I was 
not in a position in that meeting, in that private meeting, to 
make such a decision. I am one elected official that has to 
serve the entire community, and I can't make decisions without 
concurrence from the city commission, that this issue would 
have to be brought publicly before the commission.
    I also stated that this had been a very hot topic within 
our community and that I was not in favor of making this 
decision without having a public meeting and inviting, 
specifically, people from Hometown Helena Pride and the 
attorney's office that was representing the owner of the 
building.
    At that point, they reluctantly agreed that a public 
meeting would be necessary. They were disappointed that I could 
not make a decision right then and there to extend the 
boundary, but we again explained that we do have open-meeting 
laws here in Montana and we wouldn't be making these decisions 
by ourselves.
    So they agreed that we would have a public meeting, and we 
set that meeting for October 30. In the meantime we received 
communication--actually, I've gotten a lot of my information 
from my friends at the Independent Record. They'll call me and 
say, ``Did you know that this is happening?'' or that that is 
happening.
    I, about the first of October, received information--
actually, I got a question asking, with all the controversy 
around the Federal Building and those employees moving out, why 
on earth the city of Helena would agree to let the FHA and USGS 
move out of the building. My response was, ``I don't know what 
you're talking about.''
    At that point we went back to Julie Millner and we said, 
``We did not give approval for employees to move out of the 
building. We gave you approval to go out for an RFP for a 
warehouse.'' At that time they said that our city manager had 
misrepresented their intentions to the city commission.
    After numerous conversations with them, the GSA officials 
continued to insist that the city manager had misrepresented 
their request. The allegations persisted, and after we provided 
documentation outlining their request and the city's position, 
they still were insistent that Troy had misrepresented them to 
the commission and that they, indeed, had told him that both 
the FHA and the USGS would be moving out. That's not what we 
thought we approved. We thought we approved a warehouse.
    So I'm telling you this as just one example of numerous 
situations that have occurred with lack of communication, 
misrepresentation, and misunderstanding.
    The thing that complicated this and made this very 
difficult is we were then preparing for the community meeting 
we had October 30, and GSA came back and said, ``The moving of 
the offices of the FHA and USGS have absolutely nothing to do 
with the lease of this building and the attempt to renew that 
lease.''
    So we are very confused at this point saying, you know, 
``Here you are piecemealing agencies out of that building. What 
will prevent you from, one by one, taking them all out of the 
building, and then we're left with an empty building?''
    At that point they made a determination to try and help us 
understand that the lease of the building had nothing to do 
with what Julie Millner was doing.
    So I will say on Julie's--on behalf of her defense, that 
since the time we had this extremely big misunderstanding, she 
has been in constant contact, numerous times, probably a dozen 
times, with our city manager.
    We did designate our city manager as a single point of 
contact for the GSA, but we have heard very little from the 
folks at the GSA since we had the community meeting in October.
    I want to just digress here a little bit to the 1970's and 
why this building was placed in this location. I think that 
it's imperative that my testimony clearly provide you with some 
factual data that will hopefully support a decision to 
aggressively pursue options that will allow the Federal 
employees to either remain in that building or at least in the 
central business district.
    In 1970--in the 1970's, the city of Helena worked in 
cooperation with the GSA to locate a new Federal Building in 
downtown Helena. Here is a quote from the finding of facts from 
the Determination of Site Selection document.
    It states,

    The city of Helena is aggressively pursuing an urban 
renewal plan to revitalize the old downtown area and sees the 
new Federal Building as an integral contribution to their long-
range goals. There has been no adverse reaction to the project 
in this local community. The proposed site is an example of 
intergovernmental cooperation to minimize socioeconomic impact.

    I submit to you today that the Federal Building continues 
to be an integral contribution to our long-range goals in the 
community and the downtown area. I find it ironic that this has 
turned into the worst example of intergovernmental cooperation 
and communication that I have seen in my 8 years of serving 
this community.
    During urban renewal, the city of Helena invested millions 
of dollars in the infrastructure to enable the construction and 
the placement of this Federal Building in the downtown. Street 
sys-

tems were redesigned and constructed, additional land was 
acquired to provide adequate parking, and sewer and water 
services were extended, much at local taxpayer expense.
    Today officials of the General Services Administration are 
asking us to ignore the huge investment of tax money that has 
gone into the current building site. We simply cannot ignore 
the substantial investment local citizens and taxpayers made 
over 20 years ago all in the spirit of cooperation and trust 
with the GSA.
    In 1976, President Carter issued Executive Order 12072. He 
believed that the Federal use of space in urban areas ``shall 
serve to strengthen the Nation's cities and make them 
attractive places to work.''
    Currently officials of GSA are not keeping with the spirit 
of the Executive order. Repeated attempts have been made to 
extend the boundary of the Executive order with fully 
investigating the options available within the district.
    GSA has repeatedly asked the city of Helena to allow RFPs 
to be solicited outside the district. We believe this action is 
in direct conflict with the order. An example of this conflict 
is reflected in the fact that GSA has given little 
consideration to the traffic problems that will occur if 300 
people are located outside the central business district.
    Even worse is the possibility of locating 300-plus Federal 
employees in an area that is currently experiencing severe 
traffic congestion and safety issues. GSA officials appear to 
care little about the potential traffic impacts and future 
infrastructure costs to the taxpayers in Helena.
    Last, I would like to briefly discuss the situation 
regarding the existing building. In a meeting with the GSA 
officials on October 30, they stated the current lease 
arrangement was ``a bad deal for government.'' However, they 
repeatedly refused to provide financial data as to why this 
lease was a bad deal for government.
    On November 26 I was asked to address a group of concerned 
Federal executives currently working in the Federal Building. 
During this meeting, numerous employees expressed 
dissatisfaction with the location of the building in downtown 
Helena. However, many of those employees expressed serious 
concern with perceived safety issues of the structural 
stability of the building.
    Currently, GSA officials are claiming to have documentation 
in a Merrick report that substantiates $13 to $16 million in 
identified improvements, including safety and seismic issues. 
However, the building owner hired an independent structural 
engineer who claims that the building is structurally sound.
    The engineer identified only $7 million in improvements in 
the same Merrick report, not $13 to $16 million.
    As a result of these conflicting reports, and I will say 
all of this information has appeared in the press, so everybody 
reads this stuff practically on a weekly basis trying to figure 
out who's got the right story. Those Federal employees, your 
Federal employees, feel that their safety is at risk in that 
building.
    I believe that the testimony you will hear today is 
imperative for--of all the testimony you hear today, it is most 
imperative that you address the safety issues of those Federal 
employees above all else.
    No employee, whether they are in a high-risk industry job 
or a clerical position in the Federal Government, should feel 
their safety is at risk while on the job.
    It is the recommendation of the Helena city commission that 
you require GSA officials to work cooperatively with the 
current Federal Building owner resolving the potential safety 
issues within the building and extending the current lease 
agreement if at all possible.
    I would like to thank you for this time this morning. These 
issues are serious. The actions of GSA could have devastating 
impacts on our community. We are not Denver. We're not Houston. 
We're not even Salt Lake City. We're a small community of 
35,000 people who still believe that their word is as binding 
as a legal document, and that government, whether at the local, 
State, or Federal level, is charged with protecting and 
preserving the communities we have all worked so hard to build 
and call home. Thank you.
    Senator Baucus. Thank you, Colleen, very much.
    Alan.

            STATEMENT OF ALAN NICHOLSON, HELENA, MT

    Mr. Nicholson. I'm going to paraphrase my marks. Colleen 
covered a number of the main issues.
    My name is Alan Nicholson. I've lived in Helena since 1970, 
and for most of that time I've been a real estate developer and 
property manager here and in Billings. Most of our properties 
are in downtown locations. I'm a believer in urban development 
and redevelopment, and I'm happy to hear that Commissioner Peck 
is as well.
    By the way, I'm wondering if you're the older brother of 
Matt Lauer at NBC. You look almost exactly like him. That's a 
compliment.
    Mr. Peck. Yes. Call my mom.
    Mr. Nicholson. I'm a former chair of the Montana Board of 
Public Education, a past president of the Helena Chamber of 
Commerce, and the immediate past president of the Montanan 
ambassadors, a group of State business leaders appointed by the 
Governor to make Montana a better place to work and live.
    I believe government is our collective responsibility, that 
it is what we do together for the common good and that we 
should do it well. My wife and I serve in many public arenas 
and contribute significantly to Federal, State, and local 
taxes.
    As it turns out, I have lands and buildings which would be 
suitable for a new Federal Building in the downtown area, but I 
agree with other community leaders that it is in our best 
interests and the best interests of the community for the 
Federal offices to stay where they are. I have been an 
outspoken advocate of that position.
    I am disappointed and dismayed by the behavior of the 
General Services Administration, which apparently intends to 
ignore every Executive order issued by every president since 
Carter, to ignore the interests of the Helena community and its 
elected officials, to ignore the protocols of fair play and 
good business and to ignore the best interests of the 
government they serve.
    I would say to you, Commissioner Peck and Mr. Prouty, if 
you leave here believing that GSA has put forward the best 
interests of the government, has run like a business, has had 
meaningful interaction with the community, then you will leave 
here with the wrong impression. We have not done our job or we 
live in a different world.
    I believe the Executive orders are quite clear in their 
mandate to request central cities to remain economically strong 
by locating Federal offices in the downtown areas wherever 
reasonably possible. As Colleen pointed out, the city did much 
to make that happen in 1970.
    The city commission and other public bodies are on record 
and in agreement that it is in the community's best interests 
to have the Federal offices stay put. Everybody realizes that 
there are problems requiring remediation, and nobody wants the 
employees to work in an unsafe condition. We all agree on that. 
We know that some of the offices may need to locate elsewhere 
in order to maximize efficiency and to serve the public 
efficiently, but if the collected best interests of all parties 
are to be served, we understand everybody has to give a little 
in the compromise.
    The GSA has routinely rejected efforts to compromise and 
negotiate. Even before any definitive request for proposals for 
a Federal Building in Helena, GSA asked the city to extend the 
boundaries suitable for a Federal Building well beyond the 
central business district.
    Ordinary protocols of fair play and good business are out 
the window where GSA is concerned. The owners of the existing 
building found it necessary to publish a hefty volume to set 
the record straight after half-truths and outright breeches of 
verity, known around here as damned lies, were spread about by 
GSA officials.
    So far as I know, GSA has not responded either to dispute 
the owner's effort to set the record straight or to apologize 
for playing fast and loose with the facts.
    I submitted an alternative site to GSA in the central 
business district in the event that a reasonable solution could 
not be reached between GSA and the present owner. GSA thereupon 
publicly proclaimed that my site was not suitable and was 
polluted. I asked for an apology from GSA, to which they 
responded, ``It is common knowledge of Helena citizens that the 
Great Northern site was once used as a garbage dump.''
    I pointed out that we had the benefit of two independent 
environmental studies which found that the site was neither 
polluted nor a garbage dump. In a subsequent letter, after my 
continued request for an apology, GSA denied ever having said 
it. Letters documenting this exchange are attached.
    One does not expect a campaign of disinformation by the 
government in an area so far removed from the usual standards 
of political intrigue and national consequence.
    All of this tends to sour one's respect for government at a 
time when those of us who still have vestiges of respect for 
government exist in ever decreasing numbers.
    What should GSA do? I'm going to digress here just a little 
bit. I've heard, again, the bogeyman of competition and seismic 
issues here. With respect to competition, as a developer, I 
think I can safely say--and I think everybody in the room will 
understand this--you will not get a better financial deal than 
you will at the existing building. You cannot build a new 
building in today's environment and lease it back to the 
government or anybody else for what a reasonable lease on that 
older building will be.
    With respect to competition, if the Federal offices are not 
to be in that building, then it would seem reasonable for GSA 
to come to the community and say, ``What other sites are 
available?'' It's possible in this community that the city 
would even donate a site for that purpose in the central 
business district or that we could agree on a single site and 
reasonable price and have many developers come in and bid on 
that site.
    With respect to the seismic issue, we understand that any 
building in this community has to be built to the new seismic 
code. I don't know what the remediation costs are up there. I 
know that the government's own study, when you add it up, says 
$7 million, and GSA has been saying that it says $13 to $16 
million. The study itself doesn't say $13 to $16 million. It 
says $7 million. The engineer they hired up here said it would 
be a lot less than that.
    We all understand and agree that seismic issues are 
important, but I want you to say to me, as well, that in the 
Seattle area, in the San Francisco area, in the Los Angeles 
area and other areas which are also in Zone 3, that you're 
going to pay the same attention to seismic issues, and that 
you're going to vacate buildings which do not meet the current 
codes in those areas as well.
    So I think there are opportunities here for things to 
happen. I think what should happen is that the government 
should negotiate first on the existing building and should 
demand reasonable--offices which reasonably allow the 
government to undertake its duties there, including 
requirements for seismic issues.
    If that isn't possible, then I think GSA should come to the 
city commission and to the city itself and say, ``What other 
sites are available in downtown? How can we satisfy the issue 
of competition in a site downtown,'' either by offering more 
than one site or by offering a single site on which many 
developers can bid, and I think that's the solution.
    I'm going to close by saying, many of us have wondered why 
GSA has acted so badly, why they've been so covert, so 
arbitrary and why they have behaved as though they are under 
siege by an enemy. Many theories have been batted about 
including unholy alliances between the administration and large 
developers, some political favor in need of repayment, a 
rebellion by GSA against government itself, and on and on. Some 
theories are more sinister than those.
    The simple truth is that the behavior of GSA in this matter 
is so without a reasonable explanation that it begs a grand 
explanation.
    For myself, I believe it is a combination of ignorance 
stemming from unchecked bureaucratic power and a determination 
to serve the wishes of local Federal department heads who want 
new digs, Executive orders and local needs be damned.
    While I hope GSA, after this hearing, will behave more 
appropriately and in keeping with good public policy, I have no 
faith in it. This lack of faith from ordinary folks like me who 
believe in government and want it to work should scare the 
living hell out of folks like you who have dedicated a 
substantial part of your short tenure on earth to this fragile 
experiment we call American democracy. It's failing. Thank you.
    Senator Baucus. Thank you, Alan.
    The next witness is Mark Kennedy from the city council in 
Billings.

  STATEMENT OF MARK KENNEDY, CITY COUNCIL MEMBER, BILLINGS, MT

    Mr. Kennedy. Thank you, Senator, very much. I'd like to 
identify very quickly, if I could, by standing up, the members 
of the Billings community that made this trek up here to 
Helena. All of us took time out of our jobs and businesses. 
Could you just stand quickly? Thank you so much.
    Senator Baucus and members of the committee, I welcome the 
opportunity to provide testimony today regarding issues 
associated with the Federal procurement processes for office 
space.
    I have been a Billings city council member for 5 years 
during two separate terms. I'm a Billings restaurant owner and 
a local businessman. I have owned a restaurant in downtown 
Billings and pride myself in contributing to the vibrancy of my 
community. With that experience, I feel that I'm qualified to 
represent this important component of our city.
    In recent months the Billings city council and city staff 
have been involved in an important Federal Government decision 
that affects the future of the Billings downtown. A government 
decision was recently made to award a contract for the 
construction of a new Bureau of Land Management, or BLM, 
facility outside of the downtown area.
    Despite repeated efforts of local leaders to urge the 
consideration of a downtown site, the General Services 
Administration, the GSA, acting on behalf of the BLM, has cited 
the requirements of the Competition in Contracting Act, CICA, 
as the reason for making a decision that deserts the downtown 
of the largest city in Montana.
    I am here today to express my concern for my community, its 
downtown economy and a questionable future brought into play by 
the actions of these two agencies. Their actions have left a 
bitter taste in the mouths of many Billings residents, 
including some of our own Federal employees.
    I first want to comment on the requirements of Executive 
Order 12072, an act signed in 1978, as you know, by then-
President Jimmy Carter. At that time, he recognized the plights 
of urban cities and realized that the Federal Government must 
be a partner in the revitalization of America's cities.
    This Executive order requires all Federal agencies to give 
primary consideration for their locations to central business 
areas. For the past several years, the city of Billings has 
been a partner with the Federal Government in meeting that 
goal. This has resulted in the recent completion of a new 
Federal office building in downtown on property previously 
owned by the city.
    On this particular project, GSA Solicitation No. 97-15, 
something has gone awry. Initially, a bid for facilities in the 
downtown area was solicited with only the current landlord 
providing a bid for services. This response was not viewed 
favorably and it was determined that bidding should be opened 
for new sites throughout the Billings community. The 
Competition in Contracting Act was cited as the reason that new 
bids would need to be solicited.
    A meeting was held between Federal officials, Mayor Chuck 
Tooley, and our city administrator. Due to CICA, we were 
informed GSA had no choice but to open bidding up to sites 
outside of the downtown Billings area. This was the extent of 
the Federal Government's efforts to comply with Executive Order 
No. 12072.
    A later letter from our city administrator asked for 
clarification of our community's rights, but the response was 
vague and, I think, incomplete.
    As a city council member, I ask myself if a vote of the 
Council would have made a difference in granting our community 
more time in which to respond to the GSA situation.
    We had a developer from Massachusetts which expressed 
strong interest in a downtown site. However, other than a 2-
week delay, the BLM/GSA process continued until an award was 
announced between Christmas and New Year's. Merry Christmas, 
indeed.
    Federal Executive orders and contracting law are unclear as 
to what is the right of a community to object to the 
competitive removal of 200 jobs from the downtown area. What is 
the extent of the duty of the Federal Government to respond to 
the local community? These jobs are an important component of 
the downtown economy. However, no accountability was ever made 
by the GSA/BLM as to the costs associated with their move.
    We did see an unsubstantiated projection of $9 million in 
savings over 20 years. ``Savings to whom?'' we ask. We in 
Billings anticipate a negative impact to local tax 
jurisdictions and private enterprise in an amount far in excess 
of the projected $9 million savings.
    We see local property owners lowering the rents of their 
facilities to compete with a new 56,000 square feet on the 
market. Some will ask for property tax value reductions 
affecting revenues of city government, county government, and 
our school district. Local restaurants that depend on a vibrant 
lunch crowd will lose, as well as locally-owned businesses 
along the streets.
    I also want to object to a process that deliberately 
specked out the Billings downtown. The BLM/GSA proposal 
required the adjacent location of a wareyard facility. Next to 
an office building containing over 130 regional white-collar 
type workers, a warehouse work area was mandated to be 
included. This facility could not be located down the street or 
near the site, but must be directly connected and adjacent to 
the proposed site.
    This requirement created a direct conflict with the city of 
Billings zoning code criteria. A wareyard facility is not 
allowed in the central business district, as is the case in 
most American cities. The wareyard would be a facility to store 
posts, cables, vehicles, horse trailers, and surplus.
    I would liken this to the building of a Federal vehicle 
repair shop next to the Hart Senate Building in Washington, DC. 
The types of uses are incompatible and don't always mix.
    Given this, the local city council was put in a situation 
of ignoring zoning laws and creating infamous spot zones to 
comply with the Federal specifications. Due to 35,000 square 
feet specifications for the wareyard, the BLM/GSA could not 
consider locating this material in an indoor facility. We did 
look at the basement of the city library, but it was only 
20,000 square feet. Nonetheless, we are confident that 
cooperative BLM, GSA, and the city of Billings' fine efforts 
can accommodate these requirements.
    The city and private sector have been involved in a year-
long process of planning for the Downtown Billings, or 
Everyone's Neighborhood, as we call it. Due to timetables, the 
BLM/GSA could not honor waiting for the completion of the 
project which was adopted by local governments just last 
December, the same month that the project was awarded.
    Billings now has a plan, and government offices are an 
important part of it. In Montana where many jobs are with 
Federal agencies, how can they not participate in these local 
efforts? Isn't this contrary to the Executive order No. 12072? 
Our community has spent $300,000 in local funding for this 
effort, so it is not something that we take lightly. The 
Federal Government has failed by not recognizing the importance 
we take in our downtown.
    I have included with my testimony a financial summary of 
downtown taxable values which are part of a tax increment 
district. A tax increment district is an area of a community 
where taxes are frozen at a base level, and all new incremental 
tax value increase use proceeds to reinvest in the district.
    In Billings' case, the district is our downtown central 
business district. We started in 1982 with an incremental 
taxable value of $6.25 million. This rose to a high in 1991 of 
over $11 million. Since that time, we have seen the incremental 
taxable value decrease to a little under $6 million in 1997.
    Some was attributed to tax reappraisals, but overall, a 
general decline in investment. Without continued reinvestment, 
the efforts of this community can be for naught. That is why 
the loss of a major downtown source of jobs and capital 
investment is so important. The evaluation of $447,000 in 
annual projected BLM savings will be minuscule in comparison to 
the impact upon the financial vitality of downtown Billings. 
The Federal agencies did not take this into account; a major 
mistake when assessing total impact.
    In summary, the city of Billings' downtown has received a 
major blow to its diligent planning efforts, its economy, and 
its downtown workplace diversity. Our neighbors and friends are 
being removed from the area in the name of a bottom line that 
disregards the environment around it.
    As a city council member, I recognize the need to receive 
competitive bids, but I also recognize the need to award the 
most responsible bid.
    Again, with cooperative innovation and planning of downtown 
Billings, we can accommodate both of those. Please just work 
with us.
    The Federal Government in Montana is an important partner 
in securing the success and vitality of the downtowns of 
Montana cities. The process now being used is not fair, does 
not coordinate enough with local officials, and does not fully 
weigh the economic impacts. We have seen the challenges of our 
elected officials and our tireless volunteers go ignored by 
Federal agencies. As a city council member, I cannot accept the 
old adage, ``There is nothing we can do.'' There is, and it 
starts here today.
    The one request that I am making from myself and the 
community of Billings is a 1-year moratorium on any building 
projects with the GSA in the State of Montana because of 
concerns regarding this lack of coordination with local 
officials, and I also request a transcript of this hearing 
today.
    Senator Baucus. Thank you very much.
    Next witness? I ask you, also, to try to honor the 5-minute 
provision, which we've breached thus far. This is in deference 
to other witnesses, so ask questions. Mechelle Schultz, of the 
Downtown Business Association in Billings.

 STATEMENT OF MECHELLE SCHULTZ, DOWNTOWN BUSINESS ASSOCIATION, 
                          BILLINGS, MT

    Ms. Schultz. Thank you, Senator Baucus. As the director of 
the Downtown Billings Association, I represent more than 183 
member businesses. Our members include most of the retail 
shops, financial institutions, hotels, restaurants, museums and 
cultural services, professional offices, and service businesses 
in downtown Billings. The Association has been active in the 
promotion of our downtown over the past 40-plus years.
    A corps of energetic and dedicated citizens have been 
working for 2 years to put in place a mechanism and a plan for 
the revitalization of downtown Billings. The 40-percent decline 
of property value and the estimated 15- to 20-percent vacancy 
rate for office space downtown has urged us to take action.
    This comprehensive, long-range plan addresses many issues 
and takes into account the importance of all entities located 
downtown.
    Downtown employees, including Federal workers, have been 
the mainstay of the downtown community, especially given the 
decline of retail trade and the oil and gas industry. 
Approximately 10 percent of our employment base is made up of 
Federal employees. Twenty-four percent of the space within a 
14-block area is occupied by Federal agencies.
    By taking away 225 BLM jobs and adding 56,000 feet of 
vacant space, the GSA is adversely impacting our downtown. The 
removal of the BLM from downtown exemplifies the effect that 
Federal agencies have on downtown areas across the Nation. 
BLM's departure from downtown will prove to be devastating and 
a step back in our revitalization efforts.
    Since I am here to represent our downtown businesses, I 
would like to share some of their views on how the BLM and 
other Federal agencies impact their businesses. The following 
are just a few of their testimonies. Some written testimonies 
have been included in the packets that I've submitted.
    I visited with the director of the YMCA. BLM employees 
comprise 50 memberships, which when translated to their family 
memberships comprises about 200 total memberships. The director 
of the YMCA has stated that these people are members because of 
convenience of location. They're approximately a block away. 
The loss of these memberships would result in a $40,000 loss a 
year to the YMCA.
    Travel West Inn is a hotel that is about a block away from 
the BLM offices. They said that 25 to 30 rooms per month for 
three to 5 days each are rented to BLM employees. That's a 
devastating blow to their business.
    Raven's Down Under is a restaurant located within the same 
building as the BLM. If the BLM leaves, they will close their 
business, and three employees will be unemployed.
    A Holiday convenience store, they say they'll lose $10,000 
each year. Our hotels downtown range from 20 to 25 percent of 
their group business is dependent upon Federal agencies.
    The Billings Federal Credit Union, BLM is their largest 
Federal agency member. There again, we talk about convenience 
factor. They're located right by there. They feel that they 
will have to spend money to create a presence wherever BLM 
goes, and that some members will just take their accounts 
elsewhere because of the convenience factor.
    These are just a few of the testimonies that I have 
received. As you can imagine, the adverse economic impact of 
BLM and any other Federal agencies moving out of downtown is 
great.
    Our greatest frustration in our efforts to keep BLM 
downtown has been our inability to communicate with the GSA 
regarding its location decisions for Federal office space in 
the community. We've sent two letters that went unanswered in 4 
months.
    I finally received a letter dated February 4, 1998, from 
Ms. Poly Baca, who is a regional administrator for the GSA, who 
informed me that the lease contract for the building has been 
awarded, as it was in December 1997.
    We have also sent an E-Mail through the International 
Downtown Association to the GSA in Washington, DC, 
approximately 2 months ago, and never received a response for 
that either.
    Due to this lack of communication, we have been unable to 
offer our input in the bidding process or to demonstrate the 
negative impact of this decision on our community.
    Today we request a 1-year moratorium on decisions relating 
to Federal Building projects in Montana. This moratorium would 
allow time for communities to offer solutions to the Federal 
Government on their building needs and appropriate location.
    We want to work with the GSA and other Federal agencies in 
the manner outlined in President Carter's Executive Order 
12072.
    In closing, I refer to the words of Vice President Al Gore 
in his reference to the GSA's Good Neighbor policy. ``Community 
revitalization, particularly downtown revitalization, only can 
occur if all the local stakeholders are involved. The President 
and I believe that simple measures like this one are concrete 
steps for reinventing Federal Government and creating a new way 
of doing business with communities. I ask that we work together 
to benefit the Federal Government, downtown, and the taxpayers 
of the United States.''
    Senator Baucus. Thank you, Mechelle.
    Next, Barb Pahl, who is with the National Trust Historic 
Preservation, and who is visiting us from Denver.

 STATEMENT OF BARBARA PAHL, REGIONAL DIRECTOR, NATIONAL TRUST 
             FOR HISTORIC PRESERVATION, DENVER, CO

    Ms. Pahl. Thank you, Senator Baucus. I know, and after all 
those things you said about Denver. I want you to know I get up 
here a lot.
    Senator Baucus. What airline do you take?
    Ms. Pahl. The only one I can, Delta, and I can quote you 
the flight schedule if you're interested.
    I am the director of the Mountains/Plains Office for the 
National Trust for Historic Preservation. We are located in 
Denver. The National Trust was chartered by Congress in 1949 to 
promote public participation in historic preservation and to 
engage the private sector----
    Senator Baucus. Barb, pull the microphone a little closer. 
Speak right into it. Try the other one.
    Ms. Pahl. Did you get all that? I'm eating into my 5 
minutes here.
    Senator Baucus. Well, start again.
    Ms. Pahl. I am the regional director of the Mountains/
Plains Office for the National Trust for Historic Preservation 
located in Denver, CO.
    The National Trust was chartered by Congress in 1949 to 
promote public participation and historic preservation and to 
engage the private sector in preserving our Nation's heritage.
    The National Trust was a participant in helping to create 
the Executive Order 13006. On May 2, 1996, the Trust and the 
General Services Administration convened an Urban Issues 
Roundtable, attended by Commissioner Peck and acting GSA 
administrator David Barram, along with other nonprofit urban 
interest groups and historic preservation advocates.
    Participants in the roundtable engaged in a dialog about 
national locational policies for Federal Buildings and to 
explore areas for mutual activity in the adaptation of historic 
buildings for contemporary Federal use.
    Soon after the Roundtable, President Clinton signed 
Executive Order 13006 directing the GSA and other Federal 
agencies to utilize and maintain historic buildings and 
districts when making location decisions.
    The GSA, and in fact each Federal agency, has a 
responsibility to protect and utilize historic buildings and 
districts. Importantly, Executive Orders 12072 and 13006, as 
well as the National Historic Preservation Act and the Public 
Buildings Cooperative Use Act expressly link the Federal 
Government's historic preservation responsibilities with an 
affirmative obligation to consult with and consider the views 
of local government, community leaders, and other interested 
parties.
    Despite these mandates, the GSA has had an uneven record of 
community involvement and historic preservation. To its credit, 
in Savannah, GA, the GSA has involved local input early and 
often in a Federal courthouse project set in a historic 
district.
    For example, the GSA appointed Savannah preservation 
experts as jurors in the ``Design Excellence Program,'' 
competition that will select the architect for the project.
    In Wilkes-Barre, PA, the GSA converted a historic brewery 
into a new 120,000 square foot Federal agency complex. The 
project is viewed locally as the foundation for economic 
revitalization of downtown Wilkes-Barre, and GSA is seen as a 
valuable partner in the community's redevelopment.
    However, the GSA missed an opportunity to demonstrate the 
cost-effectiveness of preservation in a historic downtown area 
of Clarksburg, WV, when instead of actively pursuing a 
preservation solution, the GSA decided to consolidate Federal 
offices into a new building.
    In Salt Lake, GSA proposes to construct a new annex to the 
Federal courthouse; and although the Federal courts will remain 
downtown, the project may have an adverse impact on several 
historic resources, including the Odd Fellows Building and 
courthouse itself, both listed on the National Register of 
Historic Places.
    In Butte, MT, GSA is seeking to lease new space for their 
Federal Military Entrance Processing Station, which serves the 
State of Montana. This leasing action may result in the 
abandonment of the Federal agency's longtime home in the 
historic Finlen Hotel and relocation of the facility outside 
the uptown area, Butte's traditional commercial core, a 
historic district which is a designated national landmark.
    We would like to make several recommendations that we think 
would help implement the goals of 13006. No. 1, President 
Clinton signed the Executive order in May 1996; however, 2 
years later, the GSA still has not issued any formal guidance 
on how it should be implemented.
    As the Federal Government's main landlord and real estate 
developer, it is incumbent upon the GSA to show clear 
leadership in realizing the practical benefits of the Executive 
order in the field.
    No. 2, the GSA and all Federal agencies must systematically 
reform policies and procedures that impede the use of historic 
buildings for Federal office location.
    Even though Commissioner Peck commented that GSA does not 
necessarily select locations on price alone, historic buildings 
don't often reach that level. They're sent out of the process 
early on because they don't meet the performance bids as set up 
by the Federal agencies.
    The GSA employs an acceptable reinvestment level policy, 
which is unusual in terms of the public sector/private sector 
historic preservation activity in this country.
    The GSA requires that renovation of historic structures 
must be 40 percent less than the cost of new construction. 
Whereas, in most cases we're just trying to be the same cost as 
new construction, not less.
    They often require Class A office space. In most cases, in 
many communities like Denver, Class A office space, by 
definition, is a new building.
    There is an interior-pounds issue that is often raised, 
that historic buildings cannot meet if they don't proceed 
through the process.
    We also believe that, at the minimum, the GSA must require 
training for GSA staff and should offer training opportunities 
for other Federal agencies to assure that the Federal 
Government meets its statutory historic preservation 
responsibilities.
    However, more important, GSA should provide its own staff 
with the training and the guidance necessary to promote 
widespread use of practical, entrepreneurial real estate 
development methods that have made the rehabilitation and 
adaptive use of the historic buildings a successful tool for 
downtown revitalization by the private and public sectors all 
across the country.
    Finally, we recommend that Congress codify Executive Order 
13006. There is a bill in Congress introduced by my 
congressman, Congressman Joel Hefley from Colorado. It's H.R. 
1522. It's part of the Historic Preservation Fund 
Reauthorization, and it includes the language of Executive 
Order 13006. We support this bill.
    Senator Baucus, thank you for this opportunity to testify.
    Senator Baucus. Thank you, Barbara.
    Jack Lynch, chief executive, Butte-Silver Bow.

STATEMENT OF HON. JACK LYNCH, CHIEF EXECUTIVE, BUTTE-SILVER BOW 
                       COUNTY, BUTTE, MT

    Mr. Lynch. Thank you, Senator. This microphone provides me 
with an opportunity, since everybody has been so serious today, 
to tell you a little story.
    Recently I was out giving a welcome at the Montana Tavern 
Owners Association at the Copper King in Butte. As I got up, 
the microphone had given some problems, and the Tavern Owners 
Association was gathered all around the side of the very large 
conference center there. They have all the vending machines, 
the poker machines, and all the wares for video gambling on 
display, and the Tavern Owners are playing them.
    They also had all of the beverages that are available for 
consumption in local taverns available there on a sample basis, 
so it was a very happy-go-lucky crowd. I came in. I spoke for a 
couple of minutes of welcome. I finished my comments, I stepped 
off the podium, and one of my assistants who was with me on the 
way to another meeting said, ``Jack, the microphone didn't 
work. We never heard a word you said.''
    I didn't go two feet further when a local tavern owner came 
up to me and said, ``Jack, that's the best speech you ever 
gave.''
    I think that deals, in a sense, with perception, and I, 
first of all, very much want to express my appreciation to you, 
Senator, for scheduling this meeting here and for identifying 
what has the potential to be a serious problem for a lot of 
communities in this State.
    I also want to thank the representatives from GSA for being 
here. I don't want to give the impression I'm piling on, having 
been in the situation that you now find yourselves in, myself, 
on previous occasions, but I do think that what you've heard 
today is something that should concern you.
    I think that the exercise we've gone through in Butte-
Silver Bow, which Mrs. Fine will detail, is an excruciating 
chronological history of our interaction with the GSA, and it's 
something that should cause all of us a great deal of concern.
    Those of us that are elected officials, our ears pick up 
when I hear the commissioner talk about tax, fair 
accountability, respon-

sibility, the best deal, for those are also the guidelines that 
we work under as local elected officials; and oftentimes 
without the vast resources of the Federal Government, it's 
every bit as challenging, or equally challenging, to make ends 
meet.
    The difficulty we've had in our community is dealing with 
the GSA. And as I sat here and listened to all the comments--my 
written testimony has been submitted, and I'm deviating from 
that to the greatest extent possible----
    Senator Baucus. I can tell.
    Mr. Lynch. I just wanted to comment on what I heard today 
and some suggestions that might improve this interaction 
between local communities and Federal Government, and in 
particular, the GSA.
    As I sat and listened I thought: What can this be likened 
to? The image that I conjured up, and I hope everybody has had 
an opportunity to see it, is National Lampoon's Vacation. In 
that movie, and I hope you've had the opportunity to see it, 
Senator, the Clark W. Griswold family was going to Wally World, 
come hell or high water. The whole movie is about the efforts 
of this family to get to Wally World, regardless of the 
difficulties they encounter. And it was the most circuitous and 
convoluted and circumvented way to get to a destination that 
one could ever undertake.
    It's a humorous movie, but there's a point in my reference 
to it, and that is the fact that in this exercise of citing 
Federal lease facilities in our communities, the GSA has become 
our Clark W. Griswold. We have a sense that you know where 
you're going, and regardless of what you have to drag our 
communities through to get us there, that is where we're going.
    It's a concern to us. I think in large part, it's 
concerning because, perhaps, being as distant as you are, you 
don't recognize the impact of these Federal facilities in our 
communities. They're important. They have a great economic 
impact, and in the case of all the communities, in preservation 
of our historic districts, they're critical that we maintain, 
to the best of our ability, the integrity of those districts 
and continue to operate those Federal facilities in those 
districts.
    I feel like the odd man out here in a sense because at 
least in Billings and Helena, I heard that the GSA spoke to 
local officials, local elected officials. That is not the case 
in Butte. At no time until today had I seen anybody from GSA, 
and you really look normal. I had expected, given some of the 
things I had heard in the courthouse about the GSA, that I 
could expect to be dealing with monsters, and I don't think 
that's the case.
    I am particularly interested in focusing on some of the 
comments of Commissioner Peck as he opened relative to 
responsibility to the mission of the GSA and to the commitment 
of small towns across America and to communities, large and 
small.
    I echo everything you said, I support everything you said, 
and I'm in complete agreement with everything you said. The 
responsibility and the task you have at hand is to take that 
mission statement, to take those Executive orders, to take that 
compliance, to take that idea of concern for communities and 
have that mission statement brought to fruition through the 
GSA.
    The only other thing I'd add to the comments that have been 
made is that in our community, you need to understand the 
history of the community to understand the struggles we've gone 
through.
    Our community is a very old community. It was founded in 
1864 by nine miners from Bannack and Virginia City looking for 
silver. Subsequently, we became the leading mining community 
for copper in the United States. We take great pride in the 
fact that we contributed significantly to the industrial 
development of the country, to the electrification of the 
country, and to providing the basic materials for all of our 
wars.
    As a result, we've had some extremely difficult times. We 
lost underground mining when all of the mines and all of our 
smelting operations were closed, and overnight, our community 
and our sister community of Anaconda lost 5,000 blue-collar 
jobs. We had 20 percent unemployment. We lost half of the 
taxable value of the community.
    Since then we have struggled. We're at a point now where 
every economic indicator in our community is pointed straight 
up. We are, although this isn't the forum, the site of a new 
$520 million polysilicon production facility that has potential 
for our community much like the mining that took place in the 
last century; but it hasn't been easy.
    We have struggled against odds. We have looked at diversity 
everywhere we've turned. Throughout it all, we have attempted 
to maintain the integrity of our historical district.
    We now find in our dealings with GSA that that effort and 
that work and those hard undertakings seem to fall on deaf 
ears.
    One thing I point out, and I point this out in closing, but 
again, in our community, the most difficult things to deal 
with--I think there are two things. First of all is the family 
of the complex who is here today who have invested, for a 
number of years, significant dollars in making that a suitable 
facility to house the Military Entrance Processing Station.
    If we look at the activities of the processing station in 
terms of their quotas and their goals is the fact that it's one 
of the best stations in the country for what it does, I think 
speaks to the facility they're in. I think the fact that there 
are no less than six of those MEPS employees here today to 
observe these proceedings and to offer their support for the 
existing facility also says something about the quality of it.
    In addition to the financial commitment that the family 
that owns the complex has made, they have also invested 
countless hours of sweat equity in making that facility what it 
is, and I think, too, in terms of the partnership that's been 
proposed in an effort from the community's perspective, 
recognizing the importance of that uptown location and the 
effort that's been ongoing to make it suitable for Federal use, 
we offered early on to make $400,000 available in the form of a 
low-interest loan to the family that ran that complex in order 
to meet all of the requirements that the GSA set forth.
    My understanding is that those efforts, as well as the 
money, didn't impress GSA and they went about on the track that 
they had established for themselves to locate that outside the 
uptown.
    And I'll confuse you further; when everybody talks about 
their historic districts, they talk about the downtowns, and we 
talk about our uptown. But we wanted to maintain that complex 
in the uptown area. We expressed a willingness to partner with 
the landlords to satisfy the GSA, and it didn't work.
    But my only suggestion would be that the agency do what I 
heard the Commissioner say at the beginning of his 
presentation, and that is, adhere to the mission policy, comply 
with the Executive order, and work with local communities in 
determining where those facilities could be cited.
    I think, then, none of us would have to participate in what 
I referred to earlier as a sense of fighting on, because we 
don't want to do that. We want to work with the Federal 
Government. We want to establish partnerships that work for the 
benefit of all of our communities, and we want to see that 
those Federal facilities and those Federal employees, whose 
future and location is so certain, don't have to deal with that 
uncertainty and those questions.
    Again, Senator, my sincere thanks for bringing everyone 
here; and to your folks from GSA, we truly do appreciate your 
being here, and hopefully we can all benefit from this 
experience.
    Senator Baucus. Thanks a lot, Jack. I appreciate it very 
much.
    Next is Colleen Fine, the director of Urban Revitalization 
in the city of Butte.

   STATEMENT OF COLLEEN FINE, DIRECTOR, URBAN REVITALIZATION 
                       AGENCY, BUTTE, MT

    Ms. Fine. Good morning, Senator. Thank you for giving us 
the opportunity to speak before you.
    I'm Colleen Fine, the director of the Urban Revitalization 
Agency in Butte-Silver Bow.
    The URA is a tax-increment district specifically designed 
to assist economic development activities which lead to 
continued promotion and development of the URA. The URA is 
included in the Butte National Historic Landmark District.
    I apologize that my comments are not solution-oriented, but 
they're important to document our efforts at implementing a 
Butte-Silver Bow Good Neighbor policy and the way we were 
treated as a result of that.
    It is my understanding that the MEPS leasing process began 
in September 1996, although Butte-Silver Bow officials did not 
participate in this process until September 1997.
    On September 25, 1997, I was introduced to GSA officials at 
a meeting in the Federal Courthouse in Butte. The meeting was 
convened at our request to discuss Butte-Silver Bow concerns 
relative to the leasing process. During the meeting, I 
expressed our displeasure at not being involved in the process 
to that point.
    As Jack pointed out, we were never contacted. How GSA 
determined our central business district, we don't know. They 
didn't contact us. So our concern was our not being involved 
and the lack of adherence to the National Historic Preservation 
Act and Executive order and at the process in general.
    After a lengthy meeting with GSA and MEPS personnel, Butte-
Silver Bow officials, State Historic Preservation Office, and 
the National Trust officials left the meeting with the 
following under-

standing. We attempted to work with these folks. We met with 
them. We left the meeting with this understanding:
    GSA would work closely with local government officials in 
the process; GSA would reopen and readvertise the MEPS' leasing 
in the National Historic Landmark District providing clear 
indication that the buildings in the National Historic Landmark 
District would have a preference and detailing specifically 
what that preference was; GSA would allow local comment on the 
SFO; GSA would request that MEPCOM reconsider criteria 
considered to be detrimental to historic structures; and GSA 
would provide a detailed explanation when a historic structure 
was excluded.
    The meeting concluded with the agreement that the next step 
taken would be a written review of the SFO by Butte-Silver Bow 
officials. Following the September meeting, GSA actions were 
completely contrary to the promises they made. GSA said they 
would work closely with local government officials in the 
process.
    GSA officials kept Butte-Silver Bow staff completely in the 
dark. Butte-Silver Bow initiated virtually all communication 
regarding the leasing process. Phone calls to GSA were not 
returned. Requests for information were completely ignored.
    By early November, Butte-Silver Bow had not heard anything 
from GSA, either by phone or in writing, regarding our comments 
on the SFO or what the next step would be. I sent a letter 
expressing my concern that local officials had not heard from 
GSA. That letter was not acknowledged, and the phone calls 
again were not returned.
    At that time, I sent it over to your field office in Butte 
for their assistance. It was only through their intervention 
that Butte-Silver Bow learned what was going on. Again, we were 
promised better communication with GSA.
    For nearly a month we heard nothing from GSA. Then on 
December 16, 1997, I learned that GSA was conducting a market 
survey tour in our community. This news took me completely by 
surprise. I had no idea what GSA was doing or what their 
process would be, but quite obviously, Butte-Silver Bow staff 
were not asked to participate.
    I contacted GSA immediately but the leasing agent was not 
available and did not return my call. On Wednesday, September 
17, I again attempted to contact GSA regarding the schedule 
while in Butte. The leasing agent was out and I left a voice 
mail expressing my concern. I attempted to contact her 
supervisor, but was not successful.
    I then contacted that supervisor's supervisor. The 
secretary took a message and said that he would call me back. 
When I left work that evening, I had not heard from GSA. The 
next morning I called again, and the same secretary asked me 
for my name. I stated that it was Colleen Fine from Butte. She 
told me that the leasing agent would be calling me back.
    Her tone and response indicated to me that my name was 
marked and I would not be allowed to speak with higher level 
GSA officials.
    When the leasing agent finally called, she stated that it 
did not occur to her to include me in the market survey tour 
since I knew the buildings in Butte so well. I reminded her of 
GSA's promise to work with local government. I felt she was 
specifically excluding me.
    The market survey tour was scheduled for December 23. She 
stated she could not change that. After considerable juggling 
on our part, Butte-Silver Bow was able to have a staff member 
attend the market survey. However, GSA's treatment of that 
staff member was incredible.
    Mark Reavis, our historic preservation officer and staff 
architect, was not allowed to communicate with MEPCOM 
officials. The leasing agent specified a time and place for Mr. 
Reavis to meet the tour. His offers of a Butte-Silver Bow van 
and chauffeur services were refused.
    During the tour, Mr. Reavis would be prevented from having 
any personal contact with MEPCOM officials. He was kept 
physically separate from everybody else on the tour. He was not 
allowed to have a cup of coffee or go to lunch with the people 
on the tour. He was not allowed to know what the sites being 
reviewed were until just before the scheduled time. The irony 
of this is that both Mark and myself knew every single location 
independent from GSA prior to this tour being scheduled.
    As the designated representative of the hosting local 
government, his treatment by GSA staff was rude and demeaning. 
The contempt GSA felt for our attempt to be involved was 
palpable in that market survey tour.
    GSA promised it would reopen and readvertise the MEPS 
leasing in the Landmark District while providing clear 
indication that the buildings in the National Historic Landmark 
District would have a preference and detailing specifically 
what that preference was.
    I left the September meeting with the clear understanding 
that GSA would work with Butte-Silver Bow in this process. 
Butte-Silver Bow would provide mailing labels from our own data 
base, and GSA would produce a mailing to reopen the process for 
buildings in the National Historic Landmark District.
    This was agreed to because GSA, at its own admission, did 
not provide adequate notification of preference for the 
Historic District. I requested the opportunity to do a joint 
mailing with GSA. I wanted documentation of the URA's financial 
commitments to be included with the document GSA was preparing.
    When I wrote about the joint mailing, a GSA official called 
me and told me GSA would not be doing a mailing. GSA stated 
that any mailing would be done by Butte-Silver Bow, but GSA 
would provide us a flier.
    This caught me completely by surprise since at no time was 
this ever discussed or asked to--they didn't ask us to do this. 
Given the extremely short turn-around time for this process, as 
well as the upcoming holiday, I felt the best thing to do was 
to continue in an attempt to try to work with GSA.
    The flier was received in the form of a fax and, as such, 
was not suitable for distribution. It was retyped verbatim. The 
flier was duplicated and sent to property owners in the 
district by my agency at our expense.
    Additionally, my agency, DURA, placed an ad in the local 
paper indicating that lease space was available and for 
individuals to contact us for further information.
    The deadline for submission was set, the fliers were 
mailed, and the ad ran. This process provided developers with 
12 days to respond. That included the Thanksgiving holiday and 
weekend.
    GSA promised to reopen and readvertise the MEPS leasing. 
GSA may have allowed new proposals from outside the district to 
be included as well. My understanding from the meeting in 
September was that only sites in the National Historic Landmark 
District would be considered since this area was not given 
adequate notice of the preference.
    Every time these points have been made to GSA, the result 
has been increasingly more detrimental to the Historic 
District.
    GSA did not produce a mailing, did not prepare fliers, and 
did not advertise in local papers. Butte-Silver Bow performed 
these activities. GSA pledged it would allow local comment on 
the SFO. Butte-Silver Bow was allowed to comment but those 
comments fell on deaf ears at GSA. These comments were 
acknowledged by GSA and dismissed out of hand. We have no 
documentation that our comments were passed on to MEPCOM, and 
if they were, we do not know how our comments were portrayed.
    GSA stated it would request that MEPCOM reconsider criteria 
considered to be detrimental to historic structures.
    Butte-Silver Bow does not have firsthand knowledge that our 
comments were passed on. GSA's summary of MEPCOM's response was 
that MEPCOM believed they offered adequate concessions and 
would not consider additional modifications.
    GSA stated it would provide a detailed explanation when 
historic structures were excluded from consideration. To this 
date, this has not happened, though I do understand from 
several developers that their buildings have been excluded.
    My main concern regarding this process is the lack of trust 
local officials now have regarding GSA. This is a direct result 
of the tactics employed by GSA staff.
    Montana has one of the most liberal, open government 
philosophies in the country. This idea is an overriding tenant 
of our constitution. Those who operate the government in 
Montana are used to open, honest, and critical review of our 
work. Both the Montana Open Meeting Law and the Montana Open 
Records Law indicate that citizens of this State want to be 
well-informed regarding the operation of government at all 
levels.
    This does not work well with the type of operation 
conducted by GSA in our instance. Local officials and citizens, 
as well, have been kept in the dark, treated in a less-than-
respectful manner and have literally had to beg to be included 
in the process.
    When Butte-Silver Bow first became aware of this project, 
all local government officials wanted was to ensure that all 
regulations were followed and that the National Historic 
Landmark District was given a fair opportunity on an even 
playing field. That very opportunity is provided for by 
Executive order.
    It may very well be that this is an above-board process. 
Unfortunately, it is very difficult to believe, given the 
prejudicial treatment of local officials in the National 
Historic Landmark District. The more Butte-Silver Bow has asked 
for involvement, openness and honesty, the more secretive and 
hostile the response has been. At this point in the process, it 
is clear that GSA has completely lost its objectivity and sense 
of fairness in Butte.
    One of the major goals of our recently revised and adopted 
Community Master Plan is the continued redevelopment of uptown 
Butte. As an economic development objective, it serves several 
vital purposes. The strength of any local economy is mirrored 
in the treatment of its older urban areas. How we treat these 
areas reflects our values and hopes.
    Uptown is a living, breathing, vital place indicative of 
the spirit and heart of this community. Ensuring its strength 
is the first step in maintaining a strong local economy. The 
Federal Government has a unique opportunity to create a 
mutually beneficial partnership along with local government 
officials and private developers.
    This partnership would allow the Federal Government to 
significantly address community goals. The opposite 
consideration is equally dramatic. If the Federal Government 
chooses to leave the uptown, the perception left would be one 
of abandonment. I think this is exactly the wrong kind of 
message the Federal Government should be sending about the very 
heart of our community.
    As the Director of the URA, the economic development office 
for the Butte National Historic Landmark District, I am not 
now, nor have I ever asked for special consideration. I am 
asking GSA to honor the promises made to our community. I am 
asking for a fair process utilizing objective, quantifiable and 
justifiable criteria available to all parties beforehand in a 
written format.
    For this project in our community and for future projects 
throughout the country, my sincerest hope is that the Federal 
Government seeks to secure space in a fair, open and honest 
manner allowing for all parties concerned to meet their 
mutually agreeable goals.
    Senator Baucus. Thank you very much.
    I'd like to ask each of you--we don't have much time here, 
so I urge you to be very brief--to react to any of the comments 
that either Commissioner Peck or Mr. Prouty made that are 
constructive, to kind of help resolve the current problems and 
set up a procedure, or follow-up procedure of some kind so we 
can minimize any future potential problems.
    You heard the testimony and you heard some of the questions 
I was asking. Here is a chance for you to react to any of that 
in, obviously, a constructive way.
    Mark.
    Mr. Kennedy. There's lots I could probably respond to, but 
I think the thing that jumps out at me right away is, as I look 
at the Good Neighbor policy we have in front of us that we're 
trying to work with here, it talks about local government 
officials. I think in our situation, we had a little bit of a 
dropping of the ball by a local official who was a staff 
member, and not an elected official, and I took exception to 
that. I've done what I can to try and correct that situation, 
but I think the term ``local official'' is too broad.
    The Mayor from Helena, I think, also expressed that we're 
elected officials. We are the ones that do take the heat. A 
staff member who is no longer on the staff is gone now, and 
that person isn't accountable anymore. That's a frustration 
that I have that I've seen throughout this whole process.
    Senator Baucus. I appreciate it.
    Anybody else? Colleen.
    Mayor McCarthy. I just wanted to say that we have 
established a single point of contact within the city, which is 
Dennis Taylor, our city manager. All correspondence is to go 
through him. He has been speaking regularly with Julie Millner, 
who was working that issue with the FHA and the USGS moving 
out, but she is not the person responsible for working the 
issue of the lease, the long-term lease and extension of the 
boundary. We didn't know until today that Malia Ringler was 
that contact person. I don't believe I've gotten any, if 
anything, maybe one call since October. There's no followup.
    Senator Baucus. That's a good point. She's basically saying 
that Helena has one contact person, and the GSA should have one 
as well who can speak with authority. That's a good point, so 
the right hand knows what the left hand is doing. That's a very 
good suggestion.
    Ms. Fine. I guess in our case I'd like to point out that, 
had the leasing agent contacted local government right away, 
she would have learned that this is one of the larger National 
Historic Landmark districts in the country, which would have 
completely changed the tactic.
    When they defined the boundaries originally and created 
this Federal business district, and then they kept going even 
larger and larger, had they stayed within the Federal business 
district, provided adequate notice of the preference for 
historic structures, we wouldn't be in this larger area.
    So had they contacted us, and even had they contacted SHPA, 
the State historic preservation office, we wouldn't be in some 
of the painful things we're in right now.
    Senator Baucus. Any other suggestions?
    Mr. Kennedy. One thing a business might do in this instance 
is, it's possible to reassign some new people without the prior 
histories to these efforts to communicate with local government 
and people in the downtown areas. I think that could go a long 
way toward smoothing over some of the efforts, and to make a 
clear and overt attempt to begin negotiations and discussions 
with the city governments; and I think that will result not 
only in a politically sound decision but will result in a 
better deal financially for GSA and the government.
    Mr. Schultz. I guess I'd like to add, though, to what 
everyone is saying, that what we need is to sit down and talk 
about this. We need to talk about BLM, but we need to talk 
about other Federal agencies that are affected. We'd really 
appreciate that.
    And also, any further decisions on BLM, I guess we need to 
find out where you specifically are with that.
    Senator Baucus. OK. I think that this has been very 
helpful. I want to thank you all very, very much for your help 
here. We're making some progress. At least I hope so. I can 
feel it starting to gel a little bit here. Thank you again. If 
you don't mind, Bob, Paul, if you would come back again.
    [Recess.]
    Senator Baucus. You've heard the testimony of those folks 
that are directly affected, obviously doing the best they can 
representing their communities under somewhat difficult 
circumstances. I'm just curious what you've heard--what you've 
learned and what we might do to, from your perspective, resolve 
a lot of this.
    Mr. Peck. I'll try to be real brief. Obviously, I'm 
concerned about what I'm hearing because if even--obviously, 
people have different sides here, things different ways; but 
what I hear is that we have not, in these three communities, 
met our own standards in dealing with the public.
    I'm very disappointed because I have--my family has a very 
long tradition in government and in the military, and we have a 
very high public service standard. I'm very personally 
distressed when any action with which I'm associated and with 
which GSA is associated helps create a lack of confidence in 
the government, because I have a strong feeling, as do 
apparently all people on the panel, that government is here to 
help people, and that's our job.
    I will say this. I have a couple of suggestions. No. 1, I 
should also note that having seen National Lampoon's Vacation, 
I hope I'm not being compared to the grandmother who passed 
away and was carried on top of the station wagon for 700 miles.
    Senator Baucus. How about the dog?
    Mr. Peck. I was afraid of that. And I prefer Matt Lauer to 
Chevy Chase.
    [Laughter.]
    Mr. Peck. A couple of things. One is, I think Mr. Kennedy 
just brought up an issue which, by the way, we have been 
concerned with. It is why you can't set hard and fast rules. 
One question is, who are the local officials with whom you 
should be in contact?
    I think one of our problems, as I understand it, in Butte 
may have been talking to one local downtown group and not 
another. That's not an excuse. We have said to our folks, and 
we're trying to do training on this with people who have not 
been active in civic affairs, that there are a lot of players, 
stakeholders, in downtown. That includes elected officials, 
appointed people, downtown business groups, Chamber of 
Commerce, Historical Preservation groups.
    There are lots of people to touch base with, and you've got 
to touch base with all of them. That's something we need to do 
a better job on.
    The second reason you can't do a one-size-fits-all, in some 
areas we've been told ``It's only the mayor you can talk to.'' 
In other places we've been told, ``Don't bother the mayor. Talk 
to the planning director.''
    So it's our job to find out who it is that the city wants 
us to work with and who else we should be talking with. We 
clearly need to do a better job of figuring out who is--who it 
is we should consult with. I mean, you can consult widely and 
not narrowly.
    Although the Federal constitution doesn't have the same 
kind of open-meeting requirements that Montana has in its State 
constitution, we clearly believe that we should operate in the 
open and that we need to involve people openly as much as 
possible.
    Two other suggestions, and then I will turn it over to 
Paul. One is that it is very important to us, and we have 
realized this. I can tell you that in every situation I've 
found in which there is some difficulty, one of the problems 
we've had is that the local--that our local officials often--
and I think in the interest of doing their job, without 
bothering other people, tend to go to meetings without the 
clients around, our Federal agency clients. It only helps 
engender miscommunication when we don't have the actual folks 
who are setting the requirements also sitting down with us and 
with local people saying, ``Here's what's going on,'' for two 
reasons.
    One is that the clients need to hear directly what the 
local people think, and local people also need to hear directly 
what the Federal agencies are talking about. Sometimes I know 
when an agency says, you know, ``I can't meet this requirement 
in the historic building,'' the historic folks can say, ``I'll 
give you three instances where it's worked. Why don't we go 
take a look and see if it would work here.'' I think that's a 
suggestion.
    Finally, it's interesting, you know, Senator, being in 
Washington. I go places, and when I go to meetings in 
California they are also convinced that Washington is not at 
all concerned with California.
    One of the things we have done to try to make that better 
is to devolve as much responsibility from Washington out to the 
region so at least we don't have the way the government used to 
be some years ago where everybody was always calling Washington 
to get permission to do something.
    We tell our folks they don't need permission to do 
something. They really need more permission to say no. And 
saying yes is what we really try and get to.
    I do understand. Montana is a small State. It can feel 
isolated. None of us wants anyplace in the Union to feel that 
way, and it is incumbent upon us to do a better job, 
particularly with small towns where we don't have the presence 
of all of our forces, all of our leasing people to get the job 
done.
    One thing I would like to turn over to Paul Prouty to talk 
about is the question of how we proceed from here, specifically 
with respect to some of these suggestions. We don't want to try 
to get into a point-by-point rebuttal. We want to not 
completely forget the past. We don't want to start from zero, 
and we don't want this to take any more time than we have to, 
but we do want to figure out how we can make a cleaner start.
    Mr. Prouty. I've found this to be very informative. I've 
been in this office about 6 months. My sense is that we have a 
problem. That certainly has been magnified today. I felt like 
the dog there for awhile, but out of these kinds of situations 
come opportunities, and I think there is tremendous opportunity 
here.
    I think we were a regulatory agency before and we're not 
anymore. We didn't intentionally go out into the communities to 
talk to people because we didn't think that was our role; but 
for now in the business, it is our role and it is our 
responsibility and we're going to do it.
    In Billings we've made an award. We have a legally binding 
document. It is subject to litigation. The only commitment that 
I can make in Billings is, henceforth, we will talk to whomever 
you want and we will put somebody on it right now and we will 
have a discussion.
    We can't go back, but we can go forward. We have a lot of 
people going up there often and we will get your name to 
somebody. If you give us the name of a contact, we'll start 
meeting with you.
    In Butte--I don't even know what to say. We will have 
probably a different player. We will have a MEPS contact 
probably from Washington, a decisionmaker, and we will have one 
of our senior officials meet with you. We'll all get in one 
room and find a way to work that out.
    In Helena, I absolutely agree. We're probably going to need 
some help with the negotiations, and the city may be able to do 
that. We will decide very soon what that looks like, and either 
Sandy DiBernardo, who is right out here, or I will come up and 
we will start those discussions and we will do something that 
makes sense, although for the life of me, I wish I knew what it 
was.
    Some of it sounds very simple, but we have a challenge 
here. We need to get better information. As far as the seismic, 
we need to start talking turkey here, so we'll do that. If I 
can get, contact you or whomever, my office will contact that 
person and we'll start that discussion and set somebody in 
place who is a decisionmaker to make that happen.
    My commitment to you is that we also will get the agencies. 
There are a lot of agencies that have a lot of particular 
problems on where to locate. All of us have diminishing 
resources, so we're going to--you'll probably be seeing a lot 
of them too, but I hope some of them are here. If the MEPS 
people from Butte are here, you can help us out as well.
    Barbara, finally we have identified a person who is our 
primary contact for historical preservation, Lisa Purgey. She 
has a real strong bias, and that's why we put her in the job.
    We want to do the right thing. Those are my particular 
commitments. My long-term commitment is, it's a lot more fun 
when you have good partnerships and good relationships. This 
has not been a lot of fun for me today. It's been a learning 
experience. We're going to do better. I'm available.
    This move has not been the easiest one I've had to make 
because we've changed jobs, locations, had a baby, a new house 
and all this stuff, but I'm ready to do it. We'll get started.
    Senator Baucus. When do you think you can get the meeting 
put together with GSA and MEPS?
    Mr. Prouty. We aren't quite as stupid as we've been 
portrayed, although I would certainly wonder on occasions, but 
I called MEPS before I came here because I said, ``I know 
what's going to happen here and I know you're playing in this 
one.'' They agreed that we would talk when we get back to the 
office tomorrow and we'll set it up. We're talking a couple of 
weeks on all these, to get them started.
    Senator Baucus. Can the public be involved in that at all?
    Mr. Prouty. Sure. What the hell. I'd like to have them hear 
this, too.
    Senator Baucus. You can put out a public notice.
    Mr. Prouty. What I need to do is I just need to talk to the 
MEPS people and talk to city officials and find out when we 
need to get somebody there.
    Senator Baucus. Colleen was speaking about Urban Renewal 
and how much this part of Helena has changed. It's true. The 
street out here, Cruse, it doesn't go anyplace except the 
Federal Building, basically.
    It was designed and built for that purpose. It is very 
expensive and there was a lot of infrastructure that was built 
here for that purpose on the realization and the hope and 
promise and expectation that the Federal Building would be 
here, and that's what created the need for all the 
infrastructure. It's very--it's a very important point, and I 
hope you realize how unfair it would be to just pull out lock, 
stock and barrel.
    Mr. Prouty. I must tell you a side issue. I knew I would 
live long enough--I was one of the ones that took a beating 
when we had the fiasco getting the Federal Building here. I 
knew I would sit in a meeting sometime before I died with 
somebody saying how wonderful it is and how we must stay.
    Senator Baucus. Another question I had is about BLM and 
wareyards. Does BLM always require a wareyard?
    Mr. Prouty. We asked that question as well. They were the 
ones who held firm to that requirement. That's not the only 
offset or requirement. I think it's four to six or something. 
We pushed real hard on that to make sure it was a legitimate 
requirement.
    Mr. Peck. Let me tell you what we have done in other cases. 
Again, I won't name the agency, but one of the advantages of 
being a national organization is when an agency does ask you 
about, say, they have a certain requirement. We have had 
negotiations in which I've said, ``Well, I've checked around 
our regions and discovered that,'' for example, in one case an 
agency in Region 1 said they would only locate downtown. At the 
same time, they were trying to tell us in Kansas City that they 
couldn't be in the downtown area. So we sort of were able to 
shed some light on those things.
    Those are very difficult, and like I said, you're always 
trying to figure out, do you have a real requirement or is it a 
subterfuge for some preference which we're not allowed to take 
consideration of.
    Senator Baucus. Barb Pahl mentioned that no guidance has 
yet been issued under the Executive order. Is that coming soon?
    Mr. Peck. The guidance under 13006----
    Senator Baucus. Is that seismic?
    Mr. Peck. No, the historic preservation. We have interim 
guidance. We issued some interim guidance, we call it, on 
Executive Order 13006 to all of our people, which also 
incorporates, again, the downtown policy in general, and then 
makes it more specific about historic buildings.
    We've not made it final, quite honestly, because I haven't 
seen a draft yet which makes me confident that it will do the 
job. What we have done is taken the interim guidance out and 
started training our employees on it.
    Second, Barb also mentioned that under 13006, we are 
required to review--all Federal agencies are required to review 
their policies to make sure they don't have restrictions in 
their rules, like on our solicitations, that would, for no good 
reason, not give historic preservation our consideration.
    I will say, very honestly, I'm in charge of this agency. I 
have kicked back a draft that I saw because I thought it was 
namby-pamby and wouldn't do the job. It's being rewritten at 
the moment. I'm hoping to see another draft in a week or two, 
but I'm not going to sit still for something that gives lip 
service. So that's why we don't have the rules yet.
    Senator Baucus. What about having a designated single 
person fairly high up that Billings and Butte could talk with, 
etc.?
    Mr. Prouty. I'm going to get cards. I can see them coming 
out already, and we will call.
    Senator Baucus. One thing I would appreciate very much is 
if you could both, Commissioner or Mr. Prouty, keep me informed 
on a regular basis in writing of how the three projects are 
coming along. Obviously, the sooner we can resolve this, the 
better.
    Mr. Peck. We'll do that, yes.
    Senator Baucus. Or call me personally. In fact, I'd 
appreciate that. I'd like a personal call if you could.
    Mr. Peck. I'm up in front of your committee from time to 
time. I can't avoid you.
    Senator Baucus. Give me a call.
    Mr. Peck. I will.
    Senator Baucus. Thank you very much. Anything else you want 
to say?
    Mr. Peck. No. I'd like to say that, as always, I do spend a 
lot of time traveling, because you always have to get--
Washington is the last place you're going to find out what's 
happening, and it's important and hopeful and helpful, as 
always, to be out in the country and find out what's going on.
    I would also like to say I was very impressed with the 
panel, people who are devoted to downtown development. I must 
admit I'm an easterner, and it's wonderful to see people in a 
State like Montana, which we don't consider to be a terribly 
urbanized place back where I come from, to have so many 
advocates of good urban development and planning.
    Senator Baucus. OK. Listen to them.
    Mr. Peck. Absolutely. It's great.
    Senator Baucus. As I said at the outset, I don't want to go 
back and rehash who said what and so forth, rather, just to 
move forward and get these problems resolved and hopefully set 
up a better system under which GSA really consults with and 
talks with people here in our State on a much better basis than 
you apparently have in the past.
    Mr. Peck. I would like to come back next year for some 
celebration of successes.
    Senator Baucus. That would be very welcome. Thank you very 
much. That concludes the hearing.
    [Whereupon, at 12:40 p.m., the committee was adjourned, to 
reconvene at the call of the chair.]
    [Additional statements submitted for the record follow:]
 Prepared Statement of Hon. Max Baucus, U.S. Senator from the State of 
                                Montana
    I want to welcome everyone to today's hearing of the Environment 
and Public Works Committee. Today's hearing will focus on the 
coordination between the General Services Administration and local 
officials in the Federal building leasing process. My comments will 
brief so that we can have plenty of time to hear from all of our 
witnesses.
    For the benefit of those folks who are here from outside of 
Montana, I want to start by giving a very brief history of this area of 
Helena--which is my hometown.
    We are holding this hearing today in the heart of Last Chance 
Gulch. Gold was discovered right here over 100 years ago. Four miners 
from Georgia worked tirelessly to make the big hit. When they had 
exhausted all of their resources, their time was running out. So they 
decided to work diligently and took one last chance at striking gold. 
They did. And without their determination and grit, Helena, the Queen 
City of the Rockies, would still be a dream.
    So it is appropriate that we are in this location to discuss ways 
in which to improve the process of leasing Federal office space. The 
location of Federal office space within a community is an important 
matter. There are tremendous impacts from the decisions made with 
regard to leasing Federal office space.
    We have three Montana communities experiencing the same 
difficulties with the GSA. There seems to be a systematic problem with 
the coordination process between the Federal government and local 
communities. I do not believe that the process to date has been handled 
as it should have been. We are here today to discuss this problem and 
work to find solutions.
    I am afraid that sometimes the Federal government comes to town 
feeling it knows best--without regard to the thoughts of people who 
live in these communities. I believe GSA ought to reach out more to 
local folks. Local residents are a vast resource that the Federal 
government should tap. GSA should work with communities in order to 
understand their development plans and needs for the future.
    I believe we can resolve some of these issues. We all want to do 
the right thing for our communities and the Federal agencies involved. 
If we pledge to listen closely to all of our witnesses, we will be able 
to learn and improve the coordination process. And with that, we will 
improve the relationship between GSA and the residents of Montana.
    Again, I want to thank all of you here today. I look forward to 
hearing from our witnesses. We have a full slate, so let's begin.
                                 ______
                                 
 Prepared Statement of Robert A. Peck, Commissioner, Public Buildings 
                                Service
    Senator Baucus: I am Robert Peck, Commissioner of the Public 
Buildings Service (PBS), within the General Services Administration 
(GSA). PBS is the service responsible for providing real property asset 
management that enables Federal employees to accomplish their missions. 
PBS manages nationwide an inventory of 285 million square feet of 
primarily office, judicial and storage space, in over 8,000 buildings 
of which approximately 1,800 are government-owned. More than 200 of 
these owned buildings are on the National Register. Obviously, we have 
a very real presence in urban communities throughout the country, and I 
am pleased to appear before you today to discuss the commitment of the 
Public Buildings Service to the invigoration of the economic and civic 
life of the nation's cities.
    It is the goal of the Public Buildings Service to build on the 
Federal presence in local communities, to strengthen local partnership 
and participate in community revitalization initiatives. We have called 
this national effort our ``Good Neighbor Program''.
    This program is a way for PBS, through its existing legal, 
regulatory and contractual authorities, to undertake a broad range of 
civic initiatives in communities that support our mission to provide 
quality work environments for Federal workers and value to the American 
taxpayer.
    We offer space for cultural, educational, recreational or 
commercial activities, provide restaurants and shops open to the public 
on the major pedestrian access levels of Federal buildings, and host 
community events and activities in Federal buildings and plazas, under 
the auspices of the Public Buildings Cooperative Use Act of 1976. PBS 
also participates in downtown management districts, including Business 
Improvement Districts.
    In 1997 alone, we renewed over 800 leases in 500 downtown 
communities. We paid private lessors over $2 billion dollars, and we 
hosted more than 5,000 community events and activities in Federal 
buildings and plazas.
    PBS actively implements the President's Executive Orders 12072 and 
13006. GSA's has issued an interim rule for E.O. 12072 and an advisory 
bulletin on E.O. 13006. The interim rule provides guidance to Federal 
agencies to locate in Federal facilities in urban areas. The bulletin 
encourages the agencies to use a variety of methods in giving first 
consideration to downtown historic properties and districts. It is our 
policy to work with our customer agencies to meet their requirements to 
locate downtown, and it is our policy to coordinate directly with 
cities, urban interest groups, and local jurisdictions.
    It is important to understand, that when locating Federal agencies, 
first consideration is always given to central business areas and 
historical districts. We work with agencies to provide productive 
workspace. We help agencies refine their requirements in ways that 
encourage maximum competition among competing sources. Oftentimes, we 
can find space solutions in buildings that agencies, at first blush, do 
not think can meet their needs. In the end, market competition and 
creative space solutions result in good value to the taxpayer. If a 
local market cannot provide effective workspace at good value to the 
taxpayer within the central business area or the historic district, we 
must expand our search beyond those areas or districts.
    Our commitment to being ``Good Neighbor's'' is multifaceted. GSA is 
a member of the President's Council for Sustainable Development. In 
1997 GSA transferred millions in surplus federal property to local 
communities for public uses. We have entered into an agreement with the 
U.S. Environmental Protection Agency to assist communities to remediate 
brownfield sites in urban communities. Under Presidential Executive 
Order 12999, Computers-to-schools, GSA provides surplus computers to 
schools as part of this national initiative.
    Under our umbrella ``Good Neighbor'' Program all of these policies 
come together in a single focus, to make the federal presence a 
positive and active part of the community.
    This concludes my testimony, and I would be happy to answer any 
questions which you may wish to address.
                                 ______
                                 
 Prepared Statement of Paul Prouty, Assistant Regional Administrator, 
                        Public Buildings Service
    Senator Baucus: I am Paul Prouty, the Assistant Regional 
Administrator for the GSA Public Buildings Service in the Rocky 
Mountain Region. Our region includes the states of Montana, Colorado, 
Utah, Wyoming, North Dakota, and South Dakota. We manage 14 million 
square feet of space comprised of 582 buildings, of which 206 are 
Government-owned and 376 are leased. In Montana, we manage 1.3 million 
square feet in 29 Government-owned and 53 leased buildings. Two of 
these Government-owned buildings are on the National Register of 
Historic Properties, and six additional Federal structures are 
presently eligible.
    I am pleased to appear before you today to discuss the commitment 
of the Rocky Mountain Region to promote the housing of government 
agencies in the Central Business Areas and in historic structures and 
districts. Included in this process is our commitment to be a good 
neighbor by working with local officials and other interested parties.
    We are a significant real property services provider, and are 
fortunate to have top-notch employees who know the real estate 
business. Our program includes major construction and restoration 
projects. One of our recent historical renovations in Denver won the 
prestigious Presidential Design Award. Amongst GSA regional offices, we 
lead the nation in Small Business awards, and our programs contribute 
millions of dollars to the region, which includes an annual leasing 
investment of $7 million into Montana's economy.
    As the real estate broker for Federal agencies, our leasing process 
is triggered by the receipt of a request to locate a Federal agency or 
to continue their presence in a given community. After the agency has 
identified their requirements and a desired area for location, it is 
our role to consult with local arid city officials to determine how the 
requirement can best be integrated into a community plan. This is an 
evolutionary process which develops through a series of discussions 
with the client agency and community officials. These discussions take 
the form of meetings with public officials, chambers of commerce, 
representatives of the various historic interest groups, town hall 
meetings, and the like. Sometimes this process is accomplished with a 
great deal of ease. At other times there is not necessarily an easy 
match of agency requirements and available options in the community. 
Our skills continue to develop and the partnerships continue to evolve. 
We are determined to find better ways of dealing with communities and 
our customers, which will result in continuing successes that balance 
the interests of the Federal and local communities. This concludes my 
testimony.
                                 ______
                                 
     Prepared Statement of Colleen McCarthy, Mayor, city of Helena
    Good morning. I'm Colleen McCarthy, Mayor, city of Helena. I would 
like to thank Senator Baucus and members of this committee for allowing 
us an opportunity to discuss our experiences with the General Services 
Administration. During the past year we have become extremely 
frustrated and concerned with the lack of communication, 
misrepresentation and the actions of GSA officials. First, I would like 
to state for the record, those GSA representatives currently residing 
in the Helena area have been most helpful and understanding, our 
frustration lies with GSA representatives in the Denver office.
    I became directly involved in working with GSA representatives 
regarding the Helena Federal Building lease, almost 1 year. As mayor, I 
received a letter informing us GSA was considering lease renewal 
options on the existing Federal building. During our conversations with 
GSA officials, it became apparent, they would be considering lease 
options on buildings other than the existing structure and possibility 
areas outside the Central Business District. On May 20, 1997, I sent a 
letter to Polly Baca, Regional Administrator for GSA, advising her the 
consensus of the Helena City Commission, was that, GSA aggressively 
pursue lease options with the owner of the existing structure. I also 
clearly stated, if the decision was made to move from the current 
building, they must comply with Executive Order 12072 and relocate in 
the central business district.
    Between the dates of May 20 and August 1, correspondence between 
the Denver GSA office and the city of Helena continued through our city 
manager, Troy McGee. In late July, city manager McGee received a 
request from Julie Milner asking the city for permission to issue an 
RFP to pursue a warehouse location outside the Central Business 
District. Mr. McGee brought the request to the City Commission, the 
request was for a storage type building with few offices and minimal 
employees.
    In the spirit of cooperation, the City Commission granted approval 
for the RFP outside the central business district. Days after the 
approval, we learned that the true intentions of GSA were not only to 
find warehouse space but to also relocate two entire departments, the 
Federal Highway Administration and the USGS. Numerous employees would 
be relocated.
    When we challenged GSA's intentions and mis-communication, it was 
our city manager who was accused of falsely representing GSA's request 
to the city commission. After numerous conversations, GSA officials 
continued to insist our city manager had misrepresented their request. 
These allegations persisted, even after we provided documentation 
outlining their request and the city's position. I wanted to provide 
you with this one example of the lack of accountability and cooperation 
by GSA officials. This demonstrates just one of several examples of 
continued misinformation and frustration in dealing with their Denver 
office.
    I know my time here today is limited. However, as a representative 
of the Helena community I believe it is imperative my testimony clearly 
provides you with factual data that will support a decision, to 
aggressively pursue options, that will allow Federal employees to 
remain in the current Federal building or at minimum remain in the 
central business district.
    In the 1970's the city of Helena worked in cooperation with the 
General Services Administration to locate a new Federal building in 
downtown Helena. Here is a quote from the ``Findings of Fact'' from the 
Determination of Site Selection document:
          The city of Helena is aggressively pursing an Urban Renewal 
        Plan to revitalize the old downtown area and sees the new 
        (Federal) building as an integral contribution to their long 
        range goals. There has been no adverse reaction to the project 
        in the local community . . . the proposed site is an example of 
        inter-governmental cooperation to minimize socioeconomic 
        impact.

    I submit to you today, the Federal building continues to be an 
integral contribution to our long range goals as a community and in the 
downtown area. I find it ironic, this has turned into the worst example 
of inter-governmental cooperation and miscommunication.
    During Urban Renewal, the city of Helena invested millions in 
infra-structure to enable the construction and placement of the Federal 
Building in our Downtown. Street systems were redesigned and 
constructed, additional land was acquired to provide adequate parking 
and sewer and water services were extended, much at local taxpayer 
expense. Today, officials of the Government Services Administration are 
asking us to ignore the huge investment of tax payer money in the 
current building site. We simply cannot ignore the substantial 
investment local citizens and taxpayer's made over 20 years ago all in 
the spirit of cooperation and trust with the GSA.
    In 1976 President Carter issued Executive order 12072. He believed 
Federal use of space in urban areas ``shall serve to strengthen the 
Nation's cities and make them attractive places to work.''
    Currently, officials of GSA are not keeping with the spirit of the 
Executive order. Repeated attempts have been made to extend the 
boundary of the Executive Order without fully investigating the options 
available within the central business district. GSA has repeatedly 
asked the city of Helena to allow RFP's to be solicited outside the 
district. We believe this action is in direct conflict with the 
Executive order. An example of this conflict, is reflected in the fact 
that GSA has given little consideration to the traffic problems that 
will occur within our community if 300-plus employees are located 
outside the central business district. Even worst is the possibility of 
locating 300 plus employees in an area that is currently experiencing 
severe traffic congestion and safety issues. GSA officials appear to 
care little about potential traffic impacts and future infrastructure 
costs for Helena taxpayers.
    Lastly, I would like to briefly discuss the situation regarding the 
existing Federal Building. In a meeting with GSA officials on October 
30, 1997, they stated the current lease arrangement was a ``bad deal 
for government.'' However, they have repeatedly refused to provide 
financial data as to why this lease is a ``bad deal for government. ``
    On November 26, 1997 I was asked to address a group of concerned 
Federal executives currently working in a Federal building. During this 
meeting numerous employees expressed satisfaction with the location of 
the building in downtown Helena. However, many employees expressed 
serious concerns with perceived safety issues and the structural 
stability of the building. Currently, GSA officials are claiming to 
have documentation, in the Merrick Report, that substantiates $13-$16 
million dollars in identified improvements, including safety issues. 
However, the building owner hired an independent structural engineer 
who claims that the building IS structurally sound. The engineer 
identified only $7 million in improvements from the Merrick Report not 
$13-16 million.
    As a result of these conflicting reports, many of your Federal 
employees feel their safety is at risk. I believe, from the testimony 
you have heard here today, it is imperative you address the safety 
issues of these Federal employees above all else. No employee, whether 
they work in a high risk industry or a clerical position in the Federal 
Government, should feel their safety is at risk while on the job. It is 
the recommendation of the Helena City Commission that you require GSA 
officials to work cooperatively with the current Federal building 
owner, resolving the potential safety issues within the building and 
extending the current lease agreement, if at all possible.
    I would like to thank you for your time this morning. These issues 
are serious, the actions of GSA could have devastating impacts to our 
community. We are not Denver, Houston or even Salt Lake City. We are a 
small community of 35,000 people who still believe your word is as 
biding as a legal document and that government, whether it be local, 
State, or Federal is charged with protecting and preserving the 
communities we have all worked so hard to build and call home. Thank 
you.
                                 ______
                                 
 Prepared Statement of Mark Kennedy, City Council Member, Billings, MT
    Senator Baucus and Members of the Committee: I welcome the 
opportunity to provide testimony today regarding issues associated with 
Federal procurement processes for office space. I have been a Billings 
City Council Member for 5 years during two separate terms. I am a 
Billings restaurant owner and a small businessman. Previously, I owned 
a restaurant in the downtown Billings area and prided myself in 
contributing to the vibrancy of my community. With that experience, I 
feel that I am qualified to represent this important component of our 
city.
    In recent months, the Billings City Council and city staff have 
been involved in an important Federal Government decision that affects 
the future of the Billings' downtown. A government decision was 
recently made to award a contract for the construction of a new Bureau 
of Land Management (BLM) facility outside of the downtown area. Despite 
repeated efforts of local leaders to urge the consideration of a 
downtown site, the General Services Administration (GSA), acting on 
behalf of the BLM, has cited the requirements of the Competition in 
Contracting Act (CICA) as the reason for making a decision that deserts 
the downtown of the largest city in Montana.
    I am here today to express my concern for my community, its 
downtown economy and a questionable future brought into play by the 
actions of these two agencies. Their actions have left a bitter taste 
in the mouths of many Billings residents, including even some of our 
own Federal employees.
    I first want to comment on the requirements of Executive Order 
12072, an act signed in 1978 by then-President Jimmy Carter. At that 
time, he recognized the plights of urban cities and realized that the 
Federal Government must be a partner in helping the revitalization of 
America's urban cities. This executive order requires all Federal 
agencies to give primary consideration for their locations to be in 
central business areas. For the past several years, the city of 
Billings has been a partner with the Federal Government in meeting that 
goal. This has resulted in the recent completion of a new Federal 
office building in downtown.
    On this project, however, (GSA Solicitation No. 97-15), something 
has gone awry. Initially, a bid for facilities in the downtown area was 
solicited with only the current landlord providing a bid for services. 
This was not viewed favorably and it was identified that bidding should 
be opened for new sites throughout the Billings community. The 
Competition in Contracting Act was cited as the reason that new bids 
would need to be solicited.
    A meeting was held between Federal officials, Mayor Chuck Tooley 
and our City Administrator. Due to CICA, we were told there was no 
choice but to open bidding up to sites outside of the Billings 
downtown. This was the extent of Federal Government efforts to comply 
with Executive Order #12072. A later letter from our City Administrator 
(attached) asked for clarification of our community's ``rights'', but a 
response was vague and non-responsive.
    As a City Council Member, I ask myself if a vote of the Council 
would have made the difference in granting our community more time in 
which to respond. We had a developer from Massachusetts which expressed 
strong interest in a downtown site. However, other than a 2 week delay, 
the BLM/GSA process continued until an award was announced between 
Christmas and New Years. Merry Christmas indeed!
    Federal executive orders and contracting law are unclear as to what 
is the ``right'' of a community to object to the ``competitive 
removal'' of 200 jobs from the downtown area. What is the extent of the 
duty of the Federal Government to respond to the local community? These 
jobs are an important component of the downtown economy. However, no 
accountability was ever made by the GSA/BLM as to the ``costs'' 
associated with their move. We did see a projection of $9 million in 
savings over 20 years. But we, in Billings, can anticipate a glut of 
office space to arrive on the market after the completion of the newly 
awarded building.
    We can see local property owners lowering the rents of their 
facilities to compete with a new 56,000 square feet on the market. Some 
will ask for property tax value reductions affecting revenues of city 
government, county government, and our school district. Local 
restaurants that depend on a vibrant lunch crowd will lose, as well as 
small specialty shops along our streets.
    I also want to object to a process that deliberately ``specked 
out'' the Billings downtown. The BLM/GSA proposal required the adjacent 
location of a wareyard facility. Next to an office building containing 
over 130 regional ``white collar'' type workers, a warehouse work area 
was mandated to be included. This facility could not be located down 
the street or near the site, but must be directly connected and 
adjacent.
    This requirement created a direct conflict with city of Billings 
zoning code criteria. A wareyard facility is not allowed in the central 
business district, as in most American cities. The wareyard would be a 
facility to store posts, cables, vehicles, horse trailers, and surplus. 
I would liken this to building a Federal vehicle repair shop next to 
the Hart Senate Office Building in Washington. The types of uses are 
incompatible and don't mix! Given this situation, the local City 
Council was put in a situation of ignoring zoning law and create an 
infamous ``spot zoning'' situation to comply with Federal 
specifications. Due to 35,000 sq. ft. specifications of the wareyard, 
the BLM/GSA could not consider locating this material in an indoor 
facility. We even looked at the basement of the City Library, but it 
was only 20,000 sq. ft.
    The City and private sector have been involved in a year long 
process of planning for the ``Downtown Billings--Everyone's 
Neighborhood Project. Due to timetables, the BLM/GSA could not honor 
waiting for the completion of the project which was adopted by local 
governments in December, 1997, the same month the project was awarded. 
Billings now has a plan and government offices are an important part of 
it. In Montana, where many jobs are with Federal agencies, how can they 
not participate in local efforts? Isn't this contrary to the Executive 
Order #12072? Our community spent $300,000 in local funding for this 
effort, so it is not something that we take lightly. The Federal 
Government has failed by not recognizing the importance we take in our 
downtown.
    I have included with my testimony, a financial summary of downtown 
taxable values which are part of a tax increment district. A tax 
increment district is an area of a community where taxes are frozen at 
a base level and all new incremental tax value increase use proceeds to 
reinvest in the district. In Billings case, the district is our 
downtown central business district. We started in 1982 with an 
incremental taxable value of $6,258,307. This rose to a high of 
$11,424,295 in 1991. Since that time, we have seen the incremental 
taxable value decrease to $5,913,544 in 1997.
    Some was attributed to tax reappraisals, but overall a general 
decline in investment. Without continued reinvestment, the efforts of 
this community can be for naught. That is why the loss of a major 
downtown source of jobs and capital investment is so important. The 
evaluation of $447,000 in annual projected BLM savings will be 
miniscule in comparison to impact upon the financial vitality of 
downtown Billings. The Federal agencies did not take this into account. 
A major mistake when assessing total impact.
    In summary, the city of Billings' downtown has received major blow 
to its diligent planning efforts, its economy, and its downtown 
workplace diversity. Our neighbors and friends are being removed from 
the area in the name of a bottom line that disregards the environment 
around it. As a City Council member, I recognize the need to receive 
competitive bids, but I also recognize the need to award the ``most 
responsible bid.''
    The Federal Government in Montana is an important partner in 
securing the success and vitality of the downtowns of Montana cities. 
The process now being used is not fair, does not coordinate enough with 
local officials, and does not fully weigh the economic impacts. We have 
seen the challenges of our elected representatives go ignored by 
Federal agencies. As a City Councilman, I cannot accept the old adage, 
``There is nothing we can do!'' There is and it starts right here, 
today!

[GRAPHIC] [TIFF OMITTED] T9523.001

                                 ______
                                 
                           City-County Planning Department,
                                     Billings, MT, August 12, 1997.
Mr. Harrison Fagg,
Harrison Fagg & Associates,
Billings, MT.
    Dear Mr. Fagg: This is in regards to your property located at 222 
N. 32d Street, and more specifically the proposal for the BLM offices 
and wareyard. This property, as you know, is zoned as Central Business 
District (CBD). According to the Billings Montana Municipal Code 
(BMCC), inside or outside storage of materials and equipment is not 
allowed within the CBD zoning district. Obviously, the office use is an 
allowable use outright, and I do not believe that has ever been in 
question.
    I hope that this answers your questions on this matter. Please feel 
free to call me with any additional questions or concerns that you may 
have.
            Sincerely,
                                               Bill Armold,
                                                 Planning Director.
                                 ______
                                 
                                  City of Billings,
                              Office of City Administrator,
                                    Billings, MT, October 20, 1997.

General Services Administration,
Rocky Mountain Region,
Denver, CO.
    Dear Tanisha: On behalf of the city of Billings, I am writing to 
inquire about certain procedures followed by the City and the General 
Services Administration for the BLM project in Billings. It has 
recently been brought to my attention that Executive Order #12072 
requires that consideration will be given to the location of Federal 
facilities in central business areas (CBA's). This is important public 
policy and is one directive that should not be taken lightly.
    In a recent letter from Polly Baca, Regional Administrator to Nancy 
Bennett, local Billings attorney, it refers to earlier action by GSA 
and the city of Billings which expanded the delineated bidding area 
beyond the CBA. This officially refers to this as an ``agreement'' with 
the city of Billings. I believe this agreement refers to a letter from 
the GSA to Fred Alley, Billings Community Service Director on April 1, 
1997. (see attached.) The letter delineates the GSA's need for more 
competitive bids for the BLM site and thus, necessitated the City to be 
notified of your intent to do so.
    Now, this letter is being referred to as an agreement. I am not 
sure this is entirely correct and have spoken to our City Attorney. I 
am confused as to the authority we have as a City in the Federal 
procurement process. Was this letter construed as a full agreement by 
the City that we concurred in expanding the bidding boundaries? Or, 
were we notified as a courtesy by the GSA that the agency would be 
expanding the boundaries? When in consultation with local officials as 
you were with Mr. Alley last April, did this concurrence as to the GSA 
finding for competition under the Competition in Contracting Act (CICA) 
legally obligate the city of Billings in some way? If so, this was not 
taken before the City Council for ratification of the GSA action.
    If we have no authority over the GSA process, I am confused as to 
the Regional Administrator's use of the term agreement. Your immediate 
clarification of the City's authorities and involvement in such an 
involvement with the GSA is desired. For instance, if the City's 
concurrence had been withheld, would the BLM project have proceeded 
anyway? If it is granted via the letter from Fred Alley, the City needs 
to know the significance of that act.
    As you know, there is significant local interest in the eventual 
disposition of the BLM project. Extreme concern is being conveyed as to 
the loss of many Federal jobs in a downtown that is feeling a number of 
economic impacts.
    I thank you for clarifying this issue. Please call me, if you need 
further clarification than from above.
            Sincerely Yours.
                                            Mark S. Watson,
                                                City Administrator.
                                 ______
                                 
                   General Services Administration,
                                     Rocky Mountain Region,
                                    Denver, CO, September 17, 1997.
Ms. Nancy Bennett,
Moulton, Bellingham, Longo, & Mather, P.C.,
Billings, MT.
    Dear Ms. Bennett: Thank you for your August 8, 1997, and August 19, 
1997, letters reflecting your concerns regarding the lease procurement 
for the Bureau of Land Management (BLM) in Billings, Montana.
    The Solicitation for Offers (SFO) reflects the long-term 
requirements of our client. The lease procurement process has been, and 
will continue to be, conducted in a manner which is consistent with all 
laws, regulations, and Executive Orders. Additionally, GSA has worked 
closely with the city of Billings to ensure requirements are compatible 
with zoning restrictions, especially where the Billings Central 
Business District (CBD) is concerned. Executive Order 12072 permits, 
while the Competition in Contracting Act requires, the expansion of a 
delineated area if it is determined that adequate competition does not 
exist within the CBD. Therefore, with the agreement of the city of 
Billings, the delineated area was expanded beyond the Billings CBD to 
include the city limits of Billings.
    I hope this adequately addresses your concerns. If you have further 
questions regarding this matter, please contact Ms. Sandra DiBernardo, 
Director of our Mountain-Plains Service Center, at (303) 236-1770.
            Sincerely,
                                                Polly Baca,
                                            Regional Administrator.
                                 ______
                                 
                   General Services Administration,
                                     Rocky Mountain Region,
                                         Denver, CO, April 1, 1997.
Mr. Fredric H. Alley,
Community Development Director,
Billings, MT.
    Dear Mr. Alley: This is in reference to our on-going discussions 
regarding the lease procurement action for the Bureau of Land 
Management (BLM) in Billings, Montana.
    As discussed, the BLM lease at the Granite Tower building, 222 
North 32d Street, expires in April 1998, and GSA has leased space at 
this location since April 1976. There are currently three (3) BLM 
leases in the Billings area which will be consolidated in one location 
to achieve the economic and programmatic benefits of consolidation.
    GSA is conducting this lease procurement on behalf of BLM in 
accordance with all applicable laws and Executive Orders. Executive 
Order 12072, August 16, 1978, 3 CFR, 1979 Comp, p. 213, requires that 
first consideration be given to central business areas (CBA's) and 
other designated areas. The Executive Order also states that whenever 
practicable and cost-effective, GSA shall consolidate elements of the 
same agency or multiple agencies in order to achieve the economic and 
programmatic benefits of consolidation. Furthermore, GSA is responsible 
for confirming that established delineated area boundaries provide 
competition when acquiring leased space.
    In accordance with the Competition in Contracting Act (CICA), GSA 
may consider whether restricting the delineated area to the CBA will 
provide for competition when acquiring leased space. Where it is 
determined that an acquisition should not be restricted to the CBA, GSA 
may expand the delineated area in consultation with the requesting 
agency and local officials. The CBA must continue to be included in 
such an expanded area.
    In light of our discussions and the information provided above, it 
was determined that the delineated area must not be restricted to the 
Billings CBA, but instead expanded to include the City Limits of 
Billings. By doing so we are soliciting bids or proposals in a manner 
designed to achieve full and open competition for the procurement in 
accordance with CICA. Additionally, it is expected we will receive bids 
from a variety of sources and locations, including the CBA and other 
areas within the delineated area
    As discussed, please indicate your concurrence with this decision 
by signing in the space provided below. Please return a copy to this 
office as soon as possible. My fax number is (303) 236-1774
    I greatly appreciate your cooperation throughout the development of 
this project. If you have any questions regarding this matter, please 
contact me at (303) 236-1770, Ext 228.
            Sincerely,
                                  Tanisha Harrison,
                                       Contracting Officer,
                               Montana/Dakotas Service Center, PBS.
                                 ______
                                 
            Prepared Statement of Alan Nicholson, Helena, MT
    My name is Alan Nicholson. I have lived in Helena since 1970 and 
for most of that time I have been a real estate developer and property 
manager here and in Billings. Most of our properties are in downtown 
locations. I am a believer in urban development and redevelopment. I am 
a former chair of the Montana Board of Public Education, a past 
president of the Helena Chamber of Commerce and the immediate past 
president of the Montanan ambassadors, a group of State business 
leaders appointed by the Governor to make Montana a better place to 
work and live. I believe government is our collective responsibility, 
that it is what we do together for the common good and that we should 
do it well. My wife and I serve in many public arenas and contribute 
very significantly to Federal, State and local taxes. As it turns out, 
I have land and buildings which would be suitable for a new Federal 
building in the downtown area, but I agree with other community leaders 
that it is in the best interests of our town for the Federal offices to 
stay where they are. I have been an outspoken advocate of that 
position.
    I am disappointed and dismayed by the behavior of the General 
Services Administration which apparently intends to ignore Executive 
orders issued by every president since Carter, to ignore the interests 
of the Helena community and its elected officials, to ignore the 
protocols of fair play and good business and to ignore the best 
interests of the government they serve.
    I believe the Executive orders are quite clear in their mandate to 
assist central cities to remain economically strong by locating, 
Federal offices in the downtown areas whenever reasonably possible 
Certainly this city did much to encourage the Federal Building to 
locate in its central business district by building roads, clearing 
land and co-locating other public facilities such as the city library 
and the neighborhood center. Now, for no apparent good reason, GSA 
would not only like to vacate their present building, but move entirely 
out of the downtown area.
    The city commission and other public bodies are on record and in 
agreement that it is in the community's best interests to have the 
Federal offices stay put. Everyone realizes that there are problems 
requiring remediation at the present site and that certain functions of 
government may need to locate elsewhere in order to serve effectively 
and efficiently. . . . If the collective best interests of all parties 
are to be served, everybody has to give a little. . . . But GSA has 
routinely rejected efforts to compromise and negotiate. Even before any 
definitive request for proposals for a Federal Building in Helena, GSA 
asked the city to extend the boundaries suitable for location of the 
Federal Building well beyond the central business district.
    Ordinary protocols of fair play and good business are out the 
window where GSA is concerned. The owners of the existing building 
found it necessary to publish a hefty volume to set the record straight 
after the half truths and outright breeches of verity (damned lies) 
were spread about by GSA officials. So far as I know, GSA has not 
responded either to dispute the owner's effort to set the record 
straight or to apologize for playing fast and loose with the facts.
    I submitted an alternative site to GSA in the central business 
district in the event that a reasonable solution could not be reached 
between GSA and the present owner. GSA thereupon publicly proclaimed 
that my site was not suitable and was polluted. I asked for an apology 
from GSA to which they responded ``It is common knowledge of Helena 
citizens that the Great Northern site was once used as a garbage 
dump.'' I pointed out that we had the benefit of two independent 
environmental studies which found that the site was neither polluted 
nor a garbage dump. In a subsequent letter, after my continued request 
for an apology, GSA denied ever having said it! Letters documenting 
this exchange are attached for the record. One does not expect a 
campaign of disinformation by the government in an area so far removed 
from the usual standards of political intrigue and national 
consequence.
    All of this tends to sour one's respect for government at a time 
when those of us who still have vestiges of respect for government 
exist in ever decreasing numbers.
    What should GSA do?
    They should proclaim, that they will first exhaust all reasonable 
efforts to stay in their present building. If negotiations break down 
or this becomes otherwise impossible, they should explain, within the 
constraints of protecting the rights of the private parties involved, 
precisely why it is necessary to move including all pertinent laws, 
statutes, ordinances, regulations and other government ornaments by 
which they are bound They should then exhaust all possibilities to 
remain in the boundaries of the central business district within the 
procedures described in the Executive orders pertaining to location of 
Federal offices. If this proves impossible and after full explanation 
why, they should work with the city to locate in a mutually agreeable 
place.
    Many of us have wondered why GSA has acted so badly, why they have 
been so covert and so arbitrary and why they have behaved as though 
they are under siege by an enemy. Many theories have been batted about 
including unholy alliances between the administration and large 
developers, some political favor in need of repayment, a rebellion by 
GSA against government itself. . . . on and on . . . some theories have 
even more sinister implications. The simple truth is that the behavior 
of GSA in this matter is so without a reasonable explanation that it 
begs a grand explanation.
    For myself, I believe it is a combination of ignorance stemming 
from unchecked bureaucratic power and a determination to serve the 
wishes of local Federal department heads who want new digs, Executive 
orders and local needs be damned
    While I hope GSA, after this hearing, will behave more 
appropriately and in keeping with good public policy, I have no faith 
in it. And this lack of faith from ordinary folks like me, who believe 
in government and want it to work, should scare the living hell out of 
folks like you who have dedicated a substantial part of your short 
tenure on earth to this fragile experiment we call American democracy. 
It is failing.
                                 ______
                                 
                                                  October 15, 1997.
General Services Administration,
Rocky Mountain Region, Denver, CO.
                   re: helena federal office building
    Dear Ms. Ringler: I have heard from a variety of folks around here 
that someone from your shop has been spreading the word that the 9-acre 
parcel of land known as the Great Northern is contaminated and 
unsuitable for building. I submitted this site in response to GSA 
Solicitation for Offers #GS-08P13429. As you can see from the 
Environmental Assessment Report on this land, that is not the case. In 
fact, the new Federal Reserve building is built on a part of the 
original site.
    But Helena is a small town and gossip runs through here pretty darn 
fast. People around here tend to believe folks like you, even though 
you and I know that there is no reason they ought to. None-the-less 
they do, so what you folks have said damages Artisan, LLP and makes our 
efforts to develop this ground harder than it would have otherwise 
been. I think it would be appropriate if GSA Denver apologized to us 
and if you made a public clarification and apology as well. In fact, I 
expect it.
            Sincerely,
                                    Alan Nicholson,
                                          Managing Partner,
                                                      Artisan, LLP.
                                 ______
                                 
                   General Services Administration,
                                     Rocky Mountain Region,
                                      Denver, CO, October 24, 1997.
Mr. Alan D. Nicholson,
Helena, MT.
    Dear Mr. Nicholson: We are in receipt of your October 15, 1997, 
letter pertaining to gossip that you have heard It is common knowledge 
of Helena citizens that the Great Northern site was once used as a 
garbage dump. We can assure you that General Services Administration 
(GSA) employees have not stated in any conversation that the Great 
Northern site is contaminated.
    We have informed individuals that we have asked you for copies of 
Environmental Assessment Surveys conducted for the site. We will 
determine whether the site is suitable for Federal construction once we 
have reviewed complete documentation available in the Environmental 
Assessment Surveys.
    As I stated in my October 14, 1997 letter, please submit the entire 
Envirocon EAS original source documents and any other more recent 
documentation pertaining to the condition of the Great Northern 
Property, which has been summarized by Douglass, Inc. by October 31, 
1997. If this timeframe is not feasible, please call me to discuss a 
more appropriate date.
            Sincerely,
                                  Malia N. Ringler,
                           Real Estate Contract Specialist,
                                    Mountain-Plains Service Center.
                                 ______
                                 
                                                 November 14, 1997.
Malia N. Ringler,
Real Estate Contract Specialist,
Mountain-Plains Service Center,
Denver, CO.
    Dear Ms. Ringler: It is not ``common knowledge of Helena citizens 
that the Great Northern site was once used as a garbage dump.'' You 
have two (2) environmental assessments which are very clear that the 
``dump'' was located elsewhere. No reference was made in either study 
to the hearsay you relate in your October 24th letter.
    The mayor of Helena, Colleen McCarthy, was told by GSA that the 
site was probably contaminated. Government workers who attended a 
meeting with GSA on these issues have told me that GSA officials said 
that the site was polluted.
    This behavior is unacceptable, and I do expect you to issue a 
statement stating that the site is not polluted and that you retract 
and regret any statement by GSA officials which would lead any one to 
think otherwise.
            Sincerely,
                                 Alan D. Nicholson,
                                          Managing Partner,
                                                       Artisan LLD.
                                 ______
                                 
                   General Services Administration,
                                     Rocky Mountain Region,
                                     Denver, CO, November 25, 1997.
Mr. Alan D. Nicholson,
Helena, MT.
    Dear Mr. Nicholson: We are in receipt of your November 17, 1997 
pertaining to the Great Northern site. We can assure you that General 
Services Administration (GSA) employees have not stated in any 
conversation that the Great Northern site is contaminated.
    We have informed individuals that we have asked you for copies of 
Environmental Assessment Surveys conducted for the site. We regret any 
misinterpretation that may have occurred when we communicated our 
direction.
    Phase I & II, Environmental Assessment Report, submittal date: June 
11, 1997, page 2 states, ``An abandoned underground storage tank was 
discovered at the site . . .'' Please provide a status update on this 
issue.
            Sincerely,
                                  Malia N. Ringler,
                           Real Estate Contract Specialist,
                                    Mountain-Plains Service Center.
                                 ______
                                 
      Prepared Statement of Jack Lynch, Chief Executive, Butte, MT
    Good Morning Mr. Chairman and Members of the Committee: It is a 
pleasure to be here this morning and welcome you to Montana, the Big 
Sky Country. We all appreciate the time and trouble that the committee 
has gone through in order to get here. We also appreciate your 
willingness to take this opportunity to listen to representatives of 
local communities. We see this as an opportunity to discuss the process 
for location of Federal facilities in our communities and our 
interaction with the General Services Administration (GSA) as it 
relates to that siting process.
    Let me begin by introducing myself--my name is Jack Lynch, I am 
Chief Executive of Butte-Silver Bow. I am here today representing that 
city-county government as well as our Urban Revitalization Agency as it 
relates to our experiences with our Military Entrance Processing 
Station and our attempts to work with GSA through the maze of 
bureaucratic rules that they have established for local governments.
    In the 1870's, Butte was only a small mining claim similar to many 
throughout the western United States. By the 1900's, Butte had become 
known as the richest hill on earth because of its vast wealth of 
mineral ores lying beneath the surface. The settlement grew to the size 
of a small metropolis by the burn of the century, supporting an area 
population of approximately 100,000. It was copper that made Butte 
king, becoming the world's leading producer of copper. Copper was 
needed for everything to do with the industrial expansion of the 20th 
century. Everything electrical required copper. Butte, Montana played a 
significant role in the industrialization of the United States. Butte's 
significance relates to advances in hydroelectric power, transmission, 
electrical equipment and mining industry advancements. The outcome of 
both world wars may have been different without Butte, Montana's 
participation.
    In 1969, Butte was acknowledged for its national significance by 
being listed as a National Historic Landmark District because of the 
strong legacy of history, industrial remains and architectural 
structures. Butte still remains as one of the largest historic 
districts in the country with varied architectural, industrial and 
social mix to the district. You will see a mining head frame next to a 
worker's cottage, a millionaire's mansion next to a boarding house, 
ethnic neighborhoods and churches grouped around industry, and 100+ 
years of mining history is evident throughout the community. Butte has 
a unique look and is a unique city.
    With our rich past, current challenges and ever brightening future, 
Butte-Silver Bow government has taken a proactive and creative approach 
to preserving our past to create our future.
    Given the commitments that our communities have made to the 
preservation of our downtown areas, the enhancement of our historical 
attributes and the serious financial commitments to rehabilitation, we 
can only hope that following receipt of this testimony today--you will 
see there is obviously a need for your assistance. This is to ensure 
the playing field remains even, that the rules of the game don't change 
once the whistle has blown, that the interests of local communities 
(who are attempting to cooperate with Federal agencies) is given the 
utmost consideration in making the determination on where Federal 
facilities should be sited. The testimony you will hear from others 
this morning will go into great detail as it relates to the overall 
efforts of local government and their perception of the activities of 
the GSA. I suspect in many cases what you hear will not be pleasant, 
but in addition to their hospitality, Montanans are also noted for 
their candor and their concern about their communities. So, what you 
will hear in most cases will not be sugarcoated.
    Once again, thank you for taking the time to come to Montana. While 
you are here, we hope that you take the time to see some of the sights 
of the Big Sty Country and that you enjoy yourselves. Senator Baucus, 
we appreciate your assistance in your bringing your colleagues from the 
U.S. Senate to listen to our concerns.
                                 ______
                                 
  Prepared Statement of Colleen Fine, Director, Urban Revitalization 
                                 Agency
    Good Morning. I am Colleen Fine, the Director of the Urban 
Revitalization Agency in Butte-Silver Bow. The Urban Revitalization 
Agency is a tax-increment district designed specifically to assist 
economic development activities, which lead to continued promotion and 
development of the URA. The URA is included in the Butte National 
Historic Landmark District. The following summarizes our local 
government's involvement relative to the GSA process for leasing a site 
for the MEPS' facility in Butte, Montana.
    It is my understanding that this process began in September, 1996; 
although, I was not aware of the project until January, 1997. My first 
knowledge of the MEPS' project was in relation to a visit GSA-Denver 
conducted in Butte. At that time, GSA was already visiting prospective 
developers to secure a site for the MEPS' facility.
    Mark Reavis, the Butte-Silver Bow Historic Preservation Officer/
Staff Architect, was asked to provide a tour of a Butte-Silver Bow 
owned building that a private developer had suggested as a potential 
facility for the lease. The building was made available and GSA was 
given a tour. That is the extent of our contact with GSA in the initial 
process. During the timeframe from September 1996 to September 1997, 
there was no contact between Butte-Silver Bow and GSA other than that 
tour. In fact, I did not meet anyone from GSA until September of last 
year.
    On September 25, 1997, I was introduced to GSA officials at a 
meeting in the Federal Courthouse in Butte. The meeting was convened, 
at our request, to discuss Butte-Silver Bow's concerns relative to the 
leasing process. During the meeting, I expressed Butte-Silver Bow's 
displeasure at not being involved in the process to that point, at the 
lack of adherence to the National Historic Preservation Act and 
Executive Order and at the process in general.
    After a lengthy meeting with GSA and MEPS personnel, Butte-Silver 
Bow, State Historic Preservation Office, and National Trust for 
Historic Preservation officials left the meeting with the following 
understanding:
     GSA would work closely with local government officials in 
the process;
     GSA would reopen and readvertise the MEPS' leasing in the 
National Historic Landmark District providing clear indication that 
buildings in the National Historic Landmark District would have a 
preference and detailing what that preference was;
     GSA would allow local comment on the SFO;
     GSA would request that MEPCOM reconsider criteria 
considered detrimental to historic structures; and
     GSA would provide a detailed explanation when a historic 
structure was excluded from consideration.
    The meeting concluded with the agreement that the next step taken 
would be a written review of the SFO. Butte-Silver Bow officials 
received the SFO and written comments.
    Following the September meeting GSA actions were completely 
contrary to the promises they made.
    GSA would work closely with local government officials in the 
process.
    GSA officials kept Butte-Silver Bow staff completely in the dark. 
Butte-Silver Bow initiated all communication regarding the leasing 
process. Phone calls to GSA were not returned, requests for information 
were completely ignored.
    By early November, Butte-Silver Bow had not heard anything from GSA 
either by phone or in writing regarding our comments on the SFO or what 
the next step in the process would be. I sent a letter expressing my 
concern that local officials had not heard from GSA. Since the letter 
was not acknowledged and the phone calls were not returned, I sought 
the assistance of Senator Baucus' field office. It was only through 
their intervention that Butte-Silver Bow learned what was going on. 
Again, we were promised better communication from GSA staff.
    For nearly a month we heard nothing from GSA then on Tuesday, 
December 16, 1997, I learned GSA was conducting a Market Survey tour 
the following week. This news took me very much by surprise. I had no 
idea what GSA was doing or what their process would be but quite 
obviously Butte-Silver Bow staff were not asked to participate. I 
contacted GSA immediately but the Leasing Agent was not available and 
did not return my call.
    On Wednesday, December 17, 1997, I again attempted to contact GSA 
regarding the schedule while in Butte. The Leasing Agent was out and I 
left a message expressing my concern on voice mail. I attempted to 
contact the Leasing Agent's supervisors but was not successful. I then 
contacted the supervisors' supervisor. His secretary took a message and 
said he would call me back later. When I left work that evening, I had 
not heard from anyone at GSA.
    When I called the next morning the same secretary I had spoken to 
asked for my name, I stated that it was Colleen Fine from Butte, 
Montana. She told me the Leasing Agent would be calling me back. Her 
tone response indicated to me that my name was marked and I would not 
be allowed to speak with higher level GSA personnel.
    When the Leasing Agent finally called she stated it did not occur 
to her to include me in the Market Survey since I knew the buildings so 
well. I reminded her of GSA's promise to work with the local 
government. I felt she was specifically excluding me. The Market Survey 
was scheduled for December 23rd; she stated she would not change it. 
After considerable juggling on our part, Butte-Silver Bow was able to 
have a staff member attend the Market Survey. However, GSA's treatment 
of that staff member was incredible.
    Mark Reavis, the Historic Preservation Officer and Staff Architect 
was not allowed to communicate with MEPCOM officials. The Leasing Agent 
specified a time and place for Mr. Reavis to meet the tour. His offers 
of a Butte-Silver Bow van and chauffeur services were refused. During 
the tour Mr. Reavis would be prevented from having any personal contact 
with MEPCOM officials. He was kept physically separate from others on 
the tour. He was not allowed to have a cup of coffee or go to lunch 
with Federal officials. He was not allowed to know what sites were 
being reviewed until just before the scheduled time. The irony of the 
situation is we both knew every single location independent of GSA 
information.
    As the designated representative of the hosting local government, 
his treatment by GSA staff was rude and demeaning. The contempt GSA 
obviously felt for our continued involvement was palpable in that 
Market Survey tour.
    These activities illustrate GSA's commitment to working with the 
local government.
    GSA promised it would reopen and readvertise the MEPS' leasing in 
the Landmark District while providing clear indication that buildings 
in the National Historic Landmark District would have a preference and 
detailing what that preference was;
    I left the September meeting with the clear understanding that GSA 
would work with Butte-Silver Bow in this process. Butte-Silver Bow 
would provide mailing labels from our data base and GSA would produce a 
mailing to reopen the process for buildings in the National Historic 
Landmark District. This was agreed to because GSA, at its own 
admission, did not provide adequate notification of preference for the 
Historic District. I requested the opportunity to do a joint mailing 
with GSA. I wanted documentation of the URA's financial commitment to 
the project to be included with the document GSA was preparing. My 
agency had committed nearly $400,000 to the project.
    When I wrote about the joint mailing, a GSA official called me and 
told me GSA would not be doing a mailing. GSA stated that any mailing 
would be done by Butte-Silver Bow but GSA would provide a flyer for us 
to mail. This caught me completely by surprise because at no time was 
this ever discussed with or agreed to by local officials. Given the 
extremely short turn around time in this process as well as the 
upcoming holiday. I felt the best thing to do was to continue in an 
attempt to try to work with GSA.
    The flyer was received in the form of a fax and, as such, was not 
suitable for distribution. It was retyped verbatim. The flyer was 
duplicated and sent to property owners in the District. Additionally, 
the Agency, at its own expense, placed an ad in the local paper 
indicating that lease space was available and for individuals to 
contact the Agency for further details. The deadline for submission was 
set; the flyer was mailed; and the ad ran. This process provided 
developers with less than 12 days for response inclusive of the 
Thanksgiving holiday and weekend.
    GSA promised to reopen and readvertise the MEPS' leasing. GSA may 
have allowed new proposals from the Historic District however; they 
also allowed buildings outside of the district to submit as well. My 
understanding from the meeting in September was that only sites in the 
National Historic Landmark District would be considered since this area 
was not given adequate notice of the preference for historic sites and 
that was the very reason for allowing new proposals.
    Every time this has been pointed out to GSA the result has been 
more detrimental to the Historic District.
    GSA did not produce a mailing, prepare flyers or advertise in local 
papers. Butte-Silver Bow performed these activities.
    GSA pledged it would allow local comment on the SFO.
    Butte-Silver Bow was allowed to comment but those comments fell on 
deaf ears at GSA. The comments were acknowledged by GSA and dismissed 
out of hand. We have no documentation that our comments were passed on 
to MEPCOM and if they were, we do not know how our comments were 
portrayed.
    GSA stated it would request that MEPCOM reconsider criteria 
considered detrimental to historic structures.
    Butte-Silver Bow does not have first-hand knowledge that our 
concerns were passed on to MEPCOM. GSA's summary of MEPCOM's response 
was that MEPCOM believed they offered adequate concessions and would 
not consider any additional modifications. We have no documentation of 
GSA's request or MEPCOM's response.
    GSA said it would provide a detailed explanation when a historic 
structure was excluded from consideration.
    To date this has not happened though I do understand from several 
developers that their buildings have been excluded from the process.
    My main concern regarding this process is the lack of trust local 
officials now have regarding GSA. This is a direct result of the 
tactics employed by GSA staff. Montana has one of the most liberal open 
government philosophies in the country. This ideal is an overriding 
tenant of our State's constitution. Those who operate in government in 
Montana are used to open, honest and critical review of our work. Both 
the Montana Open Meeting Law and Montana Open Records Law indicate that 
citizens of this State want to be well informed regarding the operation 
of government at all levels. This does not work well with the type of 
operation conducted by GSA in this instance. Local officials and 
citizens as well, have been kept in the dark, treated in a less than 
respectful manner and have literally had to beg to be included in the 
process. I was even asked to sign a confidentiality agreement after I 
had already worked with every single proposer in the process prior to 
GSA involvement. That is my job.
    When Butte-Silver Bow first became aware of this project, all local 
officials wanted was to ensure all regulations were followed and that 
the National Historic Landmark District was given a fair opportunity to 
compete on a level playing field, that very opportunity is provided for 
by Executive Order. It may very well be that this is an above board 
process, unfortunately it is very difficult to believe given the 
prejudicial treatment of local officials, of the National Historic 
Landmark District and of the community as a whole. The more Butte-
Silver Bow has asked for involvement, openness and honesty, the more 
secretive and hostile the response has been. At this point in the 
process it is clear the GSA has completely lost all objectivity and 
sense of fairness.
    One of the major goals of Butte-Silver Bow's recently revised and 
adopted Community Master Plan is the continued redevelopment of Uptown 
Butte. As an economic development objective it serves several vital 
purposes. The strength of any local economy is mirrored in the 
treatment of its older urban areas. How we treat these areas reflects a 
community's values and hopes. Butte-Silver Bow values its Uptown and 
desperately wants its revitalization. Uptown is a living, breathing 
vital place indicative of the spirit and heart of this community. 
Ensuring its strength is the first step in maintaining a strong, local 
economy. The Federal Government has a unique opportunity to create a 
mutually beneficial partnership along with local government and private 
developers. This partnership would allow the Federal Government to 
significantly address goals of the community. The opposite 
consideration is equally dramatic in its statement. If the Federal 
Government chooses to leave the Uptown, contrary to the desires of the 
community, the perception left would be one of abandonment. I think 
this is exactly the wrong kind of message the Federal Government should 
be sending about the very heart of our community.
    As Director of the Urban Revitalization Agency, the economic 
development office for the Butte National Historic Landmark District I 
am not now nor have I ever asked for special consideration. I am asking 
GSA to honor the promises made to my community. I am asking for a fair 
process utilizing objective, quantifiable and justifiable criteria 
available to all parties beforehand in a written format. For this 
project in our community and for future projects throughout the 
country, my sincerest hope is that the Federal Government seeks to 
secure space in a fair, open and honest manner allowing for all parties 
concerned to meet their respective goals.
                                 ______
                                 
 Prepared Statement of Barbara Handy Pahl, Director, Mountains/Plains 
       Regional Office, National Trust for Historic Preservation
    Senator Baucus, members of the Committee, it is a pleasure to 
appear before you today to testify on behalf of the National Trust for 
Historic Preservation. The National Trust, a nonprofit organization 
with more than 270,000 members and six regional offices across the 
Nation, was chartered by Congress in 1949 to promote public 
participation in historic preservation and to engage the private sector 
in preserving our Nation's heritage. As the leader of the national 
historic preservation movement, the National Trust is committed to 
saving America's diverse historic places and to preserving and 
revitalizing communities nationwide.
    Today, we have been asked to provide our views on the coordination 
between the General Services Administration (``GSA'') and local 
governments, and other interested parties, with regard to GSA's real 
property actions, such as the leasing of space for Federal agencies or 
the construction of new Federal facilities. Over the past 18 years, the 
National Trust has helped promote the economic good health of more than 
1,300 local communities through its Main Street Program, a 
comprehensive, a locally managed program of historic preservation and 
coordinated commercial management. In addition to our direct experience 
in downtown revitalization, the National Trust has a longstanding 
involvement on a national level in urging the General Services 
Administration and other Federal agencies to fully comply with Federal 
historic preservation law and national policies benefiting our nation's 
traditional commercial centers.
    nationwide, GSA controls almost 300 million square feet of office 
space in more than 8,000 buildings, providing space for more than one 
million Federal employees. The National Trust is particularly concerned 
about the activities of Federal agencies, such as GSA, whose programs 
and policies have wide-reaching power to affect America's historic 
areas, particularly our traditional central business districts. 
Consequently, on May 2, 1996, the National Trust and the General 
Services Administration convened an Urban Issues Roundtable, attended 
by David Barram, GSA Administrator, Robert Peck, Commissioner of GSA's 
Public Buildings Services, as well as nonprofit urban interest groups 
and historic preservation advocates. Participants in the roundtable 
engaged in constructive dialog about national locational policies for 
Federal buildings and worked to identify areas for mutual activity in 
the adaptation of historic buildings for contemporary Federal use. Soon 
after the Urban Issues Roundtable, President Clinton signed Executive 
Order 13006.
    Currently the Mountains/Plains Regional Office is continuing the 
National Trust's advocacy efforts by working with staff of GSA's Region 
8, local government representatives, historic preservationists, and 
downtown revitalization advocates to promote full community 
participation in GSA projects in Salt Lake City, Utah, and Butte, 
Montana. The National Trust's primary goal in both cities is to ensure 
implementation of Executive Order 13006 and compliance with the 
National Historic Preservation Act.
    Public Input and Local Community Involvement are Critical 
Components of Federal Law and National Policy Regarding the 
Preservation of Historic Resources and the Strengthening of Downtown 
Commercial Centers.
    The General Services Administration--and, in fact, each Federal 
agency--has a responsibility to protect and utilize historic buildings 
and districts. Importantly, Executive Orders 12072 and 13006, as well 
as the National Historic Preservation Act and Public Buildings 
Cooperative Use Act, expressly link the Federal Government's historic 
preservation responsibilities with an affirmative obligation to consult 
with and consider the views of local government, community leaders, and 
other interested parties.
     Executive Order 12072, issued by President Carter in 
August 1978, strengthens our Nation's cities by committing Federal 
agencies to a policy of establishing new Federal buildings within the 
central business districts of metropolitan areas. In implementing 
Executive Order 12072, GSA must seriously consider the impact that the 
location or relocation of a Federal facility will have on the social, 
economic, environmental, and cultural conditions of the affected local 
community. In meeting Federal space needs, GSA must consider 
recommendations provided by representatives of local government.
     Executive Order 13006, which complements Executive Order 
12072 and was issued by President Clinton in May 1996, establishes that 
the Federal Government ``shall utilize and maintain . . . historic 
properties and districts, especially those located in our central 
business areas.'' Executive Order 13006 directs GSA, and other Federal 
agencies, to form partnerships with local governments and appropriate 
private organizations to enhance their participation in the National 
Historic Preservation Program. These partnerships are to ``embody the 
principles of administrative flexibility, reduced paperwork, and 
increased service to the public.''
     National Historic Preservation Act of 1966 directs Federal 
agencies to provide ``leadership in the preservation of . . . historic 
resources'' and ``encourage the public and private . . . utilization of 
all usable elements of the Nation's historic built environment.'' A key 
element of the Act is the Section 106 review process in which the 
impacts of federally funded or approved projects are evaluated and 
alternative approaches are explored to reduce adverse impacts to 
historic resources. Section 106 consultation is frequently the only 
forum available to help local communities seeking to protect their 
traditional commercial downtowns, when those areas are threatened by 
Federal agency actions. Consequently, Federal regulations implementing 
Section 106 require that local governments be given the opportunity to 
participate in the mandatory consultation process whenever the Federal 
undertaking may affect historic properties within the local 
government's jurisdiction.
     Public Buildings Cooperative Use Act of 1976 directs the 
Federal Government to locate Federal facilities in suitable structures 
of ``historic, architectural, or cultural significance,'' unless such a 
location would not be feasible and prudent when compared with available 
alternatives. Further, the Act states that GSA has an affirmative 
obligation to consult with local government, and seek comments from 
community leaders and members of the general public, whenever the 
agency constructs, alters, or otherwise acquires space for Federal 
agencies.
    Despite these Mandates, the General Services Administration has an 
Uneven Record of Community Involvement and Historic Preservation.
    The General Services Administration has demonstrated that it can 
fulfill the spirit and letter of Executive Order 13006:
     Savannah, Georgia: To its credit, in Savannah GSA has 
involved local input--early and often--in a Federal courthouse project 
set in a historic district. For example, GSA appointed Savannah 
historic preservation experts as jurors in the ``Design Excellence 
Program'' competition that selects the design architect.
     Wilkes-Barre, Pennsylvania: With help from Congressman 
Paul Kanjorski and the mayor of Wilkes-Barre, GSA decided to convert a 
historic brewery into a new, 120,000 square foot Federal agency 
complex. The historic preservation project is viewed locally as the 
foundation for economic revitalization of downtown Wilkes-Barre, and 
GSA is seen as a valuable partner in the community's redevelopment.
     Casa Grande, Arizona: After considerable advocacy by the 
local government and Main Street program, GSA was convinced to lease 
space for a branch office of the Social Security Administration in an 
area of Casa Grande which will soon be listed on the National Register. 
After seriously considering construction of a new facility outside of 
downtown, GSA was persuaded to join the local revitalization effort.
    Elsewhere, unfortunately, GSA has not done so well:
     Clarksburg, West Virginia: GSA missed an opportunity to 
demonstrate the cost-effectiveness of preservation in a historic 
downtown when, instead of actively pursuing a preservation solution, 
GSA decided to consolidate Federal offices into a new building. The new 
facility will be constructed by a private developer and leased to the 
Federal Government. GSA's original plans gave no consideration to 
renovating historic buildings for Federal use. Later, when community 
reaction compelled GSA to consider leasing a turn-of-the-century 
building in a National Register historic district, GSA established 
impossible hurdles to preservation by greatly inflating the costs of 
rehabilitation in comparison to new construction. Eventually GSA went 
through the motions of complying with Executive Order 13006 and the 
National Historic Preservation Act but in a manner that treated the 
agency's preservation responsibilities as an empty paper exercise.
     Salt Lake City, Utah: In Salt Lake, GSA proposes to 
construct a new annex to a historic Federal courthouse. Although the 
Federal courts will remain downtown in furtherance of the Executive 
Orders, the project may adversely affect significant historic 
resources, including the Oddfellows Building and Moss Courthouse, both 
listed on the National Register of Historic Places, as well as the 
locally designated Exchange Place Historic District. Regrettably, GSA 
conducted its early planning processes without community input and is 
now attempting to move through the Section 106 review on a compressed 
schedule. The Utah State Historic Preservation Office and nonprofit 
Utah Heritage Foundation expressed interest and offered assistance as 
early as December 1996, but were not invited to participate in 
meaningful consultation until December 1997. In the meantime, key 
decisions were made. For instance, the project architect was selected 
in the ``Design Excellence Program'' competition with no involvement of 
Salt Lake architects or preservation experts. Unfortunately, although a 
genuine effort is underway to establish a constructive consultation 
process, GSA project staff lack experience with historic resources, are 
unfamiliar with Federal preservation mandates, and, perhaps most 
important, seem reluctant to respect input from the local community or 
interested parties.
     Butte, Montana: In Butte, GSA is seeking to lease new 
space for the Federal Military Entrance Processing Station (``MEPS'') 
which serves the State of Montana. The leasing action may result in the 
abandonment of the Federal agency's longtime home in the historic 
Finlen Hotel and relocation of the facility outside of the Uptown area, 
Butte's traditional commercial core, which has been designated a 
National Historic Landmark District. As you will hear from others 
involved in this matter, from the outset GSA made critical mistakes, 
including not contacting the Butte-Silver Bow Urban Redevelopment 
Agency. Despite the combined efforts of the Butte-Silver Bow Urban 
Redevelopment Agency and Historic Preservation Office, Montana State 
Historic Preservation Office, Advisory Council on Historic 
Preservation, and National Trust to ensure that GSA and MEPS implement 
Executive Order 13006 and comply with the National Historic 
Preservation Act, we remain concerned that historic buildings have been 
unnecessarily excluded from consideration and that the MEPS facility 
may be moved out of the Butte National Historic Landmark District.
    Recommendation: The General Services Administration Should Broaden 
the Agency's ``Good Neighbor Program'' Beyond Business Improvement 
Districts.
    In September 1996, GSA Administrator David Barram announced the 
``Good Neighbor Program,'' a new and constructive public/private 
partnership with urban downtown associations, which calls for GSA to 
become a full participant in the nation's business improvement 
districts (``BIDs''). This was a bold move that has produced good 
results for many communities. The GSA should be commended for 
establishing its Good Neighbor Program.
    However, the establishment of a BID, which typically does not 
encompass a community's entire central business area, is only one of 
many possible funding mechanisms a community can use to revitalize and 
manage its downtown. Consequently, GSA's partnerships to invigorate 
BIDs may not reach the economic and civic life of the whole downtown, 
and certainly does not assist those communities that have not 
established such special districts. As a result, in the National 
Trust's experience, some Main Street communities have had a difficult 
time figuring out how to negotiate the establishment of the sort of 
public/private partnership with GSA contemplated by Administrator 
Barram.
    In order for the General Services Administration to help leverage 
the significant investment in economic development and downtown 
revitalization made by local communities, the National Trust recommends 
that GSA fully embrace the concept of its Good Neighbor Program and 
take steps to broaden this worthy program's scope beyond America's 
Business Improvement Districts.
    Recommendation: The General Services Administration Should Issue 
Implementing Guidelines for Executive Order 13006.
    President Clinton signed Executive Order 13006 in May 1996. Today, 
almost 2 years later, the GSA has not issued any formal guidance on the 
implementation of the Executive Order. As the Federal Government's main 
landlord and real estate developer, it is incumbent upon the GSA to 
show clear leadership in realizing the practical benefits of Executive 
Order 13006 in the field. Therefore, the National Trust recommends that 
GSA complete, circulate for review and officially issue the necessary 
implementation guidelines, which should provide for at least the 
following actions:
     Partnerships: GSA must promote the establishment and 
cultivation of working relationships with local governments, community 
leaders, and interested parties. GSA must provide adequate guidance, 
and hold GSA staff accountable, for consulting with local partners.
     Policy Reform: GSA and all Federal agencies must 
systematically reform all policies and procedures that impede the use 
of historic structures for Federal office location. For example, GSA 
employs an ``acceptable reinvestment level'' policy whereby GSA 
requires that renovation of historic structures must cost 60 percent or 
less than the cost of constructing a replacement structure of 
comparable size. GSA must set new standards for economic feasibility 
and operational appropriateness that meet the spirit and letter of 
Executive Order 13006.
     Price Evaluation Preference: Pursuant to Executive Order 
13006, GSA must adopt measures that offer a new and substantial 
``bottom line'' preference to historic properties. Pursuant to the 
Public Buildings Cooperative Use Act, GSA already offers a 10-percent 
``historic preference'' to offerors of space in historic buildings. To 
implement Executive Order 13006, GSA must increase the percentage 
amount of the price evaluation preference, and explore and institute 
other measures that actively promote Federal utilization of historic 
buildings and districts.
     Training for GSA Staff and for Client Agencies: GSA must 
require training for GSA staff--and should offer training opportunities 
to other Federal agencies--to assure that the Federal Government meets 
its statutory historic preservation responsibilities. More important, 
however, GSA must provide its staff with the training, guidance, and 
incentives necessary to promote widespread use of the practical, 
entrepreneurial real estate development methods that have made the 
rehabilitation and adaptive use of historic buildings a successful tool 
of downtown revitalization by both the private and public sectors.
     Accountability and Incentives for Implementation: Today, 
the bottom line for GSA locational policies and real property 
development decisions is time and money. In recognition of the national 
policy articulated by Executive Order 13006, GSA must work to change 
this aspect of its institutional culture. The agency must provide 
adequate incentives, and hold GSA staff accountable, for full 
implementation of Executive Orders 12072 and 13006, as well as the 
National Historic Preservation Act and Public Buildings Cooperative Use 
Act, for the benefit of the nation's downtowns.
    Recommendation: The U.S. Congress Should Codify Executive Order 
13006.
    Recognizing that the persuasive power of Executive Order 13006 may 
not be sufficient to reaffirm the Federal Government's leadership in 
historic preservation and downtown revitalization, the National Trust 
recommends that Executive Order 13006 be made law. Congressman Joel 
Hefley has introduced H.R. 1522, the Historic Preservation Fund 
Reauthorization, which includes the language of Executive Order 13006. 
The National Trust enthusiastically supports H.R. 1522.
    Senator Baucus, this concludes my testimony. Thank you for the 
opportunity to testify before this Committee.
                                 ______
                                 
   Prepared Statement of Mechelle Schultz, Director of the Downtown 
                          Billings Association
    Dear Senator Baucus and Members of the Committee: I am pleased to 
represent the Downtown Billings Association and other downtown business 
interests in providing testimony regarding the procurement process for 
Federal office space in Montana. As director of the Downtown Billings 
Association, I represent more than 183 member businesses. The 
association supports plans to reverse the decline in the profitability 
and viability of businesses within the downtown area Our members 
include most of the retail shops, financial institutions, hotels, 
restaurants, museums and cultural services, professional offices, and 
service businesses in downtown Billings. These members have joined with 
the community to raise funds for downtown revitalization and planning. 
A copy of our membership directory is attached, and I ask that this 
exhibit be submitted for the record along with my testimony.
    Downtown Billings will lose 225 of its highest paying jobs if the 
Bureau of Land Management (BLM) relocates from the community core. The 
economic vitality of the downtown area depends upon the patronage of 
downtown workers. Downtown Billings was devastated by the loss of its 
last remaining department store 2 years ago and cannot bear the future 
loss of Federal employees. Area restaurants, service businesses, and 
retail shops will suffer declines in their business attributable to the 
loss of the BLM employees. Similarly, hotels, restaurants, and other 
retail establishment will be affected by the loss of business from 
customers who currently travel to downtown Billings to transact 
business with Federal employees.
    Billings has experienced a 40 percent decline in taxable value in 
the downtown area since 1987. Downtown employees, including Federal 
workers, have been the mainstay of the downtown community, especially 
given the decline in retail trade and the oil and gas industry. At this 
time, the Federal Government employs approximately 950 full time 
equivalent (FTE) workers, including the BLM employees, in the downtown 
area.
    In addition to the potential loss of downtown employees, downtown 
property owners will lose their Federal tenants. The vacancy rate for 
office space in downtown Billings is estimated to be 15 percent to 20 
percent at this time.
    Our greatest frustration in our efforts to preserve these high-
paying jobs has been our inability to communicate with the General 
Services Administration (GSA) regarding its location decisions for 
Federal office space in the community. For example, we sent numerous 
communications to the GSA regarding the BLM bidding process, but 
received no response from the GSA. The only correspondence I received 
throughout the bidding process was a notice dated February 4, 1998 from 
Ms. Polly Baca, Regional Administrator for the GSA, who informed me 
that the lease contract for the building had been awarded. A copy of 
this letter is attached to my testimony. Due to this lack of 
communication, we have been unable to offer our input in the bidding 
process or to demonstrate the negative impact of this decision on our 
community.
    At this time, the Downtown Billings Association requests a 6-month 
moratorium on decisions relating to Federal building projects in 
Montana. This moratorium would allow time for communities to offer 
solutions to the Federal Government on their building needs and 
appropriate locations. We would like to work with the GSA and other 
Federal agencies in the manner outlined in President Carter's Executive 
Order 12072.
    We appreciate your consideration of our request.
            Respectfully submitted,
                                          Mechelle Schultz,
                                                          Director.
                                 ______
                                 
               Downtown Billings Association Member List
    Al's Bootery
    Alberta Bair Theater
    American Heart Association
    Appraisal Inspection Services
    Artcraft Printers of Billings, Inc.
    Associated Employers of Montana
    Auto Brokers
    Auto Doctor
    Barjon's Books
    Barnett Opticians
    Basket Creations
    Beartooth Oil & Gas Company
    Best Realty Inc., Better, Homes & Gardens
    Best Western Ponderosa Inn
    Beverly Ross
    Billings Area Chamber of Commerce
    Billings Army Navy Surplus
    Billings Clearing House
    Billings Family YMCA
    Billings Federal Credit Union
    Billings Food Bank Inc
    Billings Gazette
    Billings Outpost
    Billings Petroleum Club
    Billings Sports Club
    Billings Symphony Society
    Billings Travel West Inn
    Broadway Place Technology Business Center
    Brockels Chocolates
    Budget Instant Print Inc.
    Burtchaell Photography
    Buttrey Food & Drug
    Cactus Rose
    Casablanca Coffee Haus
    Caseys Golden Pheasant
    Cattins Family Dining
    Center Lodge Inc
    Chicago Title Insurance
    Christian Science Reading Room
    Citadel Broadcasting
    City of Billings
    Commonwealth International
    Computers Unlimited
    Connie M. Wardell
    Connolly's Saddlery
    Cook Travel
    Coxwell Architect
    Cricket Clothing Company
    Crowley Law Firm
    Crystal Lounge
    D A Davidson & Company
    Dain Rauscher Corp
    Deaconess Billings Clinic
    Deaconess Foundation
    Denny Menholt Frontier Chevrolet/Geo
    Desmonds
    Diamond Parking
    Don Knapp
    Dude Rancher Lodge Company
    Econo Print
    El Burrito Cafeteria
    Empire Bar Inc
    Empire Sand & Gravel Company Inc.
    ERA Land 500
    Ethan Allen
    Exclamation Point
    Farmers Insurance Group
    First Bank Billings
    First Citizens Bank
    First Interstate Bank
    First Montana Title Co of Billings
    Fischer & Associates
    Gainan's Flowers
    Galusha Higgins & Galusha
    Gene Rockman Associates
    George Henry's Restaurant
    Global Village
    Golden Crown Gifts
    Grand Bagel Company
    Hagen Printing
    High Plains Productions Inc
    Hoiness Labar Insurance
    Holiday #274
    Holliday Furniture
    Inacom Information Systems
    Insty Prints
    Jakes
    James Turley, D.D.S.
    Jasons
    Joe Lowther Insurance Agency Inc
    John's Outback
    Josephine Bed & Breakfast
    Kaspers Photo Shops Inc.
    Kathy McCleary
    KHG Advertising
    Kids & Company
    Kinkos Billings Downtown
    Kitchen Cupboard
    KSVI--TV
    KTVQ 2 The News Station
    Le Boutique
    Le Croissant
    Lou Taubert Ranch Outfitters
    Mail Drop
    Marlo Jewelers Inc
    McBride & McBride Optometrists
    McNamer Thompson Law Firm P.C.
    Mental Health Center
    Merrill Lynch Pierce Fenner Smith
    Midas Muffler
    Montana Brewing Company
    Montana Dakota Utilities
    Montana Development
    Montana Leather Company
    Montana Power Company
    Montana Tradeport Authority
    Monte Carlo Casino
    Moss Mansion
    Moulton Bellingham Longo Mather
    Mountain Mudd
    Muddy Waters Espresso
    Murphy & Kirkpatrick
    New York Life Insurance Co.
    Nick Sasich
    Northwestern Mutual Life
    Norwest Bank Montana, N.A.
    Norwest Mortgage Inc
    Pauly's Pub
    Pepsi-Cola Bottling Company
    Perkins Restaurant
    Peter Yegen Inc
    Peter Yegen Jr., Yellowstone County Musuem
    Phonetel Communications
    Pierce flooring/Geo R Pierce
    Piper Jaffray
    Planteriors
    Pretty Women
    Principal Financial Group
    Prudential/Floberg Property Mgmt
    Publication Designs
    Pug Mahons
    Radisson Northern Hotel
    Reliable Tent & Awning
    Rocke Gear
    Satin Garter
    Schutz Foss Architects
    Selover Buick
    Sheraton Billings Hotel
    Sir Speedy
    Smith Funeral Chapel Inc
    Snook Art Company
    Snow Country Clothing
    St Vincent Hospital & Health Center
    State Fur Salon
    Stogies . . . Premium Cigars, News and Gifts
    Stuarts Applied Graphics Inc
    Subway
    Sylvesters Bargain Emporium Inc
    Thai Orchid
    The Aroma Store
    The Castle
    The Event Club
    The Goldsmith Gallery Jewelers
    The Painted Pony
    Todd Miller
    Tolco Management
    Tony Soueidi Jewelers
    Toucan Gallery
    Unique Reflection
    United Properties
    Universal Adwards
    Walkers Grill
    Wendys
    Western Federal Savings Bank
    Western Pawn
    Western Technology Partners
    Wetzels Quality Cleaners
    White Family LLC
    Yellowstone Art Museum
    Yellowstone Printing & Design
    Yeliowstone Shopper
    Yesteryears Antiques & Crafts
    Zoot Banking Systems
                                 ______
                                 
                       Downtown Billings Association, Inc.,
                                                      Billings, MT.
Region Administrator,
General Services Administration,
Denver, CO.
    Dear Region Administrator: As president of the Downtown Billings 
Association I would like to urge you to reopen the site consideration 
for your proposed new BLM facility to be located in Billings, MT. 
Location of the facility on the Arcade block as being proposed by City 
Councilman, Mark Kennedy would not only keep the 200 plus BLM employees 
in the downtown area, but would also act as a bridge between the 
downtown core and the South 27th Street Corridor which is steadily 
redeveloping.
    A core of energetic and dedicated citizens have been working for 2 
years to put in place a mechanism and a plan for the revitalization of 
Downtown Billings. Keeping facilities like the BLM in the Downtown are 
key to attracting private business to locate downtown.
    If the competition were reopened to consider a downtown site I am 
sure that our public leadership would grasp with vigor the opportunity 
to provide an affordable site to developers. This is an opportunity to 
demonstrate how the city of Billings and the Federal Government can 
partner for a win/win situation. Please don't let this opportunity 
pass!
            Sincerely,
                            Jonathan E. Coxwell, President,
                                     Downtown Billings Association.
                                 ______
                                 
                       Downtown Billings Association, Inc.,
                                   Billings, MT, December 12, 1997.
Ms. Polly Baca, RA,
General Services Administration,
Denver, CO.
    Dear Ms. Polly Baca: Enclosed please find the results of an effort 
put forth by several of our DBA members regarding the BLM's possible 
move out of Downtown Billings, Montana. Business owners, managers and 
employees whose living relies in part on the business that BLM 
employees provide, signed these cards. This effort took place in 1 day 
as we realize that time is growing short. We hope this begins to send a 
message that we need the BLM Downtown.
    A month ago, we sent a letter urging you to reopen the site 
consideration for your proposed new BLM facility. We would like to 
reiterate-this request. Downtown stakeholders and dedicated citizens 
have developed a plan to revitalize our neighborhood and we realize how 
important facilities like the BLM are to Downtown. The Downtown 
Billings Association wants the BLM to remain Downtown for the sake of 
our neighborhood. Please consider all of your options and make a 
Downtown location a priority.
    Please be a ``Good Neighbor'' and help us keep Downtown Billings 
alive.
            Sincerely,
                                          Mechelle Schultz,
                                                          Director.
                                 ______
                                 
                   General Services Administration,
                                    Regional Administrator,
                                      Denver, CO, February 4, 1998.
Ms. Mechelle Schultz,
Downtown Billings Association, Inc.
Billings, MT.
    Dear Ms. Schultz: Thank you very much for your expressions of 
concern regarding the Bureau of Land Management lease procurement 
project in Billings, Montana. As you may be aware, the lease contract 
was awarded December 29, 1997. Please rest assured that any action 
taken on behalf of the Bureau of Land Management has been done with the 
best interest of all United States taxpayers in mind.
    If you have further questions regarding this matter, please contact 
Ms. Sandra DiBernardo, Director of our Mountain/Plains Service Center, 
at (303) 236-1770.
            Sincerely,
                                                Polly Baca,
                                            Regional Administrator.

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                                 ______
                                 
                                     Planteriors Unlimited,
                                   Billings, MT, February 12, 1998.

Senate Committee on Environment and Public Works,
Washington, DC.
re: gsa's coordination with montana communities on federal building and 
                            leasing projects
    As a Billings small business owner and co-chair of our recent 2-
year planning effort to revitalize and stimulate Downtown Billings, I 
would like to emphasize the concern of the community regarding the GSA 
bidding process which appears to preclude downtown locations in our 
State. The presence of Federal offices in the hearts of our cities has 
always been crucial to the economic vitality of the community. I am 
extremely frustrated with the current effort to move these offices to 
the edges of our towns, emptying buildings and creating job loss for 
local businesses.
    The plan for our future which was recently approved by the city of 
Billings and Yellowstone County envisions a healthy downtown which is a 
governmental and business center. The community has worked hard in the 
past to improve the downtown neighborhood in which Federal employees 
spend their working hours and we value their continued presence to make 
things even better in our community core.
    While attending an International Downtown Association meeting in 
Portland, Oregon, last Spring I heard a wonderful presentation by GSA 
representatives relating to their adherence to the Executive Order 
requiring consultation with local officials in making location 
decisions. I urge you to require the GSA to follow-up on that 
commitment in their dealings with Montana communities.
            Sincerely,
                                                Kay Foster,
                                                             Owner.
                                 ______
                                 
                            Rocke G.e.a.r Clothing Company,
                                   Billings, MT, February 10, 1998.
                         subject: blm building
    Dear Senator Max Baucus: Thank you for holding this hearing 
regarding the GSA and their impact on local communities. In specific I 
would like to comment on the impact the BLM's employees have on 
downtown Billings. I located my retail store in downtown Billings 
almost 6 years ago. I have since seen ups and downs regarding the 
economic environment. Downtown Billings has weathered the storm of 
urban sprawl up to this point fairly well, however the actions of the 
GSA moving the BLM offices out of downtown may be detrimental to the 
economic well-being of downtown.
    The BLM employees are a significant part of the economy of downtown 
and are very important to my retail business. Please consider each of 
the small businesses located in the downtown area and how they will be 
affected before making any decisions about moving the BLM offices out 
of downtown. The amount of money that can be saved by moving the BLM 
offices pales in comparison to the overall detriment that each and 
every one of the small businesses in downtown will feel.
    In closing, I would like to remind you that President Clinton has 
suggested that before any Federal employees are moved out of downtown 
areas. All other alternatives should be exhausted and the economic 
impact in the area should be considered. This is a clear case of urban 
sprawl that will not benefit the community as a whole and will 
certainly be unhealthy to downtown Billings.
            Respectfully,
                                            Chuck Barthuly,
                                                         President.
                                 ______
                                 
          National Trust for Historic Preservation,
                                         Board of Advisors,
                                                        Denver, CO.
Senator Max Baucus,
Senate Office Building,
Washington, DC.
    Dear Senator Baucus: Downtowns are making a come back! In the face 
of first malls and now super stores, communities are realizing that 
restoring the active life that their Main Street districts once 
supported will benefit not only a town's economy but also its sense of 
identity.
    In Billings we are working on just such a plan. While we are 
working, this country's biggest developer is thwarting these efforts. 
That developer is Uncle Sam, and be it the postal service or GSA, we 
find the Federal Governments developers are not accountable to the 
communities in question, and not interested in the good of the 
community.
    GSA is vacating buildings in our downtown core, creating job losses 
and vacancy rates that will make recovery difficult. While we work hard 
and spend money to revitalize, we have the U.S. Government developer 
working against us.
    In spite of an Executive order, the Historic Preservation Act's 
section 106 review, and the Public Building Cooperative Use Act that 
mandates that Federal agencies use existing historic buildings for 
office space downtown, GSA continues to vacate.
    GSA has a Washington-based office run by a Presidentially appointed 
administrator. In 25 years there have been more than 15 administrators. 
The regional administrator is permanent staff.
    This suggests to me that there is some difficulty in controlling 
the inner bureaucracy.
    Maybe it is time for congressional action. Maybe it is time for 
legislation. Maybe it is time for communities to feel like they are 
working WITH GSA to find solutions.
    It seems clear that this Federal agency lacks the ability to 
enforce the congressional will and the will of the people.
    It really is quite simple. GSA must be accountable.
            Sincerely,
                                              Judy McNally.

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                                   Western Heritage Center,
                                   Billings, MT, February 12, 1998.
Senate Committee on Environment and Public Works,
Washington, DC.
subject: gsa's coordination with local communities on federal building 
                          and leasing project
    The Western Heritage Center is a regional history museum located in 
downtown Billings. As one of six cultural facilities located in 
downtown Billings, the board of directors and staff are very concerned 
about the loss of the Bureau of Land Management offices from the 
downtown.
    The City of Billings, the Montana Trade Port and many private 
business owners have recently developed a public/private downtown 
planning and revitalization effort. This effort has produced a 
framework plan that has the potential to foster significant investment 
in the downtown revitalization efforts.
    On behalf of the individuals, organizations, businesses and 
government agencies working together to revitalize downtown Billings, I 
encourage you to request the Bureau of Land Management reconsider their 
position. I encourage you to work with BLM to develop a strategy that 
would meet the agency's needs and would also contribute to downtown 
Billings revitalization efforts.
            Sincerely,
                                        Lynda Bourque Moss,
                                                          Director.
                                 ______
                                 
                                     Billings City Council,
                                   Billings, MT, February 15, 1998.
    To: GSA and BLM officials attending the Environment and Public 
Works Committee hearing, Helena, MT
    Re: My opposition to moving BLM offices from downtown Billings to 
another location outside our downtown business district.
    From: Jack Johnson, member, Billings City Council, Ward IV

    I feel compelled to add my voice and strong feeling of concern for 
downtown Billings development as relates to the proposed move by BLM 
via GSA recommendations. I, like fellow city councilman, Mark Kennedy, 
`. . . am having a hard time accepting, much less understanding . . .' 
BLM's proposal to move their offices from downtown Billings to a 
different site far from our downtown business area.
    I believe BLM state offices should be housed in the Billings 
downtown district for the following reasons:
    1. Executive Order 12072 mandates that ``first consideration be 
given any centralized community business area'' in selecting federal 
office sites.
    2. The GSA is to work with each level of government, including 
local governments, and to consider their recommendations for and 
objections to any proposed selection site.
    3. Should this recommendation for a move be carried out, the loss 
of jobs and activity in our downtown neighborhood would most certainly 
have a domino effect through loss or relocation of other businesses in 
our downtown area.
    4. Our downtown property tax base would be at risk. Such reduction 
would continue as other businesses left the downtown neighborhood and/
or new businesses decided not to locate there.
    5. Leapfrogging and urban sprawl would continue rather than 
encouraging much needed infill development and increasing property tax 
revenues in our town.
    6. In his letter of September 11, 1997 to Representative Rick Hill, 
Acting State Director, Francis R. Cherry, Jr. stated in part, ``. . . 
while we do not wish to be anything less than a ``Good Neighbor,'' we 
also wish to do what is right for the taxpayer.'' Our goal is to 
acquire space which provides the best possible service to our 
customers, meets the needs of BLM and its employees.'' ``We are doing 
our best to attain that goal.''
    We, who represent local government in Billings, agree 
wholeheartedly with your goal! We earnestly request that you reopen 
bidding and reconsider downtown locations for Bureau of Land Management 
state offices and for those reasons stated above. Thank you for your 
consideration.
                                 ______
                                 
                       Montana Tradeport Authority,
              Center for Business and Economic Development,
                                   Billings, MT, February 13, 1998.
Senate Committee on Environment and Public Works,
Washington, DC.
subject: gsa's coordination with local communities on federal building 
                          and leasing projects
    The Montana Tradeport Authority is a special purpose form of 
government established by resolution of the Yellowstone County 
Commission in 1989 to aid economic development in the Yellowstone 
Region. I will disclose up front to you that one of the Tradeport 
Directors is Harrison Fagg, who owns the downtown building presently 
occupied by the BLM. Under the BLM's present plans, that building will 
be vacated. The Tradeport is not trying to preserve the status quo for 
Mr. Fagg in any manner. It is only concerned about the loss of the 
BLM's presence in Downtown Billings. A brief explanation will clearly 
demonstrate the Tradeport's concern.
    One of the projects being worked on over the past 2 years is 
Downtown Planning/Revitalization of which Tradeport has been the lead 
agency spearheading a public/private partnership for downtown 
revitalization efforts. This group of dedicated people has been able to 
develop a framework plan that has been approved by the City. This 
framework plan allows for a large investment in downtown revitalization 
over the next 10 to 30 years. I am writing to share the concerns of the 
many people involved in the downtown planning effort who feel very 
frustrated in dealing with GSA to keep the federal government presence 
in downtown Billings. The City Administrator and I met personally with 
the director for BLM and talked with GSA to offer site-specific 
locations for consideration in the bidding process. We were not alone 
in our requests. There were others in the community who spoke openly on 
this issue including the Downtown Business Association, Downtown 
Partnership Group and the City of Billings. All pleas were ignored.
    One other point that should be made is that the Tradeport is not 
interested in pitting downtown Billings against the outlying areas of 
Billings or vice versa. However, it is concerned about maintaining a 
vital downtown core area, which everyone understands is necessary in 
order to have a strong community. Right now, the downtown core of 
Billings is hurting badly and becoming weaker by the year. The 
following will demonstrate the Tradeport's concerns.
    The vacancy factor in downtown Billings is presently estimated at 
15-20%. The tax increment value of downtown property has declined from 
a high of $12,461,078 in 1987 to $6,472,033 presently, showing a 48% 
decline in property valuation. This equates to a loss of taxes to the 
Billings school system, the City of Billings, and Yellowstone County of 
$1,500,000 per year. This vacancy factor and declining taxable 
valuation contrasts with the outlying areas of Billings that presently 
have no vacancy factor and have increasing property values.
    When the BLM leaves downtown Billings, it will create an additional 
55,000 square feet of vacant office space. It will not move to a new 
building downtown, but simply move out of the downtown core area lock, 
stock and barrel. In so doing, it will remove over 200 employees from 
downtown Billings who would otherwise buy lunches and shop downtown. 
The overall health of our community cannot afford such a blow. Anything 
you can do for the Billings community will be welcomed.
            Sincerely,
                                           Jerry S. Thomas,
                                                Executive Director.
                                 ______
                                 
                                              Sandra Hawke,
                                   Billings, MT, February 12, 1998.
Senate Committee on Environment and Public Works,
Washington, DC.
subject: gsa's coordination with local communities on federal building 
                          and leasing projects
    As a downtown property owner and also as a public employee, I am 
writing to express my concerns about the uncommunicative and 
unresponsive nature of the GSA in the process of evaluating and 
selecting a location for BLM offices here in Billings.
    ``Downtowns'' have been the historical seat of government in this 
and other towns for decades. In Billings, downtown is still the heart 
of city, county, and federal government and these entities--and 
citizens who access them--find efficiency in that symbiotic locale.
    We as citizens have considered these agencies part of our community 
and offer our support. When the BLM took responsibility for the 
Pompey's Pillar monument, local volunteers rallied to support their 
efforts. For those of us who have appreciated the presence of these 
agencies in our community, and considered them partners, having the BLM 
offices plucked out of downtown with no recourse on our part was like 
having a limb amputated. We could still feel the tingling of the limb, 
but could no longer communicate.
    As a public employee, I know the benefits of keeping community 
involved with functions of government. Taking time to consider input 
and opinions may not always be convenient, but sometimes the best 
solutions come from the ground up, and the public is, after all, my 
employer. As a property owner and business person, I am a great 
believer in keeping ``plugged into my neighborhood.'' There are 
benefits in listening to the community.
    The GSA needs to listen whenever and wherever possible and act more 
responsively.
            Sincerely,
                                              Sandra Hawke.
                                 ______
                                 
                                                      YMCA,
                                   Billings, MT, February 13, 1998.
Hon. Max Baucus,
Senate Committee on Environment and Public Works,
Washington, DC.
 re: gsa's coordination with local communities on federal building and 
                            leasing projects
    Dear Senator Baucus: First, many thanks for pursuing this vital 
issue on behalf of all the Montana cities involved in this process. The 
location of these Federal facilities is an extremely critical decision 
for each of these communities. Any steps which would enhance the 
decision making process involved would obviously be beneficial.
    I have both general and specific reasons for my interest in this 
issue. In general, the decision on location of these Federal facilities 
can have tremendous impact on a local economy. This is particularly 
true in Montana where each city involved has a relatively fragile 
economy. The downtown (central business district) of each of the cities 
involved has faced serious challenges. The relocation of a major tenant 
(as in the BLM case) in a downtown has numerous detrimental impacts. 
First, is the immediate loss of active participants in the central 
business districts. There are also the long-term impacts of depressed 
prices for office space and potential loss of tax revenue driven by a 
likely glut on the market for office square footage.
    My more specific concerns revolve around the direct impact on the 
organization I manage. The Billings Family YMCA has a strong presence 
in downtown Billings. We have made a substantial commitment to the 
central business district. The BLM has been an excellent neighbor which 
provides not only members and participants but also a wide variety of 
volunteers and leaders for our programs. The loss of this neighbor will 
without a doubt impact this YMCA.
    Unlikely many others are not arguing that either the GSA or the BLM 
violated the letter of Executive Order #12072. However, I question that 
the spirit of this directive was served by the process in at least the 
BLM situation. In the big picture point of view, I am sure that time 
and care already spent seems substantial. However, the impact on 
Billings and the other Montana cities is so great that I believe an 
extraordinary effort is justified.
            Very truly yours,
                                 Michael A. Larson,
                                        Executive Director,
                                                              YMCA.
                                              Deputy Mayor,
                                                  City of Billings.
                                 ______
                                 
                                            Finlen Complex,
                                      Butte, MT, February 17, 1998.
Hon. Max Baucus,
U.S. Senator,
Butte, MT.
    Dear Senator Baucus: The Finlen Complex, Inc. respectfully submits 
this document for the record at the public meeting held at the Lewis 
and Clark Library, Helena, Montana, on February 17, 1998, at 10 a.m. 
This written testimony is in regards to Solicitation for Offers for the 
Military Entrance Processing Station (MEPS) in Butte, Montana. Thank 
you.
                                       Frank Taras,
                                            Vice-President,
                                               Finlen Complex, Inc.
                                 ______
                                 
                              introduction
    This written testimony sets forth the experience of the Finlen 
Hotel, a historic building, in dealing with the General Service 
Administration (GSA) in attempting to bid on the MEPS Federal lease. We 
think our experience demonstrates some of the problems encountered by 
historical buildings and buildings located in historic districts.
                 meps lease and solicitation background
    The Military Entrance Processing Station (MEPS) has been located in 
the Finlen Hotel, Butte, Montana since 1980. The original contract was 
for 10 years.
    Since 1990, all contract extensions have been for either 1 or 2 
years. We requested a longer-term extension, but were told repeatedly 
that MEPS and GSA were studying and reviewing options and could not 
commit to longer contract extensions.
    In August 1996, GSA contacted the Finlen and indicated a desire to 
execute single-source procurement for a contract term between 5 and 10 
years. We indicated our acceptance of this proposal and our ability to 
proceed immediately.
    In October 1996, GSA called to indicate there would be no single 
source procurement and that they would instead advertise for proposals, 
but that the boundaries would be within the confines of the historic 
district of uptown Butte. The GSA placed a small 1-day notice in the 
local paper. The Finlen responded to this request for proposals.
    In November 1996, GSA and MEPS representatives arrived in Butte to 
conduct their market study and a tour of the Finlen. They requested 
that we conduct a survey of the existing MEPS and their personnel to 
determine what would be required to improve the facility to current 
standards. We determined that only minor partition modifications were 
necessary along with various cosmetic upgrades. However, during our 
presentation, we were told that the entire facility would have to be 
completely demolished and rebuilt. On January 17, 1997, the 
Solicitation for Offers was sent by the GSA.
                              bid criteria
    The Solicitation for Offers provided in January 1997 contained 
hundreds of bidding criteria requiring compliance in order to be 
considered responsive to the Solicitation. The GSA has indicated that 
the Finlen is currently ``not'' fully responsive to this solicitation 
and therefore cannot be the successful bidder. To our knowledge, only 
four criteria remain that the Finlen proposal does not comply with. The 
first three criteria are structural and cannot be met by the Finlen or 
most historic structures. They are as follows:
    (1) Column Spacing--The Solicitation for Offers states that all 
proposed facilities have column spacing equal or greater than 25 feet 
clear span.
    By specifying a minimum column spacing, the GSA excludes virtually 
all older and historic buildings. Construction technology and materials 
of the past did not allow for long column spans. The stronger 
lightweight materials available today make longer spans possible. The 
GSA states that column spacing less than 25 feet limits design 
flexibility and space efficiency and therefore, is unacceptable. 
However, there are many buildings everywhere both government owned and 
private that have column spacing less than 25 feet and are very 
efficient in their design. The GSA did not present any specific 
examples of how the efficiency of the MEPS operation would be 
compromised by failing to meet the column spacing requirement.
    (2) Ceiling Heights--The Solicitation for Offers specifies a 
finished ceiling height minimum of 9 feet and maximum of 11 feet. As 
with the column spacing restriction, specifying specific ceiling 
heights precludes historic buildings from being acceptable. For 
example, the Finlen has many areas where 9-foot ceilings are possible 
but because of the existing structural conditions, a complete facility 
having all ceilings at nine feet may be impossible. Additionally, there 
is a beautiful ballroom with high ceilings that would highlight any 
space, but it cannot be included because it exceeds the maximum ceiling 
height specification. It would probably comply if a suspended ceiling 
was installed, but the room would be ruined. Again, no site specific 
reason was given for imposing this restriction.
    (3) Seismic Safety--The Solicitation for Offers specifies all 
buildings shall meet the seismic standards for ``new'' construction 
(1993 code) regardless if the facility is existing or new.
    In the beginning of this solicitation process, the GSA insisted 
that we provide documentation from a structural engineer proving our 
compliance with the current seismic safety codes for new construction. 
We contacted several engineers who were unanimous in their conclusion 
that it would be impossible to perform any analysis and certification 
of the Finlen from a seismic standpoint without the original structural 
drawings and specifications. Furthermore, the chances of any older 
structures meeting today's seismic codes are nonexistent since current 
seismic designs require new buildings to ``slide'' or ``pivot'' during 
seismic activity and past building designs relied on rigid structural 
connections that cannot feasibly be modified.
    In a July 17, 1997 letter, the GSA stated that Executive order 
12941 was the governing authority on seismic safety and it could not be 
comprised. Research on Executive Order 12941 determined that there are 
two completely different sets of seismic ``standards''. One standard is 
for ``new'' construction and the second standard is for existing 
buildings. Executive Order 12941 states that each government agency 
that owns or leases buildings shall utilize the ``Standards'' to 
evaluate the risks and estimate the costs of mitigating any 
unacceptable seismic risks in those buildings. We have leased to MEPS 
for 16 years and have never had any seismic evaluation of our facility. 
The Finlen requested copies of these ``seismic standards'' for existing 
facilities in order to study their application, but was told by GSA 
that it was up to us to secure this information and was only provided a 
disconnected telephone number. We were never able to property secure 
these ``standards'' for analysis and compliance. The Finlen has 
maintained its structural integrity for 74 years, including 
withstanding a major seismic disturbance in 1959. Many government owned 
buildings, including Federal courthouses, are in the same seismic 
situation as the Finlen.
    (4) Alcoholic Beverages--The Solicitation for Offers dated January 
17, 1997 specifies site location to be in a city center neighborhood. 
On July 18, 1997 the GSA modified this requirement by placing a 
restriction on buildings that serve alcoholic beverages, provide live 
entertainment, music or dancing. The Finlen maintains a lounge within 
the facility. We requested the governing document on which this policy 
was based and we protested this untimely last minute restriction on the 
facility. There have been no incidents with the lounge and MEPS in 16 
years. The GSA responded that they just ``found it'' and it was a 
national policy.
    The GSA provided these location restrictions:

        LOCATION RESTRICTIONS:
          The MEPS will not be located in buildings serving alcoholic 
        beverages, providing live entertainment, music or dancing.
          The MEPS will not be located in districts where the crime 
        rate exceeds the citywide average.
          The MEPS will be located in commercial areas that are 
        primarily designed as office areas.
          The MEPS can be collocated with retail stores serving all 
        ages. However, if MEPS is located in a shopping mall, a 
        separate entrance which must be accessible to applicants 
        without requiring them to enter through the mall itself shall 
        be provided by the lessor.
    Although this document placed numerous restrictions, only the one 
restriction regarding alcoholic beverages was made part of the 
Solicitation for Offers. The other restrictions, which could apply to 
our competition, were not even listed. Furthermore, even though this 
change placed an unnecessary and arbitrary restriction on our facility, 
we proposed an alternative plan that allowed us to comply with this 
ruling under the last restriction. However, this was dismissed since we 
are not a shopping mall in the modern definition but just a multi-use 
facility ``similar'' to a shopping mall.
                          other considerations
    (1) Cost--The Finlen has spent nearly $50,000 responding to this 
solicitation for Offers. Over $12,000 has been paid to various 
designers and consultants. Another $40,000 has been spent on internal 
staff time. As a small business, it is difficult to keep pace with 
GSA's unlimited resources.
    There are many other operations and cost saving advantages for the 
MEPS to remain in uptown Butte. The applicant lodging facility and the 
applicant dining facility is in close proximity to the MEPS. Having 
these facilities in close proximity is very efficient and it saves 
dollars on costly transportation. All public service buildings, 
courthouse, post office, medical facilities, and public transportation 
are located in Historic Uptown Butte. GSA does not appear to consider 
these operational advantages to be as significant as the efficiency 
gained from uniform 25, column spacing or uniform ceiling height.
    (2) Jobs--The economic impact the MEPS move from the Finlen and 
Uptown Butte is significant. The Finlen presently employs 13 full time 
employees, and even though the MEPS' does not directly employ these 
people, their presence is vital to the building's survival. Loss of the 
MEPS facility would cause significant job force reductions. Other 
businesses in Uptown Butte that are either directly or indirectly 
involved with the MEPS would suffer as well.
                        historical significance
    Historical Significance--The Finlen Hotel was built in 1924 and is 
situated in the heart of the historic mining town of Butte, Montana. 
The hotel is rich in history and is listed in the National Historic 
Register. It is the tallest and best preserved pre-depression era 
building standing in the State of Montana. The presence of the Military 
Entrance Processing Station in the Finlen is consistent with the 
historical character of the building. In fact, the proposed remodeling 
of the main hotel lobby along with MEPS would greatly enhance and 
preserve the historical features of this unique structure.
                           government policy
    Executive Order 12072 and Executive Order 13006 clearly state that 
Federal agencies shall give first consideration to historic properties 
within historic districts for locating Federal facilities. Furthermore, 
Section 3 of Executive Order 13006 requires agencies to take steps to 
reform, streamline, and otherwise minimize regulations, policies, and 
procedures that impede the Federal Government's ability to establish 
and maintain a presence in historical districts.
    Federal policy dictates that the GSA alter its rules, regulations, 
and bidding criteria to encourage the placement of Federal facilities 
in historic properties as long as health and safety issues are met. The 
design restrictions and limitations placed in this Solicitation for 
Offers are precisely the types of issues Congress and the President 
sought to eliminate as roadblocks to placing Federal facilities in 
historic buildings.
                               conclusion
    The comments and concerns raised in this document were communicated 
orally and in writing to the GSA on numerous occasions. The GSA refused 
to make any modifications or compromises that would enable the Finlen 
to compete. After meetings with local officials and representatives 
from the National Trust For Historic Preservation, and the Montana 
Historical Society, the GSA representative wrote,

          ``The GSA determined that a more thorough effort is required 
        to adhere with Section 106 of the National Historic 
        Preservation Act of 1966 and Executive Order 13006 for the MEPS 
        Procurement.'' Furthermore, the GSA promised to seek 
        expressions of interest ``within'' the Butte Landmark District. 
        (See Exhibit A).

    Despite these representations, the GSA issued the attached bid 
solicitation (Exhibit B) on December 2, 1997, which announced a 
preference for historic buildings then placed the same bid restrictions 
that make it impossible for historic buildings like the Finlen to 
compete.
                                 ______
                                 
                   General Services Administration,
                                     Rocky Mountain Region,
                                    Denver, CO, September 29, 1997.
Mr. Frank Taras, Manager,
Butte, MT.
    Dear Mr. Taras: After much consideration and consultation with 
Butte's local officials, General Services Administration (GSA) has 
determined that a more thorough effort is required to adhere with 
Section 106 of the National Historic Preservation Act of 1966 and 
Executive Order 13006, ``Locating Federal Facilities on Historic 
Properties in Our Nation's Central Cities'' for the Military Enlistment 
Processing Station (MEPS) procurement. As a result of this decision, 
negotiations with all existing offerors will reopen and GSA will seek 
expressions of interest for the MEPS requirement within the Butte 
National Landmark District.
    GSA will continue to work with local city officials and adhere to 
all laws and policies that provide preference to historic districts. 
Any eligible properties that are presented to GSA will be considered. 
Negotiations will continue until a Best & Final Offer request is issued 
to all parties.
    Therefore, I have issued Amendment No. 10 for Solicitation For 
Offers (SFO) No. GS-08P-13383 which will replace the existing paragraph 
1.5 ``Offer Due Date''.
    Please indicate your acknowledgment of this amendment by signing, 
dating, and returning one copy of this letter upon receipt. If you need 
additional assistance or information, please contact me at (303) 236-
1770 ext. 240.
            Sincerely,
                                  Malia N. Ringler,
                              Real Estate Contract Officer,
                                     Rocky Mountain Service Center.
                                 ______
                                 
      Wanted to Lease Office Space to the United States Government
    The U.S. Government desires to lease approximately 15,100 
occupiable square feet of office and related type space constructed to 
accommodate a Butte Military Entrance Processing Station (MEPS). The 
mission of MEPS is to process individuals for enlistment or induction 
into the armed services. The facility must be capable of providing 
physical examination rooms, aptitude testing rooms, conference rooms, 
open office areas, storage areas, and other specialized space in a 
first class facility. Six designated parking spaces for Government 
vehicles are required and the property must provide parking for 
employees and visitors.
    The property must be located within the city limits of Butte, 
Montana. A preference will be given to offerors of space in buildings 
on, or formally listed as eligible for inclusion in the National 
Register Of Historic Places, and to historically significant buildings 
in historic districts listed in the National Register. Such preference 
will be extended to historic buildings and will result in award if:
    (1) The offer for space satisfies the terms and conditions of this 
solicitation as well as any other offer received, and
    (2) The retail is no more than 10 percent higher, on a total annual 
square foot occupiable area cost to the Government, than the lowest 
otherwise acceptable offer.
    If more than one offer of a historic building is received and they 
satisfy the above criteria, an award will then be made to the lowest 
priced historic property offered.
    The General Services Administration (GSA) is conducting the 
procurement and is seeking first class quality space in an existing 
building or new construction. The space must be fully services 
including maintenance, utilities and janitorial services. The interior 
space must be capable of being altered to Government layout 
specifications.
    Successful offers must satisfy minimum Federal Government standards 
for Fire Safety and handicapped accessibility. The space offered cannot 
be located within the 100-year floodplain. The space offered must be 
contiguous and occupancy is desired by mid to late 1998. Federal 
seismic requirements must be satisfied. In addition to these standards, 
the following requirements must be satisfied:
    (A) MEPS will not be located in buildings serving alcoholic 
beverages, or buildings, which provide live entertainment, music or 
dancing.
    (B) Offerors must provide evidence from a banking institution of at 
least a conditional commitment of funds for tenant improvement in the 
amount of $725,025.00.
    (C) The interior column spacing must be no less than 25 foot clear 
space between columns.
    (D) Finished ceilings must be at least 9,.0,, and no more than 
11,.0,, measured from the floor to the lowest obstruction.
    The General Services Administration does not use tenant brokers to 
represent the Government in lease negotiations or transactions. Brokers 
or agents may represent the prospective landlord, but any properties or 
proposals submitted by brokers/agents must be accompanied by written 
evidence that they are authorized to represent the building's 
ownership.
    If you desire to list space for consideration, the building or site 
owner must forward a resume and pertinent information concerning the 
building, site, or building plans by December 5, 1997, making reference 
to Solicitation for Offers (SFO) No. GS-08P-13383 to: General Services 
Administration, Rocky Mountain Region, Rocky Mountain Service Center 
(8PR), Attention: Malia N. Ringler, Denver Federal Center, Building 41, 
Room 288, Denver, CO 80225-0546.
                                 ______
                                 
Report by Mark Reavis, Butte-Silver Bow Project Architect, Butte-Silver 
                    Bow Historic Preservation Office
    On Friday, December 19, 1997, my recollection, I received a call 
from Colleen Fine, Butte Silver Bow Urban Revitalization Agency 
Director and Assistant Community Development Director regarding my 
availability on December 23, 1997. Ms. Fine, inquired to my plans on 
this date, I had indicated that I was going to try to spend some time 
wrapping up holiday details and with my children. Colleen informed me 
that GSA/MZPCOM was making their market survey of Uptown buildings on 
this date. I indicated I would rearrange my schedule in order to 
accommodate this visit.
    Though it was personally frustrating for a single father with three 
children to spend limited time with my children to rearrange my 
schedule, I believe it was equally frustrating for all perspective 
building owners that this market survey was to be conducted on the day 
prior to Christmas Eve with very limited notice. In fact, more than 
half the people indicated to me their disbelief in the fact that the 
survey was being conducted on this day with such comments as: `` these 
people must not have a life'' and ``why the (expletive deleted) are 
they doing this today''. I simply shrugged my shoulders and indicated 
that I could not comment.
    Back to Friday morning, December 19, 1997, I attempted to call Ms. 
Malia Ringler of GSA to set up specifics with the time associated with 
her visit. On my answering machine was a message from Ms. Ringler 
indicating her phone number that she would be visiting and that she 
could not leave specifics of her visit on a publicly accessible 
answering machine. I returned the call, there was a recording on her 
machine, her voice mail. I indicated my Butte Silver Bow office phone 
number, my design studio phone number which has a nonaccessible, 
private only access as well as my cellular telephone number.
    I waited for approximately 15 minutes and recalled the GSA office. 
At this time, I talked to Ms. Ringler personally. She indicated that 
the tour would commence at 8:45 and gave me the address of the first 
building only. I inquired about the other sites and she said that these 
would be released when we were at the first site. She indicated that 
the first building would be the ``SC'' building and that she would see 
me there at 8:45. I asked about transportation and offered the use of 
the Butte-Silver Bow County van. She indicated that that was not 
possible and that she did not want to give any perception of conflict 
of interest or preference. I indicated that I would meet her there.
    On Tuesday, December 23, 1997, I arrived at the SC at 8:40. The 
owner nor GSA/MEPCOM was currently visible outside the site. Prior to 
this, I received a reminder call on my cellular phone from Butte-Silver 
Bow staff person Susan Powell reminding of the visit. I told her I was 
approximately 1\1/2\ blocks away from the site. At the ``SC'' building 
I walked around to the east side and found the owner TT waiting the 
arrival of GSA/MEPCOM. Also at the building was the owner's architect 
LB who was there to assist in the offering of the building. I was 
familiar with both individuals and the building itself. I had done some 
initial conceptual architectural work for TT prior to my employment 
with Butte-Silver Bow regarding this building and I knew Mr. LB 
architect from our association within the Butte Society of Architects 
and on various construction projects. We waited until approximately 
9:10 for the arrival of GSA/MEPCOM. Our discussion between Mark Reavis, 
LB, and TT was generally small talk and had nothing to do with the 
offering of this building with the exception of why would they be 
arriving to look at this facility on today.
    Note: It struck me at this site as well as all remaining sites of 
the absurdity of the secrecy of this project. I knew all individuals 
associated with this specific building and many of them quite well. I 
think the majority of the people were struck by the cloak and dagger 
approach and generally had a feeling of what was this all about and 
what specifically was being asked in their proposals. Virtually all 
building owners indicated that they were willing to provide whatever 
GSA specifically wanted. These specifics seemed to not be in place and 
I do not think any one's specific questions regarding what was required 
was answered during all of the market survey site visit.
    On the arrival of Malia Ringler with GSA and MEPS' representatives, 
I went up to Malia and said hello and shook her hand. All three other 
individuals with the GSA/MEPS tour group did not introduce themselves 
to me, in fact, they did not associate themselves with me during the 
entire tour. The local representatives of MEPS, a Major and a Sergeant 
simply indicated that they were the taxi drivers. Though I am a fairly 
sensitive guy, it did not bruise my ego not to be introduced; yet, I 
believe it is a basic rule of courtesy to introduce yourselves and I 
took offense to the fact that I had been marked with a scarlet letter 
and was pushed to one side. From the tour I generally picked up the 
remaining members of the GSA/MEPCOM party. I believe the MEPCOM 
representative's name was Mr. Andy Mac. The Sergeant's first name was 
Celeste. She was the First Sergeant. I do not recall the Major's name 
since I was not introduced to anyone on the tour and did not know 
anyone other than Ms. Ringler.
    We started the market survey in the reception area of the ``SC'' 
building which was an old government receiving and distribution 
facility. Ms. Ringler proceeded with showing the prototypical new MEPS' 
facility at Salt Lake. She indicated that the facility should have an 
appearance in dignity, longevity, and horizontal windows--no vertical 
windows.
    Note: I think a decision on architectural styles and what 
constitutes dignity and longevity is a subjective opinion of 
architectural styles. In my opinion and backed by my expertise in 
historic preservation issues and as a Licensed Architect, the issue of 
longevity is constituted more by classical placement of windows versus 
horizontal windows which are typical of modern office parks. Office 
parks have had little longevity and are constantly at the mercy of 
fluctuating markets. An architectural opinion such as this I believe is 
unfounded and has very weak support in the long-term context of 
architectural styles.
    Malia continued with the discussion of permanence and that the 
facility should look like a government facility. It should not be 
trendy. One such item for the government appearance is the installation 
of a flagpole and a flag. Malia indicated that she would be critical on 
the exterior and that it would be awarded on its shell and ultimately 
the price. The man from MEPCOM interrupted and called a time out and 
asked that they be shown a private place to discuss matters. There 
seemed to be a conflict over a statement by Ms. Ringler. Malia's last 
comment had to do with the design of the interior and that she would 
also be in charge of that. After approximately 5 minutes, Malia and the 
MEPCOM man reappeared and continued with the discussion. We moved into 
a conference room and pictures of the MEPCOM continued to be passed 
around and particularly at this time, Mr. TT reviewed these pictures. 
Ms. Ringler indicated that buildings facade would have to be completely 
redone.
    Note: What design criteria is this facade being completely being 
redone to. There is no indication of any design standards. Ms. Ringler 
had indicated only she would be making these types of design decisions 
along with the owner and the owner's architect. It is obvious that Ms. 
Ringler has experience in design, yet, I am not familiar with her 
credentials regarding these issues. Decisions regarding the shell are, 
in fact, completely up to one individual and their own personal opinion 
of what constitutes correct design for this facility. I feel I must 
vigorously object to this one person design approval. I again looked at 
the prototypical buildings, which was the first time I saw these; and, 
again, find nothing extraordinary about the prototypical Salt Lake City 
exterior shell treatment. The building has a flagpole, continuous 
horizontal band curtain wall windows, brick facade, and flat roof. 
There also appears to be some angling of walls which have a somewhat 
pleasing form but does not indicate any idea of what takes place on the 
interior of this facility which I do not feel is reflected in the 
exterior facade. The prototype facility generally appears to be a box 
with horizontal band windows.
    Ms. Ringler continued to expound on the expectations of a fully 
serviced lease, which means that the tenant will have to do nothing, 
with the exception of calling the building manager if there is a 
problem. Terms of the lease were explained at 15 years with 7 year firm 
with the ability to break the lease after the 7 years on short notice. 
While looking over the pictures, there was additional explanation that 
there needed to be exam rooms, ceremonial rooms, and all of those 
things associated with the induction of individuals into the military. 
Ms. Ringler asked what is your vision of this building and TT indicated 
what do you want us to provide? TT indicated that he wanted the 
building fully occupied and that he was inquiring into the availability 
of other Federal leases in this facility. Ms. Ringler indicated that 
they would not be leasing any other facilities in Butte with a vacant 
space currently in the Butte's Federal Building. In response to the 
question on the vision of the building, TT asked for further 
explanation, GSA/MEPS wants it to look more like an office building. 
LB, architect, said that TT had a good location and Malia indicated 
that this was a good location with the parking off of the main Butte 
Avenue.
    Discussion continued with what would you provide for the 
government? What specifically are you going to do to the shell for us? 
The response from both TT and LB was whatever you want. Again, those 
specifics seemed to escape everyone. A general consensus is it needs to 
look like a MEPS' Center, whatever that is? Again, referring to the 
prototype in Salt Lake City.
    Note: Is this prototype a government approved design and do all 
MEPS have to be designed within the general perimeters of it's form and 
this shape associated with this prototypical building? If this is the 
case, it again would seem to limit the opportunities of utilizing 
current facilities and more specifically historic facilities. This 
design issue of the shell must be addressed and that the issue of 
approval by one person for design of a shell, whether new, modified, or 
existing, must have approval of other individuals with expertise as 
well as the community itself. For historic compliance issues, efforts 
must be made to meet current historic preservation mandate, whether 
Federal, State, or local which assist in the redevelopment and 
strengthening of a community as a whole.
    The MEPCOM man now took his turn regarding this building, 
specifically, his questions were regarding functionality of the 
interior spaces. He indicated there was a supply function to this 
building, specifically with the exam room/doctor's office type of 
functions, and that there was a potential for x-ray equipment and its 
extra weight requirements in this facility. Is the building (sc) 
asbestos clear; TT indicated it was. Malia interjected with column 
spacing of this facility. TT indicated it was 26 feet centerline to 
centerline in all directions of columns. Ms. Ringler indicated that the 
government required 17,500 square feet of usable, rentable space and 
that ancillary facilities (lobbies, public restrooms, mech) were not 
included in this space requirement. There was a need for nine reserved 
parking spaces and that, of course, all the mechanical and electrical 
would need to be brought up to current standards. The MEPCOM man 
indicated that the prevailing codes, (which I interjected would be the 
Uniform Building Code), and that handicapped (N.C.) requirements would 
be UFAS (in lieu of ADA) which are the Federal requirements, the 
Uniform Federal Accessibility Standards, be put into place at this 
facility. The architect indicated that he was familiar with the Federal 
standards and had used them on a current project. There was a further 
discussion that the building was in a good neighborhood.
    Note: Whatever retail services have to do with the MEPS' facility, 
I am not sure?
    There was also indication that the facility will need a food 
service area required for the preparation of food. Also discussed was 
that the submittal must have computer aided design (CAD) drawings 
produced for an accurate footprint and dimensioning of this project.
    Regarding the floor plans and the CAD drawings, it is important to 
know that these plans have indicated exact dimensions and that MEPS is 
looking at specific items and structures which are not easily movable 
and if the owner is not willing to move, these would be column, 
mechanical codes, elevators, those type of objects, those things that 
cannot be moved.
    Note: The requirement of CAD drawings seems somewhat strange and I 
have voiced my objection to this requirement prior to this. The use of 
CAD drawings does not improve the accuracy of a drawing whether 
manually or CAD drawing. The manually drawn floor plan can be just as 
accurate as a CAD drawing. The adage garbage-in, garbage-out applies 
here. I simply note this because this is a small town with small 1 man 
architectural offices that do large-scale projects for private and 
government agencies that are currently not fully CAD drawing capable. I 
understand their requirement for knowing where all permanent items are 
wanted in these buildings, but this can be done my manual drafting. Is 
there a specific computer program and data format file that is required 
for the production of drawings; and are these files directly used by 
MEPCOM in planning the interior of these spaces? If so, this 
information must be provided and requirements of the specific computer 
program specified so that local architects can understand what is being 
required of them and if they can provide this to their client.
    A reasonable project schedule from MEPCOM man was discussed. A 
reasonable project schedule is to be stated and then everyone is 
expected to comply with this schedule, with penalties on both sides if 
it is not followed. If GSA/MEPS finds this building suitable, it will 
be solicited for the proposed facility. Sore specifics regarding the 
facility will be included in the solicitation. I interjected and asked 
Ms. Ringler; ``this, of course, will be the (Architectural) Program''. 
She indicated ``No! that it will simply be a listing of required square 
footage within this facility''. I said ``you will, of course, need a 
program to design this facility''. Ms. Ringler and MEPCOM indicated 
that this is not the case, this is free form design and that they want 
the architect to use his imagination.
    Note: Again, this seems to be totally contradictory to all the 
discussions that we have had prior to this. There has been a big hang 
up about column spacing and that these facilities have to be modern and 
meet exact MEPCOM requirements. The whole approach seems to be 
arbitrary and has the ability to knock people out when they do not 
answer a specific question correctly. In general, my reaction to this 
meeting was more of an interview of the owner versus an actual market 
survey of the buildings' itself.
    GSA/MEPCOM indicated that they were running late and that they 
needed to move on to the next project. Mr. TT asked if they wanted to 
view the facility. They indicated that they were just interested in the 
facade and that ``I am sure that it was fine''.
    Note: Again, this tends to confirm that the building owner and the 
shell are the priority and that there was little interest in the space. 
It seems contrary to everything I know about planning and placing a 
proposed facility in an existing building. While everyone else was 
walking out the exit, I turned and went into the building and waved the 
people in, imploring them to at least come in and take a look. With 
this, everyone came in and looked around and said oh, of course, this 
will work.
    When we left the ``GC'' building, and were outside, I was taken to 
one side and shown the next project we were visiting. Ms. Ringler had 
folded the piece of 8\1/2\ x 11,, paper so that I could only view the 
next facility where we were going.
    Note: Again, this cloak and dagger approach seemed totally absurd 
to me. What could I possibly do with this information in a matter of 
several hours that could affect the outcome of this. I had to get to 
the next facility on my own, in my own car and driving solo to the next 
appointment. site. Again, I find this offensive and the fact that I had 
to be in a separate vehicle. I missed the opportunity to be involved in 
any discussion which took place after we left a site where there may 
hare been a discussion regarding the appropriateness and suitability of 
each site that had just been visited. Many decisions and general 
conclusions could have been drawn between the time of learning onsite 
and going to the next one. There should hare been no problem with me 
tagging along with this group and being an observer of these 
discussions. I find it secretive and not in the best service of the 
public. I am an economic development officer of Butte-Silver Bow County 
and as such I have had consistent dealings with confidentiality 
requirements during development of these properties. I am sure that all 
people involved, which I personally know, would have felt better if I 
would have been part of these discussions after each of these visits, 
yet I was excluded from these.
    On to the next building. It should be noted that the ``SC'' 
building is not located within the Butte National Historic Landmark 
District. I believe there are questions regarding the opening of 
additional submissions outside of the National Historic Landmark 
District.
    Now to the ``C'' building, where we met up with Mr. and Mrs. L, the 
building owners. Again, I knew both these individuals and we had worked 
extensively with Mrs. L regarding potential updating of this facility 
utilizing URA dollars. I am very familiar with this building and the 
potentials that lay within. We went into the main areas of this 
building which was historically a theater and a retail facility. This 
building has an open floor plan with approximately 12 feet iron column 
spacing constituting this building with multi floors above. There 
seemed to be a general dismissal of this building immediately regarding 
column spacing, and what I perceive as a prejudice toward historic 
facilities. Ms. Ringler indicated that the MEPS generally likes to be 
located on upper floors so as not to be disturbed by retail activities 
below. There was a look at the central bearing wall between the two 
main buildings and that there were multiple floors and that square 
footing requirement would require multi floor occupancy.
    Note: The requirement of being on the upper floor, again, seems to 
contradict with information we have heard about. What had generally 
been previously indicated was that: first floor, new construction, 
single floor only buildings were preferred. The indication that upper 
floors preference also seems to contradict some of the program 
requirements of secured access and delivery of goods to this facility. 
Virtually all perspectives building offerors were offering first floor 
space with the assumption that it would be preferred because of 
handicapped requirements and access.
    When the discussion seemed to be going the way of ``that this 
building did not qualify'', I interjected with my knowledge of the 
building and the adjacent site to the west indicating that a submission 
with old and new construction area to the west could be provided in the 
ranking in association with this historic building could be made. A 
large parking area to the west of this facility and the currently 
unused facade could be incorporated into the new construction portion 
of the facility with large open space requirements and that the main 
historic floor could be used for certain activities accommodate with 
creative design. We went and looked at the area west of the ``C'' 
building through a window at the back of the building. There was some 
consensus that this area could accommodate a building at street level 
with protected parking underneath. With this new found information, Ms. 
Ringler indicated that computer designed CAD drawings would be required 
for this facility, Mrs. ``L'' indicated that plans for this building 
were currently available. The questions was were they computer drawn? I 
indicated that they were not but that they were accurate and that they 
met historic design, standard requirements for the aforementioned 
update. GSA's representative asked if there was an architect, Mrs. L 
indicated that her architect was LM, architect. Again, I stated that 
they had met design requirements and that they (owner and architect) 
were knowledgeable and capable of producing the ``newly found'' new and 
old facility. Mr. MEPCOM, again, went over his basic list of questions 
which were stated at the previous site and made emphasis on what was 
the footprint and what would stay in place. Those things, per se, that 
are set stone. There was also reference to seismic standards, (NOTE: 
whatever those are?) when they apply to existing structures. Ms. 
Ringler indicated maximizing the windows within the architecture and 
that there were no windows. Mrs. L, building owner, indicated that 
there was a considerable amount of glazing on the alley side as well as 
the other sides of the building.
    Note: It should be noted, that I believe there is no significant 
restriction in available window openings, if fact, historic buildings 
maximize natural lighting, which was typical of the turn of the 
century, which is not the case with modern office buildings which are 
air conditioned and have large square type format plans. I believe this 
lack of windows in new space is consistent with the Salt Lake City 
prototype facility. These ``office park'' type of buildings, have a 
square plan and have less windows per space, there is often more 
opportunity for usable and pleasant spaces with access to the outside 
environment via windows and natural ventilation in Historic Buildings 
with rectangular or ``L'' shaped plans.
    Ms. Ringler showed the prototype building in Salt Lake City to the 
Mr. & Mrs. ``L'' building owners.
    Note: Again, I find the presentation of a prototypical building of 
new construction and a historic building to be two completely distinct 
and different design issues. This contradiction of a new desired 
facility while touring a Historic Building was consistent throughout 
the tour. A persons was told to tell their vision of a building yet 
they are told that the appropriate vision is a new facility. Again, 
this is a potential that limits the possibility of using historic 
buildings that is simply an opinion.
    The discussion turned to me regarding this historic building and 
restrictions associated with it. I indicated that there was plenty of 
room on interior rehabilitation of this building and that the outside 
was in compliance and the work that she had proposed in rehabing in 
this building was in compliance when utilizing her architects. I 
indicated that it was a handsome building and everyone had to agree 
that it was in good condition and was an attractive building.
    Note: Again, I believe that the design criteria of permanent 
dignity and a government type of facility can be done on this and other 
historic building. In particular, the first floor facade windows can 
accommodate new adaptive uses of this area and could give the presence 
of an office type of facility which would indicate a government 
presence.
    Ms. Ringler indicated that the historic compliance issues would be 
a time factor and could be a problem. I noted that this should not be 
the case and that they had already complied with these issues.
    Note: Again, this is an indication of a prejudice toward existing 
historic facilities and wanting to build a brand new facility. There 
are many opportunities in historic buildings that can be handled by 
creative design. I and building owners have been consistently told 
throughout the tour that this is in fact the case that creativity is 
allowed and encouraged.
    The ``C'' building was extremely cold and unheated and people 
seemed to be wanting to move on. We went to the next facility, again, 
Ms. Ringler showed me only the next facility that we would visit. The 
GSA/MEPS crew got in their car to drive a block and a half to the next 
project, I simply walked. I met up with the representative building 
owner, BB, at the ``WB'' building. Again, in this building there seemed 
to be a general consensus that would not comply with the requirements 
of the MEPCOM building. In particular, that the facility would have to 
be located on multiple floors. This is a legitimate concern but I still 
believe that a MEPS could be accommodated. We looked at the street 
level floor, there was also an indication that there was a full 
basement underneath with parking, and we went to the upper floor which 
had previously been gutted by fire and had been completely rebuilt to 
generally show the openness of this building and its potential. Mr. BB 
seemed to concede that this building would not work for their needs and 
said that he would like to move on to the proposed site for new 
constructing facility. The GSA/MEPS crew got into their vehicle and I 
hitched a ride with Mr. BB to the proposed new constructionsite. Once 
at the site, which was located on the south side of M Street adjacent 
to PGJ, Mr. BB indicated that the facility was proposed to be built on 
this available property. He did not convey to Ms. Ringler that this 
property was currently owned by Butte-Silver Bow County which is, in 
fact, the case. But there was a general indication that it was 
available at a reasonable rate and was available for promotion and if 
this, in fact, is the case, under the City-County's developer's packet 
process for surplus property.
    Note: It should be indicated at this time, the site has potential 
for cultural resources, in particular, remains for the China Town area 
of Butte. This may be an opportunity for historic preservation if 
handled correctly with proper excavation at this site and recovery of 
artifacts with donation to the Mys across the street These issues will 
be brought up if, in fact, a solicitation is brought back to this owner 
and the owner contacts us regarding this site. I think the general 
reaction of Ms. Ringler here indicates her total preference for new 
construction. It was not in so many words, but just simply from 
reaction of body language and a generally higher interest in the 
proposal of such site for new construction.
    Ms. Ringler voiced concern that this area appeared to be totally 
abandoned. Mr. BB simply indicated that this was part of the charm of 
Butte, Montana and went on with his presentation. I thanked Mr. BB for 
this comment. Mr. MEPCOM indicated that this site had possibilities 
when Mr. BB indicated that the building would be pushed toward M Street 
and that there was a gentle slope that would accommodate parking 
underneath the proposed building. It was pretty much left ``at that'', 
and this site meeting was called completed. I asked where the next 
project was and Ms. Ringler indicated that there was some time between 
the next appointment and that they were going to go get a cup of 
coffee.
    Note: Again, I was not invited to tag along with this group. I 
politely refuse to ride with Mr. BB. I asked Ms. Ringler where the next 
appointment was and she indicated it was at the ``FWG'' building. As I 
took off on foot up the hill to get my own cup of coffee, the GSA/MEPS' 
car came up behind me and said the next meeting is not until 11:15. I 
said is that at the ``FWG'' building? She indicated, yes. I pointed to 
the facility and the backside of the facility that was visible from G 
Street. I found the whole discussion back and forth on times and 
appointments presented in a confusing manner and that it was not 
represented to me correctly. There were three miss starts in Mrs. 
Ringler's statement and I was left wondering what was going here. As I 
walked up the hill past the back of ``FWG'' building, I was heading 
toward a local cafe. On the street I ran into a low-income individual 
which I had met as a laborer on a construction project, he asked me 
what was going on, I said ``cannot tell you'', and he said ``sounds 
like a government operation''. I offered to buy him a cup of coffee. We 
went in and sat down at the lunch counter and drank a cup of coffee. I 
finished the cup of coffee and wondered over to the ``FWG'' building.
    I was about 5 minutes early and the owners Mr. FT and JT were at 
the building. I was familiar with this building but had not been in it 
since the retail area had been cleared. There was obviously large, open 
spaces with maximum versatility in this building. I generally worked my 
way around the large space waiting for the arrival of GSA/MEPS. Again, 
I was familiar with the building owners. When GSA/MEPS arrived, they 
indicated that they had gone to another appointment but nobody was 
there and it probably did not matter because the proposal did not seem 
to meet their requirements. I said what building was this and when was 
this scheduled? I did not get a satisfactorily response. Later, after 
the tour of the ``FWG'' building, I specifically asked Ms. Ringler what 
project this was. She had indicated that it was the ``P'' building and 
that it was Mr. DB who was the owner. It did not ring a bell (at this 
time) what this project was and where it was at this time. Ms. Ringler 
indicated that the building did not seem to accommodate MEPS needs, 
that the elevator was too small and that the building itself did not 
project an image of an office building and that it was retail now.
    Note: I take exception to the fact that these historic buildings 
are indicated as having a certain style. Uptown buildings have a long 
history of multiple uses and have accommodated anything from government 
and private institutions, offices, or retail establishments. The change 
of image is no great leap of faith.
    We continued with the tour of the ``FWG'' Building. This building 
is a 1930's building, reinforced concrete with considerable open, 
usable space. At this time, Mr. MEPCOM showed a higher level of 
interest as well as Ms. Ringler regarding the potential of this space.
    Note: There seemed to be considerable tension between Ms. Ringler 
and Mr. FT. Mr. FT kept asking specifics on what was required and Ms. 
Ringler kept responding with curt answers. The lead for this market 
survey evaluation was primarily conducted by Mr. MEPCOM.
    Ms. Ringler asked about parking and would nine parking spaces be 
provided. Mr. FT said that initially only six were to be provided. He 
indicated that there was more than 30 spaces available in the facility 
on two parking levels on G Street, one at street level, and one at a 
sub-basement; but that availability of spaces would be part of the 
negotiation. The owners would offer them if it was specifically spelled 
out. We walked around the entire building and headed to the upstairs 
area. The structural system was obvious when upstairs, (which is 
primarily unfinished), you could see the exposed concrete frame of the 
building and the terra cotta infill between these. I indicated that 
there was plenty of architectural opportunities for adding windows to 
these currently windowless walls to accommodate the MEPS. We worked our 
way over to the north primary facade and took a look at the gothic, 
inspired windows. I indicated to Mr. MEPCOM that these would 
accommodate a ceremonial swearing in room quite well. He shook his 
head, yes. We worked our way through all of the upstairs areas and then 
worked our way down through the building to the basement area. We went 
through the building, over the alley, back up through to the first 
level and then back down to G Street. We entered the parking area on G 
Street into that area and then to the basement area below to look at 
the availability of protected enclosed parking. Previously, during the 
tour, Ms. Ringler asked FT about lead paint, FT said I don't know. I 
said what standards apply to lead paint? Ringler indicated that no lead 
paint is allowed in any Federal facility. From my knowledge of lead 
paint requirements, I asked does this have to do with specific readings 
or required encapsulation. She said she did not know. From my knowledge 
of lead paint on Federal housing projects, that readings using x-ray 
fluorescence can be taken and corrective action is only required if 
specific levels are hit, then only must be addressed. Lead paint can be 
addressed by removal or total encapsulation.
    Note: Again, specific things are said and required that do not have 
backing of a specific manual or requirement. Again, I feel that 
sometimes people respond and do not know how to give a specific answer 
regarding these requirements even though they are willing to comply 
with them, and then, in fact, these ``no responses'' lead to a building 
being dropped out of consideration. This is unfair and does not meet 
the intent of this market survey and does not open it up to all 
perspective, qualified proposers.
    After the total tour of the building, we again heard toward the 
front of the building with everyone else who had scattered throughout 
the project. There was a general consensus that this was a very good 
building and it had lots of opportunities and that there was an ability 
to install windows. I indicated that historic criteria could be met, 
and that the facility could be readily serviced via the alley, secured 
loading, and secured parking. Again, the owners indicated their 
willingness to provide whatever was required if and when they received 
those specific requirements.
    We broke for lunch. I indicated and wondered where they were going. 
I gave Ms. Ringler several options for lunch, she indicated her 
preference but that she did not know where they were going at this 
time. Again, I was not invited to go along with this group. I left the 
building and went back to the same cafe for lunch. During my lunch, I 
received a desperate phone call from the building owner of the ``P'' 
building. He had indicated that he had driven 300 miles specifically 
for this appointment. I had told him that I did not know where they 
were but that I would make an effort to try to locate them. I said to 
please stay around and give me several phone numbers where I could 
contact him and that I would make sure that they would visit his 
facility. I called the current MEPS' facility and asked for the major's 
phone number because I had seen that he had a mobile home. The 
individual on duty indicated that this was a private phone and that he 
did not have access to the phone number. I went to several potential 
Uptown eateries and did not find the group. While looking on P Street 
and going between various restaurants, I saw the GSA/MEPS' vehicle. I 
had flagged them down to inform them of the building owner for the 
``P'' building and that he desired that his appointment be reached. Ms. 
Ringler and crew were in the process of taking photos of the various 
facilities at this time. She indicated they were available and had 
about a half an hour until the next appointment. I called the cell 
phone number that the ``P'' building owner had given me. I used my cell 
phone to call the phone number which he had given him. I relayed the 
information of his availability, I said can we go now, and Ms. Ringler 
indicated, yes, in approximately 10 minutes. After talking on the phone 
during lunch to the building owner Mr. DB of the ``P'' building, it 
came to me what building this in fact was. A major building within the 
Historic Landmark District and the fact that I was also familiar with 
this building owner who happens to be an out of town resident. I met up 
with the building owner approximately 5 minutes before the arrival of 
the remaining group and he had indicated that he was in his architect's 
office, who is located in this building, and that he was in the 
upstairs area when they came for their first appointment and apparently 
missed them.
    Note: I am still at a loss why I was not invited to this initial 
meeting and review of this facility.
    We met on the second floor, generally, we looked around this area. 
Ms. Ringler indicated that this whole area would have to be gutted. Mr. 
DB seemed to be very unfamiliar with what was required, as were various 
other perspective building developers. He said, well I am generally 
offering this lower area below here which will be vacated in the near 
future. We went to this area and Mr. MEPCOM indicated that the column 
spacing seemed to be too close. This column spacing was generally 15 
feet from center to center in one direction and approximately 20 feet 
in the other direction. Again, this column spacing issue tends to 
bother me when there is extensive versatility within this area, which 
is open without permanent walls within the area. It was not indicated 
at this time by Ms. Ringler or anyone else that MEPCOM had a preference 
for upper floors. I indicated that this building had upper storage and 
that there is a central open atrium type of space that could be 
potentially be utilized.
    I also indicated that this building has had multiple uses and that 
the building owner, DB, had a historic picture of the building which I 
handed to GSA/MEPCOM. I said the primary changes to the historic 
building had taken place with the removal of the ``cornice'' and with 
the modifications of the first two floor's facade. I said since they 
had been modified on the first two floors, that there was a whole lot 
of leeway for accommodating the appearance of a government building. 
Ms. Ringler said then, ``well, of course, the cornice would have to be 
reinstalled''. I said, ``no, that is not the case'' but that could be 
done.
    Note: Again, I think that this building was dropped off the list 
and that the people involved did not fully understand the potential of 
this building. The owner was willing to put in elevators, accesses, 
separate security, all of those type of things; but he, of course, had 
not thought these out at this time. How can you drop out a building at 
this initial stage without full understanding of the program and being 
provided with the requirements. The building owner (DB) was asked to 
project his vision of this building. This question was very hard for 
the owner to understand. ``What do you mean'', he said. What is your 
vision of this building,'' Ms. Ringler said. A response from DB was, 
``whatever you want it to be''.
    Note: I strenuously object to this opinion on what is the best 
design for the facade of this building. What are the requirements and 
where is the mandate for a single government official able to make 
these design decisions?
    Note: Everyone seemed to be in a rush and generally this building 
was knocked off the list for what, I believe, was the column spacing 
issue.
    We took a short tour into the basement and we also viewed the 
parking area immediately out behind the building to the south. I also 
indicated at this time that there was a building underneath this 
parking area as well.
    Note: Again, I believe this building was knocked off the list. I 
will be surprised if it will be asked for an offer for solicitation, 
though I do think there are lots of opportunities with this building 
and it should, again, still be considered and that the owner be given 
the opportunity to further evaluate the potential of this building 
utilizing his architect toward the specific requirements of a MEPS 
Center.
    The initially scheduled meeting after lunch was now at hand. Ms. 
Ringler, again, showed me only the next listed facility. It was the 
``D'' building and the building owner was Mrs. MV. Again, I am familiar 
with this owner and with the building itself because URA funds were 
utilized for the rehabilitation of this building. The building is a 
shell and has fire damage but there was extensive rebuilding of the 
roof and replacement windows. This is the only case where I generally 
agree with GSA/MEPS that this building is not suitable for the 
inclusion of a MEPS' facility. The wood frame construction, generally 
the tight room configuration for residential construction does not 
allow for the development of a MEPS facility. With multiple floor 
required, and the constrictive site to the south, and level changes 
would make a feasible facility improbable. Again, there was confusion 
regarding what was exactly being required by the survey. Everyone 
thanked each other and we moved on to the next project.
    At this time, finally the paper was completely unfolded and the 
last site was the ``M'' building, owner HC. I arrived at the site and 
Mr. HC was waiting on the corner of the street. The GSA/MEPS' group was 
close behind. Mr. HC conducted the tour of this facility. A company 
with a month-to-month lease, was currently the only tenant on the lower 
level and approximately two-thirds of this building was currently 
unoccupied. Mr. HC was totally accommodating and said that he would be 
more than willing to make absolutely any modifications to the interior 
of the facility in order to accommodate the needs of the MEPS Center. 
There were lots of questions regarding windows at the building. I 
indicated at this time that there was plenty of opportunities to 
provide lighting into these areas. I went out to the outside and 
pointed out to Ms. Ringler and Mr. MEPCOM what was the original fabric 
of the building and what was the infill. I indicated that the concrete 
block infill could be removed and probably should be removed to 
reestablish the integrity of the facade with plenty of design 
opportunities to do such and to make this a facility that would work. 
There were questions regarding elevators and handicapped access. Mr. HC 
indicated that there was currently handicapped access to this building. 
Ms. Ringler indicated that the primary entrance did not work. Mr. HC 
indicated that this entrance was for the upstairs tenant and that 
anything could be done to accommodate their (MEPS) use. The existing 
entrance could be the primary entrance or it could shift and probably 
should shift to the flatter area out front on G Street and would be a 
specific entrance for MEPS, Mr. HC indicated that there was 75,000 
square feet on this street level floor. Ms. Ringler responded that 
there is a requirement of 17,500 square feet absolutely required. Mr. 
HC that he could work out with the up-

stairs tenant in freeing up some space to fully accommodate the needs 
of the MEPS Center. At this building we looked at column spacing which 
appears to be around 20 feet by 20 feet on center. In this instance, 
everyone seemed to indicate that this column spacing was acceptable. 
Again, I am at a loss while in some cases the column spacing is 
absolutely critical and drops out a building while in other cases the 
building is a 20 foot by 20 foot column spacing is acceptable.
    Note: What I believe, is that this is an indication of prejudice 
toward certain sites and specifically building owners and how they 
present the proposal. The market survey should have been specifically 
involving the buildings suitability only. It also brings up the fact 
that the 20 foot by 20 foot column spacing is arbitrary and that there 
is no prototypical building or prototypical solution. Each project is 
specific to a specific site and that an architect, if qualified, can 
design a fully functional appropriate MEPS' facility.
    Continuing to look at the facility, we went to the back side to 
look at the potential of loading into the facility from a nonstreet 
area. After looking over the entire building, and going up to the 
upstairs and generally looking at the currently occupied area and 
looking at the basement parking level, we finished the tour.
    I thanked Mr. HC, I thanked everyone else, again, with the 
exception of Ms. Ringler no one else responded or talked to me. I 
approached Ms. Ringler, thanked her for the visit, offered her all the 
potential information at this particular building, as with other sites 
questioning was not consistent. A question was asked about, was the 
building in the floodplain? At the parting statements, I indicated that 
we could provide any additional information regarding historic criteria 
as well floodplain information. She said that they had all those maps 
and they had the FEMA flood insurance maps at their facility.
    Note: Again, it seemed more of a test of the building owners versus 
the buildings themselves. It seemed that a response of, I don't know, 
was as good as a, no, and could potentially reject a proposed building. 
I parted this building and worked my way back to the Courthouse. I had 
picked up my car after the visit to the ``P'' building.
    Conclusion: In general, I found the entire experience quite 
frustrating. The market survey approach seemed to be quite arbitrary 
and the decision on whether a solicitation would be sent to a building 
owner was left very much up in the air. I do not believe that any 
building owner felt satisfied with the responses of GSA/MEPS. In all 
cases, I was always left with inquiring looks or questions my way. I 
always had to indicate that I was simply here as an observer. I found 
this very frustrating as an officer of economic development for Butte-
Silver Bow. All of these individuals have looked for our assistance in 
the past. We are an open government which is also very friendly and 
accommodating and tries anyway to assist a building owner in 
rehabilitating their structure which will ultimately assist in meeting 
the goal of rehabilitating of the National Historic Landmark District. 
This, in fact, is the point of all of these efforts. It has been 
determined as a primary goal of Butte-Silver Bow Government which is 
endorsed by the administrative and legislative branches of the 
government that this is a goal of our City-County Government, to 
strengthen and revitalize the National Historic Landmark District area. 
In my opinion, the way GSA/MEPS has operated has limited the 
possibilities of strengthening this area. We have felt that the actions 
of GSA and MEPS did not comply with the National Historic Preservation 
Act and was the reason for the meeting at the Federal Building and the 
involvement of the National Advisory Council as well as the National 
Trust for Historic Preservation.
    We will continue to pursue all avenues to ensure that GSA and MEPS 
complies with the intent of the National Historic Preservation Act and 
that all such buildings within the District are given fair 
consideration for inclusion into the proposed development of a new 
MEPS' facility.

[GRAPHIC] [TIFF OMITTED] T9523.012

              Butte-Silver Bow Urban Revitalization Agency,
                                        Butte, MT, January 6, 1998.
Mr. Ralston Cox,
Advisory Council on Historic Preservation Office,
Washington, DC.
    Dear Ralston: As we discussed, the following is a summary of my 
involvement relative to the GSA process for leasing a site for the 
MEPS' facility in Butte, Montana.
    It is my understanding that this process began in September, 1996; 
although, I was not aware of the project until January, 1997. My first 
knowledge of the MEPS project was in relation to a visit Ms. Malia 
Ringler, GSA-Denver, conducted in Butte. At that time, Ms. Ringler was 
already visiting prospective developers to secure a site for the MEPS' 
facility.
    Mark Reavis, Historic Preservation Officer and Staff Architect, was 
asked to provide a tour of a Butte-Silver Bow owned building that a 
private developer had sug-

gested as a potential facility to house MEPS. Mr. Reavis made the 
building available and provided a tour. That is the extent of this 
Agency's contact with GSA in the initial process. During the timeframe 
from September 1996 to September 1997, I did not deal with GSA. In 
'act. I did not meet anyone from GSA until September of this year.
    On September 25, 1997, I was introduced to GSA officials at a 
meeting in the Federal Courthouse in Butte. The meeting was convened to 
discuss Butte-Silver Bow's concerns relative to the leasing process. 
During the meeting, I expressed my displeasure at not being involved in 
the process; no one from the local government was asked to participate.
    As you will recall, Butte-Silver Bow officials left the meeting 
with the following understanding:
     GSA would work closely with local government officials in 
the process;
     GSA would reopen and readvertise the MEPS' leasing in the 
Landmark District while providing clear indication that buildings in 
the National Historic Landmark District would have a preference and 
detailing what that preference was;
     GSA would allow local comment on the SFO;
     GSA would request that MEPCOM reconsider criteria 
considered detrimental to historic structures; and
     GSA would provide a detailed explanation when a historic 
structure was excluded from consideration.
    The meeting concluded with the agreement that the next step taken 
would be a written review of the SFO. Butte-Silver Bow officials 
received the SFO and were instructed to provide written comments by 
October 15, 1997. My comments and Mr. Reavis' comments were forwarded 
to Ms. Ringler by that date. I have included copies for you.
    Butte-Silver Bow does not have first-hand knowledge that our 
concerns were passed on to MEPCOM. GSA's summary of MEPCOM's response 
was that MEPCOM believed they offered adequate concessions and would 
not consider any additional modifications. One item of particular 
concern was which specific seismic safety standards GSA was requiring. 
When Butte-Silver Bow and the National Trust pressed for these specific 
seismic standards, Ms. Ringler suggested that we search the Internet. 
(See enclosed fax). It is still unclear whether GSA knows what these 
standards are.
    In the meantime, Butte-Silver Bow was contacted by a local 
developer requesting a search to determine whether there were any 
historic structures in a given area. Mark Reavis, in his capacity as 
Historic Preservation Officer, notified the developer on September 16, 
1997, that there was a building constructed in 1928 on the site 
indicated. Because of its age, the building was eligible for listing on 
the National Register. Mr. Reavis indicated to the developer that if 
the project in question was a project for the Federal Government, the 
developer would have to ensure that construction did not impact this 
historic structure. Butte-Silver Bow had no further contact with the 
developer and that building was demolished the week of December 15, 
1997. (A copy of Mr. Reavis' letter is enclosed.) This same information 
was provided to GSA's Regional Historic Preservation Officer.
    It is important to note that it is widely believed in this 
community that there was a handshake deal between the developer and GSA 
on this location and it is the site where MEPS will ultimately be 
located. The rest of the activities; the meeting in September, and the 
additional effort made to reach buildings in the Historic District, may 
well have been window dressing.
    By early November, Butte-Silver Bow had not heard anything from GSA 
either by phone or in writing regarding our comments on the SFO or what 
the next step in the process would be. I sent a letter dated November 
13, 1997, to Ms. Ringler (copy enclosed). In the letter I expressed my 
concern that I had not heard from GSA. It was my understanding that GSA 
would work with Butte-Silver Bow in this process. Butte-Silver Bow 
would provide mailing labels from our data base and GSA would produce a 
mailing to reopen the process for buildings in the National Historic 
Landmark District. This was agreed to because GSA, at its own 
admission, did not provide adequate notification of preference for the 
Historic District. I requested the opportunity to do a joint mailing 
with GSA. I wanted documentation of my Agency's financial commitment to 
the project to be included with the document GSA was preparing.
    Shortly after the receipt of my letter, Ms. Ringler called me; I 
believe it was November 17th. She told me that GSA would not be doing a 
mailing. Ms. Ringler stated that any mailing would be done by Butte-
Silver Bow but she would provide a flyer from GSA. This caught me 
completely by surprise because at no time was this ever discussed with 
or agreed to by local officials. At that point, I considered voicing my 
concerns but given the extremely short turn around time in this process 
as well as the Thanksgiving holiday, I felt the best thing to do was to 
continue in an attempt to try to work with GSA. Ms. Ringler told me I 
would receive the flyer by November 19, 1997, but it was ultimately 
received the afternoon of Friday, November 21, 1997.
    The flyer was received in the form of a fax and, as such, was not 
suitable for distribution. My secretary retyped it verbatim. The flyer 
was duplicated and sent to property owners in the Distict. 
Additionally, the Agency, at its own expense, placed an ad in the local 
paper indicating that lease space was available and for individuals to 
contact the Agency for further details The deadline for submission was 
set for December 5, 1997. The flyer was mailed November 24, 1997, and 
the ad ran on November 28, 1997. This process provided developers with 
less than 12 days for response inclusive of the Thanksgiving holiday 
and weekend.
    During the week of December 1, 1997, as developers submitted their 
proposals they began calling me with concerns regarding questions Ms. 
Ringler was posing to them. One of the individuals, H. C., stated that 
Ms. Ringler called him and said that his proposal was insufficient and 
that it was not detailed enough. The flyer states ``If you desire to 
list space for consideration, the building or site owner must forward a 
resume and pertinent information concerning the building site or 
building plans by December 5, 1997.'' That information was submitted to 
Ms. Ringler, however, H. C. was requested to provide detailed financial 
information not requested in the flyer.
    On December 3, 1997, M. V. called me with concerns because Ms. 
Ringler indicated she needed a letter from me promising my Agency's 
commitment of $382,000 toward the project. I was to specifically state 
that her building was eligible. Since everybody at the September 
meeting had a clear understanding that money was available, my Agency 
was not going to send letters to Ms. Ringler for each individual 
proposer at a time when she knew the commitment was available and only 
eligible buildings could propose. I told M. V. this and she was 
satisfied with my response.
    I was contacted by D. L. on December 4, 1997, concerning his 
proposal. Apparently Ms. Ringler told him that he needed to demonstrate 
the financial ability to handle the project, otherwise his proposal 
would be considered nonresponsive. I suggested he let her know in 
writing that he had the financial ability to handle the project but was 
not, at this point, willing to open up his financial records to the 
Federal Government. Again, let me state that at no place in the flyer 
does it say that this information needed to be provided.
    On December 5, 1997, I was contacted by M. M. regarding his 
proposal. He submitted a proposal and detailed building plans regarding 
his building. Ms. Ringler called him back and stated that it would not 
be considered since it was nonresponsive. Her concerns had to do with 
the seismic safety of the building. Recall, all attempts to find these 
standards have been met with brick walls. I indicated to M. M. to 
commit to meeting the seismic standards and indicate to Ms. Ringler 
that he would discuss it with her during the market survey.
    On Tuesday, December 16, 1997, I was having lunch at an Uptown cafe 
when one of the proposers asked me if I was going to be on the tour 
with Ms. Ringler. I had no idea what he was talking about. He told me 
Ms. Ringler was coming to town the following Tuesday. This news took me 
very much by surprise since I had had no contact whatsoever with Ms. 
Ringler after our discussion regarding flyer the week of November 17, 
1997. I had no idea what GSA was doing or what their process would be 
and was not asked to participate. These activities are completely 
contrary to the agreement reached in the meeting in September. I 
attempted to contact Ms. Ringler immediately but could not reach her.
    On Wednesday, December 17, 1997, I again attempted to contact Ms. 
Ringler regarding her schedule while in Butte. She was out of the 
office and I left a message expressing my concern on her voice mail. I 
attempted to contact her boss, Ms. DeBernardo. I did not leave a 
message with her but her voice mail indicated a cell phone number to 
contact. I attempted to contact that number but was not successful. I 
then contacted Mr. Paul Proudy. His secretary took a message and said 
he would call me back later. When I left work that evening, I had not 
heard from anyone at GSA in Denver.
    On Thursday morning, December 18, 1997, I attempted to contact Mr. 
Proudy again. His secretary asked for my name, I stated that it was 
Colleen Fine from Butte, Montana. She said, ``Oh, Ms. Ringler will be 
calling you back. She will be handling this matter.'' I was not able to 
talk to Mr. Proudy. In fact, I felt I was kept from speaking to him. 
Ms. Ringler called me a few minutes later. I asked her about her visit 
to Butte. She stated, and I quote, ``It did not occur to me to invite 
you since you know the buildings so well.'' She said that the purpose 
of the market survey was to provide the client and GSA an opportunity 
to observe the buildings and determine their suitability for the 
project.
    She stated that a copy of the market survey and any decisions 
regarding proposals would be provided to Butte-Silver Bow. I indicated 
to her that I was not available on Tuesday nor was Mark Reavis. I 
expressed my concern regarding local participation and also expressed 
my concern that I was not contacted. She apologized but stated that she 
would not reschedule the market survey since there were individuals 
coming from Chicago and GSA was being pressed to complete the project. 
I asked her if she could tell me where she would be touring. She told 
me she was concerned about confidentiality. I indicated to her that I 
would not release any of the sites to be toured. She gave me a list of 
sites scheduled to be toured.
    When she completed her recitation of the tour list. I asked her 
about one building that I thought was submitted but she did not list as 
included in the market survey. I asked her whether she had received a 
proposal from the Ben Franklin (F.W. Grand Building). She indicated she 
did not. She closed by saying that if we were able to find a staff 
member to come, they could contact Major Walsh and connect up with him 
at the beginning of the tour. However, after going to great lengths to 
alter his schedule. Mr. Reavis was not allowed to connect with MEPCOM 
officials. Ms. Ringler specified a time and place for Mr. Reavis to 
meet the tour. His offers of a Butte-Silver Bow van or his chauffeur 
services were refused. During the tour Mr. Reavis would be prevented 
from having any personal contact with MEPCOM officials. As the 
designated representative of the hosting local government, his 
treatment by GSA staff was rude and demeaning.
    After I hung up with Ms. Ringler, I called the firm which indicated 
to me they intended to submit a proposal on the Ben Franklin building. 
I told them their proposal was not received. They stated the proposal 
was faxed to GSA by the deadline along with a request for a return fax 
confirming the proposal's receipt. The firm did not get a return fax--
rather a phone message from a GSA staff person indicating that the fax 
had been received. At this point, I contacted Senator Max Baucus' field 
office to express my concerns. Subsequently, I learned from the firm 
which submitted a proposal on the Ben Franklin that Ms. Ringler thought 
the 16-page fax was related to an existing lease. She did not realize 
that it was a new proposal. She did not read the fax but simply put it 
in a file.
    Senator Baucus' field office called me that afternoon and told me 
they had contacted Mr. Proudy and Ms. Ringler and that the Ben Franklin 
proposal would be included. Concerns that the Ben Franklin site would 
not receive an equitable review were alleviated when Ms. Ringler 
pledged that she would rearrange the schedule to make sure the building 
would be given fair consideration.
    Later that afternoon, it occurred to me that Ms. Ringler did not 
indicate to me that she was reviewing a new construction proposal. Upon 
learning the market survey was scheduled, I contacted those developers 
that contacted me during the submission process. As it happens, every 
single developer had contacted me and I verified that each was invited 
on the market survey. The new construction proposal was a joint 
proposal. I called the two firms; one indicated they were contacted 
regarding an existing building they had proposed and the other firm had 
not been contacted at all. This confusion was cleared up with the 
assistance of Ms. DeBernardo and the new constructionsite was reviewed. 
The market survey was conducted as scheduled. I have included Mr. 
Reavis' comments on the tour for your review.
    I have many concerns. GSA pledged to work closely with Butte-Silver 
Bow officials in the process. On the contrary at nearly every turn we 
have been kept in the dark. Butte-Silver Bow has initiated all 
involvement by local officials. All questions have been responded to 
with reticence, reluctance and repugnance on the part of the leasing 
agent. We were allowed no personal contact with MEPCOM staff. Local 
comments and concerns have been censored through GSA personnel. During 
the market survey Butte-Silver Bow officials were kept physically 
separate from MEPCOM staff. We were not allowed to participate in lunch 
and Butte-Silver Bow staff were not even allowed into the same vehicle 
as the representatives of the Federal Government. These behaviors do 
not foster a trusting relationship.
    GSA promised to reopen and readvertise the MEPS' leasing in the 
Landmark District while providing clear indication that buildings in 
the National Historic Landmark District would have a preference and 
detailing that preference. GSA may have allowed new proposals from the 
Historic District, however, they also allowed buildings outside of the 
district to submit as well. My understanding from the meeting in 
September was that only sites in the National Historic Landmark 
District would be considered since this area was not given adequate 
notice of the preference for historic sites and that was the very 
reason for allowing new proposals. One of the buildings toured during 
the market survey is outside the National Historic Landmark District 
and is not eligible for URA funding. Why that building was included, I 
do not know. But, I do know GSA did not mail the flyers, produce a 
mailing or advertise in local papers. Butte-Silver Bow performed these 
activities.
    GSA promised local comment on the SFO. We were allowed to comment 
but those comments fell on deaf ears at GSA and we do not even know if 
our comments were forwarded to MEPCOM.
    GSA stated they would request that MEPCOM reconsider criteria 
considered to be detrimental to historic structures. GSA stated MEPCOM 
felt they had made all the concessions they would make. Since Butte-
Silver Bow has been completely barred from discussions we have no way 
of knowing if or how our concerns were portrayed.
    GSA promised a detailed explanation when any historic structure was 
excluded from consideration. It is unknown yet whether GSA will live up 
to this promise.
    My main concern regarding this process is the lack of trust local 
officials now have regarding GSA. This is a direct result of the 
tactics employed by GSA staff. Montana has one of the most liberal open 
government philosophies in the country. This ideal is an overriding 
tenant of our State's constitution. Those who operate in government in 
Montana are used to open, honest and critical review of our work. Both 
the Montana Opening Meeting Law and Montana Open Records Law indicate 
that citizens of this State want to be well informed regarding the 
operation of government at all levels. This does not work well with the 
smoke and mirrors operation conducted by the GSA leasing agent in this 
instance. Local officials and citizens as well, have been kept in the 
dark, treated in a less than respectful manner and have literally had 
to beg to be included in the process.
    The leasing agent has continued these hostile activities by 
pressing Mr. Reavis to sign a confidentiality agreement regarding the 
procurement process. He did so under duress. He felt if he were not to 
sign, Ms. Ringler would not have allowed him to participate. Ms. 
Ringler instructed Mr. Reavis to have me sign this document as well. 
Upon receipt I noticed it is called a Certificate of Procurement 
Integrity.
    I have no intention of ever signing this agreement. It contains 
references to Federal policies, regulations and laws that are not 
attached. I have no idea what those policies, regulations and laws 
describe and I have no intention of looking them up on the Internet. I 
have reviewed my decision with both the Butte-Silver Bow County 
Attorney and my personal lawyer. Both concur, I would be ill advised to 
sign this document. In fact, the County Attorney, citing the Montana 
Constitution, Montana Open Meeting Law and Montana Open Records Law 
informed me I could not sign this agreement without more documentation 
and even then, I may not be able to sign it. It is truly unfortunate 
Mr. Reavis was required to do so.
    I told Ms. Ringler I would keep the sites visited in the Market 
Survey confidential and I have, however, it must be remembered that 
every single proposer contacted me on their own prior to me ever 
speaking with Ms. Ringler regarding the Market Survey. I find it hard 
to believe that I must keep confidential, things I've learned in the 
normal scope of my duties as an employee of Butte-Silver Bow. The very 
nature of my involvement in economic development activities dictate 
professional decorum but this process is completely out of the norm. On 
numerous occasions I have been instructed, by the Chief Executive, the 
Butte-Silver Bow Council of Commissioners and by the Urban 
Revitalization Agency Board of Commissioners, to ensure Butte-Silver 
Bow's interests are heard regarding the MEPS facility. I made every 
effort to do so and I will not allow my participation in this process 
to be included in GSA's veil of secrecy.
    When we first became involved in this process all Butte-Silver Bow 
wanted was to ensure all regulations were followed and that the 
National Historic Landmark District was given a fair opportunity to 
compete on a level playing field. That was it; period; end of 
discussion. Now it seems the longer the process has gone on the 
stranger the turn of events have been. It may very well be that this is 
an above board process, unfortunately it is very difficult to believe 
given the prejudicial treatment of local officials, of the National 
Historic Landmark District and of the community as a whole. The more 
Butte-Silver Bow has asked for involvement, openness and honesty, the 
more secretive and hostile the response has been. At this point in the 
process it is clear the Leasing Agent has completely lost all 
objectivity and sense of fairness.
    As you may be aware, one of the major goals of Butte-Silver Bow's 
recently revised and adopted Community Master Plan is the continued 
redevelopment of Uptown Butte. As an economic development objective it 
serves several vital purposes. The strength of any local economy is 
mirrored in the treatment of its older urban areas. How we treat these 
areas reflects a community's values and hopes. This community values 
its Uptown and desperately wants its revitalization. Uptown is a 
living, breathing vital place indicative of the spirit and heart of 
this community. Ensuring its strength is the first step in maintaining 
a strong, local economy. A new MEPS facility in Uptown Butte meets 
several local goals while presenting a unique opportunity to create a 
mutually beneficial partnership between the Federal Government, local 
government and private developers. It allows the Federal Government to 
significantly address goals of the community. The opposite 
consideration is equally dramatic in its statement. If the Federal 
Government chooses to leave the Uptown, contrary to the desires of the 
community, the perception left would be one of abandonment. I think 
this is exactly the wrong kind of message the Federal Government should 
be leaving about the very heart of our community.
    As the economic development officer for the Butte National Historic 
Landmark District I am not now nor have I ever asked for special 
consideration. I am asking for a fair process utilizing objective, 
quantifiable and justifiable criteria available to all parties 
beforehand in a written format. For this project in our community and 
for future projects throughout the country, my sincerest hope is that 
the Federal Government seeks to secure space in a fair, open and honest 
manner allowing for all parties concerned to meet their respective 
goals.
            Sincerely,
                                    Colleen Fine, Director,
                                       Urban Revitalization Agency.
                                 ______
                                 
             Butte-Silver Bow Historic Preservation Office,
                                     Butte, MT, September 16, 1997.
                      re: purchase of 3-acre site
    Thank you for your inquiry regarding historic resources at your 
proposed new development site.
    In general, the site that you have identified is remote to the 
Butte National Historic Landmark District. Because of this, we have 
little information regarding the potential for historic structures 
along Harrison Avenue. The date of construction is 1928. Because of its 
age, it meets the 50-year criteria eligibility for listing in the 
National Register of Historic Places. Since the area is along Harrison 
Avenue, a site of considerable construction disturbance, it is highly 
unlikely that any useful archaeological sites still remain.
    Per our phone conversation regarding this project, I asked if any 
Federal funds would be utilized for the construction of this project. 
You indicated that it was all privately-funded. If your potential 
lessee is a Federal agency, they will have to consider impacts to 
historic resources during their lease negotiation process. Again, this 
is the Federal agency's responsibility not the private developer's.
    Please confirm with the potential lessees if they have any such 
requirements in order to protect you and the development regarding a 
solid lease of your proposed facility.
            Sincerely,
                                    Mark A. Reavis,
                             Historic Preservation Officer,
                     Butte-Silver Box Historic Preservation Office.
                                 ______
                                 
              Butte-Silver Bow Urban Revitalization Agency,
                                       Butte, MT, October 14, 1997.
Ms. Malia N. Ringler,
Real Estate Contract Specialist,
Mountain-Plains Service Center,
General Services Administration,
Denver, CO.
    Dear Ms. Ringler: Thank you for the opportunity to comment on the 
SFO for the MEPS facility in Butte. I do have some concerns regarding 
the documentation you provided.
Page 4, 1.0 Summary, Unique Requirements
    This section contains a requirement for an interior column spacing 
which cannot be less than a 25-feet clear span. While the requirement 
that the interior structural column be wrapped in drywall and finished, 
is not a problem, the 25-feet clear span is really a mechanism to 
exclude historic structures from consideration.
    The SFO calls for a large amount of square footage and many of the 
historic buildings choosing to participate will far exceed the square 
footage requirement. From a functional standpoint, any tenant will be 
able to work around the column spacing with no loss of efficiency. 
Unless there can be some demonstrable reason why any Federal agency 
would need a clear span of 25 feet, I would find this requirement 
designed solely to be prejudicial toward historic structures.
Page 5, 1.3 Location, sub (2) Restrictions
    The restriction regarding the location of a MEPS facility in a 
building which serves alcoholic beverages, appears to be meant to 
preclude the current landlord of the MEPS facility in Butte.
    The business serving alcoholic beverages is not open during MEPS' 
hours and therefore military entrants are not exposed to the interior 
lounge area during their processing.
    I would not have a concern with the prohibition of alcoholic 
beverages if it were an adopted regulation applied uniformly to all 
MEPS meal, lodging and processing sites throughout the Country, but 
since alcohol is not available during the MEPS' processing time and is 
available at most meal and lodging sites, this restriction is unfair to 
the owner of the existing location.
Page 25, 4.2 Ceilings and Interior Finishes (Sep 1991)
    ``The ceilings must be at least 9 feet high and no more than 11 
feet measured from the floor to the lowest obstruction.'' This 
requirement could unfairly eliminate historic structures and, if 
implemented in a historic structure, would impact the integrity of the 
building.
    While it is possible to put in a suspended ceiling in any building, 
it is generally known that historic structures will have a higher 
ceiling height, the maintenance of which should be encouraged. This 
MEPS' requirement would mean that a building would be altered, 
therefore, diminishing the historic value of the building. I can find 
absolutely no tie between ceiling height and operational efficiency or 
effectiveness. This alteration would affect a historic building's 
standing with regard to the Federal Historic Tax Credit. Ironically 
this program was designed by the Federal Government to encourage the 
use of older historic structures. The ceiling height requirement is 
completely biased against historic structures.
    One item you did not highlight in your SFO was the topic of seismic 
safety. Again, Butte-Silver Bow's position is that the Federal 
Government cannot impose requirements not currently met at its own 
facilities. Additionally, the requirement cannot be so egregious to 
comply with that to do so would irreparably alter the historic 
integrity of the building. Requirements imposed cannot be designed to 
be met only through new construction. Seismic criteria used must allow 
modifications to a historic building absent the virtual destruction of 
its historic character.
    I thank you for the opportunity to respond to the SFO. It is my 
sincerest hope that GSA continues to work in the spirit of cooperation 
with the Historic Preservation Community and Butte-Silver Box Local 
Government. We look forward to the successful completion of this 
process. If I can be of any aid to you at all in the future, please do 
not hesitate to contact me.
            Sincerely,
                                    Colleen Fine, Director,
                                       Urban Revitalization Agency.
                                 ______
                                 
             Butte-Silver Bow Historic Preservation Office,
                                       Butte, MT, October 14, 1997.
Malia N. Ringler,
Real Estate Contract Specialist,
Mountain-Plains Service Center,
General Services Administration,
Denver, CO.
    Dear Ms. Ringler: Thank you for giving me the opportunity to 
comment on the SFO for the Butte MEPS' facility. As I stated in the 
past and at the recent meeting at the Federal Building, I wish to 
continue to stress the importance of giving priority to projects 
located within the Butte National Historic Landmark District.
    In particular, I am concerned about SFO restrictions for column 
spacing which cannot be less than 25 feet as well as the ceiling height 
restriction of no more than 11 feet. Requirements such as these without 
notation for allowances for historic structures, would seem to 
eliminate the possibility of utilizing landmark historic structures. 
Also, please modify your SFO to reflect the opportunities (10 percent 
preference and Federal Tax Credits) for utilizing historic structures.
    As discussed at the meeting, an extra effort should be made to 
ensure that building owners within the National Historic Landmark 
District are notified and are aware of all the benefits, opportunities, 
and requirements and that these are com-

municated to increase the possibility of rehabilitating a historic 
structure and complying with the National Historic Preservation Act 
and, in particular, the Section 106 process.
            Sincerely,
                                       Mark A. Reavis, AIA,
                    Butte-Silver Bow Historic Preservation Officer.
                                 ______
                                 
                                                  October 10, 1997.
    Malia: I'm reviewing the MEPS' solicitation for offers and have a 
few questions.
    I would like to see a copy of the seismic standards referenced in 
Executive Order 12941. Do you have a copy? Have you contacted the 
Interagency Committee on Seismic Safety in Construction? Can you help 
me to contact the committee?
    Have you contacted MEPCOM regarding additional flexibility? What 
was the result?
    Thanks in advance for your help.
                                             Robert Nieweg.
                                 ______
                                 
                                                  October 14, 1997.
    Robert: Do you have Internet access? I believe you will find all 
the information you could dream of by searching the net. If you do not 
have Internet access, I will begin researching the seismic requirements 
to get you the appropriate information.
    As GSA stated in the meeting, we believe that MEPS has offered 
adequate concessions and therefore, we have not asked them to consider 
any additional concessions. It was agreed in the meeting that you and 
the others, Ralston, Mark, Colleen, Paul would initiate any concerns as 
my letter of September 29, 1997 confirms.

                                             Malia Ringler.
                                 ______
                                 
              Butte-Silver Bow Urban Revitalization Agency,
                                      Butte, MT, November 13, 1997.
Ms. Malia N. Ringler,
Real Estate Contract Specialist,
Mountain-Plains Service Center,
General Services Administration,
Denver, CO.
               subject: lease process for the meps center
    Dear Ms. Ringler: Other than receiving your request for comments on 
the SFO, I have not heard from you since the September meeting 
regarding MEPS. It was my understanding that GSA would be in touch with 
Butte-Silver Bow Local Government shortly after the meeting in order to 
obtain an address list for buildings in the Historic District. Is that 
still a correct assumption?
    If it is still your intention to notify building owners in the 
Uptown area regarding the potential for the MEPS' lease, is it possible 
for URA to piggyback with a joint mailing? The URA Board of 
Commissioners at their November 4, 1997, meeting declared their 
$382,000 commitment to the Finlen facility transferable to any building 
in the Uptown area that secured the MEPS' lease as long as the project 
met with the URA program requirements. It would be helpful if, at the 
time that you send out your requests for letters of intent on the 
project, we could join your mailing and inform building owners of the 
URA commitment to the project.
    Again, it is our intention to work with you on this process. Please 
let me know when you intend to notify the building owners and I will 
have a mailing list ready. I will await a reply from you.
            Sincerely,
                                    Colleen Fine, Director,
                                       Urban Revitalization Agency.
                                       Kissock Realty, Inc.
                                      Butte, MT, February 12, 1998.
Senator Max Baucus,
Washington, DC.
    Dear Senator: As a Realtor, it is important that I understand the 
``House Rules.''
    As a citizen, I would like the consideration of a new building and 
site developed on the tax roles; as well as respecting the historical 
area.
    To bid a GSA property is very expensive for the contractor. It 
would be most helpful, if, GSA would not call for bids outside of the 
historical areas, if they cannot be considered because of law, and/or 
politics.
    I would appreciate a copy of any conclusions reached from this 
meeting.
            Respectfully,
                                          Betty R. Kissock,
                                               Kissock Realty, Inc.
                                 ______
                                 
                                      Montana State Senate,
                                                        Helena, MT.
Senator Max Baucus,
Billings, MT.
    Dear Senator Baucus: I would like to urge you to make an effort on 
behalf of downtown Billings. If the Bureau of Land Management moves its 
offices, it will strike a serious blow to our city's heart just as we 
are making efforts to give it new life.
    The downtown Billings renovation project holds great promise for 
our town. But if another 54,000 square feet of rental property suddenly 
go vacant, it will tear a hole in that fabric. In addition to the fact 
that vacant property doesn't pay taxes, this move would have a negative 
effect on rental property values downtown. At the very moment we are 
trying to encourage more property owners to offer residential rental 
space downtown, the BLM's move would undermine the incentive for them 
to do so.
    Senator, I encourage you to support the city of Billings' efforts 
to obtain a 1-year moratorium on this move, to ensure that it has been 
done properly, and with due regard to the welfare of downtown. Only by 
careful study can we make sure that our Federal Government is not 
harming our city's growth and development.
    Thank you for your kind attention to this matter, Senator. I am 
sure you are concerned for the health of downtown Billings, and this is 
one step we can take that will translate that concern into positive 
action.
            Sincerely,
                                    Senator Sharon Estrada.
                                 ______
                                 
                             Harrison G. Fagg & Associates,
                                   Billings, MT, February 16, 1998.
Hon. Max Baucus,
U.S. Senate, Washington, DC.
    Dear Senator Baucus: Solicitation for Offer No. 97-15 presented by 
GSA requesting space for BLM in Billings, Montana, if continued, will 
cause a serious impact on the entire city of Billings. The bid proposal 
and the results will be detrimental to Billings for the following 
reasons:
    1. There are currently 201,969 square feet of vacant space in the 
Billings Central Business District. The government leaving Granite 
Tower will vacate another 54,486 square feet increasing the total 
square footage to 256,455, an increase of approximately 27 percent.
    2. The increase in rental space will depreciate tax values and have 
a deteriorating effect on the city of Billings.
    3. The move from the Central Business District was predicated on 
BLM's desire to have a wareyard and warehouse attached to their 
building. Please note:
    a. CBD zoning does not allow wareyards and warehouses.
    b. A study of 11 regional offices of BLM shows 66 percent of the 
wareyards and warehouses are not adjacent to the office building, but 
in fact, are located in locations fitting that type of facility.
    c. BLM has claimed large savings by having the wareyard and 
warehouse attached to their building. Actual savings through a study 
made by the Billings regional office came to $35,000 per year.
    4. Executive Order 12072 has not been followed. Please note the 
following:
    a. GSA offered the space for leasing within the CBD on June 23, 
1996. It was done in a competitive manner with opportunities for anyone 
in the United States to bid. Granite Tower submitted. This bid has 
never been rejected. If accepted, it would have met all the terms of 
the Executive Order.
    b. BLM has stated along with GSA repeatedly and publicly that no 
site in the CBD would be overlooked, thus allowing the Executive Order 
to be met. On September 11, 1997, in a letter to the Honorable Rick 
Hill, Frances R. Cherry Jr., Acting State Director for the Bureau of 
Land Management stated that they were aware that the building could not 
be placed in the CBD as bid. Thus, they acknowledged their 
noncompliance with the Executive Order, but the bidding process 
continued.
    c. The Executive Order requires consultation with city officials. 
On November 3, 1997, the Billings City Council had determined that the 
City had not authorized GSA to relocate BLM from downtown Billings. On 
November 12, 1997, Mayor Charles Tooley notified Polly Baca, GSA 
Regional Administrator that GSA's attempts to relocate the BLM from the 
CBD ``will be contrary to the Presidential mandates of Executive Order 
12072 and leaves our downtown with a major amount of vacant space and 
declining property values''.
    The above actions create a situation making it impossible to bid 
this structure within the CBD and all occurred in the face of GSA's 
repeated promises to all of the three of Montana's congressional 
Delegation that the building would be located in the CBD, or at least 
that CBD property owners would get a fair shot at bidding. This was not 
done.
    In addition to the bid being unfair to the city of Billings, the 
bidding process has been unfair to us as building owners of Granite 
Tower for the following reasons:
    1. BLM has indicated a large savings by moving out of Granite 
Tower. Using BLM consolidation savings prepared by them with the 
wareyard offsite and the totals from the bids presented by Granite 
Tower, in proposal #2 submitted in September 1997, BLM will save the 
taxpayer $15,166,425 in 20 years if they stay in Granite Tower.
    2. There are at least eight special specifications in the bid 
specifically placed to exclude Granite Tower. All were pointed out to 
GSA and GSA refused to waive them.
    3. The original bid answering the solicitation of June 23, 1996, 
has been ignored and has neither been acknowledged or rejected. Thus, 
the bidding is flawed as an existing bid meeting all of the 
requirements of the original solicitation still exists.
    4. By excluding the Central Business District, yet broadening the 
geographical boundary, GSA has allowed preferential bidding for those 
out of the CBD in direct violation of the Fairness in Bidding 
Procedures required by the U.S. Government.
    5. On the day before the bid opening, pre-cast buildings were 
excluded from bidding. Granite Tower is a pre-cast building. On the day 
after the bids were opened, pre-cast buildings were re-included and the 
bidding procedure changed. Thus, creating a bidding procedure which was 
flawed and a bidding procedure which should be rejected and new bids 
taken.
    6. On at least seven occasions, in writing, high officials of BLM 
or GSA and the owners of Granite Tower have assured the Montana 
congressional staff that downtown Billings would be included in the 
proposal. This with the full knowledge that the codes and zoning 
ordinances of the CBD would not allow the central core of the city of 
Billings to house the entire facility.
    In conclusion, GSA has not followed Executive Order 12072, has not 
followed proper bid procedures, has conducted preferential bidding, has 
provided the taxpayer with a building that will cost millions of 
dollars more than the existing space, has worked in direct opposition 
to the betterment of the community and the city of Billings, and in 
doing so, has misled the congressional delegation about their true 
intentions.
    I would further request that a 1-year moratorium be placed on GSA, 
if it turned out the bidding was flawed and that this matter be turned 
over to the Office of Management and Budget or a Senatorial sub-
committee that can take testimony and evaluate the situation through a 
full investigation of the bidding procedure.
    I would request that a re-bidding be held at the end of the 
investigation that would be fair and equitable to downtown locations 
and developers and one which would save the Federal Government millions 
of dollars.
    It is my understanding that a similar situation exists in Butte, 
Helena and perhaps other cities in Montana. If so, I would request that 
these other cities be placed in the evaluation.
            Sincerely,
                                     Harrison G. Fagg, AIA.

                                  
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