[House Hearing, 110 Congress]
[From the U.S. Government Publishing Office]


 
   A CASE STUDY IN NATIONAL GENERAL SERVICES ADMINISTRATION LOCATION 
                     POLICIES FOR FEDERAL AGENCIES 
=======================================================================
                                (110-12)

                             FIELD HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED TENTH CONGRESS

                             FIRST SESSION

                               __________

                   FEBRUARY 27, 2007 (WASHINGTON, DC)

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure

                     U.S. GOVERNMENT PRINTING OFFICE

34-783 PDF                 WASHINGTON DC:  2007
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                 JAMES L. OBERSTAR, Minnesota, Chairman

NICK J. RAHALL, II, West Virginia    JOHN L. MICA, Florida
PETER A. DeFAZIO, Oregon             DON YOUNG, Alaska
JERRY F. COSTELLO, Illinois          THOMAS E. PETRI, Wisconsin
ELEANOR HOLMES NORTON, District of   HOWARD COBLE, North Carolina
Columbia                             JOHN J. DUNCAN, Jr., Tennessee
JERROLD NADLER, New York             WAYNE T. GILCHREST, Maryland
CORRINE BROWN, Florida               VERNON J. EHLERS, Michigan
BOB FILNER, California               STEVEN C. LaTOURETTE, Ohio
EDDIE BERNICE JOHNSON, Texas         RICHARD H. BAKER, Louisiana
GENE TAYLOR, Mississippi             FRANK A. LoBIONDO, New Jersey
JUANITA MILLENDER-McDONALD,          JERRY MORAN, Kansas
California                           GARY G. MILLER, California
ELIJAH E. CUMMINGS, Maryland         ROBIN HAYES, North Carolina
ELLEN O. TAUSCHER, California        HENRY E. BROWN, Jr., South 
LEONARD L. BOSWELL, Iowa             Carolina
TIM HOLDEN, Pennsylvania             TIMOTHY V. JOHNSON, Illinois
BRIAN BAIRD, Washington              TODD RUSSELL PLATTS, Pennsylvania
RICK LARSEN, Washington              SAM GRAVES, Missouri
MICHAEL E. CAPUANO, Massachusetts    BILL SHUSTER, Pennsylvania
JULIA CARSON, Indiana                JOHN BOOZMAN, Arkansas
TIMOTHY H. BISHOP, New York          SHELLEY MOORE CAPITO, West 
MICHAEL H. MICHAUD, Maine            Virginia
BRIAN HIGGINS, New York              JIM GERLACH, Pennsylvania
RUSS CARNAHAN, Missouri              MARIO DIAZ-BALART, Florida
JOHN T. SALAZAR, Colorado            CHARLES W. DENT, Pennsylvania
GRACE F. NAPOLITANO, California      TED POE, Texas
DANIEL LIPINSKI, Illinois            DAVID G. REICHERT, Washington
DORIS O. MATSUI, California          CONNIE MACK, Florida
NICK LAMPSON, Texas                  JOHN R. `RANDY' KUHL, Jr., New 
ZACHARY T. SPACE, Ohio               York
MAZIE K. HIRONO, Hawaii              LYNN A WESTMORELAND, Georgia
BRUCE L. BRALEY, Iowa                CHARLES W. BOUSTANY, Jr., 
JASON ALTMIRE, Pennsylvania          Louisiana
TIMOTHY J. WALZ, Minnesota           JEAN SCHMIDT, Ohio
HEATH SHULER, North Carolina         CANDICE S. MILLER, Michigan
MICHAEL A. ACURI, New York           THELMA D. DRAKE, Virginia
HARRY E. MITCHELL, Arizona           MARY FALLIN, Oklahoma
CHRISTOPHER P. CARNEY, Pennsylvania  VERN BUCHANAN, Florida
JOHN J. HALL, New York
STEVE KAGEN, Wisconsin
STEVE COHEN, Tennessee
JERRY McNERNEY, California

                                  (ii)

  


 Subcommittee on Economic Development, Public Buildings and Emergency 
                               Management

        ELEANOR HOLMES NORTON, District of Columbia, Chairwoman

MICHAEL H. MICHAUD, Maine            SAM GRAVES, Missouri
JASON ALTMIRE, Pennsylvania          BILL SHUSTER, Pennsylvania
MICHAEL A. ARCURI, New York          SHELLEY MOORE CAPITO, West 
CHRISTOPHER P. CARNEY, Pennsylvania  Virginia
TIMOTHY J. WALZ, Minnesota           CHARLES W. DENT, Pennsylvania
STEVE COHEN, Tennessee               JOHN R. `RANDY' KUHL, Jr., New 
JAMES L. OBERSTAR, Minnesota         York
  (Ex Officio)                       JOHN L. MICA, Florida
                                       (Ex Officio)

                                 (iii)





















                                CONTENTS

Summary of Subject Matter........................................    vi

                               TESTIMONY

                                                                   Page
 Anthony, Mignon, Project Manager, Bureau of Alcohol, Tobacco, 
  Firearms and Explosives........................................     5
 Baschuk, Bruce, Chairman, NoMa Business Improvement District....     5
 Winstead, David L., Commissioner, Public Buildings Service, 
  General Services Administration, accompanied by Bart Bush, 
  Assistant Regional Administrator for the National Capital 
  Region, General Services Administration........................     5

          PREPARED STATEMENT SUBMITTED BY A MEMBER OF CONGRESS

Norton, Hon. Eleanor Holmes, of the District of Columbia.........    51

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Anthony, Mignon.................................................    30
 Baschuk, Bruce..................................................    33
 Winstead, David L...............................................    54

                       SUBMISSION FOR THE RECORD

 Baschuk, Bruce, Chairman, NoMa Business Improvement District, 
  NoMa Business Improvement District, map and executive summary..    37

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


   A CASE STUDY IN NATIONAL GENERAL SERVICES ADMINISTRATION LOCATION 
                     POLICIES FOR FEDERAL AGENCIES

                              ----------                              


                       Tuesday, February 27, 2007

                  House of Representatives,
    Committee on Transportation and Infrastructure,
Subcommittee on Economic Development, Public Buildings, and 
                                      Emergency Management,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:00 a.m., in 
Hearing Room 1 at Federal Energy Regulatory Commission, 888 
First Street, Northeast, Washington, D.C., Hon. Eleanor Holmes 
Norton [chairman of the subcommittee] presiding.
    Ms. Norton. Good morning, can you hear me? I am very 
pleased to welcome today's witnesses to this hearing on the 
General Service Administration's Site Location Policy entitled, 
``A Case Study in National GSA Location Policies for Federal 
Agencies.''
    I especially thank the Federal Energy Regulatory 
Commission, their officials and their staff, who readily made 
excellent accommodations available for today's hearing.
    For 16 years, our Subcommittee, on which I have served ever 
since coming to Congress, has had an opportunity to closely 
observe GSA as it has located Federal agencies here, creating a 
virtual microcosm of GSA location policies nationwide.
    The agency is charged by statute to perform various 
developer, landlord and real estate functions. Established in 
1949, the GSA has unique and unsurpassed expertise in every 
location in the country, including extensive knowledge of local 
and regional real estate markets, costs, availability, and 
trends.
    GSA is responsible for approximately $3.8 billion of leased 
space, office space nationwide, and for finding space for 
almost all Federal agencies with the exception of the 
Department of Defense and Veteran Administration entities.
    Today's hearing seeks to learn more about the GSA's role as 
real estate agent, specifically, as to how it carries out its 
statutory responsibilities in guiding and advising agencies 
seeking office space, and whether the GSA is meeting the 
Statute's requirements in carrying out this mission.
    According to Title 40, Subtitle 1, Paragraph 584, the 
Administrator of General Services is responsible for assigning 
and reassigning space. She exercises this authority after 
``consultation'' with the head of an agency, and on the 
determination that the ``assignment or reassignment'' is 
advantageous to the Government in terms of economy, efficiency 
or national security.
    GSA is assigned this responsibility because unlike other 
Federal agencies it has unique professional and technical 
knowledge. Importantly, this function is assigned to GSA, and 
not to Federal agencies themselves, in order to assure 
adherence to uniform policies, to control important variables 
such as cost per square foot, and to assure that taxpayers 
receive the best valuable for the available Federal funds.
    Because the District of Columbia is the Nation's capitol 
with many Federal agencies, this jurisdiction is ideal for 
studying how GSA carries out its location policy mandate 
nationwide.
    The Subcommittee, for several years, has received 
complaints that GSA decisions have created the impression that 
some locations are unacceptable, despite their proximity to 
public transportation and amenities, even where there is 
existing Federal investment.
    Today we are holding this hearing in a location that can 
act fairly as a case study, for looking closely at GSA location 
policy. We are holding this field hearing in a Federal agency, 
in the heart of an area known as NOMA, which stands for North 
of Massachusetts Avenue. This area generally bounded by Union 
Station, North Capitol Street, Florida and New York Avenues, 
and 2nd Street, N.E., was once dotted with warehouses, parking 
lots, and vacant lots. However, its prime location led to make 
over that began almost two decades ago.
    NOMA is located in the Central Employment Area, the CEA, 
defined as, ``parts of the central area of Washington where 
employment facilities are concentrated and adjacent to areas 
where additional development, economic diversification, and job 
generation are encouraged.'`
    NOMA qualifies to be included in the CEA because it, 
``contains a mix of land uses that efficiently support the 
existing Federal activities.'`
    As part of the GSA project authorization project, including 
requests for proposals, a CEA description is always attached.
    The private sector has long given NOMA its vote of 
confidence, even before a New York Avenue Metro Station was 
added with funds jointly from the private sector, the Federal 
Government, and the District of Columbia Government.
    NOMA has been the headquarters for brand-name, private, 
public, and non-profit entities, among them XM Radio, 
CareFirst/Blue Cross Blue Shield, the Securities and Exchange 
Commission, and Kaiser Permanente, and, of course, FERC, the 
agency, we are holding this hearing, and there area many more 
that I could name.
    NOMA is in the midst of a building boom, and will have 
about 60 percent office space and 40 percent rental housing, we 
are told. The confidence in the private market is so high that 
a supermarket will be built before most of the housing will be 
done. In addition, a number of other factors would appear to 
make NOMA desirable to Federal agencies.
    Most Federal agencies located in the District desire to 
remain here, and NOMA is located close to the capitol of the 
United States, and has rates that are significantly below those 
in other downtown locations.
    NOMA is not only close to the New York Avenue Metro, but 
also to Union Station, the City's transportation hub, where 
rail, light rail, Metro, bus and taxi service converge. 
However, it must be noted that Federal investment in urban 
areas is not limited to CEA areas only. Guided by Executive 
Orders, GSA is charged to bring Federal facilities to urban 
areas throughout the country to, ``strengthen the Nation's 
cities and make them attractive places to live and work,'` as 
one Executive Order states.
    However, Washington, D.C. is unique among large cities, in 
that most agencies need little inducement to remain or locate 
in the Nation's capitol. The major location challenge GSA finds 
here is, there is not enough space for many of the agencies 
that desire to consolidate and expand in the District. It 
cannot be doubted that the Federal Government regards the 
centrally located NOMA area as vital to Federal interest. The 
NOMA transformation has been significantly influenced by 
Federal policy and construction.
    The new Bureau of Alcohol, Tobacco and Firearms, or ATF 
Headquarters, signaled that NOMA was regarded as an ideal site 
for Federal facilities.
    To make the point unmistakable, the Federal Government also 
invested in an extra Metro Station that had not been planned as 
part of the Metro system, and, specifically, positioned the 
station to serve the NOMA area, fulfilling GSA's requirement 
that Federal facilities be located in close proximity to public 
transportation.
    As a result, NOMA has a new Metro Station on the north end, 
in addition to the Union Station Metro that has long served 
much of NOMA. We are holding this hearing at FERC, which has 
been located in NOMA for more than 30 years, and chose to stay 
here in 1995, when it moved to this new, very attractive 
building.
    How can we explain 50 city blocks of existing and planned 
below-market office space without any significant commitment 
from any Federal agency since the ATF anchor was awarded and 
the New York Avenue Metro was built.
    In years of oversight of GSA, through Democratic and 
Republican administrations like, this Subcommittee has found 
evidence that agency preferences, not statutory mandates, often 
dominate GSA selections. The 57-acre government-owned Southeast 
Federal Center, located five minutes from the Capitol, is a 
particular case in point. GSA was unable to convince agencies 
to locate there. After ten years of seeing agencies avoid the 
area I introduced the Southeast Federal Center legislation, 
that for the first time is allowing the private sector to 
develop a federally-owned site that the Federal Government 
itself could not, and did not, develop.
    Shortly thereafter, of course, the new Department of 
Transportation Headquarters, scheduled to open soon, was built 
on part of this government-owned Southeast Federal Center site, 
where GSA had previously been unable to attract Federal 
agencies.
    Meanwhile, Federal agencies have continued to lease higher-
price space in more traditional areas near K Street, 
Connecticut Avenue, and similar downtown locations. Not 
surprisingly, Federal employees often prefer downtown 
locations, locations near shops, theaters and restaurants. 
Agency preferences are, of course, relevant, and must be taken 
into account.
    However, significant questions are raised concerning GSA's 
adherence to statutory requirements, when sites complete with 
amenities are continually bypassed in NOMA, which is close to 
the Capitol, other Federal agencies, private and non-profit 
entities, and the Union Station Mall and Metro Stations at both 
ends of the area as well.
    Who is calling the shots?
    The Subcommittee has documented luxurious courthouses, 
virtually, designed by judges, because GSA, essentially, 
deferred its statutory role to them. The result has been 
luxurious courthouses, with scandalously lavish comforts, 
including individual showers, kitchens, and special exercise 
facilities only for judges, unknown in public buildings.
    Is there deference to Federal agencies in seeking space at 
the expense of U.S. taxpayers as well?
    This much is clear, today's staggering Federal deficit 
requires that GSA demonstrate that the agency can do much more, 
and that the agency takes seriously its responsibility to 
ensure that the Federal Government gets the best price, while 
agencies are comfortably and conveniently accommodated.
    This nationwide obligation increases exponentially when the 
Federal Government has moved and advanced the targeting area 
with pioneering office space, such as the ATF Headquarters at 
the north end of NOMA, as well as new transportation 
facilities.
    GSA is a peer agency, and may need assistance from our 
Subcommittee to meet pressures from Federal agencies that 
assume they can have their pick of space, regardless of how the 
Federal real estate tax dollar is spent. This Subcommittee does 
not seek to penalize GSA or other Federal agencies. However, we 
are resolute in our determination that the Federal office 
space, not only reflect the best accommodations for agencies, 
but also, and I emphasize, the best deal for the taxpayer.
    This hearing begins the process of assuring this policy and 
this outcome.
    Again, I welcome today's witnesses, and I look forward to 
their testimony. I'd be pleased to recognize my colleague, Mr. 
Cohen, if he has a statement to offer at this time.
    Mr. Cohen. Thank you, Madam Chairman.
    I didn't necessarily know what I was walking into, but I'm 
happy I'm here, and I'm happy I'm here for many reasons. First 
of all, as I came in this building, I am Freshman 
Congressperson, and I reflected on the fact, Madam Chairman, 
that I think it was, if I'm accurate, 34 years ago after I 
finished law school, I had a friend up in Washington, an 
attorney named Flanagan, and Mr. Flanagan was very close to 
Speaker Tip O'Neill, and he had arranged to get me a job up 
here as an attorney, with this group here, the Federal Energy, 
I know we are here at GSA, but the Federal Energy Regulatory 
Commission, and I was really happy to be coming to Washington 
as an attorney, and was up for like a secondary interview, and 
the lady that interviewed me, this was in the Nixon days, said, 
``I see here you ran for office as a Democrat,'` which I had 
done when I was in college.
    And, I said, ``Yes, ma'am.'`
    And, she said, ``I guess all you people down there are 
Democrats.'`
    And, I took that as a negative from her, and I didn't get 
that job.
    So, it's good to be back here in a different capacity, a 
little bit ironic.
    As a Freshman, I get lost quite often in the Capitol 
buildings and other places, and I've gotten lost and, 
therefore, I've discovered the NOMA district. I live at 4th and 
Mass., I'm kind of in the hood, and when I got lost I stopped 
at a place where they had a grocery store, and I think they 
specialized in meats, they weren't necessarily premium meats, 
but they had like rib eyes, 12 for $15.00 or something like 
that. It was a pretty low income, I think, grocery store.
    And, when I saw the neighborhood which we are talking 
about, there's no question it needs development, and it's 
important that this NOMA district be developed, and the Federal 
Government peruse the materials given as President Carter 
instructed, that whenever possible we try to go into urban 
districts and help urban development. There was a report on 
poverty in the United States that just came out the other day, 
and I think it said that the disparity in wealth is getting 
greater and greater. The number of people that are extremely 
low income has grown in a very disproportionate amount and 
share compared to the rest of the society, and Washington, 
D.C., I think, had the highest number of people in extreme 
poverty. I would suspect that part of some help we could 
provide is to follow President Carter's law passed during his 
Administration, and to develop areas such as NOMA with Federal 
buildings when possible, because it would certainly be a help 
to the Nation's Capitol. I think when the Nation's Capitol is 
improved and aided, that the country is aided.
    So, I'm happy to be here. I just happened to wander into an 
area that I think is--the Chairwoman has led me to a good spot.
    Thank you, Madam Chairwoman.
    Ms. Norton. Well, Mr. Cohen, you may not have gotten a bad 
job with the people of Tennessee, so I gave you another one.
    I'd be pleased to hear from today's witness, Mr. Winstead, 
would you like to start.

TESTIMONY OF DAVID L. WINSTEAD, COMMISSIONER, PUBLIC BUILDINGS 
 SERVICE, GENERAL SERVICES ADMINISTRATION ACCOMPANIED BY BART 
BUSH, ASSISTANT REGIONAL ADMINISTRATOR FOR THE NATIONAL CAPITAL 
   REGION, GENERAL SERVICES ADMINISTRATION; MIGNON ANTHONY, 
   PROJECT MANAGER, BUREAU OF ALCOHOL, TOBACCO, FIREARMS AND 
EXPLOSIVES; BRUCE BASCHUK, CHAIRMAN, NOMA BUSINESS IMPROVEMENT 
                            DISTRICT

    Mr. Winstead. Sure. Can you hear me all right?
    Chairman Norton and Congressman Cohen, I'm very pleased to 
be here. I'm David Winstead, Commissioner of Public Building 
Service, General Services Administration. I bring you greetings 
of Administrator Doan, and I'm very pleased to be here today to 
testify, and continue working with you and the Committee in the 
110th Congress.
    I'd like to take the opportunity of also introducing our 
Assistant Regional Administrator for National Capital Region, 
Bart Bush, who joined the Department, oh, about six or eight 
months ago, and he is directly involved, obviously, in our NCR 
leasing activity, and directly to some of the issues that 
Chairman Norton mentioned is encouraging, attention both on 
redeveloping the opportunities emerging in the NOMA area, as 
well as other markets in the District of Columbia.
    As the Chairman knows, we have been very actively involved 
with the District Government in developing community, as well 
as Chairman Norton and this Committee, in revitalization of the 
District of Columbia.
    In the past ten years, we've worked very, very closely with 
our partners in the Southeast Federal Center. As Chairman 
Norton mentioned the legislation, and that 1.8 million square 
feet, including the Department of Transportation Headquarters, 
which will be opening shortly, some 2,800 residential units, as 
well as 200,000 neighborhood-serving destination, as well as a 
five and a half acre regional park.
    We are also working with the District to develop 
preservation of the St. Elizabeth's Campus, which we've spent a 
lot of time on and working with the Coast Guard and Department 
of Homeland Security, this 176-acre site offers enormous 
opportunity in securing a Federal campus for the needs of the 
Department of Homeland Security. It's also a challenge in terms 
of saving and preserving its characteristics as a National 
Historic Landmark.
    And finally, and the reason why we are here today, is to 
both talk about locational policy of GSA and the Public 
Building Service, but also our commitment in terms of the 
tenancy in this section of the District of Columbia, NOMA. We 
presently occupy about 2.8 million square feet of space in 
NOMA. Included in this total is headquarters for three major 
Federal agencies, the Bureau of Labor Statistics, FERC, this 
building, as well as the new Bureau of Alcohol, Tobacco and 
Firearms building, which is a fabulous new headquarters for 
them opening up here shortly in NOMA.
    For the past few years, GSA has undertaken a variety of 
actions in cooperation with other districts and this Committee, 
obviously, with Madam Chairman's leadership, to reacquaint our 
staff with the NCR and our tenant agencies with what NOMA has 
to offer. I actually, in my prior life as a lawyer here in the 
District of Columbia, am very familiar with this region, and 
also in a role I had years ago with Secretary of Transportation 
now I'm very conscious of the importance of New York Avenue, 
Union Station, in terms of the transit station intermodal 
connections there, as well as the transit stations here in the 
NOMA area.
    I think our efforts have included, not only to work 
directly with our tenant agencies, but briefings for developers 
in NOMA, on how to do business with GSA, tours for potential 
tenants, and agencies looking for attractive workplace 
solutions, and as the Chairman said, looking at both quality 
workplace and the best value to the taxpayer.
    And, we also, I also took a tour of the ATF Headquarters in 
the NOMA area recently with the Chairman, as well as our 
Administrator, Lurita Doan, looking at both existing Federal 
tenancy as well as opportunities in this market of the District 
of Columbia. In fact, today we are sponsoring a region-wide 
location fair, and have invited state and local economic 
development officials, as well as agency tenants. And, the 
purpose of this, which is done regularly, is to educate Federal 
tenants about local economic development projects, so that they 
can make more informed choices and decisions with us on 
location in the District of Columbia, sending representatives 
from both NOMA as well as other areas of the City.
    Our efforts to locate significant Federal agencies in NOMA 
date all the way back to 1990, when GSA signed a major lease of 
the Hines Corporation properties, and what is now known as 
Portal Square at the corner of Massachusetts Avenue and North 
Capitol Street, for a new headquarters of the BLS. Our lease 
enabled Hines, which has redeveloped the site on behalf of the 
U.S. Postal Service, to obtain financing and to double the size 
of the building, restore its historic areas.
    In addition to BLS, it housed a Capitol City Brewery 
Company restaurant, a post office, and Smithsonian Postal 
Museum.
    Currently, as noted by the Chairman, GSA is nearing 
completion, we have Ms. Anthony here, a major tenant, 
completion of the construction of a new 438-square foot 
headquarters for ATF at the intersection of Florida Avenue, New 
York Avenue, near the northern boundary of NOMA. This project 
is coming into the area that has previously consisted mostly of 
abandoned warehouses and empty lots, and the ATF itself was, 
and the ATF site, was a public works yard for the District of 
Columbia. It's most prominent feature at one point was some old 
railroad trellises.
    The District Government, the Metro system, which is a 
marvelous Federal and local investment in the National Capitol 
Region, and our NOMA neighbors, have provided valuable 
assistance by working with Federal Government to jointly 
finance the construction of a new Metro Station immediately 
east of the ATF building.
    I would note that in my prior life I was cognizant of the 
way this was negotiated, and it was a very innovative 
investment, public/private investment, in the expansion of 
transit to serve a major urban area such as NOMA.
    Development of this station, which is now open for 
business, is, in fact, the first time in the U.S. had a new 
subway station was added between two existing stops, while 
continuing to provide service along that line, which was a 
remarkable engineering, as well as construction feat.
    Both the presence of the new ATF building and the new Metro 
Station has contributed significantly to making the northern 
and central portions of NOMA attractive to office development.
    In an article last December, December of 2006, in the 
Washington Business Journal, which sort of tells the story of 
how ripe this area is, and the kind of development and 
investment its attracting, it was estimated that a total of 
$1.2 billion in new construction will occur, commitments made 
and occur during this current Fiscal Year 2007.
    In today's hearings, as the Chairman mentioned, we've been 
asked to answer questions about GSA tenant agencies, and 
whether they are, in fact, giving full--we are giving full 
consideration to NOMA.
    As you are aware, one concern expressed in the past has 
been an issue in terms of amenities in northern and central 
part of NOMA. GSA has taken action on its own to include 8,000 
square feet of restaurant and retail facilities as a part of 
the ATF Headquarter development, located directly across the 
street from the new Metro Station.
    We anticipate announcing our selection of a retail manager, 
master leaser for this space in the next few weeks, and we 
believe that this master lease will, in fact, be--they will, in 
fact, be responsible for fitting out and attracting tenants and 
managing this facility, which we think this 8,000 square feet 
will provide a lot of amenities, a lot of restaurant and retail 
functions, for both our tenant, ATF, and their employees. And 
so, we are really urging this solution, and are on the public 
side a part of adding increased amenities in this area.
    GSA has also encouraged our tenant agencies to consider 
NOMA by adding into the delineated area that GSA uses as a 
starting point for all of our lease actions in Washington, D.C. 
In addition, in January, 2006, we issued a real estate 
bulletin, which established a higher level of scrutiny of 
agencies proposed, tenant agencies proposed to the areas. All 
acquisition plans now include a written justification to 
demonstrate that agencies have taken into consideration 
specific location, economies, market rates, as well as other 
related costs, real estate, labor, and other operational costs, 
and applicable local incentives, such as we see throughout the 
Metropolitan Washington Area, a lot of local governments are 
very highly desirous of GSA and Federal tenancies, and are 
offering enormous incentives.
    We followed this up by meeting with agency contacts in June 
of this last year, and before I sort of conclude, I know these 
are brief opening statements, I'd like to sort of acquaint the 
Subcommittee with the ongoing issues that are attentive to this 
area, both in terms of development, I mentioned 1.2 million 
square feet, also to issue spacing us in terms of 
transportation, ensuring that the District study of 
alternatives for upgrading the capacity of New York Avenue, 
proceed in looking at how to handle this volume in a way that 
encourages access to NOMA and serves our client needs, in terms 
of car access, as well as, obviously, the transit access which 
we have.
    We are participating with D.C. DOT in that regard, working 
closely with Mayor Williams in terms of its efforts along the 
New York Avenue corridor, as well as Florida Avenue, and what 
options are available there. We will continue to work with the 
National Capitol Planning Commission, and we joined them in a 
recent three-day charette on this issue about improving New 
York and Florida Avenue intersections.
    So, we are very pleased to continue, and we'll report to 
this Committee any of our thoughts in that regard.
    But, Madam Chairman, just in concluding, I would like to 
mention that GSA has promoted, and will continue to promote, 
NOMA as a good location for Federal office tenants. I think 
we've already done that quite a bit, obviously, the 2.8 million 
square feet, obviously, the investment of 8,000 square feet of 
retail and other amenities to serve the ATF employees, and I 
think you'll hear about that from our next panelist.
    But, NOMA is a part of our delineated area for selecting 
office space, and we are very, very committed to it, and think 
it has a very, very bright future.
    Madam Chairman, just in conclusion, a letter you received 
recently from our Administrator sort of highlights, and just in 
summary, the commitments that we have taken, in terms of 
increase commitment, and looking at how we work with the 
private options and Federal tenancy in NOMA, and just to 
reiterate, we have expanded limited areas to include NOMA. 
We've met with interested developers and property owners to 
provide in-depth explanation of how our leasing process works. 
We met with the D.C. Office of Planning to learn of efforts 
they have contemplated to upgrade the neighborhood. We 
participated, as I mentioned, in this recent charette with the 
Department, D.C. Department of Transportation, and, obviously, 
the commitment of ATF as the new Headquarters here in NOMA will 
have significant economic development benefits and also our 
commitments in terms of these new master lease to bring 
amenities to the area.
    We are, just in conclusion, we appreciate this opportunity. 
We look forward, Madam Chairman and Chairman Cohen, to continue 
to work with the Subcommittee, to look at this issue of our 
commitment to providing the best workplace solution and the 
best value to the Federal taxpayer.
    Thank you.
    Ms. Norton. Thank you, Mr. Winstead.
    Ms. Anthony.
    Ms. Anthony. Good morning, Chairwoman Norton, Mr. Cohen, 
and Distinguished Members of the Subcommittee. My name is 
Mignon Anthony, and I've served as the Director of New Building 
Projects for the Bureau of Alcohol, Tobacco, Firearms and 
Explosives for the past eight years. I bring greetings from our 
Acting Director, Mr. Michael Sullivan, and appreciate the 
opportunity to address you this morning.
    I'm pleased to be here today, primarily, because it 
represents the culmination of the commitments by this 
Subcommittee, Chairwoman Norton in particular, the General 
Services Administration, the District of Columbia, and another 
stakeholders, to move ATF to the corridor north of 
Massachusetts Avenue, known as NOMA.
    As we are all aware, this cross roads intersection of New 
York Avenue, Florida Avenue, 1st Street, Eckington Place, O 
Street, and the new 2nd Street, N.E., is at the very east end 
boundary of NOMA, and our partners, XM Satellite Radio, Federal 
Express, and Douglas Jamal's People's Building, pioneered that 
neighborhood where Wards 5 and 6 meet, and where the 
Metropolitan Police District--three Metropolitan Police 
Districts intersect.
    It was on a chilly December morning in 1999 that public and 
private entities met at the longstanding public works yard at 
New York and Florida Avenue to memorialize this agreement and 
partnership. Under the terms of that agreement, the ATF 
Headquarters, a Federal building, essentially, would become the 
anchor development for this burgeoning neighborhood and for the 
gateway corridor to our Nation's Capitol. Much work and five 
short years later, we all remember, we assembled again to 
celebrate another anchor, that's the public/private partnership 
and the success of the openings of the New York Avenue, Florida 
Avenue, Galludet University Metro Rail Station.
    Although the City initially had a very different vision for 
this area, one of brass and glass, and one that really did not 
include a Federal law enforcement agency, it took only one 
session at ATF's current Chinatown offices to convince everyone 
that ATF's new home would represent the corporate image of the 
Federal Government.
    We worked with GSA, we worked with the District, with the 
Washington Metropolitan Transit Authority, and many others, to 
develop a plan that would help to establish a face for NOMA, 
that would enable a vibrant and living work environment to grow 
and take into account our critical security needs.
    While acknowledging a wide range of options of opinions 
about the design of our building of 438,000 square feet, I 
think we can all agree that the new ATF Headquarters building 
is an outstanding structure that will provide a unique and 
modern statement for the District of Columbia, as well as the 
people of the United States of America.
    We, at ATF, are very proud to have our first dedicated 
permanent headquarters building, and to have it located in the 
NOMA neighborhood. We strongly believe that our 1,100 
headquarters employees will be a vital part of the local 
community, both economically and socially.
    In considering NOMA, the NOMA site in 1999, GSA worked with 
us, and it was really perceived as ideal for ATF's future, 
because it was in town, but now downtown. Now, because it 
provided an opportunity to strongly influence the new retail 
and the new amenities that were going to be there to represent 
a steady Federal presence, and because it provided an 
opportunity for a win/win situation, a win/win partnership, 
with Metro because of its proximity to the Red Line Metro 
Station.
    However, since selecting the site, the core communities of 
NOMA, residents, institutions, developers and private 
companies, have consistently included ATF in their planning for 
growth dependency and cooperation, strong cooperation. This 
summer, ATF has relocated all of our headquarters operations to 
NOMA, both to the 1,100 person new Federal Headquarters 
building, and also to 1 NOMA Center, which is located at 131 M 
Street, under the historic Woodward & Lothrop Warehouse Water 
Tower. We were very excited about the additional partners 
moving to NOMA, the Marriott Hotel, and we strongly encourage 
other Federal agencies to move there. Together we can all enjoy 
and work to enhance the social and economic benefits of the 
neighborhood, and again, Chairwoman Norton and Distinguished 
Members of the Committee, I thank you for this invitation to 
appear before you today, and welcome any questions you may have 
and your support.
    Thank you.
    Ms. Norton. Thank you, Ms. Anthony.
    Mr. Baschuk.
    Mr. Baschuk. Good morning, Chairwoman Norton, Congressman 
Cohen, Members of the Committee, and Committee Staff, I'm Bruce 
Baschuk, testifying in my capacity as Chairman of the NOMA 
Business Improvement District.
    As you know, NOMA, or as others call it, Capitol Hill 
North, is the Washington, D.C. neighborhood extending from just 
a short walk north of the Capitol to the intersection of New 
York and Florida Avenue. The views from these streets and 
buildings of NOMA, are dominated by the Capitol Dome and Union 
Station.
    A great new addition at the northern end of our skyline is 
the striking headquarters designed for ATF by internationally 
renowned architect, Moshe Safdie. Established as a result of 
the visionary plan for a former industrial neighborhood, NOMA 
represents the very best in modern urban planning. It's 
proximate to the hub of Federal activity on Capitol Hill, in 
the heart of Washington, D.C.'s CBD.
    Significantly, NOMA is a multi-modal transportation hub, 
served by Amtrak, Maryland and Virginia commuter rail lines, 
MARC and VRE, respectively, at Union Station, Metro's Red Line 
service at both Union Station and the New York Avenue Metro 
Station, local and regional bus services operating out of the 
Greyhound Terminal on 1st Street, N.E., excellent access to 
Interstate 395 and Route 50, and we are just ten minutes from 
National Airport.
    The Federal Government has been a critical investment 
partner in helping to establish this area, through, as 
mentioned earlier, GSA's construction of the new Headquarters 
building for the Bureau of Alcohol, Tobacco and Firearms, BLS 
and FERC, which we are pleased to be in today.
    And, through its investment, along with the Government of 
the District of Columbia, and NOMA property owners, in the 
development of the New York Avenue Metro Station in a tri-party 
agreement, these investments are paying off, and paying off 
well, with over 5 million square feet of privately-owned office 
space built in NOMA we can see the vision was firmly based on a 
realistic assessment of user needs and the benefits of a NOMA 
location. Workers can commute to work without adding another 
car to our congested roads, even from the more affordable, more 
distant suburbs.
    NOMA provides significant savings to tenants, with rents 
that are roughly two thirds of Central Business District rents, 
mid 40's versus mid 60's.
    With Union Station at its front door, NOMA is a Central 
Business District location from our perspective, with access to 
everything, great shopping, food, more than 125 shops in the 
areas, in Union Station, some wonderful neighborhoods with 
lunch spots, and a variety of fine restaurants and hotels 
adjacent to NOMA, where it borders on Mass. Avenue. We have 
provided a map of neighborhood amenities for the record, along 
with my written testimony.
    Nearly 1.5 million square feet of new Class A space will be 
under construction this year. Those same developers, and other 
developers, are developing approximately 1,600 apartments in 
three separate development initiatives, and more than 120,000 
square feet of retail space, and two hotels with 300 rooms. 
And, as mentioned earlier, we hope to announce the addition of 
our grocery store very soon.
    These additions, which are targeted for completion within 
24 months, will make this a dynamic mixed-use environment. With 
the addition of a significant residential, retail and hotels to 
the already existing and new office space, NOMA will be a new 
24/7 downtown neighborhood much like the bustling East End.
    As the desirability increases, so will the rents. When they 
do, people may say with regret, I wish we'd made a commitment 
to this area earlier.
    As Chairman and one of the founders of the NOMA Business 
Improvement District, or BID, I would like to spend a brief 
time talking about ways in which our BID will add to the 
exciting things already going on in NOMA. The effort to 
establish the NOMA BID grew out of a recognition by the 
property owners, many of them savvy institutional development 
entities, that NOMA would benefit from a local organized focus 
on neighborhood beautification and improvement.
    The NOMA BID, like downtown, Golden Triangle, and other 
BIDs in D.C., will work to keep NOMA a clean and safe working 
and welcoming environment. It will work to make sure that 
NOMA's streets are lively and attractive and that NOMA is a 
good neighbor to adjacent residential communities.
    As NOMA owners demonstrated with their investment in the 
New York Avenue Metro Station, they are unusually effective in 
seeing that the whole can be better than the sum of the parts. 
Through the NOMA BID, local owners are committed to reinforcing 
the fabric of neighborhood and community, by bringing people 
together to support employment of community residents, 
celebrate neighborhood and residential accomplishments, and to 
make sure that NOMA is a great neighborhood for, not just 
office tenants, but everyone.
    In closing, I would predict that it won't be long before we 
tell the story of NOMA and GSA's location policy in these 
terms, NOMA is one of the best examples of a type of radical 
transformation that can be accomplished in an inner city, 
formerly an industrial area. Proper attention was paid to 
transportation, great architecture, the mix of uses, and the 
quality of community. Most significantly, public and private 
actors came together and collaborated on the implementation of 
a shared vision. By their efforts, they've created a thriving 
new neighborhood that is a welcome--simply just a great place 
to live and work in D.C.
    We welcome the continued involvement of and participation 
of GSA and all of its client agencies in this transformation. 
As significant investment partners, we encourage them to take 
advantage of current opportunities to lock in economic benefits 
and locational advantages before the values the people see 
increase.
    I appreciate the opportunity to appear for you, before you 
today, and be happy to answer your questions.
    Ms. Norton. Thank you very much, Mr. Baschuk.
    Let me begin with Mr. Winstead. Mr. Winstead, let me ask 
how you, GSA, how you conceive your role? Do you conceive your 
role as a real estate agent, like the private sector, or is 
there any difference between somebody doing what you are doing 
for Federal agencies and what a real estate agent would do in 
the private sector?
    Mr. Winstead. Madam Chairman, we, as you mentioned, we are 
governed by both FMR regulations and the Public Buildings Act, 
we are, in fact, driven, increasingly, because of just the 
competition in the market, to find cost effective economic 
solutions for our tenant agencies.
    We've adopted, in the last three or four years, major new 
reforms in terms of customer service, where we------
    Ms. Norton. Yes, well, if you are driven to find cost 
effective solutions, let me just ask Mr. Baschuk, would you 
compare the cost of space here to the cost of space in office 
space in downtown, other downtown areas?
    Mr. Baschuk. Yes, ma'am.
    Again, I believe, and there's plenty of support for this 
belief if you get quotes from landlords, that the cost of new 
office space, Class A office space, is approximately two thirds 
of what you would spend in the Central Business District for 
new office space, Class A.
    Ms. Norton. Mr. Winstead, were you aware of that as you 
take on your mandate, as you said, to find the cost effective 
solutions for your clients?
    Mr. Winstead. Madam Chairman, I'd be--we do, I mean, we are 
very committed to, obviously, looking at the right location 
decision, taking both the rent in consideration, as well as 
technical factors and operational concerns of the agencies, as 
well as their current housing needs in many cases.
    As you know, there are extension of leases in existing 
buildings, but we are--and Bart Bush can comment further, as 
being directly responsible for executing these leases, but from 
a policy standpoint we are aware of the competitive issues here 
in NOMA, and we have found, as I understand, and he can 
elaborate, that rental rates may be below market in some cases, 
we think $4 to $5 per square foot.
    Ms. Norton. And, of course, we are talking about Class A 
space and new space, we are not talking about moving into some 
office building that's maybe a number of years old. Virtually, 
all of these buildings are going up for the first time, just 
like FERC moved into this building as the first tenant. I 
remember breaking ground here.
    So, we are talking about brand new state-of-the-art space, 
right, at below market prices, in the District of Columbia, 
which is known to have an expensive office market, and where 
agencies, nevertheless, desire to be.
    I mean, I'd just like to know how you would explain 50 City 
blocks which have been on the market now for years, and I'm 
going to quote from Mr. Baschuk's testimony, 1.5 million square 
feet of new Class A office projects, understand we are talking 
a few blocks from the Capitol, Mr. Baschuk talked about the 
view of the Capitol you have from the top floors of many of 
these buildings.
    But, we are not just talking office space, he's talking 
about, ``A dynamic mixed-use environment,'` 1,600 apartments in 
three developments of more than 120,000 square feet of retail 
space, that's in addition to the Mall, sir, two hotels with 
more than 300 rooms, and Mr. Baschuk testified, we hope to 
announce the addition of a grocery store very soon.
    I know one thing, most Federal employees would wish that in 
addition to the other amenities downtown there was a grocery 
store, that's one of the things that we are trying to get in 
the 7th Street Corridor, for example.
    So that, when I received only yesterday, I might add, an 
answer to my letter to the Administrator, who was good enough 
to come personally to NOMA to see for herself, and was 
apparently impressed with what she saw, nevertheless, we get a 
letter that says the lack of amenities in the central and 
northern areas of NOMA, where you have just heard testimony 
about Class A office space with amenities that would suit a 
family, and certainly employees who happen to be in the area, 
how then can you explain this notion of amenities as a problem, 
50 square feet where you have to show for it an IRS master 
lease, which, by the way, has been there for a very long time 
and does not represent any new development. I need to know what 
the problem is with amenities. I need to know what an amenity 
is, after hearing Mr. Baschuk's testimony. I need to know 
whether you knew about what is happening in NOMA before you 
heard his testimony today.
    Mr. Baschuk. Chairwoman Norton, if I might, I know you have 
addressed someone else, but I do want to, in defense of our 
Federal Government, indicate that most of these developers who 
are putting into place the solutions that I have articulated, 
have come to this table, if you will, within the last 12 
months. I want to be clear on that.
    Ms. Norton. Well, let me ask you, within the last 12 
months, let's be fair, have you, Mr. Winstead, known of these 
developments?
    Mr. Winstead. Madam Chairman, absolutely. I mean------
    Ms. Norton. I put no time frame on it, Mr. Baschuk, I just 
asked him if he knew.
    Mr. Winstead. Thank you, Mr. Baschuk.
    I'm well aware of it, Madam Chairman, and also Bart Bush 
and his fine staff at NCR is as well.
    This is, obviously, a major market, evolving market, and 
the amenity issue is one that has been raised in the past, and 
is commonly included in our lease solicitation, regardless of 
the delineated area. We have a market under--development with 
both the commitments of $1.2 billion I mentioned earlier, as 
reflected------
    Ms. Norton. You have what, I'm sorry?
    Mr. Winstead. --sorry, we do have major development 
underway, the $1.2 billion that Mr. Baschuk and others have 
talked about, in terms of grocery stores and retail that are 
bringing amenities to the area. So, we do understand that there 
has been a lot of recent market action that brings the kind of 
quality lunchtime and evening activity that this region will 
improve on, in terms of quality of life, both work environment, 
as well as a lot of residential development, before 24 hour, 
not just eight hour activities in the region.
    So, we are well aware of these developments. We are on top 
of them. We've engaged with DCBIA. We've engaged with the 
brokerage groups. We have ongoing efforts to keep informed 
about these developments and options.
    Ms. Norton. Yes, and you've been engaging for a long time, 
for example, you engaged with me--when did we have the GSA, 
when we had our--when the rents were even lower, and GSA worked 
with me, precisely, because we were in a deficit, and because 
NOMA was on the cusp of becoming exactly what it is today, 
what's that, three years ago, five years ago, and we said let's 
let the Federal Government know first, GSA cooperated in the 
best possible way, and we invited in developers to say what is 
not planned, but what is on the drawings boards, what is going 
to happen. And, I've never seen anything like it.
    That was five years ago, when GSA saw for itself and was 
happy to cooperate, to have the Federal agencies, whom we 
invited to this seminar, come and see what was available, and 
yet, all we have to show for it is an IRS master lease and 1 
NOMA Square, which has been in the works for some time.
    I have to ask you what you consider to be amenities, Mr. 
Winstead.
    Mr. Winstead. Madam Chairman, I'd be happy to speak to 
that, but also in terms of any details that Bart Bush might 
provide, if that would be agreeable.
    Ms. Norton. Of course.
    Mr. Winstead. Great. Overall------
    Ms. Norton. If he has some details to the questions I've 
asked, I'd be pleased to hear it.
    Mr. Winstead. Sure. Do you want to deal with that, Bart?
    Mr. Bush. Thank you very much.
    Ms. Norton. Let me ask you the question, what--sir, would 
you identify yourself and say what your position and role is?
    Mr. Bush. My name is Bart Bush, I'm the Assistant Regional 
Administrator for PBS in the National Capital------
    Ms. Norton. All right, you answer then, what are amenities? 
What does GSA consider to be amenities? You just heard a list 
of amenities that I think would impress almost anybody.
    Mr. Bush. Sure.
    Ms. Norton. But, maybe we don't consider the same thing as 
amenities as you do, so I need to know what is an amenity 
necessary for a Federal agency to locate in a brand new Class A 
building?
    Mr. Bush. As defined in our solicitations, amenity 
requirement is, generally, expected to include a variety that 
is available to the Federal employees, commonly available in 
the City location, including retail establishments, dry 
cleaners, banks, pharmacies, day care, and other food 
establishments, within a reasonable walking distance, as 
defined within our solicitations as 2,500 linear feet.
    The offerers always have the opportunity, when they respond 
to us, to include in their development projects these amenities 
within their space, which is to be developed, meaning the 
amenities don't have to exist already for us to consider them 
in our evaluation.
    Ms. Norton. Are you aware that the District of Columbia 
requires that office space have such ground-level ``amenities'` 
in any case, quite apart from GSA, and that all of these 
buildings are going to have ground-level ``amenities'` right in 
the buildings?
    Mr. Bush. We are very excited about that, and certainly we 
have heard in the $1.2 billions worth of development that is 
proposed in the NOMA area, extensive amenities that would 
satisfy our requirement, as the development projects come 
forward, and consider them.
    If you don't mind, I'd like to address one of the other 
NOMA specific questions, as it related to price comparison, 
when we were talking about market rates.
    Market rates, generally, do tend to be less expensive in 
NOMA. However, it's not really been our experience over the 
last year in our full and open competitions. We have conducted 
five such procurements over the last five years, or over the 
last year. In considering our evaluation of space, while the 
market rates may be cheaper, we also have to take into 
consideration the cost of relocation of the agency in our 
overall impact to the Federal Government.
    Ms. Norton. So, excuse me, so these are agencies located in 
the District, who are looking for space, therefore, looking to 
move, and it would be more expensive to move to NOMA than to 
higher-priced space somewhere else in Washington?
    Mr. Bush. My point that I'm trying to make here is that, in 
two of those instances it was cheaper for the agencies to 
remain in place, therefore------
    Ms. Norton. What about the others?
    Mr. Bush. --therefore, not incurring those relocation 
expenses.
    We conducted------
    Ms. Norton. Because that's fine, they are not in the market 
then, we are, obviously, trying to find whether or not people 
looking for space are, in fact, end up getting space in higher-
priced areas in the District of Columbia than NOMA. If those 
people dropped out, they are not of interest to us.
    Mr. Bush. Of the three remaining, two were conducted on the 
source selection criteria. One of those------
    Ms. Norton. Would you explain source selection criteria?
    Mr. Bush. Source selection takes into a variety of 
criteria, including price, but as well as criteria that is 
established in the solicitation, including proximity to 
adjacent other Federal institutions that the agency might have 
to deal with, other criteria that is important to the 
operational component piece of that agency.
    Under solicitation------
    Ms. Norton. Yes, indeed, what you are doing is affirming 
what Administrator Doan said, procurements, let's see what the 
appropriators think about this, are not always based on low 
price, and our government customers often consider both price 
and technical factors related to building attributes, and then 
she names proximity to clients. Now, you know, we are talking 
about an area located near the Capitol. And, we are talking 
about a small compact City, and the notion that you are not 
close to clients, when you are in an area close to the Capitol 
where agencies come regularly, is itself very telling.
    I have no idea what she means by technical factors, what 
are technical factors that you take into account, name me some 
technical factors so I can understand.
    Mr. Bush. Let me just reference her letter, if you don't 
mind.
    Ms. Norton. You know, when you say source selection, just 
let me be clear, you are talking about something that is not 
price driven. Now, we understand that price is a factor, not 
the only factor. But, when an agency can sit down and say, and, 
by the way, I want to be near my clients, that is code for 
lawyers, and guess where they are located, not as many on 
Capitol Hill as on K Street. Everybody knows what that is.
    So, who pays for being close to clients? In either case, 
you are not going to be able to walk there normally. We have a 
state-of-the-art Metro system, we are not talking about going 
out to Virginia, these people want to stay in the District, or 
stay put as you said, they don't want to go out away from the 
Capitol.
    You and I know that the preference is to be as close to 
1600 Pennsylvania Avenue and the Capitol of the United States 
as possible, where here you are right here, within blocks of 
the Capitol, but we are told that proximity to clients can mean 
the difference in addition to price.
    I need to know the technical factors. Proximity to clients 
is spelled out.
    And, Mr. Winstead, perhaps, you weren't here, it was the 
FCC, but we know all about proximity to clients, because GSA 
had a horrific experience, where it had a signed lease, built 
in accordance with the FCC, and guess what, the FCC having 
signed the lease knew exactly where it was going to be, said we 
are not going. So, the people who built the building, down now 
where the hotel--a rapidly developing area, the portals, but 
the hotel down there, the people--the Mandarin, the people who 
signed the lease, of course, took them to court and won.
    So, we know all about preferences, and we know all about 
sitting down with GSA and acting as if GSA is a private real 
estate agent, of course, on the dime of the taxpayers, and 
saying, look, we want to be close to our clients, and then 
there's some ``technical factors,'` and I want to know what the 
technical factors are.
    Mr. Winstead. Well, Madam Chairman, first of all I think 
you referenced, obviously, the other decisions that had been 
arrived at through the NCR's actions in the past.
    I've heard a lot of clear, over the 15 months I've been 
Commissioner, about the very strong direction and our 
fulfillment of that, of being the landlord for the Federal 
agency, and making market-based decisions in the best interest 
of both our tenant, as well as the American taxpayer.
    I mean, you and I have talked a lot about------
    Ms. Norton. Is it a market-based decision to leave space 
unused, which can only be built under D.C. law if it has 
amenities in the building, and you have heard has loads of 
amenities and loads of company coming, some of which you don't 
even have in most parts of the City, like a grocery store, how 
can I take your testimony that you operate on market-based 
basis------
    Mr. Winstead. Madam Chairman------
    Ms. Norton. --in the face of this evidence?
    Mr. Winstead. --yes, well, I think that, you know, as Bart 
has mentioned, we have a number of procurements underway, we've 
had a number over the last two or three years. We actually 
provided this Committee, at your request last week, of all the 
lease actions between 2002 and 2007.
    Ms. Norton. I would like to, I'm sorry, you have provided 
that?
    Mr. Winstead. We are--we are--Bart, the NCR will be 
providing that to the Committee. There's a lot of work that's 
been going into that, to frame it in the way that you want it, 
to make it clear.
    Ms. Norton. Within the next 30 days, I'd like to------
    Mr. Winstead. Oh, no, it will be quicker than that.
    Ms. Norton. --I'd like to have, let's say, beginning in 
2002 to 2006, your information on every prospective level lease 
procurement, but let me make sure I'm on the record here, every 
prospective level lease procurement for which NOMA, a NOMA 
building, submitted a bid, the value of the lease, the eventual 
winner and the reason why the NOMA BID was rejected.
    Mr. Winstead. We'll be happy to provide that, it's in the 
works, and we'll get it up as quick as possible.
    Ms. Norton. Thank you.
    Mr. Winstead. Madam Chairman, I think your point is, and I 
think what the testimony we've had from this panel shows, is 
that this area is no longer an evolving market, it's becoming a 
mature market.
    Ms. Norton. Well, just a moment. Let me just stop you right 
there. In other words, you were waiting until it became a 
mature market when the prices would go up.
    Mr. Winstead. Our commitment to 2.7 million square feet 
already in tenancy here, including new Headquarters, are a 
commitment. We are actually--we've got ATF Headquarters, we've 
leased a total of 2.7 million square feet, we are very--and, as 
you said, I see this as clearly as you do, Madam Chairman, this 
area is proximity to the Capitol, it's proximity to the gateway 
to the District of Columbia, New York Avenue, it's proximity to 
two Metro Stations and intermodal commuter rail to Maryland and 
Virginia, make it a very, very good and competitive spot to 
locate agencies in, and that's what Bart Bush and his team, you 
know, procurement specialists, are, in fact, underway.
    You know the policies we go by, in terms of the agency's 
involvement.
    Ms. Norton. Yes, I know what the Statute says.
    Mr. Winstead. Right.
    Ms. Norton. But, Mr. Winstead, you've got to get more 
specific here, and again, the Subcommittee is willing to help 
you.
    Let me ask you, maybe if you get more specific I can 
understand, what specific action------
    Mr. Winstead. Sure.
    Ms. Norton. --what specific action does--listen to my 
questions.
    Mr. Winstead. OK, I'm sorry.
    Ms. Norton. I'm not interested in the broad policy, Mr. 
Winstead, we all know the policy. We all know you understand 
the policy. This is a case in point, and it's very troublesome, 
because we wonder whether we should have field hearings in 
other parts of the country.
    I want to know what--since you understand the policy, since 
we are talking about NOMA, I want to know what specific actions 
does GSA take to ``market'` an area to an agency which, of 
course, by definition knows nothing about real estate, 
amenities, or any of the rest of it, but comes to you the same 
way we come to a real estate agent, with this exception, the 
real estate agent is prepared to get the kind of space I can 
afford, the agency comes to you to get the kind of space the 
taxpayer can afford.
    So, I want to know very specifically what--how you 
``market'` an area like NOMA, how you have marketed NOMA since 
the ATF building RFP was approved, what have you--give me 
examples of actions so I understand what GSA does.
    Mr. Winstead. First of all, we've had, like today, we're 
having a locational forum, where we are bringing both 
developers, brokers, and our clients together to, obviously, 
show major areas of desired building.
    Ms. Norton. I appreciate that you are doing that. Of 
course, that's regional.
    Mr. Winstead. Right.
    Ms. Norton. The problem, again, and this is the lack of 
specifics here is almost annoying, the problem in the District 
is that there are more agencies than there is space to put 
them. Is it still the case that you need 10 million square feet 
in the District?
    Mr. Winstead. In terms of--you mean there's more 
opportunity.
    Ms. Norton. No, that GSA would like--this is--I'm going 
back to at least two years ago when I was told this by GSA, 10 
million square feet in the District.
    Mr. Winstead. Yes, there is enormous, you know, again, back 
to my opening statement, you've asked for specifics about what 
we've done.
    Ms. Norton. What do you do to market NOMA in particular?
    Mr. Winstead. Number one, we've expanded the delineated 
area to include NOMA. Number two, we've met aggressively with 
real estate developers and property owners in NOMA to provide 
an in-depth explanation of our leasing process.
    Ms. Norton. The developers are not the problem. The 
agencies know nothing.
    Mr. Winstead. Right.
    Ms. Norton. And, therefore, they look to you for guidance 
about how much they should spend.
    Mr. Winstead. Right.
    Ms. Norton. They look to you for guidance to what kind of 
things they should look for. They even look to you for guidance 
about what part of the City, unless, of course, they have a 
view that they are to remain somewhere near their ``clients.'`
    So, in order for them to move from where they are, which 
may be more centrally located, somebody has got to convince 
them. My question to you is, what do you do to convince them to 
move to an area that is developing in this way?
    Mr. Winstead. We work aggressively to look at their needs. 
We do take them to tours of NOMA, as well as the other areas 
within the District of Columbia.
    Ms. Norton. Do you talk to them about the Statute and your 
role to do more than simply show?
    Mr. Winstead. Absolutely. I mean, as I mentioned, we, 
obviously, explain our leasing process, and how we will------
    Ms. Norton. I'm talking about what the Statute says, what 
the Statute says in terms of cost, efficiency, or national 
security.
    Mr. Winstead. But, we do brief them through our process, in 
this case at NCR their staff is actively involved with each 
tenant agency's need, through the process of defining their 
needs, as well as including NOMA within the delineated area.
    So, we are actively--Bart, do you have anything else to add 
to that from a marketing perspective?
    Mr. Bush. As has been stated, we most certainly do reach 
out to understand what advantages have been brought to NOMA, 
and educate our clients to those advantages, as their 
procurement------
    Ms. Norton. So, you are just like a regular real estate 
agent then, you just educate them, and, of course, in terms of 
the scriptures of the Statute, in terms of cost, the problems 
that your agency has for that matter, and every Federal agency 
now has with deficits, do you advise them on the importance of 
getting comfortable space at the lowest possible price?
    Mr. Bush. We most certainly do. As part of our charge we--
----
    Ms. Norton. And so, why aren't they in NOMA then, sir?
    Mr. Bush. --as part of our charge, we are ensuring adequate 
competition, competition is good for driving down the costs, 
not only for GSA, but our customers, as well as for the Federal 
taxpayer, by ensuring that we have adequate and proper 
competition we can ensure that those costs come down.
    We most certainly understand that according to FMR each 
Federal agency is responsible for identifying the delineated 
area within they wish to locate their specific activities, 
consistent with their mission and program requirements.
    Ms. Norton. I don't know, you know you are signing leases 
at a higher lease rate than a centrally-located decision, and 
yet you tell me you are getting the best deal for the taxpayer.
    GSA needs help. You are going to get some.
    Mr. Baschuk. Congresswoman?
    Ms. Norton. Yes, sir.
    Mr. Baschuk. If it is at all helpful, the NOMA BID owners 
would be very glad to host the agency heads and GSA to educate 
them on the amenities and development projects that are coming 
in to this area. If that is helpful to you, it's helpful to 
GSA, we'd love to do that.
    Ms. Norton. Well, I just think, you know, that's the kind 
of thing you would expect GSA to say, you know, instead they 
are doing a regional location thing. You know, we are buried by 
a huge region here, and I don't think that helps the problem 
before us at all. But, if we want to do what we did five years 
ago, I would welcome it, Mr. Baschuk, and I very much 
appreciate your offer.
    May I ask you, Mr. Baschuk, what the average rent is, I 
know that's difficult to say here compared to the Central 
Business District.
    Mr. Baschuk. Well again, my quote of 2/3s run is based upon 
construction of a new building and, primarily, costs increases 
due to the price of ground here relative to the price of ground 
in the Central Business District.
    I think it's only fair to point out that if GSA considers 
an existing building, where the owner has a much lower basis, 
they would achieve a better variance than that 2/3s, but 
something less than that, or something greater, if you will. 
The price difference may be $5.00 a square foot, but for new 
construction, we think it's 2/3s, $45 a square foot would be a 
full-service rent that we could do for GSA, presuming we have 
some agreement on what the tenant improvement allowance is.
    Ms. Norton. $45 per square foot, what would be the price, 
Mr. Winstead, or Mr., is it--I'm sorry, what's your name again?
    Mr. Bush. Bush.
    Ms. Norton. Mr. Bush, what would be the price in the 
Central Business District?
    Mr. Bush. May I ask, is that full-service lease that you 
are quoting?
    Mr. Baschuk. That's correct.
    Mr. Bush. I do know that in our most recent open 
competition, with respect to the requirement that included a 
NOMA response, the NOMA response was more expensive than where 
we ended up selecting for one of our customer clients, and we 
can share that information with you.
    The quotes that------
    Ms. Norton. What is the price per square foot in the 
Central--you just heard him say 2/3s. Are you challenging that, 
are you saying, no, they are not under market? Are you 
challenging the notion that they are under market in the 
Central Business District or not?
    Mr. Bush. We understand the market to be somewhere between 
$50 and $60 a foot, depending on government's needs, depending 
on what the fit-out requirements would be for the customer, 
particular customer in question.
    Ms. Norton. Ms. Anthony, what were the main drivers of your 
selection, and just let me say, when you selected NOMA there 
was hardly a NOMA there. We are talking about the north end. 
ATF undertook to become the anchor, undertook knowingly to 
become the anchor, but people don't decide to build just to 
become the anchor, or to do anybody a favor.
    Talk about your decision to locate in the New York Avenue, 
Florida Avenue Corridor.
    Mr. Anthony. Well, as you know, Chairwoman Norton, we were 
one of those agencies that had a technical factor. We had a 
location factor, which identified our delineated area, which 
was to be within some area of the United States Treasury 
Building, because at that time we were an agency of the 
Department of Treasury. So, we looked at that from a location 
standpoint, but we had a huge technical factor, and that was to 
find a location that offered enough land that would allow us to 
build a facility, a Federal building, not a leased building, 
that we could have setback.
    Having said that, however, you know, we did--one of the 
deals, one part of the deal in getting that property with the 
District of Columbia Government, was that ATF would commit with 
GSA to developing--and amenities on a ground-level location.
    Ms. Norton. Now, understand how important what you are 
saying is, you are talking about a secure building, Level 4 
building, and, nevertheless, had to develop the same amenities 
as if it had been a less secure building in the District of 
Columbia, because the District of Columbia requires that.
    Go ahead, please.
    Mr. Anthony. I'm going to speak a little bit out of turn, 
in that, you know, ATF hired me because I had worked for 20 
years on other GSA buildings in the District of Columbia area. 
And, in all of those the NASA Headquarters at 3rd and E, S.W., 
and the National Science Foundation, and then the Ronald Reagan 
Building, we did have to work with GSA in all of those 
developments to develop ground-floor amenities and retail.
    Speaking a little bit in defense of GSA, and in some way 
maybe some help.
    Ms. Norton. Give them a little help here, Ms. Anthony.
    Mr. Anthony. I think the help is that they just can't be 
everything, and I think that agencies don't typically hire 
people, like I was, who have the expertise to help define and 
strengthen those connections with the local areas that they are 
looking at, because at the time, of course, ATF, I mean, we had 
to put a big stake into the development of figuring out what 
was going to happen if we moved to an area that had nothing, 
even the City had nothing planned in that area. There was no 
infrastructure in that area, and ATF had to play a huge role in 
helping GSA to find out exactly what the issues were.
    And so, I think at the regional level, and I can't speak 
for GSA, but one of the conflicts that we constantly had was 
that, you know, they pretty much listen, they do listen to the 
clients, and I think in trying to engage, engaging with the 
Chamber of Commerce, and engaging with the BID, and engaging in 
the local community requirements, was really something that, 
although GSA has general information, it was sort of--the onus 
was on the agency to really get involved with that.
    Ms. Norton. Oh, yes, and we do understand that. The 
agencies get so involved that they are dominating the 
decisions, it would seem.
    With Mr. Cohen having returned, I want to ask my colleague 
if he has any questions he'd like to ask. I've been going at 
them.
    Mr. Cohen. Thank you, Madam Chair.
    Obviously, not having been here for your responses, I hate 
to be going over subjects, and I know the Chairwoman has made 
it abundantly clear that it's important, and sometimes from the 
beginning if I missed something, there is a chicken and egg, 
and I don't know all the history on the amenities and all the 
issues that have come up, but sometimes you have to, if you put 
something in an area to develop the amenities they'll come, you 
know, build it and they'll come, all of a sudden their fans in 
the stands, and they are not just playing baseball in the 
weeds.
    So, I think that's maybe part of what we could see in NOMA. 
I used to be on our Center City Commission on Downtown 
Development, I was on it for 20 years, and in Memphis we've 
done a lot, but sometimes you had to have a developer, and the 
government often times is what gets it started.
    But, all politics is local, and I can't get the GSA to have 
my name listed in the phone book. Do you think you could do 
something about that? Two months, and they still call me and 
say, Congressman Ford.
    Mr. Winstead. It will be listed before the end of the week.
    Mr. Cohen. Thank you, as another Tip O'Neill.
    Mr. Winstead. But, I do want to mention, whether it's 
Memphis or otherwise, I think your reference to your 
involvement in the economic development efforts, Chairman 
Norton, obviously, part of our commitment, Administrator Doan's 
visit, my briefing here with her, and also the business 
community that was here, we are well aware of our role in terms 
of its impact from an economic development standpoint, a 
Federal tenant, a headquarters like ATF has huge impacts on the 
region, and is acting as a stimulant and a spark for continued 
redevelopment of NOMA.
    And, the amenity issues, I think, are being dealt with. 
They are being drawn in, people are committing to both 
residential, we require a 24-hour lifestyle here, not just an 
eight-hour work day. Obviously, the grocery store the Chairman 
mentioned is key to this. Obviously, eating establishments 
within a short walking distance, and Union Station, obviously, 
is a smorgasbord, but trying to get within this part mentioned, 
a little closer to the site is key.
    But, all that I think has happened. I think the bottom line 
on NOMA, Madam Chairman and Congressman Cohen, is that, you 
know, this area is a very desirable market within the District 
of Columbia and Metropolitan Washington Region, and we are 
taking every action we can to educate our tenants, in terms of 
what the options are here, to look at the cost effectiveness to 
the taxpayer locating here, but we are operating through our 
regulations, our procurement regulations, the role of the 
tenant agency to define the delineated area, and our review of 
that, as well as the other factors that the Congresswoman 
mentioned, in terms of, obviously, security, and it's 
importance in the ATF decision, and how that building was 
designed.
    So, I think we are at a very positive stage here, in terms 
of the major questions, dealing with NOMA and I'd be happy to 
provide this Committee examples in other parts of the country, 
Tennessee and other states, about the impact of our locations, 
whether it's ATF Headquarters, a new Federal courthouse.
    I was just up in Springfield, Massachusetts, where we are 
building a new Federal courthouse, and its impact on the region 
is enormous. Last week, Friday, we opened a new Federal office 
building, or new Federal courthouse in Miami, which doesn't 
need a lot of economic development help, but it's incredible 
the growth that's occurring there as a result of that 
investment.
    So, we do take that into consideration, and we do take into 
consideration our procurement obligations to have full and open 
competition, and also to educate our tenants on all options 
that are most cost effective to them, as well as adhere to our 
budget process and procurement processes.
    Mr. Cohen. Did you make it to the Basketball Hall of Fame?
    Mr. Winstead. I'm going to go within the next visit to the 
region.
    Mr. Cohen. Thank you, Madam Chairwoman.
    Ms. Norton. Thank you, Mr. Cohen.
    Now, you said something in response to Mr. Cohen that is 
very important that we get to. And, that is the role of the 
agency in defining the delineated area. I can just see it now.
    First of all, say what a delineated area is.
    Mr. Winstead. I'd be happy to, or why don't you do it, as 
it would be pertinent in terms of NCR.
    Mr. Bush. Yes. Most certainly we work with our client 
agencies with respect to a delineated area as described. Our 
first look, though, at any procurement is for an open and full 
competition within respect to the District of Columbia, the 
full CEA. Occasionally, we will get requests from our customer 
agencies to narrow that scope, from a locational aspect, and 
they bring into that discussion certain characteristics that 
are important to them.
    Ms. Anthony described one of those characteristics, with 
respect to ATF in close proximity to the Treasury. We have 
other agencies that most certainly have either a direct worker 
relationship with their central office, or with other agencies 
where they have determined from an operational standpoint close 
proximity will assist them in the delivery of their service to 
the taxpayer.
    From that locational decision, we ask and require from our 
agencies a written description of that delineated area, and a 
defense for that request before we look to narrow down from a 
CEA full D.C. solicitation to a smaller area.
    Ms. Norton. You say you do have written justifications.
    Mr. Bush. Yes, we do.
    Ms. Norton. How many have you denied so far?
    Mr. Bush. I don't know, I do not know that.
    Ms. Norton. Well, let everybody understand what a 
delineated area is, if you know nothing about real estate, and 
the average agency doesn't, and the GSA says define your 
delineated area, or sit with me to define your delineated area, 
what is to keep--in fact, what is to make the agency define a 
delineated area in NOMA, as opposed to the preferred areas, K 
Street, Connecticut Avenue, you name it?
    Once you have a role in that, unless somebody is pushing 
back by, for example, strongly marketing lower price and 
amenities elsewhere, there is no way, unless you can give me 
some way, for an agency to do anything but define an area that 
they know of. That's why client base becomes a code for 
essentially red lining everywhere else.
    Mr. Bush. Most certainly we push back whenever an agency 
looks to narrow from a full and open competition to a smaller 
delineated area.
    Ms. Norton. Oh, well, they can be a full and open 
competition in the central district of the District of 
Columbia, if that's the only way.
    How about price? What role does price play in your 
judgment?
    Mr. Bush. Without our source selection criteria, it would 
depend. It is not 100 percent, certainly, we are taking------
    Ms. Norton. What percent should price pay today?
    Mr. Bush. I would have to look at the most recent 
solicitation to determine what that percentage was.
    Ms. Norton. Mr. Winstead, do you mean to say reasonable or 
low price is not the major factor?
    Mr. Winstead. Madam Chairman, obviously, price is a driving 
factor in our decisions, in all cases, as Bart Bush mentioned.
    Ms. Norton. Compare price to client base, what role would 
price pay?
    Mr. Winstead. Well, the fact, in terms of the factors for 
consideration and the criteria in the SFO actually evaluate 
that, and the delineated area is reviewed in terms of whether 
it's fostering competition, whether it's inclusive of NOMA, 
which I mentioned is now in our procurements.
    Ms. Norton. Except the agency can narrow the delineated 
area.
    Mr. Winstead. Yes, but, you know, then we can question it, 
and if they don't like our determination there they have a 
review process with both the ARA, Bart, it goes to Bart in the 
first instance if it's a smaller lease, if it's a larger lease 
it comes to the Administrator.
    Ms. Norton. So, how many of these have you turned down, if 
you can object.
    Mr. Winstead. Well, what I will do, based on the 
information you've requested, I will make sure that we get all 
the lease actions from 2002 to 2007, and actually all the 
rationale for the actions taken.
    Ms. Norton. And, I want to know how many delineated areas, 
I want to know what the delineated areas have been in each and 
every lease from 2002 to 2007.
    Mr. Winstead. We'll be happy to do that. I'll get that 
information to you.
    Ms. Norton. Thank you.
    Mr. Baschuk, what has been your interaction with GSA?
    Mr. Baschuk. Well, personally, we have not had significant 
interaction, because we are just a new-founded entity, 
Chairwoman, so again, in their defense, we------
    Ms. Norton. When were you founded?
    Mr. Baschuk. --we have been not yet recognized by the 
District of Columbia, based on the change in administration. We 
expect that would occur in March, but we have begun the 
processes of marketing, clean and safe, all those functions 
that we expect prior to official recognition and payment of 
dues.
    Ms. Norton. Let me ask you about your actions to promote 
the area. When I visited NOMA early on, I was taken up, I 
guess, in 1 NOMA Square to look over a very impressive view of 
Washington you seldom get.
    I went back again, and this time NOMA had literally a two-
minute film that took my socks off. In a two-minute film, NOMA 
described, this film described, again, not things that might 
happen, but showed you what it would look like, talked about a 
shuttle, is that a free shuttle, Mr. Bashchuk, that's planned?
    Mr. Baschuk. It's what's hoped for at this point. It's not 
definitive.
    Ms. Norton. That's the shuttle going up 1st Street, this, 
in spite of the fact that you got subways on either end.
    But, what I saw was, NOMA at large with all that was 
happening.
    So, let me ask you whether anybody from GSA has seen that 
two-minute film, number one, or whether they regularly see the 
two-minute film. And two, what you are doing to promote NOMA.
    Mr. Baschuk. First, the film has not been viewed by anyone 
on the outside, because there were internal members who felt 
that the film did not yet represent appropriately the 
development of the region. There were areas that were 
inappropriately defined as not including development. There 
were streets that were inserted where there should not have 
been streets, et cetera.
    So, there is some changes to the film, which you had 
reviewed in a preliminary sense, which should be completed in 
the next month. And, we would then distribute it to any and all 
people.
    In the interim, to answer the second part of your question, 
we have formed a marketing committee. The marketing committee 
includes developers who are prominent in that area, and we 
expect that marketing committee will be developing, along with 
a budget, an active and aggressive campaign to market this 
region, not only to GSA, but to private sector tenants.
    Ms. Norton. Well, you seem to have, the private sector 
seems to regard this as a coming area, people wouldn't be 
putting their money into buildings left and right if they 
didn't believe that this was money well spent and money for 
which they will get return.
    Ms. Anthony, in your testimony you talked about being 
pleased that NOMA was in town, not downtown. Would you explain 
that distinction and why?
    Mr. Anthony. Of course. In 1999, of course, that northern 
end of NOMA was really the corner of the Central Employment 
Area, and we had a lot of interest since then in our own 
Department of Justice and other agencies who see the area as 
well when they have a meeting to go to, or when there is some, 
in our case, law enforcement or security conference, or some 
type of things that they see it as a really--it's a very 
special location, because it's not in the congestion. It's in 
town, it's very close to the Congressional buildings, but it's 
not over on K Street, it's not down in the real hub. I think 
that may change, because NOMA will become more vibrant and more 
active, but at the time, in 1999, we saw that as a benefit to 
us, that we weren't right in the center part of the District, 
but we were on the edge of the District, but still within an 
area that was being developed and really was going to be very 
busy and active.
    Ms. Norton. I want to say Ms. Anthony, I had to fight for 
the ATF, because the ATF is typical of Federal agencies, the 
ATF wanted to remain in the District, but like so many agencies 
one the main problems was enough space to build a new agency, 
and as you say, with the appropriate setback. And then, there 
came some Virginia developers, who had some land who tried to 
``steal'` the ATF.
    ATF fought back, insisted on remaining in the District. ATF 
fought back, I think, for the same reason that most agencies 
want to be in the District of Columbia, it's the Nation's 
Capitol.
    Your problem, Mr. Winstead, is there isn't enough space, 
and NOMA is probably the last clear chance. As you testified, 
we had to take Department of--we had to take DHS, Department of 
Homeland Security, across the Anacostia to find a space big 
enough.
    I'm not sure that there's anything left, but we are very 
fortunate that something is left so close to the Capitol, so 
much midtown, some would even say downtown, so close to Union 
Station.
    Mr. Winstead, what do you think is the strongest selling 
point for NOMA?
    Mr. Winstead. Madam Chairman, prior to being Commissioner 
of Public Buildings for the last 15 months, I was involved with 
a law firm that had a lot of involvement in real estate in the 
region. I dealt a lot in planning, and like you, like the BID's 
perspective on NOMA, like the actions we are seeing in the 
marketplace by the developers, that this is, obviously, a 
developed area with highly good proximity, and also, obviously, 
good transportation.
    You mentioned, when Lurita Doan and I met with you we 
talked about some of the options I think the District ought to 
proceed along with the BID, in looking at shuttle links, and 
funding for that through the Federal Highway Intermodal grants, 
which are possible to get subsidies for those kind of 
operations, as well as private contributions.
    I think it's------
    Ms. Norton. Do you see any area of the District of Columbia 
that offers a better opportunity for Federal agencies today?
    Mr. Winstead. Chairman, I------
    Ms. Norton. Taking everything into account.
    Mr. Winstead. --obviously, it's highly desirable and highly 
competitive in any procurement that we are considering moving 
forward.
    I do have to be, in terms of the NCR's role, as being the 
procurement region, we have 11 regions, they are the ones 
responsible for the education of our tenants, going to the 
markets that have very good, cost effective options for tenancy 
in buildings that provide better new buildings that could 
provide it.
    I think that they've got a very firm committed focus on 
NOMA as a very desirable market within D.C., and within the 
Metropolitan Washington Region, and I do acknowledge, simply 
because of my background, that its proximity, its access, its 
transit connections, its intermodal commuter connections, make 
it, you know, very desirable urban area.
    Ms. Norton. Mr. Cohen, did you have other questions?
    Mr. Cohen. No, ma'am, thank you.
    Ms. Norton. Mr. Winstead, would you submit for the record 
every prospectus level lease that GSA has signed anywhere in 
the District of Columbia in the past six years? I've asked you 
about NOMA, this is anywhere in the District of Columbia, for 
space of any kind.
    Mr. Winstead. And the delineated areas.
    Ms. Norton. Excuse me?
    Mr. Winstead. And the delineated areas.
    Ms. Norton. Yes, please, of course.
    Could I ask you, Mr. Winstead, do you feel--is it common to 
feel pressure from agencies to move or to remain in certain 
parts of the City as opposed to other parts?
    Mr. Winstead. I think, as Bart mentioned, that there are 
obviously operational criteria on the existing leases, there's 
obviously economics of the current landlord and what they are 
offering up that are, you know, both economic------
    Ms. Norton. No, no, my question--you are not getting my 
question, I asked you whether GSA sometimes feels pressure from 
agencies to move to certain areas of the District of Columbia. 
In other words, do agencies come to you saying I'd like some 
space located X, Y, Z?
    Mr. Winstead. I have--outside of the direct involvement 
I've had with you, Madam Chair, in terms of the St. Elizabeth's 
Campus, they--a lot have not come to me.
    Bart may well have examples of that, I would refer to him.
    Ms. Norton. Yes, sir.
    Mr. Bush. It is not unusual for agencies to express levels 
of interest. As you can imagine, in many instances agencies' 
initial preference, depending on their size requirements, is to 
remain where they are. It's a natural progression, no change 
from any perspective is the best alternative.
    And then, from that we also have agencies who express a 
level of interest in remaining in a similar neighborhood, and 
those are the issues that we work out with them. This is a 
collaborative process. We need to ensure that we are obtaining 
the highest level of competition, and meeting the operational 
needs of the agency, as defined to us and defended by them to 
us.
    Ms. Norton. But, it is more difficult to convince an agency 
to move to a part of town where there are not already existing 
Federal agencies and clients and the like.
    Mr. Bush. I think that's natural.
    Ms. Norton. Yes, I think it's natural, too, and I think 
that's why we've seen this problem, despite the statutory 
mandate in terms of efficiency, cost, or national security.
    And, I want you to know that the Subcommittee believed, Mr. 
Winstead, when the Administrator came up, and seemed very 
pleased to see for herself, seemed to understand that there was 
a problem, we were very pleased to have her come, and pleased 
at her reaction there.
    And, I must say for the record, and I'm going to submit my 
letter for the record and her response, that I could not be 
more disappointed in her response. First, we've seen nothing 
significant happen, even since she visited, although, of 
course, this falls to you and your staff.
    Also, essentially, she said that price is not the--or low 
price is not the most important thing always, and had cited 
something called technical factors, building attributes, 
proximity to clients.
    This raises very, very real questions about what kind of 
help GSA may need in light of the statutory language. NOMA 
stands out as an area that, but for the buildings already being 
up, would, in fact, have particularly attracted public sector 
clients who spend the public's money. It has not.
    The hope that ATF would send the right signal, the Federal 
investment in an extra subway stop, the fact of private sector 
agencies having no problem coming to NOMA, none of that has 
worked.
    So, the Subcommittee is very concerned. We only got a 
response from the Administrator yesterday. We've seen no 
material change in how the area is marketed. For me, it's 16 
years of no change, except now we have such a humongous deficit 
that I don't think it can be ignored, so I just want you to 
know that the Subcommittee is considering a number of actions. 
The most immediate action is one I intend to take right now, 
and that is to notify the relevant appropriations subcommittees 
about leasing expenses incurred by agencies, even though 
salaries and expenses come out of agencies' budgets, there is 
no oversight as to whether or not the amount an agency pays to 
lease space is the best economic deal for the government. That 
just comes as a lump sum, and the appropriation committees 
don't, obviously, have any way or reason to look behind it.
    I intend to put least cost per square foot on at least an 
equal footing with amenities as an evaluation criteria. They 
clearly are not. I don't think that today's Congress would 
regard price as a matter to be simply equal. To tell you the 
honest to goodness truth, this Congress has gone to PAYGO, so 
we feel compelled to look in our respective areas for whether 
agencies are, in fact, saving money, whether or not PAYGO might 
apply in a particular circumstance.
    As long as leasing of space is so divided between agency 
decision and GSA, collaborative though it has to be, that we 
cannot know for sure that price pays a predominant cost. As 
long as that is the case, I believe that we are not spending 
the taxpayer dollar wisely.
    I do not believe that the Federal dollar should simply 
provide proximity, or should, indeed, simply provide comfort. 
The Federal dollar should make sure that all the factors are 
taken into account, beginning with price, and then, of course, 
including the amenities, the comfort to employees, public 
transportation, the factors that you are well aware of.
    Because NOMA has virtually nothing to show for an area that 
is in the midst of a building boom, with GSA looking for space 
every day, and, apparently, finding it, this Subcommittee 
believes that further action is taken--further action must be 
taken, and if I may say to all of you, to you, Mr. Winstead, to 
you, Ms. Anthony, to you, Mr. Bashchuk, we are open to your 
suggestions as to what further action should be taken.
    We simply indicated, the appropriators simply have to know 
that from year to year they can look at this matter and can 
question this matter, as they question other matters.
    But, I don't intend to stop there, I don't intend to engage 
in, necessarily, punitive actions. If statutory change is 
needed, I will not hesitate, but I do not regard the present 
state of affairs as satisfactory. I do regard NOMA as a case in 
point that cannot be ignored.
    I cannot understand how a space so close to the Capitol, 
with so many amenities which GSA itself recognized five years 
ago as the coming area, as the area to come to while the price 
was low, I cannot understand why nothing has occurred since, 
and I welcome your suggestions as to how to make sure that the 
public is assured that dollars are being spent wisely.
    Thank you all for coming. I particularly thank you for your 
testimony.
    The hearing is adjourned.
    [Whereupon, the hearing was adjourned at 11:50 a.m.]

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