[House Hearing, 112 Congress]
[From the U.S. Government Publishing Office]


 
                         SITTING ON OUR ASSETS: 
                            THE COTTON ANNEX 

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

                                (112-77)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
    ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             SECOND SESSION

                               __________

                             MARCH 22, 2012

                               __________

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                    JOHN L. MICA, Florida, Chairman
DON YOUNG, Alaska                    NICK J. RAHALL II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
FRANK A. LoBIONDO, New Jersey            Columbia
GARY G. MILLER, California           JERROLD NADLER, New York
TIMOTHY V. JOHNSON, Illinois         CORRINE BROWN, Florida
SAM GRAVES, Missouri                 BOB FILNER, California
BILL SHUSTER, Pennsylvania           EDDIE BERNICE JOHNSON, Texas
SHELLEY MOORE CAPITO, West Virginia  ELIJAH E. CUMMINGS, Maryland
JEAN SCHMIDT, Ohio                   LEONARD L. BOSWELL, Iowa
CANDICE S. MILLER, Michigan          TIM HOLDEN, Pennsylvania
DUNCAN HUNTER, California            RICK LARSEN, Washington
ANDY HARRIS, Maryland                MICHAEL E. CAPUANO, Massachusetts
ERIC A. ``RICK'' CRAWFORD, Arkansas  TIMOTHY H. BISHOP, New York
JAIME HERRERA BEUTLER, Washington    MICHAEL H. MICHAUD, Maine
FRANK C. GUINTA, New Hampshire       RUSS CARNAHAN, Missouri
RANDY HULTGREN, Illinois             GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
CHIP CRAVAACK, Minnesota             MAZIE K. HIRONO, Hawaii
BLAKE FARENTHOLD, Texas              JASON ALTMIRE, Pennsylvania
LARRY BUCSHON, Indiana               TIMOTHY J. WALZ, Minnesota
BILLY LONG, Missouri                 HEATH SHULER, North Carolina
BOB GIBBS, Ohio                      STEVE COHEN, Tennessee
PATRICK MEEHAN, Pennsylvania         LAURA RICHARDSON, California
RICHARD L. HANNA, New York           ALBIO SIRES, New Jersey
JEFFREY M. LANDRY, Louisiana         DONNA F. EDWARDS, Maryland
STEVE SOUTHERLAND II, Florida
JEFF DENHAM, California
JAMES LANKFORD, Oklahoma
REID J. RIBBLE, Wisconsin
CHARLES J. ``CHUCK'' FLEISCHMANN, 
    Tennessee
                                ------                                7

 Subcommittee on Economic Development, Public Buildings, and Emergency 
                               Management

                   JEFF DENHAM, California, Chairman
TIMOTHY V. JOHNSON, Illinois         ELEANOR HOLMES NORTON, District of 
ERIC A. ``RICK'' CRAWFORD,               Columbia
    Arkansas,                        HEATH SHULER, North Carolina
  Vice Chair                         MICHAEL H. MICHAUD, Maine
RANDY HULTGREN, Illinois             RUSS CARNAHAN, Missouri
LOU BARLETTA, Pennsylvania           TIMOTHY J. WALZ, Minnesota
BOB GIBBS, Ohio                      DONNA F. EDWARDS, Maryland
PATRICK MEEHAN, Pennsylvania         BOB FILNER, California
RICHARD L. HANNA, New York           NICK J. RAHALL II, West Virginia
CHARLES J. ``CHUCK'' FLEISCHMANN,      (Ex Officio)
    Tennessee
JOHN L. MICA, Florida (Ex Officio)



                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               TESTIMONY
                               Panel One

Hon. Scott P. Brown, a United States Senator from the State of 
  Massachusetts..................................................     2

                               Panel Two

Robert A. Peck, Commissioner, Public Buildings Service, U.S. 
  General Services Administration................................     7

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Scott P. Brown..............................................    22
Robert A. Peck...................................................    24

                    [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                         SITTING ON OUR ASSETS:
                            THE COTTON ANNEX

                              ----------                              


                        THURSDAY, MARCH 22, 2012

                  House of Representatives,
       Subcommittee on Economic Development, Public
               Buildings, and Emergency Management,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:07 a.m. in 
the Cotton Annex, 300 12th Street, SW., Washington, DC, Hon. 
Jeff Denham (Chairman of the subcommittee) presiding.
    Mr. Denham. Ladies and gentlemen, if you can take your 
seats, the subcommittee will come to order.
    Before we get started this morning, I understand that the 
mother of Elliot Doomes, a very fine Democrat staffer here, is 
here in the audience. Just wanted to welcome her and tell her 
what a fine job we think her son is doing. So thanks for 
joining us.
    Let me first welcome and thank Senator Brown for joining us 
here today. He has been a leader on this issue in the Senate, 
and certainly in his region, as well. I also want to thank 
Chairman Mica--he is on his way, as well as Congresswoman 
Norton--the ranking member, for their leadership on this issue, 
as well.
    Last month we stood in the vacant annex of the Old Post 
Office, not far from where we are today. It has been 1 year 
since our first hearing in that annex. And it took quite a bit 
of time for GSA to finally select a developer to redevelop that 
site. That site has been vacant for more than a decade, and it 
took 5 years after Congress directed GSA to redevelop it before 
a developer was actually chosen.
    Today we are in yet another vacant building, the Cotton 
Annex. This building has been vacant for 5 years, sitting on 
prime real estate in our Nation's capital. The Cotton Annex and 
surrounding vacant property are worth at least $150 million if 
sold, according to the Congressional Budget Office, yet here it 
sits vacant, deteriorating, and costing the taxpayers to 
maintain.
    In the so-called Stimulus Bill, the GSA received $5.5 
billion. Why weren't any of those funds used to prepare this 
building for reuse, if GSA intends to keep it in its inventory? 
And if not going to reuse the building, why hasn't GSA made 
steps to sell or redevelop it? Whether GSA uses this site to 
move Federal agencies out of leased space, redevelops the site, 
or just sells it, GSA can't keep sitting on prime real estate 
like this.
    We know that there have been a number of proposals for the 
redevelopment of this site, yet GSA has acted on none of them. 
This is exactly why I have introduced the Civilian Property 
Realignment Act, to get agencies like GSA to get rid of 
unneeded and undeveloped properties. Even without enactment of 
specific legislation, GSA has--already has broad authority to 
reuse, redevelop, and sell sites like this, but has chosen not 
to.
    And what makes matters even worse is, instead of getting 
rid of unneeded properties, GSA seems to actively compound the 
problem of unused and underused space. GSA is slow to vacate 
properties, but chooses to build an unneeded $340 million 
courthouse in Los Angeles, which we have had great differences 
and discussions on. That will actually add empty space in our 
inventory. We see GSA condemning private property in Norfolk, 
Virginia, for a courthouse that will never be built. We still 
see the old Dyer Courthouse in Miami sitting vacant and 
abandoned, with no plan to reuse or sell it. Despite our budget 
deficit and despite even the direction of President Obama's own 
real property directive in 2010, GSA continues to operate 
business as usual.
    It is unacceptable, it is costly, it is costly for the 
taxpayer. And we hope today to hear that GSA has plans to do 
redevelopment or reuse with this building and others like it.
    Again, I want to thank our witnesses here today for joining 
us, and thank the Honorable Scott Brown for joining us, as 
well. Thank you.

  STATEMENT OF THE HONORABLE SCOTT P. BROWN, A UNITED STATES 
            SENATOR FROM THE STATE OF MASSACHUSETTS

    Senator Brown. Thank you, Mr. Chairman. I want to thank you 
also and the ranking member, and Members of the House that are 
taking this very important issue up. It has been a pleasure 
working with you and addressing CPRA, and I want to 
congratulate your passage of it out of the House last month.
    As the committee knows, the Federal Government owns over 
45,000 excess and underutilized properties. And, according to 
GAO, these properties cost American taxpayers over $1.7 billion 
per year. And that, as we know, is unacceptable, especially in 
this tough economic climate. It is one of the main reason that 
GAO has put the Federal property management on its High Risk 
List. Despite the high-risk status, as you referenced, little 
has been done to successfully address this problem, and the 
current disposal process led by the Federal Real Property 
Council is mired in bureaucratic red tape, politics, competing 
stakeholder interests, and other inefficiencies.
    And, as you know, Mr. Chairman, the current process is 
broken. The President has acknowledged that the process is 
broken. So simply accepting the status quo and codifying the 
FRPC with some modest changes, as alternative proposals 
suggest, will do little to guarantee that the properties are 
properly disposed of.
    I mean you just look at the building we are in here today, 
90,000 square-foot building sitting on prime real estate, as 
you referenced also, worth upwards of $150 million. It would go 
a long way to helping not only pay down our debt or deficit, 
or--obviously helping with programs that may be needed by those 
who need it most. Yet it has been sitting empty for over 5 
years, which is completely unacceptable, while taxpayers foot 
the bill, once again, for its maintenance. And this building, 
which is down the street from Congress, serves as a symbol of 
the culture of complacency our Government has towards wasting 
taxpayer dollars. With us being over $15 trillion in debt, 
taxpayers cannot afford for Washington to continue business as 
usual.
    And in today's political environment, it seems that 
everything is turned into a partisan fight, with little 
accomplished. Even commonsense legislation like the Stock Act 
has struggled to make it through Congress. We are finally 
taking it up today, I am happy to say. But fighting waste, 
fraud, and abuse in the Federal Government is not a partisan 
issue. It is something Senator Carper and I have been working 
on, almost from the get-go. And saving tax dollars is not a 
partisan objective.
    So, I am pleased to announce that today, in a bipartisan 
effort, Senator Mark Warner and I are introducing the Civilian 
Property Realignment Act of 2012. Senator Warner and I have 
been working to improve the CPRA legislation I introduced last 
August. And our bipartisan legislation takes the necessary 
steps to ensure the best of the--best use of Federal property 
for taxpayers, because it is time that the Government put the 
best interests of taxpayers first. And our improvements also 
strengthen the legislation's deficit reduction goal by 
requiring a minimum of 80 percent of the proceeds and savings 
to go into the treasury for deficit reduction, rather than 
being used to pad the Federal agencies' budgets, and that is a 
good thing.
    I strongly believe that the independent commission, like 
the one established through CPRA, is the only viable way to 
overcome the hurdles in the disposal process created by 
competing stakeholder interests. And I also believe that the 
streamline process created by CPRA is the best way to break 
through the red tape and ensure that the properties are 
actually disposed of properly.
    President Obama proposed CPRA last year. And under your 
leadership, Mr. Chairman, it was successfully passed out of the 
House. So at two-thirds of the way of having this critical 
legislation signed into law, Senator Warner and I are looking 
forward to working with Chairman Boxer on the Environment and 
Public Works Committee, and our other colleagues in the Senate, 
to ensure its passage in the Senate.
    I appreciate the opportunity to come and speak. I know you 
have other witnesses that have a lot to say, so thank you for 
your courtesy, and I look forward to working with you on this.
    Mr. Denham. Thank you. Thank you, Mr. Brown. At this time 
opening comments from Chairman Mica.
    Mr. Mica. Well, thank you. And before you leave, Senator 
Brown, we want to thank you for coming out, for participating, 
and being such an aggressive advocate for trying to get these 
vacant and underutilized buildings not only in Washington, but 
across the country, moving.
    At our last hearing--well, our last couple of hearings--we 
started this last February. It was 32 degrees outside, and we 
took everyone to the annex. It was 38 degrees inside. So this 
is--then we were back there a few weeks ago. But this is one of 
our most comfortable settings in a vacant building.
    But the other thing is, as you know, we have 14,000 of 
these. And we are on a jihad, a national jihad, to take them, 
if we have to, one at a time. So we are at 13,998, and we 
appreciate your help. And we have got a few more to go. Thank 
you.
    Senator Brown. Thank you.
    Mr. Mica. Well, thank you for recognizing me, and welcome 
this morning. And I am sorry I am a couple of minutes late. 
Somebody should do something about traffic and transportation.
    [Laughter.]
    Mr. Mica. But that being said, good to be here, appreciate 
your leadership, Chairman Denham, Ranking Member Norton. I am 
pleased that--they told me, too, that Elliot Doomes has his mom 
here. Welcome, too, from all sides of the aisle. We are pleased 
to have you and your family's leadership on this panel. Now if 
you can help me get those 13,998 others occupied to the maximum 
use of the taxpayer, we will really be proud of him. And I 
appreciate your being here.
    I think that sort of says it all, but this building is 
another example, unfortunately, and we need to have a plan. We 
have to take these buildings one at a time. We are going to 
demonstrate that we should not have these vacancies. This has 
been vacant, I guess, for 5 years. Not only this building 
itself, which is a valuable asset that we are sitting on, but 
also the adjoining land and property. And we would like to move 
forward with plans and work with GSA, work with both sides of 
the aisle.
    So, that is our goal, is trying to be constructive and 
productive. The average citizen across the country I think who 
is, in fact, the largest property owner--it is not the Federal 
Government, it is not GSA, it is not the Congress, but the 
people own these assets, and we have been sitting on them for 
too long, as our report pointed out nearly 2 years ago.
    So, I want to hear GSA's plan today. It is great that we 
have bipartisan and bicameral support for these measures. The 
Old Post Office and the annex are great examples. We are very 
proud of what we were able to accomplish together there. And a 
salute to GSA for moving forward.
    I am looking forward to actually a better response on our 
resolution, Mr. Peck, on the FTC request that we passed last 
week. What was passed along to us is totally inadequate, but I 
want to see a good and better utilization proposal so we can 
get FTC consolidated and save, I predict, a half-a-billion 
dollars on that one transaction, better coordination for an 
agency, an important agency's activity, rather than having it 
scattered, and saving money, providing space for other 
important activities that are sponsored by the United States 
Government.
    So, with those remarks, Mr. Chairman, great to be with you. 
It is not as chilly as--we need to find some chillier vacant 
buildings to liven things up. But I salute you and Ms. Norton, 
and we are going to get it done. Yield back.
    Mr. Denham. Thank you. Now recognize Ranking Member Norton 
for any opening comments she may have.
    Ms. Norton. Well, thank you, Mr. Chairman and Mr. Chairman. 
Thank you for being here. I do note for the record that Senator 
Brown testified that he was introducing a bill, but did not 
note that the House has passed two BRAC bills that I suppose 
are in the Senate right now. I know they had two that were 
already introduced, so maybe we can get all those bills 
consolidated, and something can happen.
    Today we are meeting at a virtual palace, compared to the 
Old Post Office building: the Cotton Annex building, a greatly 
underused General Services Administration building located on 
prime land near the National Mall, here in the Nation's 
capital. Built in the 1930s, the Cotton Annex is approximately 
79,000 square feet of incredibly valuable rental property. The 
building has been mostly vacant since 2007, when the U.S. 
Department of Agriculture left, and has remained unutilized 
with no clear plan for full utilization.
    Over the past 5 years there have been a number of 
opportunities for development of this building, including the 
$5.5 billion in American Recovery and Reinvestment Act 
renovation funds to GSA for renovation of Federal buildings, 
and several legislative proposals for the redevelopment of this 
site, including a national women's history museum, a national 
health museum, and several proposals from private developers. 
The strong interest and possibilities demonstrate the Cotton 
Annex's significant potential for delivering a financial return 
to the U.S. taxpayer, or for housing Federal agencies and 
federally owned space with savings to the Government, which 
leases space throughout the national capital region.
    Despite the various proposals for reuse of this valuable 
property, GSA has failed to develop a plan for the property, or 
to use its existing authorities to renovate or redevelop the 
site with a private partner. The Cotton Annex is adjacent to 
the National Mall, and therefore, will probably have uses in 
keeping with its monumental location. But, if anything, its 
location makes the Cotton Annex particularly attractive to 
developers. If GSA chose not to renovate the building, why did 
it not use its previous experience working with the private 
sector to turn underutilized buildings to profitable use, 
including the highly regarded renovation of the historic Tariff 
Building in Washington, DC?
    More recently, in February, GSA, of course, announced its 
selection of the Trump Organization to redevelop the historic 
Old Post Office building as a hotel. Of course, this 
announcement was the culmination of nearly a decade of dogged 
bipartisan work of this committee for redevelopment of that 
site for the benefit of U.S. taxpayers. We do not intend to 
allow the same delay to get full use of the Cotton Annex.
    Among other precedents for--in GSA's portfolio is the 
public-private partnership for the redevelopment of the 
Southeast Federal Center into The Yards, one of the largest 
public-private mixed-use projects in the United States. This 
project resulted from my Southeast Federal Center Public-
Private Development Act of 2000, which allowed the private 
sector development of a large tract of fallow, but very 
valuable, federally owned waterfront property in the District 
of Columbia. I wrote this legislation in the hope that it would 
not only develop the parcel here, but might launch a new 
direction in Federal land use by leveraging private sector 
development expertise and capital to extract the maximum value 
from valuable Federal land.
    This has not happened, despite the bill's dramatic effects 
in the Nation's capital, converting a 57-acre eyesore of 
dilapidated Navy Yard structures into a mixed-use community 
that will generate millions of dollars for the Federal 
Government and contribute to the tax base of this city. Having 
worked with GSA on successful Federal public-private 
partnerships, this committee must continue to ask why GSA is 
not reaching out for similar partnerships, especially today, 
when development costs are at record lows.
    It cannot be for lack of authority. In 2003, Congress 
granted GSA what is known as 412 authority. Section 412 
authority gave GSA permanent authority to engage in public-
private partnerships like the Old Post Office building and the 
Southeast Federal Center. This valuable authority allows GSA to 
offset costs associated with renovating or creating Federal 
space without the need for Federal appropriations.
    There are, as yet, no signs of the GSA's at least 
investigating whether to use its authority to continue the 
agency's largest current development project, the consolidation 
of the Department of Homeland Security at the St. Elizabeths 
Campus, which has been significantly slowed, due to diminished 
appropriations. While the least expensive and, therefore, most 
fiscally responsible way to complete the redevelopment of the 
St. Elizabeths DHS site, and augment the billions of dollars 
that have already been spent on the infrastructure, would be to 
appropriate Federal dollars, GSA knows that it will not get 
funding at the rate necessary to complete this facility for the 
security of our country, except over several years beyond the 
plan date.
    Yet GSA's existing authority provides a way, in plain view, 
to complete this project now. For every day that passes, 
construction costs for the DHS headquarters increases, and 
Federal agencies remain in expensive leased space instead of 
the Government-owned DHS space planned. I have requested that 
GSA provide an analysis of how 412 authority can be used to 
complete this project, and expect to hear from GSA without 
delay.
    The time is overdue for GSA to use its considerable 
footprint in the marketplace, and all of its authority to 
develop the Government's assets and provide the maximum return 
to U.S. taxpayers. I look forward to hearing from GSA today 
about its asset management strategy for the Cotton Annex, and 
how GSA plans to address other underutilized properties.
    And I thank you, Mr. Chairman, for calling today's hearing.
    Mr. Denham. On our second panel we have Mr. Robert Peck, 
commissioner, public building services, the General Services 
Administration. I would like to welcome Mr. Peck and thank him 
for being here today and making this space available for the 
hearing.
    I ask unanimous consent that our witness's full statement 
be included in the record.
    [No response.]
    Mr. Denham. Without objection, so ordered. Since your 
testimony has been part of the record, the subcommittee will 
request that you would limit your oral testimony to 5 minutes. 
And you may proceed.
    And just as we are told--are going to be calling votes in 
about--just over a half an hour, so probably 11:10 or so.

  STATEMENT OF ROBERT A. PECK, COMMISSIONER, PUBLIC BUILDINGS 
         SERVICE, U.S. GENERAL SERVICES ADMINISTRATION

    Mr. Peck. All right. Thank you, Mr.--Chairman Denham, 
Chairman Mica, Ranking Member Norton. Thank you for the 
opportunity to be here. I thank you for picking a lovely spring 
day. I wish we had windows, so we could see the cherry blossoms 
outside. But perhaps we can find a building in the heat of a 
Washington summer, and really put ourselves at some pain----
    Mr. Mica. Oh, that is a great idea.
    [Laughter.]
    Mr. Peck. So thank you. I am sorry I said that, already.
    [Laughter.]
    Mr. Peck. We are at the annex, the Cotton Annex, a property 
that we are actively assessing for productive reuse, and I will 
talk about that a little bit later. GSA is a leader in 
Government asset management, and we take pride in effectively 
utilizing our owned and leased building portfolio. We are 
building on our successes with aggressive efforts to further 
improve utilization in the Government.
    We continue to make progress on the targets put in place by 
President Obama in his June 2010 memorandum on disposal of 
unneeded Federal real estate. Federal agencies are on target to 
exceed the $3 billion goal of cost savings by the end of fiscal 
year 2012. To date, GSA has saved more than $300 million toward 
our goal--within that $3 billion--of $450 million. As part of 
this effort, we are assisting other agencies in meeting their 
targets, and will continue to aggressively identify 
underutilized assets for disposal. And we are almost finding 
new ones every month, I have to say. It is interesting.
    Over the last decade, GSA has successfully implemented a 
major restructuring aimed at right-sizing our real estate 
portfolio. Since GSA gained the authority to retain sales 
proceeds in 2005, GSA's disposal actions have returned almost 
$244 million to the Federal Buildings Fund. At the end of 
fiscal year 2011, GSA's national vacancy rate for all owned and 
leased assets was 3.4 percent, and was even lower in the 
District, at 1.96 percent, much lower than the private sector's 
rate.
    In fiscal years 2010 and 2011, we disposed of 88 vacant or 
underutilized properties from the inventory, totaling more than 
4 million square feet. For example, we disposed of a surplus 
Federal building in Brooklyn, New York. We got about $10 
million for that. And we are in the process of disposing the 
West Heating Plant in Georgetown, in Washington, DC. We also 
recently began disposing of a GSA-owned warehouse in 
Gaithersburg that currently houses testing facilities for the 
Consumer Products Safety Commission.
    These disposals will allow GSA to avoid $73 million in 
anticipated repair needs, and operations and maintenance costs.
    Since our restructuring initiative began, we have delivered 
a number of critical consolidation projects, and completed more 
than 140 major modernization projects. We are modernizing our 
own headquarters at 1800 F Street, NW., and will move in our 
Federal Acquisition Service currently housed in leased space in 
northern Virginia, saving millions of dollars in annual leased 
costs. We are also redeveloping the Department of Homeland 
Security headquarters campus at St. Elizabeths, which will 
consolidate more than 20 DHS locations in the DC area. This 
move will allow GSA to transition Federal employees from 1 
million square feet of leased space to federally owned space.
    We have successfully used our out-leasing authorities to 
improve the use of our properties. Most recently we selected, 
as you noted, the Trump Organization to begin redeveloping the 
Old Post Office. We are now negotiating an agreement for the 
building's redevelopment, with occupancy potentially in 2016. 
This is a significant step in putting this notable asset to its 
highest and best use, while preserving its historic integrity.
    I will also note that, of course, however, we will not be 
using it for Federal office space. The higher and better use is 
as a hotel, apparently.
    Additionally, GSA is leading the way to use space more 
effectively by breaking out of traditional office space 
configurations, and providing tools and solutions that support 
a truly mobile and flexible work space for ourselves and other 
Federal agencies.
    Mr. Chairman, I also want to note that I am glad that the 
committee moved some of our pending lease prospectuses early 
this month. However, 10 leases from GSA's fiscal year 2011 
leasing program still require action. Most of these leases 
represent replacements for already-existing space, but nearly 
all will result in reductions in the amount of space that 
Federal tenants occupy. If the prospectuses are left on hold 
and fall into hold-over, it will cost taxpayers far more money 
than approving them and letting us go forward with those, as I 
say, reduced-space leases. I am hopeful we can work with the 
committee to remove the remaining prospectuses.
    Today the committee is hosting this hearing here at the 
Cotton Annex, which formerly housed components of the 
Department of Agriculture until 2007. It represents one of 
GSA's few remaining developable parcels in DC. We have held on 
to this property so far, because studies that we conducted that 
concluded in 2008 showed that Federal construction represented 
the highest and best use of the property. While the Cotton 
Annex is not yet currently meeting its full potential, by a 
long shot, it is generating small, positive revenue, because we 
do lease some of the space to the Federal Protective Service. 
We are considering a number of options for it.
    I would also note that Congress has considered legislation 
that would direct us to dispose of the property to specific 
users--and that is one factor--while we have not yet made a 
decision on what to do with the annex. Currently, we are 
considering some public-private proposals to modernize the 
central heating and refrigeration plant right across the 
street. There is a potential need for this property in that 
modernization. We believe in a very few months we will know 
whether that is necessary, and then we will make a decision 
about the disposition of this asset.
    In conclusion, GSA is a leader in asset management, 
aggressively moving out unneeded properties from our inventory, 
effectively utilizing space, and pursuing new strategies that 
meet our obligation to taxpayers to house Government functions 
as efficiently and economically as possible.
    We are also taking advantage of our position in the Federal 
Government to help drive better decisionmaking across partner 
agencies that will result in a sustainable and efficient 
Government.
    We appreciate your interest in this initiative, in the 
Civilian Property Realignment Act. And again, I want to 
congratulate you for getting that through the House. You know 
we have some reservations about it, but it has been a very good 
bipartisan effort. And I am, obviously, happy to answer any 
questions.
    Mr. Denham. Thank you. And we look forward to moving the 
bill out of the Senate and getting it to a position where the 
President looks forward to signing it. So we--certainly if 
there are other amendments--you and I have continued to talk, 
and if there are other amendments, we certainly want to work 
with you on that. But we certainly need to make sure we 
continue to take politics out of it, and focus on the policy of 
the issue.
    On the leases, you know, we were glad to pass a number of 
those out. We look forward to continuing to work with you. We 
want to make sure that each of the leases, as we did in the 
last 10, continue to reduce the footprint and the leased space, 
and make sure we are using the best usage rates as possible.
    You have a very daunting task, with consolidating the 
Federal footprint, redeveloping many of these different 
buildings, certainly selling off the things that we don't need. 
Just looking at your current portfolio, I can see the 
challenges. Some we feel, obviously, have sat way too long, and 
we need to expedite moving forward on those.
    But you said something that I found interesting. You said 
that you are finding other properties every day. And when the 
bill, the new bill that just passed the House dealing with 
properties--a lot of reporters ask me, you know, what is the 
difference between the two bills. And I just wanted to 
emphasize, with the Civilian Property Realignment Act, one of 
the big challenges that I see that you have is not only 
redeveloping and selling off the things that we have today that 
have outlived their usefulness, but all of these properties 
that you don't know what the lists are, or what the proper 
usage is.
    And I think one of the big differences in the current 
proposal is--with Civilian Property Realignment Act--will 
actually give you the ability to take a look at all of the 
different agencies, and see where our best use is, what can be 
sold off, what can be combined, and really start making some 
large-scale differences in how GSA runs the overall asset 
portfolio.
    Mr. Peck. Yes, sir. And, as you know, we agree with that, 
that the opportunity to have a commission that could look 
across the board in the Federal Government at as many agencies 
as possible, take a look at all the properties and see where 
there are underutilized assets that we could consolidate, get 
rid of, is important.
    I will just note there is--and this is getting in the 
weeds, and I can bore everybody to death, but we run--as you 
know, the Government does have an inventory of real property. 
And one of the things we have discovered in looking at this--
and our colleagues, led by Danny Werfel at the Office of 
Management and Budget have looked at this, too--the way in 
which we categorize properties--underutilized, excess--in that 
inventory is not totally helpful for determining where we 
actually have underutilized space.
    Give you an example. There are some properties that we are 
discovering in which the property looks like it is fully 
utilized. And yet, if you really go visit it, you will see that 
you could consolidate people into one part of the property and 
dispose of the other. That is something that some of these 
inventories don't show us yet.
    Mr. Denham. Like the current LA courthouse.
    Mr. Peck. The current LA courthouse has other problems, as 
you know, security issues are the--being among the biggest of 
them.
    But there are other properties in which we have seen some 
things that are utilized in a way that probably the private 
sector would be more interested in developing in a different 
way, and we could still use the property for Federal uses.
    Mr. Denham. And we also have buildings like the courthouse 
in Miami that is not on the current excess or unneeded list, 
even though it is clearly, clearly sitting vacant.
    Mr. Peck. It is completely vacant. It is the--you know, 
there is--what is that old line? There are, you know, 8 million 
stories in the Naked City--I guess we should call it the Big 
Apple now. Everyone has a story.
    I went to visit the Dyer Building in Miami, because I am 
concerned, too, that it is sitting there, vacant. And the 
hurdle we have to get over is that there is a three-building 
court complex there. The vacant building happens to have all of 
the heating and air conditioning for the three buildings. Wish 
it hadn't been developed that way. And so, to move that 
building out of the inventory, we need to figure out whether 
anyone would pay us enough money to move--to severe the 
building. It also has a tunnel that we would have to seal.
    So, there are issues, and--but we are actively looking at 
it, including the possibility of some form of public-private 
partnership that could actually help us move that one out. We 
have a team in our Atlanta regional office that is working 
really aggressively on that.
    Mr. Denham. Thank you. On this building in particular, you 
said 2007 this became vacant?
    Mr. Peck. Yes, sir.
    Mr. Denham. And they moved out prior to 2007?
    Mr. Peck. I think in 2007 is--at least 2007 is when the 
Agriculture Department gave it back to us.
    Mr. Denham. In 2008 GSA determined it would not declare 
this property excess, and that Federal construction was 
better--the best course of action to meet GSA's long-term 
mission.
    So, my question is, after receiving $5.5 billion, stimulus 
dollars, why is this building still vacant? Why at that time 
wasn't the decision made--you had money available, stimulus 
dollars, to redevelop and put people in here.
    Mr. Peck. It is a good question. As the--as you know, the 
filter through which we made decisions on where to spend the 
$5.5 billion of stimulus money in GSA had a couple criteria. We 
looked first for projects that were ready to go, that we could 
get out, contract as fast as possible and create jobs as fast 
as possible.
    On this one we did not have plans for the site, and it 
would have taken a while to develop them. Because, be honest, 
if you look at this building, it is unlikely that it would make 
great sense just to rehabilitate the Cotton Annex by itself and 
not combine--use the other vacant property here, this just 
plain land, and do something with it. It would have taken a 
long time to figure out those plans. You would have to go 
through all kinds of review procedures. And it just didn't look 
like that was going to get done fast enough to responsibly 
spend that money.
    I have to say you could ask the question another way, which 
was that we made a decision in 2008 that however we came up 
with the money, somehow GSA, in the course of the work that we 
do in the public buildings service, would have money at some 
point in the relatively near future to build a building. And 
the way the Federal Buildings Fund works, that looked--that, I 
think, was a reasonable judgment at the time. However, in the 
last 3 years we have not been able to spend the money that 
accumulates in the Federal Buildings Fund to do those kind of 
renovations or new construction.
    And so, it is looking less and less like there is a time 
when we are going to get Federal--get dollars generated by the 
Federal Buildings Fund to renovate this building, which I think 
means that we go back and take another look at it.
    One other thing I alluded to in my testimony, I want to--I 
am not sure all of you are aware this is going on. Across the 
street there is a very large structure that houses the central 
heating and refrigeration plant. It provides steam and chilled 
water for Federal buildings, the entire Federal Triangle, some 
other buildings on or near the Mall. It needs to be 
redeveloped.
    Last Friday we accepted offers or initial indications of 
interest from private sector utility firms to see if they would 
be interested in investing their dollars to rehab that plant. 
One of the things that we had been told was that they might 
decide, rather than rehabbing a plant--or in addition to--they 
might need part of this site to do a modernization of that 
plant.
    There is an opportunity to save a lot of money for the 
Federal Government here. We believe that--we are just now 
evaluating what they came in with, and we believe we will know 
in a few months whether anybody thinks that this site is 
critical to that proposal. When we make that determination, if 
there is a determination that they need part of this site, we 
will deal with it then. If they don't, we are going to move 
forward and make an aggressive decision about what to do with 
this particular parcel.
    One other thing I will--just to put in context, we are 
taking a look--there are some other vacant slivers of land down 
Maryland Avenue toward the Capitol that the Federal Government 
owns. And we have--in 2008 we took a look at how we might 
reposition those. We are looking at that again, and we have had 
some indications of interest from some private developers. And 
we might be able to do a bundled package deal for a number of 
surplus properties here that would get them--either have them 
used for Federal uses or for private uses, but would make 
terrific use of them, and be a form of public-private 
partnership.
    Mr. Denham. How big are ``slivers''?
    Mr. Peck. They--well, there are different pieces of 
leftover triangles. But some of them are three-quarters of an 
acre, half-an-acre. However, half-an-acre is 22,000 or so 
square feet, and you can build something on those. Some very 
interesting ideas coming up.
    Mr. Denham. And just finally, just to sum things up, so you 
don't agree with the 2009 assessment on redeveloping this 
building. You are going to take this back and look at making a 
new decision. And if you are going to do that, what is your 
timeline?
    Mr. Peck. I have told my folks that we are going to make 
some kind of a call on this site within the next 6 months. And 
I am hoping sooner than that. I just don't know how long it is 
going to take us to evaluate the proposals for the heating 
plant.
    Mr. Denham. And is there still interest in the sale of this 
property? Do you still have interested buyers?
    Mr. Peck. Yes, sir.
    Mr. Denham. Thank you. Ms. Norton?
    Ms. Norton. Thank you very much, Mr. Chairman. Now, Mr. 
Peck, you and I have had discussions over the years about the 
chronic shortage of space in the Nation's capital for agencies 
that want to remain here. Agencies really don't want to move 
out of the Nation's capital, but we have to lease space 
throughout the region, because there would never be enough 
space in the Nation's capital.
    You know, it--let me ask you. Who owns most of the land 
around this particular building?
    Mr. Peck. The Federal Government.
    Ms. Norton. Isn't that amazing, that so close to the Mall 
you will not find more valuable property in the District of 
Columbia than this property and, as you say, the properties 
surrounding it, owned by the Federal Government. It is 
inconceivable that any private owner would have left this land 
vacant for decades. I just think it is emblematic of how GSA 
doesn't have plans for even what is right in its face, as it 
goes around leasing here and there, complaining that there is 
not enough space.
    You indicate some of the limitations of this building, and 
that wouldn't it be great to use all of this land around it. 
Where is the plan, Mr. Peck? Where is the plan for development, 
not just of the Cotton Annex, but for development of this 
extraordinary parcel of land that surrounds it, including the 
Cotton Annex, which means that the Federal Government is 
sitting on just millions, billions--I don't know what it is.
    Mr. Peck. Well, Ms. Norton, can I just say that one 
reason--I mean I can only account for the last 2 years at GSA--
--
    Ms. Norton. No, no, don't give me that.
    Mr. Peck. Well, I----
    Ms. Norton. Since you have been here, you know, you--first 
of all, you have been here before, and you have come back 
again.
    Mr. Peck. Correct. And when I was----
    Ms. Norton. And what I want to know is, with land that is 
perhaps--and I would wager to say the most valuable plot of 
land that is vacant in the District of Columbia, with this 
agency having triggered the notion that, ``Hey, wait a minute, 
we own this land, why don't we do something about it'' in 2007, 
how could it possibly be that there is no plan on paper to do 
something about this entire parcel of land, valuable land owned 
by the United States taxpayers?
    Mr. Peck. Ms. Norton, I--our portfolio management group, 
our planning group in this region, happens to be a terrific 
group. And I think that they did not make this a high-priority 
for planning because there were some congressional proposals, 
one for a national health museum, one for the national women's 
history museum for the proposal. So I believe that people were 
waiting to see if those were going to go through----
    Ms. Norton. No, I am talking about----
    Mr. Peck [continuing]. Because, actually----
    Ms. Norton. I am talking about the land that the Federal 
Government continues to own, not the land that the women's 
health--the health museum has been gone forever. The only 
possible land that is outstanding is the women's history museum 
does want some land in the back of this.
    Mr. Peck. Right, right, right.
    Ms. Norton. I am talking about----
    Mr. Peck. And----
    Ms. Norton [continuing]. The majority of the land owned by 
the United States of America.
    Mr. Peck. Well, as I said, there are some slivers of land 
along Maryland Avenue that the Federal Government has not 
developed. Each of them, they have issues. They back up to a 
railroad right-of-way, rather than----
    Ms. Norton. So?
    Mr. Peck [continuing]. To a street. It makes them difficult 
to develop in some cases. And there has been a question of just 
how much money does GSA have, and where does it get allocated. 
And so it has----
    Ms. Norton. Mr. Peck----
    Mr. Peck. Quite honestly, I believe----
    Ms. Norton. Listen, I am going to stop you there----
    Mr. Peck [continuing]. Quite honestly--may I finish?
    Ms. Norton [continuing]. Because I have been talking 
about--in my own opening statement I talked about public-
private partnerships. I am not asking you to pull money out of 
a hat. But I am saying that it is inconceivable that any but 
the Federal Government would have said, ``Well, we can't do 
anything on this because we don't have any money,'' or because 
somebody else may want a piece of it.
    And my impatience with seeing this grows, as you see where 
the private sector could develop down here. Mandarin Hotel, 
they have seen how valuable the land is. The notion that 
anybody would be sitting on as valuable a property as this and 
can't figure out what to do with it, even though the private 
sector--and even though in your own portfolio are private 
sector precedents, you know, is not an answer, sir.
    Mr. Peck. Ms. Norton, you and I have violently agreed for 
years on the benefits that there would be if GSA had routine 
access to public-private partnerships. And we are grateful 
that--both for your legislation on the Southeast Federal 
Center, and for the section 412 authority. We also have section 
585, it is called property exchange authority.
    And as you know, we have tried in the past previous 
administrations--our own in the Clinton--at least the GSA, our 
previous administrators, I and other folks have tried--have 
made proposals for that in various places, meeting with mixed 
success when it goes through all of the Government reviews. We 
are trying again. We have a team inside GSA looking at various 
ways we might use the section 412 authority on this and other 
properties around the country. And we are going to see, again, 
if we can get up a head of steam and make this work within the 
Federal----
    Ms. Norton. All right, Mr. Peck. Mr. Peck, you know, the 
notion that you can't convince OMB that it is wasting money by 
letting this land lie fallow, it really is--and I can 
understand how difficult OMB is. But passing the hat 
continually to OMB is not going to--particularly when 
legislation could--I mean if you need help--and, by the way, 
the notion of the Southeast Federal Center didn't come from the 
GSA, it came from us. And so we passed a piece of legislation. 
And, you know, the GSA can't do anything about that.
    Mr. Chairman, I just have one more question before--I know 
I am over my time.
    But I want to ask you, Mr. Peck. You--at the DHS 
construction, you have now spent over $1 billion, and that has 
gone with the assumption that there would be a set of 
buildings. And we know that that can't happen very quickly. We 
also know that the infrastructure is in place, because that had 
to be built first. And we know the waste of just letting that 
kind of lie there with nothing over top of it, you know that 
the Coast Guard is going to be there, beginning in 2013.
    Now, if I am talking about this as a matter of urgency 
because it is in your face, that is a piece of property that 
will go to waste if we don't do something about it. It does 
seem to me that if you could not convince OMB of what to do 
about this property, you might have better luck with DHS if you 
went and asked for 412 authority to continue to build the 
buildings that are buildings necessary for the security of the 
United States of America. Have you done so? How do you intend 
to complete the Department of Homeland Security?
    Mr. Denham. Brief response.
    Mr. Peck. OK. That has occurred to us as well, and we are 
having conversations about that inside with OMB, about how--so 
that we could accelerate what is now looking like a stretched 
out project at St. Elizabeths. We have raised that possibility 
with them on a number of the specific projects within the St. 
Elizabeths consolidation.
    Mr. Denham. Chairman Mica?
    Mr. Mica. Well, don't work too hard, because I want to put 
all of that on hold, except for the Coast Guard building, until 
I get some resolution, you know, on the FTC project. Not only 
that project, but a lot of the resolutions. We did let some go, 
we are trying to work with you, and we certainly don't want any 
cost to the taxpayers. But when you have a project that can 
save a half-a-billion dollars, in my evaluation--and I think it 
is fairly conservative--I want to move forward with it. So that 
and other initiatives, until I get a response, I am not going 
to be--and I will continue with this, I can assure you. And I 
can also assure you that help is on the way. So we will get it 
done.
    The FTC, let's move to that, and the resolution that we 
passed. I have--and we asked for housing and floor plans that 
incorporate and reflect two separate alternatives. This is what 
I have gotten so far. Am I getting the balance?
    Mr. Peck. Well, this was not in response to the resolution 
that the committee passed.
    Mr. Mica. OK. It is not.
    Mr. Peck. This is in response to your previous request.
    Mr. Mica. OK. But we are getting what we are----
    Mr. Peck. Mr. Chairman, I want to express a significant 
concern about the resolution, and just to put it on the record. 
The resolution would direct GSA to investigate a sole-source 
lease on a building in Washington, DC. And, as a matter of 
policy, as a matter of getting the best deal for the taxpayers, 
that is a bad way for us to operate.
    We are not allowed to go out on the market with a 
requirement and just go to one property owner.
    Mr. Mica. Well, unfortunately, the taxpayer was already 
shafted, and we already have the space. And I am looking at the 
best utilization of the space, and you didn't have anything to 
do with the----
    Mr. Peck. That's right. No, I----
    Mr. Mica [continuing]. Shafting of the taxpayers in that. I 
guess it was the Securities and Exchange Commission.
    Now, what I want is a plan that does incorporate--and the 
information we have gotten from before, the utilization of that 
space, there is 379,000 rentable square feet that has been 
leased by the Securities and Exchange Commission, plus another 
40,000 square feet that has special use.
    So, what we are looking at, and the plan--well, the--this 
is a housing plan for FTC that you--by title. It shows they 
need 240,000 square feet of office space, and 125,000. Now I 
went to the University of Florida, I am not the best at math. 
But--and it wasn't my degree specialty--but I add those up and 
I get 365. Now, somehow, 365 will fit in to 397 without a plan 
to realize some efficiencies of scale.
    In addition to that, we have another 40,000 square feet, 
according to the information we got from the Securities and 
Exchange Commission on that same property that is available for 
special use common to the building occupants, all of which is 
listed here, some of those common-use offices. There could be--
my God, we could have some consolidation and do some things 
together that would save the taxpayers money.
    So, all I am looking for is, again--and we have New Jersey 
Avenue, that lease coming up. We have--I have--what is the 
current total square footage in the FTC Apex Building, 302? 
Staff? Somebody?
    Mr. Peck. Usable is----
    Mr. Mica. 325 gross, and we are using 160, approximately, 
just for argument's sake here.
    But again, I want to see this project completed. And I 
know, you know, you said you had some disagreements with Ms. 
Norton. I have some disagreements with Ms. Norton on that 
particular issue, too, and I have some disagreements with you. 
But we are going to do this, one way or the other. We have 
support in the Senate, and we are going to move legislation 
forward there, if we have to, directive legislation. And it 
will appear in legislation, and we will get it done.
    So, I want the plan. And we are putting them on notice. We 
are trying to work with them, because again, it is an important 
agency. They have an important responsibility. But when I have 
400,000 square feet, approximately, of leased space that the 
Federal Government has committed to pay, and I have leases 
expiring with FTC, I have a building that is 80 years old, of 
which we are using 160 out of 320--about half the square 
footage, even a simple analysis says that it could be combined.
    So, I appreciate your cooperation to date. I would like to 
see, again, a utilization. The longer we stall--I know the game 
is trying to shove a couple of folks in there and then say it 
can't be used. Mr. Moran came to me, expressed his concern 
about what he'd heard might happen. And I don't want that to 
happen. Mr. Moran--and last time I checked he was on the other 
side of the aisle. Isn't he an appropriator, too, over some of 
these matters? Yes? So he came to me. I didn't initiate it. So 
he is concerned about this, too.
    So, again, I appreciate your being here. Look forward to 
working with you. We want an amicable resolution, and move 
forward. Thank you.
    Mr. Peck. Mr. Chair, can I just----
    Mr. Mica. Just a comment, you don't have to respond.
    Mr. Peck. Let me just--I know. Let me just put one issue on 
the record, just because it is important in an ongoing 
negotiation.
    The amount of space that the SEC actually can convey to us 
as excess is--it is hard to know, because they did this 
proposed lease action in a unique way. It is about 279,000 
square feet. I know there is other space available in the 
Constitution Center. I just want to put that on the record. It 
is important for us in our ongoing conversations with the owner 
of the building.
    Mr. Mica. And again, what you provided me was to have 279 
available. You produced 240 is what they need, an office space 
and then other space.
    So, what--and no one is trying to give anybody a sole-
source lease. I think everyone knows that. And I would not 
support that. But a consolidation where there is that space 
available, we just want to see a proposal. Haven't said give it 
to them. I want to see a proposal.
    We had this conversation, as I recall, before Christmas. 
And now this is--we are getting to Easter. Now I don't mind 
Christmas, I don't mind Easter. But, you know, I am not 
celebrating the Fourth of July still discussing this. Thank 
you.
    Mr. Denham. Ms. Norton?
    Ms. Norton. I just have a couple of questions more. Mr. 
Peck, this committee needs to know. Are there any other 
buildings like the Cotton Annex in the District of Columbia 
sitting vacant or underutilized?
    Mr. Peck. You know, Ms. Norton, I have learned enough now 
in this business that I would like to say I am unaware of any. 
We have looked around. In the GSA inventory I can tell you the 
answer is none that we are not already working on. Whether 
there are other agencies that might turn up and say, ``I have 
got something I don't need or that you didn't know about,'' 
that may be something else. But that is----
    Ms. Norton. I just want to make sure that we won't have----
    Mr. Peck. We are----
    Ms. Norton [continuing]. That we won't find another GSA 
building looking like this building looks, or I say, greatly 
underutilized.
    Mr. Peck. Right.
    Mr. Denham. If the CPRA were in place today, though, you 
could definitely tell which buildings were underutilized and 
which ones were vacant.
    Mr. Peck. After a few months of them working, right, 
through the inventory, we believe that is the case.
    Ms. Norton. Are there such buildings in the national 
capital region that are underutilized or vacant the way this 
one is?
    Mr. Peck. There probably are.
    Ms. Norton. The reason I ask----
    Mr. Peck. I mean I am not thinking of anything 
specifically, but I----
    Ms. Norton. The reason I ask is because of the--this is the 
region that has the largest amount of leased space. Would you 
provide the chairman within 2 weeks a list of all properties 
that are either vacant or underutilized owned by GSA----
    Mr. Peck. Of course.
    Ms. Norton [continuing]. In the national capital region?
    Mr. Peck. Yes.
    Ms. Norton. One last question. I have not been able to 
figure out how the Veterans' Administration has been able to 
use authorities that GSA claims it does not--cannot use, even 
though, of course, we have given you the authority.
    For example, the Veterans' Administration avoids the whole 
notion of appropriations, that you are locked in, by its 
enhanced use lease authority, where the property is developed 
and then they lease back the property. Have you ever considered 
doing that? And why is the Veterans' Administration able to do 
that, and GSA is not able to do that?
    Mr. Peck. A really good question. We have talked to the 
Veterans' Administration. They have some legislative authority 
that gave them the right on their reservations to lease 
property for a very long time, to use some of it, to allow the 
private sector to share in the use so they could have a----
    Ms. Norton. On their reservations? I don't know what you 
mean----
    Mr. Peck. I mean--I am sorry. VA refers to their hospital 
campuses with a lot of land around it as a VA Reservation. And 
so they have been able to build things there.
    I am sorry to tell you that I have learned recently, 
however, that their authority to use the enhanced use lease has 
been cut back. I am not quite sure what the origin of that is, 
but they have told us that they don't have the access to----
    Ms. Norton. Do they have the authority or not?
    Mr. Peck. I think they have the authority on the--I believe 
on the books they still have it. Can anyone--I don't think it 
has been repealed legislatively, but I believe they are running 
into some policy issues with using the authority.
    Ms. Norton. Well, again, it--I think the way they got it--
--
    Mr. Peck. But we have been talking to them about health----
    Ms. Norton. You know, I think the way they got it is that 
they had leadership that was able to convince the Congress they 
should have it. You--we did this on our own, the 412 authority. 
We certainly didn't use it because GSA came and explained how 
much they needed this. We did it because we felt pushed to do 
it because GSA kept saying it just couldn't do anything.
    So, Mr. Chairman, I appreciate your keeping with this 
agency. And I think if Mr. Peck finds some more authorities--
some more buildings like this, we should go out into the region 
to have hearings just like the hearings you are having here 
that point up the need for GSA or the Congress, if we are going 
to get our BRAC bill through, to quickly move on this horrific 
waste. This is the worst, perhaps second only to the Old Post 
Office. It is the worst, because it is so visible and because 
it is so valuable, and because there is so much land. Thank you 
very much, Mr. Chairman.
    Mr. Denham. Thank you. Mr. Peck, how much space does the 
Federal Government lease in DC?
    Mr. Peck. The General Services Administration leases about 
24 million square feet in the District itself, and about 44 
million square feet--hope I have that number right--in the 
region, as a whole. Is it 44 or 55--50 million square feet in 
the region, as a whole.
    Mr. Denham. So 74, combined?
    Mr. Peck. No, I am sorry, 50 million square feet of leased 
space in the region, as a whole, and about another 50 million 
square feet of Government-owned space in this region. So about 
100 million square feet, overall, for GSA alone. That excludes 
properties that are controlled by other agencies like the 
Pentagon, which is not one of our properties. The military 
installations are separate.
    Mr. Denham. But the 24 million in DC is combined in the 50 
million----
    Mr. Peck. Yes, sir.
    Mr. Denham [continuing]. DC area.
    Mr. Peck. Yes, sir.
    Mr. Denham. So if we have got 50 million square feet in the 
DC area of leased space, why wouldn't you have filled office 
buildings like this over the last 5 years?
    Mr. Peck. Well, this building, because it is not exactly--
it is pretty close to usable right now, but I think because we 
have asked ourselves whether we were going to dispose of it, we 
wouldn't want to move somebody in here who would have a long-
term use, thinking that we are just going to move them in and 
then move them out to redevelop the site. So, I suspect that is 
the reason why, when it first came back in the inventory, we 
didn't put anybody in it.
    Mr. Denham. And----
    Mr. Peck. But I will--can I just say--one of the successes 
we are having is that we are where we can get the money--and I 
have to say, you know, in the interest of all candor, I have to 
tell you we are trying very hard to use less space in the 
Government. And, unfortunately, that requires some upfront 
investment to move people around. And at the moment we are 
having--we have not been allowed within our budget to use the 
profit that we generate in the Federal Buildings Fund to do 
that.
    So, that is another--one of the impediments. We think we 
could relinquish some leased space. We are going to relinquish 
a couple hundred thousand square feet of leased space for part 
of GSA when we move back into our renovated office building.
    Mr. Denham. What about the Prettyman Courthouse?
    Mr. Peck. Pardon?
    Mr. Denham. The Prettyman Courthouse, 600,000 square feet. 
Remember, Ms. Norton asked which office spaces are vacant right 
now? There is only 400 people in there is my understanding.
    Mr. Peck. Mr. Chairman, the Prettyman Courthouse, you know, 
the court sent you and us a letter saying that--and I have been 
in there, and the parts of it that are occupied by--that are 
supposed to be occupied by the courts are fully utilized. We 
have--if I remember correctly, the only part of the building 
that is not utilized is some part of it in which we are doing 
some work.
    And that is--you know, whether--what do you consider full 
utilization? How many people need to be in a given corridor in 
a given time is certainly open to question.
    Mr. Denham. We can further debate that one in the future. 
But let me just ask you a couple questions about this complex 
here. I know this is hard to see, but we are----
    Mr. Peck. Yes.
    Mr. Denham [continuing]. The building here is the Cotton 
Annex that we are talking about. You have got a vacant piece of 
open ground, just north of this.
    Mr. Peck. Right.
    Mr. Denham. My question is, you have got the Department of 
Energy building that was built over a road. Are we ever going 
to build any more buildings over a road again?
    Mr. Peck. No, sir.
    Mr. Denham. So, to fully utilize the two vacant spots on 
each side of the road, and to redevelop the Cotton Annex, you 
would have to build either over a road or, to fully utilize 
that space----
    Mr. Peck. You mean on this--are you talking about this 
parcel, the vacant lots around the Cotton Annex itself?
    Mr. Denham. Yes. I am talking about the vacant piece right 
next to the Department of Energy, as well as the vacant piece 
right next to this building, and the overall----
    Mr. Peck. Oh, well----
    Mr. Denham [continuing]. The Cotton Annex.
    Mr. Peck. You are right. There is one parcel that is on the 
other side of the ramp that is called the 12th Street Ramp 
down--it is part of the freeway system. It is possible, 
although it is expensive, to build up and over that road. You 
have to maintain a certain clearance for the cars and trucks 
that go down there. It is possible to do it. And the plans that 
the two museums who have looked at this have had--I believe in 
both cases--would have bridged over that road.
    We would, for Federal agencies, because of our security 
requirements, we probably wouldn't do that. And in fact, when 
we did our studies on the site, we showed that you could get a 
higher number of square feet for a private development than we 
could get for the public--for the Federal Government, because 
we would have ostensibly have setbacks and wouldn't build over 
the road. Still, there is a significant development potential 
here.
    Mr. Denham. So my question is, as a developer, when you are 
looking at a area or a region like this, where you have got a 
Department of Energy building, you have got this Cotton Annex, 
a couple of vacant parcels, and just a couple--a block or so 
away I am told that there is a private developer that has--
willing to build 600,000 square feet, that you could move this 
property over and then sell--still be able to sell this off for 
about $200 million, on top of the relocation costs. So you 
would have new prime office space--it would be leased space, I 
would assume--but then it would give you the opportunity to 
redevelop three or four, five different parcels right here.
    Mr. Peck. We are--you about got it right. I mean there are 
a lot of--as in any plan on a piece of urban ground, there are 
a lot of moving parts. One of the parts I will just put to the 
side for the moment--but it is a huge one--is the option of 
developing it for federally owned office space, which is the 
best fiscal deal for the taxpayers. It is a difficult one, 
because you have to get your hands on the--it is an indelicate 
way to say it--you have to get your hands on the money to build 
it.
    But are right. There are opportunities to use private 
dollars to do it, or to have private sector people to build the 
building, and we could lease it. We could lease it from them. 
As I always say, I would much rather lease it back on a section 
412 kind of project, where at the end of the term we would be 
able to own the building. That would be a good deal for the 
taxpayers.
    So, we are looking at all of those options. And there is 
clearly interest in the site. And I said there have been a 
number of different proposals. And in a way I think what 
happens is some of the proposals--you know, it is kind of 
like--they bump each other apart, and we need to sit down and 
make a decision about which one we are going to try to pursue. 
And then, when we do, I would love to enlist your help in 
making it happen.
    Mr. Denham. Absolutely. Why don't you and I plan on getting 
together in the next month?
    Mr. Peck. OK.
    Mr. Denham. And if you could walk me through your thought 
philosophy on all of the parcels combined, that would be 
helpful.
    Mr. Peck. Be happy to.
    Mr. Denham. We are about out of time, as they are calling 
votes. I just have one final question, more of a comment. It 
took nearly 4 months for this committee to get what should have 
been just basic information from you regarding how much GSA has 
spent on administrative costs over the last 5 years. And just 
this week we received your responses, but we are still missing 
quite a bit of information.
    So, if you could, follow up and give us why your other 
administrative costs increased by more than $100 million. What 
are your total administrative costs, including those associated 
with specific projects? Why are there still unobligated funds 
remaining with projects that have been finished for years, like 
the Prettyman Courthouse, that we are continuing to talk about?
    Mr. Peck. OK.
    Mr. Denham. We have a lot of followup questions.
    Mr. Peck. OK.
    Mr. Denham. And I don't want it to take 4 months to get a 
response on the followup questions. So----
    Mr. Peck. Can I give you one answer right now, just so you 
know? The short answer on--I also asked this question, too--on 
unobligated funds on projects that look like they ended a long 
time ago, the answer is often that there is some kind of a 
claim, a construction claim, and we are holding off the money 
to see if we have to use it to satisfy it. But I will get you 
answers on all that.
    Mr. Denham. Thank you. Can you agree to have your staff 
meet with my committee staff to come up with the answers on 
those this week?
    Mr. Peck. Yes, sir. Yes, sir.
    Mr. Denham. Thank you. All right. Well, with that, thank 
you for your testimony, Mr. Peck, and there are no further 
questions.
    I would like to ask unanimous consent that the record of 
today's hearing remain open until such time as our witnesses 
have provided answers to any questions that have been submitted 
to them in writing, and unanimous consent that during such time 
as the record remains open additional comments offered by 
individuals or groups may be included in the record of today's 
hearing.
    [No response.]
    Mr. Denham. Without objection, so ordered. I would like to 
thank Mr. Peck again for joining us once again on another 
hearing, as well as thank Senator Brown for being here to 
testify on his bill, as well. We are getting not only 
bipartisan support on this issue, but often times our battle is 
not with the other party but with the other House, and it is 
good to see that the other House has taken equally an 
aggressive approach to this, too. So we are looking forward to 
continuing to work between the two Houses to make sure we can 
marry the two proposals together and actually get something to 
the President that will expedite all of these different 
problems, not only in this region, but throughout the entire 
United States.
    If no other Members have anything to add, the subcommittee 
stands adjourned.
    [Whereupon, at 11:15 a.m., the subcommittee was adjourned.]
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