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





FIELD HEARING ON GOVERNMENT OPERATIONS OVERSIGHT: ADDRESSING UNUSED AND 
                        VACANT FEDERAL PROPERTY

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON GOVERNMENT OPERATIONS

                                 of the

                         COMMITTEE ON OVERSIGHT
                         AND GOVERNMENT REFORM

                        HOUSE OF REPRESENTATIVES

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                               __________

                             APRIL 25, 2013

                               __________

                           Serial No. 113-21

                               __________

Printed for the use of the Committee on Oversight and Government Reform





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              COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM

                 DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida                ELIJAH E. CUMMINGS, Maryland, 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee       CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina   ELEANOR HOLMES NORTON, District of 
JIM JORDAN, Ohio                         Columbia
JASON CHAFFETZ, Utah                 JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan                WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma             STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona               GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania         JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee          MATTHEW A. CARTWRIGHT, 
TREY GOWDY, South Carolina               Pennsylvania
BLAKE FARENTHOLD, Texas              MARK POCAN, Wisconsin
DOC HASTINGS, Washington             TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming           ROBIN L. KELLY, Illinois
ROB WOODALL, Georgia                 DANNY K. DAVIS, Illinois
THOMAS MASSIE, Kentucky              PETER WELCH, Vermont
DOUG COLLINS, Georgia                TONY CARDENAS, California
MARK MEADOWS, North Carolina         STEVEN A. HORSFORD, Nevada
KERRY L. BENTIVOLIO, Michigan        MICHELLE LUJAN GRISHAM, New Mexico
RON DeSANTIS, Florida

                   Lawrence J. Brady, Staff Director
                John D. Cuaderes, Deputy Staff Director
                     Robert Borden, General Counsel
                       Linda A. Good, Chief Clerk
                 David Rapallo, Minority Staff Director

                 Subcommittee on Government Operations

                    JOHN L. MICA, Florida, Chairman
TIM WALBERG, Michigan                GERALD E. CONNOLLY, Virginia 
MICHAEL R. TURNER, Ohio                  Ranking Minority Member
JUSTIN AMASH, Michigan               JIM COOPER, Tennessee
THOMAS MASSIE, Kentucky              MARK POCAN, Wisconsin
MARK MEADOWS, North Carolina













                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on April 25, 2013...................................     1

                               WITNESSES

Mr. Michael Gelber, Acting Deputy Commissioner Public Building 
  Service, General Services Administration
    Oral Statement...............................................     6
    Written Statement............................................     8
Mr. David Wise, Director, Physical Infrastructure Team, U.S. 
  Government Accounting Office
    Oral Statement...............................................    14
    Written Statement............................................    16
Mr. Tommy Wells, D.C. Council Member, Ward 6
    Oral Statement...............................................    31
    Written Statement............................................    33
Mr. Ed Kaminski, Commissioner, Washington, D.C. Advisory 
  Neighborhood Commission
    Oral Statement...............................................    36
    Written Statement............................................    39

                                APPENDIX

Mr. David Garber, Advisory Neighborhood Commissioner, Single 
  Member District 6D07 Washington DC, Statement..................    56
The Honorable Gerald E. Connolly, a Member of Congress from the 
  State of Virginia, Opening Statement...........................    66
Half Street Market, a Community-led Initiative for the District 
  and Ward Six...................................................    68

 
FIELD HEARING ON GOVERNMENT OPERATIONS OVERSIGHT: ADDRESSING UNUSED AND 
                        VACANT FEDERAL PROPERTY

                              ----------                              


                        Thursday, April 25, 2013

             U.S. House of Representatives,
             Subcommittee on Government Operations,
               Committee on Oversight and Government Reform
                                                   Washington, D.C.
    The Subcommittee met, pursuant to notice, at 9:37 a.m. at 
49 L Street, S.E., Washington, D.C., Hon. John Mica [Chairman 
of the Subcommittee] presiding.
    Present: Representatives Mica, Meadows, Amash, and 
Connolly.
    Also Present: Representative Norton.
    Staff Present: Alexia Ardolina, Assistant Clerk; Ashley H. 
Callen, Senior Counsel; Caitlin Carroll, Deputy Press 
Secretary; Gwen D'Luzansky, Professional Staff Member; Justin 
LoFranco, Digital Director; Laura L. Rush, Deputy Chief Clerk; 
and Peter Warren, Legislative Policy Director.
    Mr. Mica. Good morning. I would like to call this hearing 
of the U.S. House Oversight and Government Reform Committee's 
Subcommittee on Government Operations to order.
    I would like to welcome everyone this morning, my 
colleagues. The topic of today's field hearing is entitled 
Government Operations: Addressing Unused and Vacant Federal 
Property.
    We are convened at this property to conduct and emphasize 
the issue of vacant Federal properties and better utilization 
of taxpayers' assets.
    With that, we are joined by Mr. Meadows. Mr. Connolly, 
Democrat Ranking Member, told me he would be here shortly. We 
will start the hearing.
    The order of business will be first opening statements by 
members. We are also pleased to be joined--although she is a 
member of the Committee, not a member of the Subcommittee--by 
the Delegate from the District of Columbia, Ms. Norton. 
Welcome.
    I would like to ask unanimous consent that she be allowed 
to participate as part of these proceedings, and without 
objection, so ordered.
    Welcome, Ms. Norton.
    Ms. Norton. Thank you, Mr. Chairman.
    Mr. Mica. She will be recognized after we recognize the 
members of the Subcommittee.
    With that, we will begin the proceedings. Again, welcome, 
everyone. I will start with my opening comments.
    It is absolutely astounding to come to another vacant 
property in the District of Columbia that sat idle, this one 
for nearly five years. I saw the price tag just a few minutes 
ago, $19 million, that this property is worth.
    This is a very vibrant area of the District of Columbia, 
with huge economic potential. It is property that has sat idle 
as the Federal Government is closing down some vital services 
and operations.
    While its value is $19 million, estimated in that 
neighborhood, actually it is equal to the property we held a 
hearing at in Georgetown behind the Ritz-Carlton, which is on I 
believe about two acres. That recently sold for $19.5 million 
in an on-line auction after sitting vacant for ten years.
    Not this particular Subcommittee, but in my previous work, 
we held a hearing in that vacant building. Down the street we 
have the old Post Office, where the Annex sat vacant for 15 
years. That has turned around through the efforts of this 
continuing congressional investigation and initiative.
    Instead of costing 8 to $10 million a year, that will now 
employ 1,000 people, have around a 400 unit hotel commercial 
center, and an estimated 1,000 people are going to work at that 
site.
    This is at least the fifth in the District that we have 
focused on, and we have also looked at the Capital Region. We 
found 7,000 acres that houses the Agricultural Research 
Service, some 500 buildings, of which 200 were vacant or 
dilapidated or unusable.
    Whether it is right here in the heart of the District or in 
the periphery, the amount of space that is vacant, under 
utilized buildings, public assets sitting idle, it is just 
outrageous. That does need to come to a halt.
    This hearing is meant to focus on that problem. You can see 
right here again a very viable property that has great 
potential.
    Today we will hear some different ideas on the possible 
utilization. I know there is interest from the local community 
in better utilizing this asset. I think all the viable 
alternatives should be considered, but something should be done 
to make this again a valuable property.
    We have the National Stadium, home of the Washington 
Nationals baseball team, located just around the corner.
    Again, the private sector has come forward, in fact, 
launched many remarkable initiatives in an area that has had 
some economic problems in the past, and yet the Federal 
Government lags behind.
    This building was built in 1924, has 33,000 square feet of 
space. It has been used for storage, and others have looked at 
the property, but nothing has been done. That is the final 
word.
    The purpose of this hearing is to get us to stop sitting on 
Federal assets and better utilize valuable properties that the 
Federal Government houses.
    It is estimated that it costs about $1.6 billion annually 
to operate and maintain vacant or under utilized buildings like 
this, about a quarter of a million just maintaining a vacant 
property.
    Again, in a time in which the Government is struggling to 
make ends meet and our deficits are climbing, I think it is 
appropriate that we look at the multi-billion dollar waste and 
practices that do not adequately address the problem of vacant 
properties or under utilized assets.
    With that, again, I welcome everyone. Thank you for coming 
out. Mr. Connolly is not here.
    If you all do not mind, I am going to yield to Ms. Norton, 
and then we will come back to our panel members. A little bit 
out of order, but we will do it as a courtesy since we do not 
have Mr. Connolly here.
    Would you like to provide us with an opening statement, Ms. 
Norton?
    Ms. Norton. Thank you, Mr. Chairman. I appreciate the 
opportunity to say a few words of opening here in my District, 
in an area where we have a very special interest.
    I very much appreciate that you are focusing on this 
property. This property is just off from M Street, which 
essentially has been remade into an entirely new community for 
the District of Columbia, including beginning in the 1990s, 
working with President Clinton, when we got the Naval Sea 
Systems Command transferred here when it was about to go to 
California.
    Of course, perhaps most importantly, the Southeast Federal 
Center, which has been converted into revenue producing 
property as retail, office space and parks being built.
    It is most distressing and unusual to see a property as 
spacious as this that has been outstanding for all of this 
time, when almost all of it has been disposed of, at least the 
property on M Street, through the Southeast Federal Center 
bill.
    I am perplexed as to how something as large and beneficial 
as this property is to somebody could still be outstanding.
    Every time there is a piece of property that is not being 
used, of course, it has a direct effect on all the property 
around it.
    I appreciate this hearing and the opportunity to hear what 
GSA is going to do about this property. I recognize we do not 
give away Federal property, but we at least sell it. We do not 
sit on it.
    If the Federal Government is not using it and if this is 
GSA and not another agency that does not have the authority to 
sell or make use of the property--if it is GSA, then I think 
GSA has a lot of explaining to do. I appreciate that you are 
holding this hearing to bring forth that explanation.
    Mr. Mica. I thank the gentlelady. Let me yield to Mr. 
Amash.
    Mr. Amash. Mr. Chairman, I yield back to you.
    Mr. Mica. We also have Mr. Meadows.
    Mr. Meadows. Thank you, Mr. Chairman. Thank you for holding 
this hearing on this critical issue. Obviously, I look forward 
to hearing from Mr. Gelber in terms of just the action plan.
    As a member who in the private sector for the last 25 years 
has been in real estate in terms of development, in terms of 
land leases and commercial development, I am acutely aware of 
when you have assets sitting by idly, not only the costs but 
the opportunity costs that so many times we miss out on.
    I am looking forward to really an aggressive plan on how we 
can put Federal properties back to use or liquidate them or 
allow the private sector to come in and develop them.
    Truly what it does is it increases the value of all 
surrounding property, so whether it be the private sector or 
the Federal Government, put this property to use in a real way, 
surrounding properties that we would own or others would own 
would actually increase in value.
    There is no place like Washington, D.C. in terms of the 
value of property. I can tell you having paid rent for the 
first time in my adult life, it is eye opening.
    For this to be a cost factor and not a revenue producer is 
something that we have to address.
    I look forward to hearing your testimony today. Thank you, 
Mr. Chairman. I yield back.
    Mr. Mica. Thank you. I was thinking how many Members of 
Congress we could house in this and how much money we could 
make.
    Let me yield now to the Ranking Member of the Committee, 
the gentleman from Virginia, Mr. Connolly. You are recognized.
    Mr. Connolly. Thank you, Mr. Chairman. Because I am a local 
Congressman, I usually have events on the way in. Of course, I 
faced the second worse congestion in America, so forgive me for 
being a little bit late. Thank you to our panel for being here.
    According to the U.S. Government Accountability Office's 
2013 high risk update, the Federal Government owns nearly 
100,000 buildings it no longer needs.
    In 2010 alone, maintenance of the buildings cost the 
Government $1.7 billion, that is with a ``b,'' dollars. These 
are rough estimates. That is a fundamental weakness in the 
Federal Government's efforts to effectively manage real 
property, its failure to maintain an accurate inventory of 
accessible real property data.
    The GAO audit found that in certain real estate markets, 
the total square footage of excess Federal real property would 
be large enough to house every Federal agency in the region, 
yet in these very same real estate markets, the vast majority 
of agencies are wasting precious resources on leases with 
private landlords.
    This type of--one could only say ``mismanagement''--is 
unacceptable. Every dollar spent on unnecessary lease is a 
dollar diverted from mission critical functions.
    In this current era of austerity, operational 
inefficiencies such as these have real world consequences.
    This GSA warehouse is an example of what we are talking 
about. The building has been vacant since 2009. It cost GSA 
approximately $70,000 a year to operate and maintain the 
building, which nobody uses, save for today.
    Thank you. This is a $70,000 a year hearing.
    I am certain that individuals of this community would 
prefer to see their tax dollars go toward a building that is 
actually being used in an efficient way and is supportive of an 
important mission.
    GSA must take the needed steps to utilize buildings like 
this in a much more expeditious manner.
    My understanding is there are options GSA can exercise such 
as advance to non-Federal entities which would develop this 
under utilized site to benefit the broader community.
    For example, this space might be ideal for a future grocery 
store that could address a critical need of residents in this 
area and Washington, D.C. while simultaneously ensuring that 
their tax dollars are not wasted and paying for empty space.
    Consultation with the D.C. City Government, I think, is a 
very important part of this, too, for a building such as this, 
to make sure that whatever we do with disposition of the 
property is consistent with their goals and what they want to 
achieve.
    I strongly urge GSA to consider this type of transfer since 
my own experience as Chairman of Fairfax County demonstrated 
the potential for Federal real property transfers to benefit 
both the Federal Government and a local community.
    A great example is the Lorton Prison site. It had been a 
prison for almost 100 years. It had outlived its functionality. 
It was about 2,500 acres. We purchased it for $8 or $9 million, 
I think. We pledged to not develop it but to preserve it in 
terms of open space and to try to retrofit some historic 
buildings. There were over 300 buildings on the site.
    It has been a huge boom for our community and it allowed 
the Federal Government to divest itself of property it no 
longer needed and did not wish to maintain.
    There are lots of opportunities for win-win, so long as we 
work with local governments to make sure that we are not doing 
harm and we are working with their priorities and their plans 
and their vision for the community.
    I think that disposition of such excess properties can 
really be a win-win for local taxpayers and for the Federal 
Government.
    Thank you, Mr. Chairman, so much for highlighting this 
issue. Thank you to my colleague, Eleanor Holmes Norton, with 
whom I have worked over many years, and I hope this hearing can 
lead to some fruitful discussions. Thank you.
    Mr. Mica. Thank you. I see we have Ms. Norton, Mr. 
Connolly, Mr. Amash and Mr. Meadows. It looks like we have a 
number of local citizens.
    We see the suspects that come before us as far as audience 
in the Capitol, but I see we have a lot of local folks. Let me 
just explain to you the process here.
    This is an official hearing of Congress. In a few minutes, 
I will recognize these four witnesses. They will have an 
opportunity to testify and we will question them, members will.
    Many of you may want to comment. This is not that kind of a 
hearing. Let me tell you how you can participate. You have your 
Representative here, Ms. Norton, and you can submit your 
comments to her, and if she chooses, she can submit them. In a 
minute, I will offer that motion.
    Again, if you have ideas, et cetera, we welcome them but it 
is done through a process. If you happen to have swam across 
the Potomac and you are from Virginia, if you like, contact Mr. 
Connolly, and he would have that prerogative, or through any of 
the members, you can contribute to the record. It would be 
through a Representative. That is the way this will be handled.
    Without objection, members may have seven days to submit 
opening statements for the record. You will have that time in 
which to participate and members will submit. So ordered.
    Now let me turn to our witnesses. Today we have Mr. Michael 
Gelber, Deputy Commissioner, Public Buildings Service at GSA.
    Mr. David Wise. He is the Director of Physical 
Infrastructure Team at the U.S. Government Accountability 
Office.
    Mr. Tommy Wells, who is the D.C. Councilmember representing 
Ward 6.
    We have Mr. Ed Kaminski, who is Commissioner of the 
Washington D.C. Advisory Neighborhood Commission.
    This is an investigative committee of Congress. We do swear 
our witnesses. I would ask our witnesses to stand, raise your 
right hand.
    [Witnesses sworn.]
    Mr. Mica. The record can reflect the witnesses answered in 
the affirmative.
    We will proceed. We will start with Mr. Gelber. We will 
give you five minutes. You can submit additional testimony or 
information for the record upon request through the Chair.
    Mr. Gelber is the Deputy Commissioner of Public Buildings 
Service at GSA. We will withhold questions from the panel until 
we have heard from all four of the witnesses today.
    Welcome, sir. You are recognized.

                       WITNESS STATEMENTS

                  STATEMENT OF MICHAEL GELBER

    Mr. Gelber. Thank you very much, Mr. Chairman. Good 
morning, Chairman Mica, Ranking Member Connolly, Representative 
Amash, Representative Meadows, and Representative Norton.
    I am Michael Gelber, the Acting Deputy Commissioner at 
GSA's Public Building Service. Thank you for the opportunity to 
join you today at the warehouse at 49 L Street, S.E.
    Under new leadership, GSA has refocused on its mission of 
delivering the best value in real estate, acquisition and 
technology services to the Government and the American people.
    We are meeting these goals in part by working with our 
partner Federal agencies to reduce their space requirements and 
disclose unneeded properties.
    There are more than two dozen major Federal land holding 
agencies, and GSA manages just 9,600 of the more than 834,000 
buildings and structures reported by agencies in the most 
recent Federal real property profile.
    We have a robust asset management program to track the 
utilization of our inventory, strategically invest in our 
assets where needed, and aggressively dispose of unneeded 
assets. As a result of our efforts, our vacancy and utilization 
rates lead the market.
    Since 2008, GSA has disposed of 93 of our own assets 
generating more than $134 million in proceeds. In the same time 
period, we have disposed of 750 Federal assets Government-wide 
using such approaches as public sales on our website, 
www.realestatesales.gov.
    At the same time, we are leveraging private capital to 
deliver better and more efficient space to our partner Federal 
agencies.
    GSA's exchange authority is one potential tool for GSA to 
dispose of unneeded or under utilized properties, allowing us 
to leverage the equity of some of our older and inefficient 
buildings to get new and highly efficient ones.
    Already we have put in motion a number of potential real 
property exchanges that can provide considerable savings to the 
taxpayer. For example, we are considering an exchange of the 
Justice Department's Federal Bureau of Investigations' aging J. 
Edgar Hoover Building for a new consolidated headquarters 
within GSA's National Capital Region.
    We have also solicited ideas from the real estate community 
to exchange five existing buildings in the District's Federal 
Triangle South area for new Federal work space in an innovated 
mixed use eco district.
    These initiatives are part of a broader effort to both 
fully utilize all of GSA's existing authorities and realize the 
benefits of the Government communities and the American people.
    Today the Committee is discussing the warehouse at 49 L 
Street, S.E. The warehouse consists of more than 32,000 
rentable square feet and sits on a property that is nearly 
seven-tenths of an acre in the fast growing Capitol Riverfront 
neighborhood of Washington, D.C.
    The site is close to many retail amenities, less than 250 
feet from a Metro stop, and just two blocks from the National 
Parks Baseball Stadium.
    This building has housed Federal tenants since its 
construction in 1924. The U.S. Joint Chiefs of Staff utilized 
the warehouse until 2009. Anticipating their departure, GSA 
began exploring potential ways to reposition this property in 
2008, due to the deteriorating condition of the warehouse 
itself.
    After the Joint Chiefs vacated the property in 2009, GSA 
continued assessing the property for other potential uses. The 
U.S. Court of Appeals for Veterans' Claims expressed interest 
in using the site for the construction of a new courthouse, and 
GSA helped develop requirements for the potential project.
    Veterans' Claims received $7 million in appropriations for 
advanced design planning in fiscal year 2009. After working 
with them to develop a detailed program of requirements, the 
resulting planning studies revealed that using the 49 L Street 
site for their new courthouse would prove too costly.
    Given the cost estimates and a lack of funding for the 
project, GSA and Veterans' Claims abandoned the plans for a 
proposed courthouse project in late 2011.
    GSA once again began preparing for the property's disposal 
process. In 2012, GSA received some interest on the property 
from another potential Federal tenant. However, GSA has 
recently eliminated that possibility, and we are now planning 
to exchange this property for sale.
    As we go through this process, we will ensure to keep the 
community involved as well as all other interested parties.
    Given the high real estate value and rate of growth in the 
surrounding Capitol Riverfront neighborhood, the 49 L Street 
property presents GSA with many potential opportunities to find 
a better use for or dispose of this vacant property and provide 
considerable savings to the taxpayer.
    On behalf of GSA and the Public Building Service, I welcome 
the opportunity to be here today, and I am pleased to take your 
questions when appropriate.
    Thank you.
    [Prepared statement of Mr. Gelber follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Mica. Again, we will withhold questions. Now we will 
hear from Mr. David Wise. He is the Director of Physical 
Infrastructure Team at U.S. Government Accountability Office.
    Welcome, and you are recognized, sir.

                    STATEMENT OF DAVID WISE

    Mr. Wise. Chairman Mica, Ranking Member Connolly, members 
of the Subcommittee, I am pleased to be here today to discuss 
Federal real property management with a focus on challenges 
associated with managing excess and under utilized real 
property.
    The Federal Government's Real Property Portfolio includes 
about 400,000 owned and leased buildings located throughout the 
country. In 2004, the President issued an Executive Order 
establishing the Federal Real Property Council.
    The Executive Order required the FRPC to work with General 
Services Administration to establish and maintain a single 
comprehensive database describing the nature and use and extent 
of all Federal real property.
    The FRPC created the Federal Real Property Profile to meet 
this requirement and began data collection in 2005. Despite the 
implementation of the Executive Order, nationwide data 
collection efforts, various reform efforts and proposals, data 
problems have continued.
    The agencies also face other long-standing problems in 
managing real property, including over reliance on leasing and 
excess and under utilized property.
    As a result, GAO continues to evaluate the management of 
Federal real property as high risk.
    The previous and current Administrations have given high 
level attention to the issue of Federal real property 
management. For example, in May 2011, the Administration 
proposed legislation referred to as the ``Civilian Property 
Realignment Act.'' CPRA, among other things, would have 
established a legislative framework for consolidating and 
disposing of civilian real property.
    Although this and other real property reform legislation 
introduced in the previous Congress have not been enacted, 
similar legislation has been reintroduced in the current 
Congress.
    According to the President's budget request for fiscal year 
2014, the Administration will continue to pursue enactment of 
CPRA.
    Regarding excess and under utilized Federal property, our 
June 2012 report focused on reviewing agency reported FRPP data 
elements, including utilization, condition index, annual 
operating costs, and value.
    We found that data problems continued to hamper the Federal 
Government's efforts in this area. For example, FRPP data did 
not accurately describe the properties at 23 of the 26 sites we 
visited, overstating the condition and annual operating costs. 
In many cases, agencies reported replacement costs 
significantly higher than the property's actual worth, not 
taking into account market value or asset conditions.
    According to agency officials, many excess properties do 
not have the potential for generating revenue. Indeed, we saw 
more than 80 buildings on our site visits that agencies claim 
are demolished when they have sufficient resources.
    In addition, FRPC had also not followed sound data 
collection practices by not ensuring the data elements are 
consistently defined and reported. Thus, limiting the 
usefulness of FRPP data as a decision making tool.
    The Federal Government's continued reliance on costly 
leasing has been an ongoing problem. The Government often 
leases space from private landlords in the same real estate 
market where it owns under utilized real property. This 
practice is inefficient resulting in millions of dollars of 
additional costs to Federal agencies.
    Federal agencies reviewed have taken some actions to better 
manage the real property, including using excess and under 
utilized property, consolidating offices, and reducing employee 
work space.
    However, the agencies still face long-standing challenges. 
For example, costs could outweigh the financial benefits of 
property disposal, legal requirements, such as those related to 
preserving historical properties, and conducting environmental 
remediation can lengthen the process.
    Finally, stakeholder interests can conflict with the 
property disposal or reuse plans. For example, GSA officials 
reported that local stakeholder interest had delayed conveyance 
of a Federal building in Portland, Oregon.
    Finally, the location of some Federal properties can 
present challenges.
    While multiple Administrations have committed to a more 
strategic approach toward managing real property, their efforts 
have not yet fully addressed the underlying challenges that we 
have identified.
    In the June report, we recommended that OMB in consultation 
with FRPC develop a national strategy for managing Federal 
excess and under utilized real property. OMB did not directly 
state whether it agreed or disagreed with our recommendation.
    In the same report, we recommended that GSA and FRPC take 
action to improve the FRPP, to increase Federal capacity to 
implement and monitor effective measures.
    GSA has taken action to begin implementing our 
recommendation related to FRPP, including enhancements to 
clearly define data collection requirements, data quality tests 
and assessments to ensure data reliability, development of new 
performance measures to support Government-wide goals, and 
efforts to improve collaboration with agencies.
    We will continue to monitor efforts to implement our 
recommendations which we believe are critical to addressing the 
challenges that have led us to keep Federal real property 
management on the high risk list.
    Chairman Mica, Ranking Member Connolly, and members of the 
Subcommittee, this concludes my prepared statement. I will be 
happy to answer any questions you may have at this time.
    [Prepared statement of Mr. Wise follows:]

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Mr. Mica. Thank you. We will withhold questions, as I said.
    Now I am pleased to welcome and recognize the Council 
person from this District. Mr. Wells, welcome. You are 
recognized.

                    STATEMENT OF TOMMY WELLS

    Mr. Wells. Thank you very much. Good morning, Chairman 
Mica, Ranking Member Connolly, my Congresswoman, Eleanor Holmes 
Norton, and Representative Meadows, I am D.C. Councilmember 
Tommy Wells for Ward 6, the largest Ward in the City, and the 
only one that touches all four quadrants.
    It stretches from the Shaw and Mt. Vernon Square 
neighborhoods in Northwest through the H Street corridor in 
Northeast, along down the Anacostia River and Southeast, and 
includes the Capitol Riverfront and Southwest Waterfront.
    As you can see from your arrival at today's hearing, this 
warehouse at 49 L Street, S.E. is in the middle of a 
neighborhood undergoing immense change.
    With the highly successful Capitol Riverfront Business 
Improvement District as well as creative partnerships with City 
planners, private developers, business owners, and citizen 
leadership, this is a neighborhood that has one of the 
District's fastest residential growth rates and is poised for 
even greater progress in the next few years.
    However, this warehouse is vacant and not a contributing 
asset to the neighborhood.
    I appreciate the work of our GSA partners and this 
Committee to explore ways to return this building to productive 
use.
    The Federal and District Governments have a long and 
successful partnership of working together, and often, with the 
leadership from our own Congresswoman Norton, to turn unused 
Federal properties and parcels into economic catalysts and 
neighborhood amenities.
    You can look at any number of success stories, from large 
scale site transfers, such as the Southeast Federal Center and 
pending Walter Reed Campus, to specific properties, such as the 
old Naval Hospital on Capitol Hill, the impressive Hotel Monaco 
downtown, and the current West Heating Facility.
    All have or are in the process of creating economic 
opportunities out of under used Federal facilities and 
returning them to productive use for the City and for the 
surrounding community.
    Much like this Committee's work last year spurring action 
on the West Heating Facility, I am hopeful that we will soon 
see an active plan emerge for this Federal warehouse.
    Indicative of the new energy developing in the 
neighborhood, neighbors have worked together to outline a 
proposal for creative use of this particular building, known as 
the Half Street Market initiative.
    The overarching goal is to create an asset that will serve 
both the Capitol Riverfront neighborhood and the entire 
District. I strongly support the community vision captured in 
the Half Street Market plan.
    With the Capitol Riverfront neighborhood, we are building 
the equivalent of a small city with tens of thousands of 
residents, great cities and great neighborhoods have 
distinctive places in community spaces.
    You could ask for no better example of that than Yards Park 
on the riverfront just a few blocks away.
    Among other great spaces are public markets that activate a 
streetscape and the blocks around it and serve a neighborhood 
with fresh food and places to gather as a community.
    The Half Street Market proposal seeks to create a vibrant 
public market and restaurant. They would operate a workforce 
development and education program for D.C. residents, host 
community education programming and provide a commercial 
kitchen incubator with access to small business formation 
resources for culinary entrepreneurs.
    This initiative warrants support, whether as proposed or 
adapted to market conditions that preserve the central elements 
of the community's vision and holds the possibility to 
transform the vacant building into an iconic project, an 
important community amenity in the Capitol Riverfront 
neighborhood.
    Again, I appreciate the work of this Committee and the 
opportunity to testify at today's hearing, and I am happy to 
answer any questions you have.
    [Prepared statement of Mr. Wells follows:]

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    Mr. Mica. Thank you. Let me recognize our final witness, 
Mr. Ed Kaminski. He is the Washington D.C. Advisory 
Neighborhood Commission representative.
    You are recognized, sir, and welcome.

                    STATEMENT OF ED KAMINSKI

    Mr. Kaminski. Chairman Mica, Ranking Member Connolly, 
members of the Subcommittee on Government Operations, my name 
is Ed Kaminski, and I serve as the Advisory Neighborhood 
Commissioner in the 6D02 neighborhood.
    I represent residents living in Southwest and the near 
Southeast communities of Washington, D.C. on a variety of 
issues, including public safety, economic development, 
infrastructure improvement, and more.
    I am also the President of Velocity Condominium 
Association, which is the building right behind us. I am the 
Board Member of the Capitol Riverfront Business Improvement 
District.
    The Southwest and Capitol Riverfront communities in 
Washington, D.C. are strongly interested in redeveloping the 49 
L Street warehouse into an innovative, educational commercial 
partnership, creating an institute for food business education.
    The Federal Property and Administrative Services Act of 
1949, as amended, provides the Secretary of Education with the 
authority through the GSA to sell surplus Federal real property 
to eligible applicants for educational purposes.
    I urge the GSA to nominate 49 L Street, S.E. to the GSA 
Record of Excess, and make the property available to the City 
of Washington, D.C.
    You will find that multiple community non-profit 
organizations will respond to this GSA action and make exciting 
proposals to the U.S. Department of Education.
    In a recent Internet survey that I hosted, over 80 percent 
of 400 community participants recognized public culinary 
education as an economic opportunity for new business 
formation, a means to promote better food choices, a catalyst 
for neighborhood development, and an urban link to rural 
economies.
    As an educational amenity, 49 L Street can serve as an 
urban work study campus dedicated to healthy food education and 
sustainable development.
    Educational partners can offer employee training and 
professional degree programs. Established restaurants and food 
institutions in Washington will find their next generations of 
managers and workers in these programs.
    This fusion of public educational services with private 
entrepreneurial business formation is a key to the larger 
public benefit of our community. The public benefit amenity 
could be implemented at the street level of this building as an 
educational site.
    The building would offer adaptive spaces and resources, 
providing students with shared working areas, including 
kitchens, refrigeration and storage spaces, a large hall with 
flexible open space could be configured to hold community and/
or educational food events.
    Students would invite the community into 49 L Street 
kitchens and dining areas for cooking demonstrations, food 
concept feedback, community dinners and food purchases.
    The prepared foods would provide residents and visitors 
with creative food options in the Half Street retail area.
    Community gardeners, and we have quite a few in this area, 
could partner to provide and support locally grown sustainable 
organic foods.
    This work study concept could offer ways for small business 
employees and entrepreneurs to test business concepts without 
the many fixed costs and risks in the commercial retail market.
    Community groups have explored concepts with developers 
about this property, to improve the building and exploit the 
air rights in exchange for a non-profit managed street level 
space.
    One compatible upper level use could be a boutique hotel as 
an anchor tenant serving the ballpark area and complimenting 
the educational programs with hospitality employment.
    With a generous discounted transfer allowance from the GSA 
to the District, the property could be held in a District 
agency. That agency could put out a competitive RFP and manage 
the development. The arrangement could be at zero development 
costs to the District and would offer a residual tax base on 
the upper commercial space.
    At the ground level, an educational anchor tenant could 
bring the science of food and an understanding of diet and 
nutrition to the art and business of cooking. Random 
demonstrations could be captured and digitally stored and 
available as food preparation and demonstration content. 
Available to students, area lease and stall rental agreements 
will resource experiments with small scale cooking operations 
and customer interface experience.
    This will provide many concrete vocational skills, trade 
and operational experience, plus cooking food, preparing food, 
and selling food to market scale.
    With the knowledge of how a food business must function, 
students will be armed with food market literacy, some student 
graduates will work in restaurants, delicatessens, hospitals 
and other institutions, and others will start new businesses 
and expand the ambitions and opportunities for others.
    What are the steps to move forward? The first step would be 
to designate this building, 49 L Street, to the GSA Record of 
Excess.
    The second step would be to invite proposals to the U.S. 
Department of Education for uses that would focus on education, 
transfer the property to the City with a generous public 
benefit discount allowance, including commercial air rights 
development, secure the contract with no bridge costs to the 
City.
    The commercial value of the air rights above the building 
would flow to the GSA, so there would be money flowing into the 
GSA. The conveyance allowance would flow to the educational 
amenity that would use the first floor, and the residual 
commercial taxes would flow to the City, so everyone would 
benefit.
    There is no existing Washington, D.C. public or private 
institution modeled on this concept of education and food 
business formation. Other cities have taken this path.
    Projects of note in the region include the Baltimore Food 
Hub, sponsored by the American Communities Trust and Cross 
Street Market Partners, the Philadelphia Food Enterprise 
Center, and the New York City Food Incubator.
    Mr. Chairman, Committee members and other panel members, 
thank you for your time and consideration regarding the future 
and potential of this important site.
    Thank you.
    [Prepared statement of Mr. Kaminski follows:]

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    Mr. Mica. I thank you and all of our witnesses. Now we will 
start a round of questioning. A lot of us are double booked on 
hearings today. I am going to yield to Mr. Connolly first. Our 
Ranking Member is recognized.
    Mr. Connolly. I thank the Chair and I thank you for your 
graciousness. I belong to two committees whose passionate 
philosophy is there is no human problem that cannot be solved 
by another hearing.
    [Laughter.]
    Mr. Connolly. I do have another hearing this morning. I 
thank the Chair for his graciousness, and I thank my 
colleagues.
    Mr. Gelber, in listening to your testimony, what is the 
current status of this property? Has it been listed as excess 
property or we are still not there yet?
    Mr. Gelber. It is not listed as vacant property, not listed 
as excess property.
    Mr. Connolly. It is not?
    Mr. Gelber. That is correct.
    Mr. Connolly. We spent a fair amount of money trying to 
determine what the status ought to be?
    Mr. Gelber. When we say we spent a fair amount of money on 
the status, there was a proposal from the Veterans' Claims 
Office to construct a courthouse here.
    There were funds expended on that study, but when Veterans' 
Claims and GSA realized they could not construct a courthouse 
at the site that would meet their needs, that process was 
suspended.
    Mr. Connolly. At what point do we decide since we do not 
have a better idea, maybe the District of Columbia has a better 
idea and we ought to try to begin the process of transferring 
the property?
    Mr. Gelber. That is the process that GSA has recently 
begun.
    Mr. Connolly. I cannot hear you, Mr. Gelber.
    Mr. Gelber. I am sorry. That is the process GSA has 
recently begun.
    Mr. Connolly. Do you not have to list it as excess at some 
point?
    Mr. Gelber. Our intent is we have the ability to put this 
property up for sale for what we refer to as an ``exchange for 
construction services.'' That is our preferred option.
    What a potential buyer would provide us with would be a sum 
of money that we could use for needed repair and alteration 
projects across GSA's real estate portfolio, with the money 
that would be derived from a sale of this property.
    That is our preferred option. We would, of course, also 
work with the District on any ideas they may have on this 
property.
    Mr. Connolly. You said that is the preferred option, 
meaning, a way of translating what you said, to get fair market 
value so we are sort of getting return on our investment?
    Mr. Gelber. That is correct.
    Mr. Connolly. When does, however, the concern or the vision 
of the local government come into play? They are not always in 
sync. The Federal desire to get fair market value, which is a 
fair concern, but a broader vision the local government may 
have, and we are in the midst of their community, do we not 
need to sort of try to make sure the two are compatible at some 
point?
    Mr. Gelber. We try to work with local communities to ensure 
that whatever plans GSA has is, as you say, compatible with the 
local community's desires. Sometimes they are successful and 
sometimes there are differences of opinion on the matter.
    We would work with the local community on this particular 
property before proceeding for final disposition, to a final 
disposition.
    Mr. Connolly. Is there a point at which we recognize that 
the desire of the local government or the plan of the local 
government trumps our desire to reap fair market value for 
properties?
    Mr. Gelber. Yes. That varies from project to project. There 
are points in time where the desire of a local community and 
local representatives outweigh the overarching need of the 
Federal Government.
    Mr. Connolly. That is good to hear. As somebody who has 
spent 14 years in local government, it is very important to me 
that the Federal Government, while trying to maximize its 
interests on behalf of the U.S. taxpayers also recognizes that 
we are in the midst of a community. We do not stand alone. We 
have a responsibility to that community to try to make sure our 
goals are consistent with their goals.
    The disposition of a property can be both a boom to a local 
community and can be extremely disruptive if it is in fact 
outright inconsistent with the needs, goals and visions of a 
local community.
    It seems to me we have a heavy responsibility to take that 
very seriously, not incidentally a box to be checked off, but 
integral to the process.
    Mr. Gelber. I agree.
    Mr. Connolly. Good. Mr. Wise, what have we learned in terms 
of benchmarking, about what works and does not work in terms of 
disposition of property?
    As Lincoln once said about McClellan, ``We've got the 
slows,'' when it comes to disposition of excess property, even 
deciding a property is excess.
    What have we learned about what does and does not work? Are 
there financial incentives for agencies that make a difference 
from their point of view, given our experience?
    Mr. Wise. It is kind of a mixed bag, Congressman. It is 
very much a mixed picture. As far as the proceeds or ability to 
retain proceeds, every agency is governed by different 
legislation.
    Some agencies can keep proceeds. Some cannot. Some retain 
them and then reinvest them in future buildings. An example of 
that would be the State Department. Others cannot.
    Mr. Connolly. Can I just interrupt? The variation has to do 
with statute?
    Mr. Wise. Yes. There are different statutory requirements. 
Each agency has separate appropriations legislation that 
governs the disposition and proceeds from the sale or 
disposition of Federal real property.
    Mr. Connolly. Again, if I can interrupt for one second, I 
commend that to the Chairman as we look at possible 
legislation. I think this really is a problem because we are 
all over the lot in terms of rules and regulations, what is 
permissible and what is not, and thus, we lack a consistency 
when we try to approach the subject.
    Excuse me, Mr. Wise.
    Mr. Wise. I was almost finished. I think one of the things 
we reported in the past that makes a lot of sense, if an agency 
is going to dispose of a property, I think it is logical that 
it would certainly retain the costs of that disposal.
    For example, there would be environmental costs, marketing 
costs, those kinds of things. It obviously makes sense they 
should be reimbursed for absorbing those kinds of costs because 
it costs money to make money sometimes, and that is part of the 
process of trying to dispose of a property.
    Mr. Meadows. Would the gentleman yield?
    Mr. Connolly. Of course.
    Mr. Meadows. I think the gentleman from Virginia brings up 
a very valid point, and it is something I am willing with my 
real estate background to work with the gentleman in a 
bipartisan fashion to work on crafting some legislation that 
hopefully will address this issue.
    What you are saying, Mr. Wise, is legislatively, you have 
barriers to disposal of Government properties in terms of the 
motivation of a particular agency on whether they get the money 
back or not. Is that correct?
    Mr. Wise. There are challenges in that area; yes.
    Mr. Meadows. Thank you. I appreciate the gentleman 
yielding.
    Mr. Connolly. My time is up. Mr. Chairman, I want to thank 
you so much for holding this hearing. This is one of those sort 
of unsung not often sexy kind of issues, but it makes such a 
profound difference, both positive and negative, in 
communities, and I think frankly in terms of maximizing benefit 
for U.S. taxpayers.
    Thank you so much for highlighting the issue.
    Mr. Mica. Thank you, Mr. Connolly. I will go to a couple of 
questions and then I will yield to Mr. Meadows and Ms. Norton 
in that order.
    It was interesting to hear your testimony, Mr. Gelber, that 
money had been spent to consider utilization of this property 
for another purpose. Did you say $7 million?
    Mr. Gelber. $7 million was appropriated.
    Mr. Mica. How much was spent?
    Mr. Gelber. My understanding is around $400,000.
    Mr. Mica. $400,000. I guess that would be a reasonable 
amount to decide you could not use it. The $7 million would 
have been over the top.
    When that fails, the problem is these processes take so 
long. We are here now, we will be approaching five years that 
this property has been vacant.
    You heard the proposal from Mr. Kaminski, I guess 
requesting this be designated on the Record of Excess Property. 
Is that correct?
    Mr. Gelber. Yes.
    Mr. Mica. Are you familiar with that process?
    Mr. Gelber. I am familiar with the process.
    Mr. Mica. Is that something that can be done at this point?
    Mr. Gelber. That is something that can be done.
    Mr. Mica. Again, I think you see the desire on the part of 
the local officials and the Representative to move the property 
forward, and also consider the requests of the local citizens, 
and that could be accommodated.
    The problem again is it takes so long. We sit on these 
properties. Nothing is done.
    This is not as bad as some of the others we have 
highlighted.
    What is the status of the Cotton Exchange, which is one of 
the prime pieces of real estate from 395 all the way to the 
Mall? We held a hearing in that empty building. I have not 
heard where we are moving forward.
    Can you enlighten the Committee?
    Mr. Gelber. The status of the Cotton Exchange facility is 
part of a larger project that GSA currently has that we refer 
to as ``Federal Triangle South.''
    We have issued a Request for Information on how best to use 
both the Cotton Exchange Building as well as the other 
adjoining facilities around that.
    Mr. Mica. Again, a Request for Information is not really a 
Request for Proposals. We are still in that stage. How long 
will that take? When are we going to do a Request for 
Proposals?
    Mr. Gelber. We have received the responses to that Request 
for Information and we are currently evaluating them. There 
were approximately ten responses. It will take several months 
to evaluate those proposals, and then in turn, we would then 
issue a Request for Quote associated with the project.
    Mr. Mica. You are telling the Committee, okay, a couple of 
months, that would go into July. By July you think we will be 
able to move forward on that?
    Mr. Gelber. That would be my hope.
    Mr. Mica. In fact, send him a letter and ask him what date. 
We will be going into 11/12 years on the Cotton Exchange 
Building. We are also talking about a vast area for 
improvement.
    I had introduced legislation last week because nothing has 
been done with a Miami Courthouse. That is going on six/seven 
years. This is only $70,000 a year to maintain. That is $1.2 
million, and we have probably spent $6 or $7 million in 
maintaining it.
    Now I am told there may be as much as $20 million worth of 
mold remediation required on a building for which the locals, 
the community college, which is located next door, it would be 
like across the street from the street in front of us, has been 
trying to get that property, the President of the College told 
me, for some five or six years.
    What is the status there?
    Mr. Gelber. On that particular property, I believe you are 
referring to the Dyer Courthouse.
    Mr. Mica. The Dyer Courthouse, the vacant Federal 
courthouse in Miami.
    Mr. Gelber. We issued a Request for Information associated 
with that property. Unfortunately, we did not receive any 
sufficient responses, and we are currently evaluating the 
status of that building.
    The challenge we have there is that building is in effect 
tied to an adjoining Federal facility through its mechanical 
and heating plans, or air conditioning plans, in the case of 
Miami.
    Mr. Mica. Even a small time developer like myself could 
figure out a solution to that. We are going on and on with 
that.
    In the meantime, I have introduced legislation to transfer 
the property. You are aware of that?
    Mr. Gelber. I am aware you have legislation; yes.
    Mr. Mica. Again, it is so frustrating. Where is my little 
chart here? This is my little chart. This is the District of 
Columbia. We have made some progress with five of these 
hearings. We started out with 14,000, I think, we are working 
our way down. We will have a few more to add to the chart.
    Is there any hope of speeding this up, Mr. Gelber?
    Mr. Gelber. From GSA's perspective, we are actively engaged 
in this process. From the properties on that list, only around 
100/150 of those are GSA controlled properties.
    Mr. Mica. Right. I had that responsibility in my oversight 
limited and narrow jurisdiction from Transportation, but we 
have very broad authority on this Committee and the 
Subcommittee.
    We are looking at the whole Government. I have not decided 
if we are going to go out to do a hearing at the 7,000 acres in 
Beltsville, but that is the size of the City of Key West with 
500 buildings, of which 200 are vacant or under utilized.
    You do not have any say in that, do you?
    Mr. Gelber. That property is controlled by the Department 
of Agriculture and not under GSA's control.
    Mr. Mica. We will have some additional action on that. Does 
anyone know, how did Monument Realty--did they acquire any 
property from the Federal Government that they now have as a 
parking lot or was that private?
    Mr. Gelber. I believe you are referring to the parking lot 
south of this facility. That has always been in private hands, 
to my knowledge, and never been part of the GSA inventory.
    Mr. Mica. You have not sold any property adjacent that you 
know of?
    Mr. Gelber. We have properties within several blocks of 
here, the Navy Yards facility, but nothing adjacent to this 
property; no, sir.
    Mr. Mica. I just wondered about that.
    Mr. Wise, you indicated that on 23 of 26 properties you 
visited, the assessment of the conditions did not match what 
you found in the reports issued by the agency; is that correct?
    Mr. Wise. Actually, 23 of 26 sites. There were a lot of 
buildings on each site. The visits we did brought to light the 
inconsistencies that we found in the Federal Real Property 
Profile. We found lots of discrepancies or inaccuracies, if 
something was utilized or not utilized or what condition it was 
on paper versus what it looked like.
    Some of that is exemplified in the full statement I 
submitted to the Committee with some photographs of some of 
those we visited.
    You have been to Beltsville. You know what that looks like. 
We saw some inconsistencies out there. We were out there quite 
a bit as well.
    It is a real issue with the data collection procedures. As 
I mentioned in my statement, we are hoping the action GSA has 
begun to take to implement that recommendation will lead to 
some improvements in the Federal Real Property Profile.
    I think as you all know who are in real estate, if you do 
not have good data and good information about your properties, 
you really just cannot get out of the dug out and make good 
management decisions.
    That has been our perspective and that is what led to that 
recommendation from the June report.
    Mr. Mica. I have helped author some of the legislation to 
provide additional tools and also try to speed up the process, 
and we will continue in that effort. We do not want to be the 
blame.
    By the same token, I have had witnesses from GSA tell me 
they had authority to move forward. The problem is they do not 
move forward and people do not make a decision, and we end up 
with extensive costs for maintenance and the properties sit 
idle.
    We have two representatives from the local level. I 
appreciate your coming forward, Mr. Kaminski. You had some 
pretty detailed recommendations in your proposal for 
utilization.
    The problem we have is I am involved with a group that is 
pretty close to bankruptcy, it is called the ``Federal 
Government.''
    Actually, when I came to Congress, we instituted a Control 
Board. A lot of people did not like it. It took over the 
Federal Government, brought in a Chief Financial Operating 
Officer, Anthony Williams, I recall, and he did an excellent 
job.
    We went from about $700 million a year in deficit to now 
the District is running a surplus. I do not want to impose on 
the District even though they have a surplus, but we have two 
choices.
    One, to convey the property as a public convenience to 
another public entity, but by the same token, we are also 
bankrupt and we are looking for hard cash and people with some 
in their pockets or Treasury.
    The Advisory Commission cannot commit to spending District 
funds, but do you think the District would be interested, Mr. 
Wells, in some type of remuneration for the property?
    Mr. Wells. Absolutely. This is a derelict property that is 
a non-contributing asset to the community. As you can see, this 
is a very vibrant economic neighborhood, and I believe that the 
District could reap quite a bit from an investment of $19 
million.
    Mr. Mica. I have seen your bottom line. You could help in 
that regard.
    I think the local community should be given preference, 
just like in Miami, Dade College. Here is a college sitting 
next door.
    The District and the neighborhood has hopefully a viable 
proposal. I am not going to evaluate that or make a judgment on 
it here.
    I just wanted for the record for it to be known that we 
have a willing buyer and a public entity that is interested. 
Last time I checked their bottom line and paid my D.C. taxes, I 
saw they had good cash flow.
    With that, I am going to yield first to Mr. Meadows and 
then I will go to Ms. Norton.
    Mr. Meadows. Thank you, Mr. Chairman. Thank each of you for 
your testimony here this morning. Mr. Kaminski, if you are head 
of your property owners association, my condolences to you.
    [Laughter.]
    Mr. Meadows. Having served on a number of those boards, it 
is a thankless job.
    I guess my concern is as I mentioned in my opening 
statement, the opportunity costs, but probably more problematic 
is the Federal Government creates a false market when they hold 
onto properties that quite frankly are in neighborhoods like 
this.
    Whether it is Mr. Wells and the constituents he represents 
wanting to put this property to use or the private sector. If 
you made the decision today to liquidate this property, you 
would have multiple offers within 30 days.
    To sit back and not do anything, not only is not being a 
good steward of the hard working American taxpayers but it also 
has an indirect effect on the neighborhood and those that live 
around it. Both of those things are not one that we can 
tolerate.
    You mentioned, Mr. Gelber, in your opening testimony the 
liquidating of assets, and I think you said you had realized 
$195 million in terms of liquidating those assets. Is that 
correct?
    Mr. Gelber. I believe the number was $134 million.
    Mr. Meadows. $134 million. If we put that in perspective, 
your years of work in terms of what you have liquidated, $134 
million, is less than 20 minutes on the national debt in terms 
of what you have liquidated, when we really look at the real 
dollars there.
    Yet we have assets, over 13,000 here in the D.C. area. What 
we are doing is we are holding on to those. Why do we hold on 
to those? It cost $70,000 to maintain this.
    Why do we not lease it for $1.00 a year and let them take 
care of the maintenance if nothing more than that? Why do we 
continue to just take taxpayer dollars and pay for all the 
maintenance and keep it in our portfolio?
    Mr. Gelber. In many cases, with properties that appear 
vacant that are vacant, we are evaluating if there are other 
Federal agencies that are interested in occupying the space.
    Entering into a lease may preclude us then from having the 
other Federal agencies----
    Mr. Meadows. I have done leases. You can do leases that 
have a termination clause. Literally, if you want to lease this 
tomorrow and still keep it available. If you are in the private 
sector, you can figure out a way to do that, and what happens 
is there are two ways things get done here in Washington, D.C., 
slow and never.
    What we have got to figure out is a way that we get this 
stuff done. If you were charged with managing the portfolio and 
managing those things and you got paid based on how many 
properties you got rid of, can you figure a way to do that?
    Mr. Gelber. I think we currently do do that. If we were 
provided extra authorities and abilities to process these 
properties quicker, that would assist us.
    Mr. Meadows. You are saying legislatively you need the 
authority to get rid of it quicker? This is not an agency 
decision, you need Congress to act?
    Mr. Gelber. We can expedite these processes and we 
currently are expediting as many of these processes as we can. 
The agency has stated that if we were to receive what we refer 
to as a ``civilian BRAC authority,'' the ability to quickly 
process vacant and under utilized Federal properties, that 
would be a greater benefit to us.
    Mr. Meadows. What do you need to do that? What is ``quick'' 
to you? This has been vacant since 2009. We are here in 2013. I 
guess this is quick?
    Mr. Gelber. I think for our purposes, we were evaluating 
this property through 2011. We wanted to ensure there were no 
other Federal entities that were interested in this property.
    We have come to the conclusion that there are no other 
Federal entities interested in this property, so we are now 
embarking on a course to dispose of this property from the 
Federal inventory.
    Mr. Meadows. What do we do, we just do a wish list for 
other agencies? I noticed in part of the testimony what was 
looked at was possibly storage for Library of Congress. I love 
the Library of Congress and want to make sure we provide 
adequate storage.
    Why would we take a prime property worth $19 million, tear 
it down and make it for storage for something, if it is not 
going to have a venue that adds to the value of the community?
    Mr. Gelber. One of the potential uses for this site was for 
a courthouse for the Veterans' Claims Office. It was not 
necessarily just for storage but to ensure that any other 
Federal entity in the District of Columbia that needed space 
could possibly use this space.
    Mr. Meadows. We had monies allocated to build that 
facility?
    Mr. Gelber. For the Veterans' Claims courthouse, there were 
monies allocated to study whether or not that facility could be 
located here.
    Mr. Meadows. There were monies to study it but not monies 
to build it?
    Mr. Gelber. Invariably, the money to study it comes first, 
and then if the decision is to go to Congress to request funds 
for the facility, that is the next step in the process.
    Mr. Meadows. You also mentioned in your testimony that you 
prefer real estate exchanges, you want to exchange property.
    Does that not complicate the process? With an exchange, 
what you have to do is look at the value of what you are 
disposing of and the value of what you are acquiring, which 
requires two different analyses and transactions.
    Does that not slow down the process? Yet, you say that is 
your preferred way.
    Mr. Gelber. It is a preferred alternative because it 
provides us greater flexibility to funds that we could use to 
repair and renovate existing Federal structures.
    Mr. Meadows. Preferred in that you get to keep the money?
    Mr. Gelber. That would be one way to look at it; yes, sir.
    Mr. Meadows. If you had another vehicle where you could 
just sell it and keep the money, would that speed up the 
process?
    Mr. Gelber. I think that would provide GSA greater 
flexibility; yes, sir.
    Mr. Meadows. Why is it important for GSA to keep the money?
    Mr. Gelber. Currently, we have a large number of facilities 
that are in need of repair or renovation, and using that money 
to do that would be a benefit to the agency.
    Mr. Meadows. This costs $70,000 a year. If you had disposed 
of this in 2009, would you not have had quarter of a million 
dollars to pay for maintaining other facilities?
    Mr. Gelber. That is correct, but unfortunately, that amount 
of money does not cover the types of repairs that we are 
looking to accomplish.
    Mr. Meadows. You just need big dollars? I am trying to 
figure out when we look at it from a Government perspective, 
Government is never efficient or accountable.
    What happens is they can sit back and they can work on it 
and what happens, you have neighborhoods that are driving by a 
brick building that is not particularly attractive from the 
outside, and I must say not particularly attractive from the 
inside either.
    As we look at this, how do we become good stewards of 
Federal property and make sure that we dispose of it in a 
manner that is one, responsible to the American taxpayer, and 
two, responsible to the community that Mr. Wells represents and 
Congresswoman Norton represents?
    Mr. Gelber. I think GSA's new leadership is committed to 
disposing of as many of these properties as possible.
    Mr. Meadows. What is your objective here? How many do you 
think you can dispose of in the next 24 months? Do you have a 
number?
    Mr. Gelber. I do not have a number currently, but we are in 
the process of looking at several facilities.
    Mr. Meadows. I am out of time. I yield back. Thank you for 
your patience, Mr. Chairman.
    Mr. Mica. Thank you. Let me recognize now Ms. Norton.
    Ms. Norton. Thank you very much, Mr. Chairman. Before I 
begin my time, may I ask unanimous consent that the testimony 
of David Garber, the Advisory Neighborhood Commissioner, be 
entered into the record?
    Mr. Mica. Without objection, so ordered.
    Ms. Norton. Thank you, Mr. Chairman. I thank all the 
witnesses. I think the testimony was very important to 
understanding the entire process, what happens from beginning 
to end, and why for that matter this hearing has been 
important.
    Mr. Wise indicated the Administration's proposal, and I 
must say two bills, one from this Committee, and Mr. Mica and I 
serve on both Committees, where there have been bills that 
would facilitate quick or quicker disposal of properties.
    I note that one of those bills, the bill from this 
Committee--I am not on the Subcommittee, I am on the full 
Committee--one of these bills was marked up within the past six 
months or so.
    I would much prefer to see these matters dealt with through 
a real process rather than the piecemeal concerns that this 
Committee and the other Committee has had on properties in the 
District of Columbia and elsewhere.
    In the absence of the passage of those bills, I hope the 
bill that came forward from this Committee will go to the Floor 
soon.
    Here we have an enterprising community that seeing a large 
vacant property within its midst, surrounded by booming 
development on all corners, develops its own proposal for the 
property.
    Mr. Gelber, under the rules, before you began to talk with 
the Architect of the Capitol, the Judiciary, should not this 
property have been declared excess?
    Mr. Gelber. Under the rules you speak of, our primary goal 
is to first speak with other Federal agencies.
    Ms. Norton. Should it not be declared excess before you 
speak to other agencies, if in fact the point is we do not have 
any use for this property, why is it not immediately declared 
excess so the Federal agencies, once it is declared excess, can 
know it is time for them to step up, the community can know 
maybe they come first, or the homeless come first?
    Why was not the procedure of declaring it excess followed 
some time ago, given how long--let me ask you, how long has 
this been vacant?
    Mr. Gelber. This building was last used by the Federal 
Government in 2009.
    Ms. Norton. What did we use it for at that time?
    Mr. Gelber. At that time it was used by the Defense 
Department's Joint Chiefs of Staff for storage related to 
events in the Washington, D.C. area.
    Ms. Norton. That certainly was an inappropriate use as the 
community has developed. I can understand they needed to move 
out.
    Why was it not declared excess? I do not understand how the 
Federal Government or agencies are kind of given early word. 
First of all, some of them will not even know. If it is not 
declared excess, then the agencies who might want to make use 
of this property may not know to come to GSA and say I want to 
make use.
    My first question goes to procedure, so we have a 
transparent procedure, everybody who might be interested in the 
property knows, the GSA says we have no use for this property.
    Why is not that procedure followed to alert all concerned 
initially, and then let the chips fall where they may?
    Mr. Gelber. The process currently is if the Federal 
Government declares it excess, it is no longer available to 
another Federal entity to use. That is why we have to do the 
Federal screening prior to declaring the property excess.
    Ms. Norton. I must say I do not understand that to be the 
law. If that is the case, I think the law needs to be changed.
    Not every Federal agency, by the way, will be wondering 
about property in Southeast Washington. I cannot understand why 
there would not be notice. The moment GSA decides that as the 
manager of property GSA has no use for it, I just do not 
understand that the law gives you the opportunity to go pecking 
around to see if you can find a Federal agency who might be 
interested.
    Mr. Gelber. I apologize. Just to clarify, once GSA has 
completed its process of evaluating if any other agency can use 
this facility, we then declare it excess and then a notice is 
in fact issued where other Federal agencies have the ability to 
say----
    Ms. Norton. Was a notice issued with respect to this 
property?
    Mr. Gelber. No notice has been issued with respect to this 
property.
    Ms. Norton. Here we have an excess property, no notice had 
been issued. Thank goodness I have constituents who on their 
own discovered this has been sitting in their midst unused, so 
they step up. God knows how many Federal agencies might have 
wanted to step up, but there was no notice.
    The first thing I think we are going to have to require of 
the agency is immediate notice once a property is vacated and 
GSA decides that it has no use.
    It seems to me once it is vacated, particularly if it is an 
area like this, GSA has an obligation to make that decision 
very early.
    For the community now to hear, as a matter of fact, but you 
do not know it, we have been talking to a lot of Federal 
agencies because we are on the inside with them and we do have 
a use for it, that does not seem to me to be the way the law 
says GSA ought to operate, and it certainly does not give the 
transparency that this Committee insists happen.
    I wish you would go back to Mr. Tangherlini and ask him if 
there are any other excess properties in the District of 
Columbia or anywhere else in the United States where the notice 
that it is excess has not yet been posted.
    I would like the Chairman to get a list of all properties 
where the notice of excess has not yet been made, so the public 
can know and other Federal agencies can know.
    Mr. Mica. Will the gentlelady yield? I will also submit 
that question formally to the agency in addition to your 
request.
    I think we also need to look at some time limit in which to 
have consideration, and maybe it would be appropriate for the 
agencies that are interested in the property to put their plan 
together and pay for it so again, someone is providing a viable 
plan.
    Look at the time they wasted and the money, $400,000, and 
$7 million was appropriated.
    If that is not in place, we need to request it be in place, 
and if necessary, statutorily provide for that. I will be glad 
to work with the gentlelady. I yield back.
    Ms. Norton. Thank you, Mr. Chairman. Four years, no notice 
that this is excess property. A community found it out. Who 
knows how many other Federal agencies may have use for this 
property.
    Although this is my District, I wear two hats. I understand 
my first obligation is not to see if I can snatch some property 
for the District of Columbia as much as that is where my heart 
is. My first obligation is to see that the property is best 
used in the interest of Federal taxpayers.
    My question really goes to my great interest, frankly. In 
your testimony at page five, ``GSA's sale and exchange 
authorities.''
    Let me compliment the GSA, and Mr. Tangherlini has been the 
Acting Administrator, and he has acted like someone who knows 
real estate in the private sector sense of that word, how to 
make use of all these tools which have been dormant, certainly 
as long as I have been on the Committee.
    You say ``To dispose of unneeded and under performing 
properties by leveraging the equity of older, inefficient 
buildings in the inventory to get new and highly efficient 
ones.'' That is a very important mission.
    In fact, our two bills not only allow for the disposal of 
property, but for such transactions as exchange, consolidation, 
and the rest.
    I need to hear more, I want the record to show, are you now 
in the process of negotiating an exchange so that the funds 
could be used, and they are desperately needed, I would be the 
first to concede, so the funds could be used in your inventory 
or for other construction that is ongoing here and throughout 
the country?
    Is that transaction in the process or is that something you 
intend to do?
    Mr. Gelber. The transaction related to this building is 
being initiated now. That process is occurring across the 
country at other properties.
    Ms. Norton. ``Being initiated now.'' You have to be more 
specific than that. Are you saying to the community it is not 
likely--again, maybe I have a dime in that dollar but I cannot 
spend it--I want only to know the truth about this property.
    Can you say that it is unlikely that this property will be 
available to the community because the law requires that you 
get the highest value, and I certainly understand that, the 
highest value, and you are in the process of negotiating?
    Is it with a specific--we do not need the name--is it with 
a specific entity? Are you in search of a specific entity? Are 
you almost certain or near certain that this exchange can 
occur? How deeply into that strategy are you and how successful 
is it likely to be?
    Mr. Gelber. We are beginning that strategy. We believe it 
will be successful. Our preferred alternative is to pursue that 
course of action.
    Ms. Norton. Mr. Chairman, of course, my time has run. I 
think we have an obligation to keep track of it. We have had 
this hearing, so they are beginning, now to track how long that 
will take.
    If I can just ask, how long will that process take now that 
you have begun it?
    Mr. Gelber. We have no fixed time line associated with that 
process, but we hope to complete----
    Ms. Norton. That is a problem, Mr. Chairman. That is the 
problem.
    Mr. Mica. I agree. I will be glad to work with the 
gentlelady. We have been on this for some time with GSA on a 
limited fashion. We are looking at the whole Government problem 
right now.
    What you see here in this vacant facility is just one 
example. There are multiple in the District of Columbia, 
thousands throughout the United States.
    We have just GSA here. We also have other agencies that are 
also leaving valuable Federal assets in the lurch.
    Just one question, Mr. Gelber. You had said that the GSA is 
considering an exchange of the FBI's aging J. Edgar Hoover 
Building in the District for a new consolidated headquarters 
within the National Capital Region, and I think you made 
reference to a swap construct arrangement.
    Is there anything specific you can relay on how that would 
work and is that a serious consideration now for the new FBI 
facility?
    Mr. Gelber. It is a serious consideration. We issued a 
Request for Information associated with that project. We 
received over 30 responses to that request. We are evaluating 
those responses, and then we will issue a Request for Quotes 
associated with that particular project.
    Mr. Mica. Mr. Wise, did you have any comment on what they 
are doing here?
    Mr. Wise. Yes, sir. The swap, as you know, is essentially a 
barter arrangement, and probably one of the better ones known 
is the FBI, as Mr. Gelber has alluded to, but there are a 
couple of other things they are working on at GSA.
    One is the whole Southwest Federal Redevelopment Area, just 
down the street from here, as well as the L.A. Courthouse.
    One thing we are interested in looking at, we think there 
could be some challenges in this area. For one thing, as far as 
we know, we have not really studied this yet, but as far as we 
can tell, the GSA does not have a lot of experience in doing 
swap constructs. There have been a couple small projects mainly 
focused, I believe, on parking facilities.
    We are talking here about some really big, big projects. 
The idea that the capacity is perhaps a challenge deserves to 
be looked at.
    The second thing is there may be some issues, and this is 
something I guess for General Counsels to think about, do they 
have the authorization or do they have the authority to do this 
without any additional congressional authorization.
    That is something else that needs to be looked at.
    The third thing is looking at the potential success of the 
swap. You have to have some very solid contractors that have 
both a great deal of capital as well as capacity to do this. 
That is obviously something that would need to be looked at 
very closely before going down the road of these very, very key 
large projects that are being talked about under the swap 
construct scenario's.
    Mr. Mica. Ms. Norton, did you have any final questions?
    Ms. Norton. No final questions. I want to say, Mr. Wise, I 
do not think this is a question of legislative authority. I 
think this is a question of GSA having not used the 
considerable tools that the Federal Government has given it, 
including tools that this Committee has given it, and they 
simply have refused to use, until Mr. Tangherlini took over the 
Chair of the GSA just a few months ago.
    Now we see the Echo District moving in that regard with 
talks of exchanges. That is what we wanted to see.
    I do not think we are going to cast--I think to give the 
GSA anything like a legal excuse would be a real mistake. I say 
to the GSA if you can do it, act like a real estate agent, and 
do it. I believe you can do it.
    If you cannot do it, declare it surplus and let the 
community take care of it.
    Mr. Mica. Our other GSA witnesses have said they had 
authority, what they lack is sometimes just someone making that 
decision and moving forward.
    Ms. Norton. Exactly.
    Mr. Mica. This hearing today has answered some questions 
and also raised some others. We will have additional questions 
to submit to our witnesses.
    Again, you have an opportunity to submit if you have input 
you would like to provide to the Committee through a Member of 
Congress. We will be happy to do that. The record will remain 
open for seven days.
    There being no further business, I want to thank the 
witnesses for being with us today and the public who has 
attended and others.
    I declare this hearing of the Subcommittee on Government 
Operations adjourned.
    [Whereupon, at 10:58 a.m., the subcommittee was adjourned.]

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