[House Hearing, 114 Congress]
[From the U.S. Government Publishing Office]
VACANT FEDERAL PROPERTIES
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON
TRANSPORTATION AND PUBLIC ASSETS
OF THE
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED FOURTEENTH CONGRESS
SECOND SESSION
__________
SEPTEMBER 23, 2016
__________
Serial No. 114-116
__________
Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
________
U.S. GOVERNMENT PUBLISHING OFFICE
23-485 PDF WASHINGTON : 2017
____________________________________________________________________
For sale by the Superintendent of Documents, U.S. Government Publishing Office,
Internet:bookstore.gpo.gov. Phone:toll free (866)512-1800;DC area (202)512-1800
Fax:(202) 512-2104 Mail:Stop IDCC,Washington,DC 20402-001
COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
JASON CHAFFETZ, Utah, 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
JIM JORDAN, Ohio ELEANOR HOLMES NORTON, District of
TIM WALBERG, Michigan Columbia
JUSTIN AMASH, Michigan WM. LACY CLAY, Missouri
PAUL A. GOSAR, Arizona STEPHEN F. LYNCH, Massachusetts
SCOTT DesJARLAIS, Tennessee JIM COOPER, Tennessee
TREY GOWDY, South Carolina GERALD E. CONNOLLY, Virginia
BLAKE FARENTHOLD, Texas TAMMY DUCKWORTH, Illinois
CYNTHIA M. LUMMIS, Wyoming ROBIN L. KELLY, Illinois
THOMAS MASSIE, Kentucky BRENDA L. LAWRENCE, Michigan
MARK MEADOWS, North Carolina TED LIEU, California
RON DeSANTIS, Florida BONNIE WATSON COLEMAN, New Jersey
MICK, MULVANEY, South Carolina STACEY E. PLASKETT, Virgin Islands
KEN BUCK, Colorado MARK DeSAULNIER, California
MARK WALKER, North Carolina BRENDAN F. BOYLE, Pennsylvania
ROD BLUM, Massachusetts PETER WELCH, Vermont
JODY B. HICE, Georgia MICHELLE LUJAN GRISHAM, New Mexico
STEVE RUSSELL, Oklahoma
EARL L. ``BUDDY'' CARTER, Georgia
GLENN GROTHMAN, Wisconsin
WILL HURD, Texas
GARY J. PALMER, Alabama
Jennifer Hemingway, Staff Director
David Rapallo, Minority Staff Director
Michael Ding, Counsel
Willie Marx, Clerk
------
Subcommittee on Transportation & Public Assets
JOHN L. MICA Florida, Chairman
MICHAEL R. TURNER, Ohio TAMMY DUCKWORTH, Illinois, Ranking
JOHN J. DUNCAN, JR. Tennessee Member
JUSTIN AMASH, Michigan BONNIE WATSON COLEMAN, New Jersey
THOMAS MASSIE, Kentucky MARK DeSAULNIER, California
GLENN GROTHMAN, Wisconsin, Vice BRENDAN F. BOYLE, Pennsylvania
Chair
C O N T E N T S
----------
Page
Hearing held on September 23, 2016............................... 1
WITNESSES
The Hon. David Mader, Controller, Office of Management and Budget
Oral Statement............................................... 6
Written Statement............................................ 9
Mr. David Wise, Director of Physical Infrastructure, Government
Accountability Office
Oral Statement............................................... 13
Written Statement............................................ 15
Mr. Michael Gelber, Deputy Commissioner, Public buildings
Service, General Services Administration
Oral Statement............................................... 31
Written Statement............................................ 33
The Hon. Gregory Parham, Assistant Secretary for Administration,
U.S. Department of Agriculture
Oral Statement............................................... 37
Written Statement............................................ 40
APPENDIX
Written Statement from Ranking Member Duckworth, Entered by
Chairman Mica.................................................. 62
Proposed Legislation by Representative Jeff Denham, Entered by
Representative Glenn Grothman.................................. 64
VACANT FEDERAL PROPERTIES
----------
Friday, September 23, 2016
House of Representatives,
Subcommittee on Transportation and Public Assets,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittee met, pursuant to call, at 10:17 a.m., in
Room 2154, Rayburn House Office Building, Hon. John L. Mica
[chairman of the subcommittee] presiding.
Present: Representatives Mica, Massie, Grothman, and
DeSaulnier.
Mr. Mica. Good morning. Thank you for being with us.
I call the hearing of the Committee on Oversight and
Government Reform Subcommittee on Transportation and Public
Assets hearing to order this morning. I'm Congressman John
Mica. I'm pleased to welcome you.
And, without objection, the chair is authorized to declare
a recess at any time.
We'll of course let you know that the House did adjourn
last night, so we have a limited number of members. But I
chose, rather than to delay the hearing, to go forward, and I
think we can have a very constructive exchange with the
witnesses that are here and the members that will be able to
attend. Some will come and go because there are other hearings
scheduled today, even with the House in recess.
I want to also state that the order of business will be
opening statements from members, I will start with mine, we'll
recognize someone from the ranking side, and other members.
We'll also leave the record open for 5 legislative days for any
member who'd like to submit a written statement. And we'll also
have the opportunity to submit to witnesses questions, which
will be made part of the record.
The additional order of business will be then hearing from
all of our four witnesses, and after we've heard from our
witnesses we will go to questioning. So that's the order in
which we'll proceed today.
And, again, I welcome everyone.
The title of today's hearing deals with ``Vacant Federal
Properties,'' and that's been the subject of a lot of my
interest since coming to Congress. I'm a former smaller-time
real estate developer in business. And when I came to
Washington, I saw the opportunity to work with the Federal
Government and its various agencies, because the Federal
Government and the American public are actually the largest
property owners of anyone in the world. And part of our basic
tenets as Americans is private property ownership, and, as a
government, we have to be good custodians of the property and
assets that we hold in trust.
The purpose of today's hearing, of course, is that we still
have, even with some past efforts, a huge inventory of
property, Federal property. Some of it we don't even know the
complete inventory. And we have thousands of buildings, not
under GSA--and we'll hear from them and also USDA today--but we
have many, many agencies--DOD, post office. We have countless
numbers of vacant Federal properties or underutilized
properties and buildings.
It's estimated that the inventory of some 270,000 buildings
had total operating costs exceeding $18.7 billion. And agencies
reported an inventory of over 7,000 underutilized buildings and
properties. I think that's, though, just the tip of the
iceberg; it's even further than that.
About 6 years ago now, I helped produce a report looking at
this issue, and the title of the report is the Federal
Government must stop sitting on its assets, or ``Sitting on Our
Assets: The Federal Government's Misuse of Taxpayer-Owned
Assets.'' And, in the report, which I helped to publish as the
ranking member of the Transportation Committee--and they have
authority over some of the public assets and buildings--we
actually highlighted a number of properties that were vacant.
We'll talk a little bit about some of those.
In that capacity, I also held a number of hearings, along
with Mr. Denham. And he helped me, as the chairman of the
Subcommittee on Public Buildings--Economic Development, Public
Buildings, and Emergency Management was the title. And we held
hearings in different locations to highlight, again, some of
the issues that we faced with specific properties.
On the 25th of April, 2013, I held a hearing as the
chairman of the Government Operations Subcommittee of this full
committee, and we held that down the street in an empty
warehouse located at 49 L Street, Southeast, in Washington,
D.C. There's a picture of that on the screen.
At that hearing, the GSA official who testified is Mr.
Gelber, who is here again today, and he told the committee,
from his testimony, ``Given the high real estate value and rate
of growth of the surrounding Capitol Riverfront neighborhood,
the 49 L Street property presents us with many potential
opportunities to find a better use.'' That's his quote at that
hearing.
Unfortunately, I'm disappointed to say that GSA did not
declare the property excess until 2015, and, unfortunately, the
warehouse, we found, is still vacant to this day. So, while
we've made some progress, that's not one of our stellular
examples.
The Cotton Exchange, which is down the street, a huge swath
of property that goes from the Mall all the way out to 395,
that very valuable property, just the Cotton Exchange, we held
a hearing there in the vacant building, which has been vacant
for years, and some of the adjacent property. That property we
finally got, I think last year, some decision to move forward,
and I'm pleased to hear that, but we have one of the most
valuable assets in property in our Nation's capital still
vacant.
You may hear some of this from GSA, but we have had some
successes and better luck in getting the Federal Government to
act on some other buildings.
Let me say, when I started this, I looked a lot at
Washington, D.C., our Nation's capital, but I also looked--
several years ago, we took a subcommittee down to NASA, to Cape
Canaveral, which is in my own backyard. I'm in central Florida.
We held a hearing there. And there are hundreds of buildings,
about half of them vacant--177,000 acres, five times the size
of Manhattan, much of it underutilized. The space program,
which has been diminished as far as Federal participation, a
lot of those assets sitting idle, buildings sitting empty.
I will report, that 177,000 acres, and next to it 16,000
acres, which is owned by the Air Force, just adjacent to it, we
are struggling but we are making some progress with either
finding uses for the build, tearing some of them down that are
expensive to maintain, or looking at additional ways we can
utilize those valuable assets for the taxpayers. So that's a
little bit of good news on that side.
In June, I held a hearing--of 2012, I held a hearing in the
Heating Plant in Georgetown, which had been vacant since 2000,
costing taxpayers millions of dollars to maintain, empty over
more than a decade in 2013. In fact, when we arrived to conduct
the hearing in the empty building, there was a ``for sale''
sign that had been put up on the top floor of the building. We
asked the witnesses from GSA at the time when they started
their marketing plan, and they had told us ``yesterday,'' which
was the day before the hearing, they put the sign up.
So that did go online; that sold to developers for $19
million. And I'm told that property has plans now from the
private sector to create a substantial development which will
employ people and utilize the property and also pay taxes.
In March 2013, we held a field hearing in--well, actually,
I held one in the empty Dyer Courthouse, which actually had
been vacant since 2007 when they opened the adjacent new
Federal courthouse. After that hearing--and it was costing us
$1.2 million a year to maintain vacant--I was contacted by the
president of Miami-Dade Community College, which is across the
street. It's like from Rayburn to Longworth buildings, that
distance. He had said he had contacted GSA and attempted to
find some information on how they could obtain that and use it
for classrooms and a judicial center.
Nothing happened, so I went down and we held another
hearing at the community college to highlight the empty
building. That goes back, again, a number of years. And I'm
pleased to say that just within the last few months, actually
in May, we completed a negotiation. We've transferred over the
property to Miami-Dade. It will be the center of judicial
studies and architecture.
It's a historic, beautiful building in the center of
downtown Miami. There's a picture of it there. It has a
coquina, which is very rare stone, facade. But a magnificent
building that we let go into some disrepair will now have a
use. But it sat vacant for many, many, many years, costing
millions and millions.
Another success story that we've had and also highlighted--
the last two were highlighted here in this ``Sitting on Our
Assets''--is the Old Post Office. And we conducted a hearing.
It was 32 degrees outside. And in the vacant 15,000-square-foot
annex behind the post office, we conducted a hearing in 38-
degree weather. Made a few of the bureaucrats and our staff
shiver. But, also, we were losing up to $6 million a year.
The Old Post Office main structure was built in the late
1800s, and it had 400,000 square feet--a magnificent structure
just two blocks from the White House. And of the 400,000 square
feet, half of it was empty. And we were losing between $6
million and $8 million a year on that project. Last week, they
had the soft opening, and they will open, I think, next month.
I'm going next week to view it. It is now the Trump Hotel.
There was a--actually, we went down a year later and held a
second hearing in the annex again, which will now be the
largest ballroom, I'm told--I'm sorry, banquet room east of the
Mississippi River. The project will employ hundreds and
hundreds of people, millions in tax revenue and, actually,
revenue to the Federal Government, rather than losses. An
incredible example.
GSA came and testified earlier that the project was ahead
of schedule and under budget. So we can take properties like
that and turn them around for the taxpayer and make a big
difference.
Finally today, we've invited the Department of Agriculture
to our hearing. They'll tell us they're good about disposing
some of their excess property, but, unfortunately, some of the
data they provided us shows that their annual operating costs
for building uses has increased 95 percent from fiscal year
2014 to 2015. And they were unable to provide us with an
explanation. We'd like to hear that today.
USDA also holds on to poorly utilized properties in prime
real estate locations. We have--we can put up the map. One of
the biggest properties that USDA has is the Agricultural
Research Center in Maryland, just not too many miles from here,
and they have 6,500 acres. I think that--we pointed out that's
the size of the city of Key West.
One of the most valuable pieces of real estate in the
Capital Beltway area, of which--and just a few minutes ago
staff handed me--if we can find the figures. There are only 113
utilized buildings on the property, a total of 379 vacant
properties. So that's not a very good record.
Some of those are small structures. I've been out there.
There are some chicken coops and pigpens and other things that
were used years ago. There are also office buildings that are
vacant, with the windows broken out and vines growing over
them. It's not a pretty sight. It's not the way we should
handle a valuable public asset.
So we'll look at the Beltsville Agricultural Research
Center. We have 200 of these research centers, some that date
back, I believe, to the 1820s, across the country--that's just
one example--who had a different role than they have today. And
while the Department of Agriculture serves a good purpose, we
need to revisit the vacant properties and valuable assets that
they hold, maybe don't maintain well.
With that, I'd recognize any other members for opening
statements.
Mr. Grothman?
Mr. Grothman. Yeah, I'd just like to thank the subcommittee
chair for holding this hearing. And I hope, at the end, we do
something about expediting the disposal of this excess
property. I mean, obviously, it's not just a matter of the
Federal Government is broke and we could make some money if we
sold some of this property, but even maintaining the property
is wildly expensive.
I know back in Wisconsin we have a local governmental
authority that's been owning all sorts of excess property, and
very frustrating because it's just a waste of taxpayers' money.
And I hope, by the time we're done, maybe not this session but
early next session, we can flip this stuff around and clear it
out.
Mr. Mica. Will the gentleman yield?
I'll also say that, working with both Chairman Chaffetz,
who had a bill previously, Mr. Denham from California, who
chaired the Public Buildings Subcommittee, and others, there is
legislation pending that would not only require an inventory
but an accounting and then action, an evaluation of the
property and then action--independent evaluation, then action
to make certain that we use to the maximum the value of those
assets.
So Mr. Denham isn't here, but I'd like to--maybe you could
request a copy of his legislation, and Mr. Chaffetz, be put in
the record at this point.
Mr. Grothman. I'll request them.
Mr. Mica. So ordered.
Mr. Mica. At least we'll have that in the record. Thank
you, Mr. Vice Chairman.
Mr. Massie?
Mr. Massie. Yes. My interest in this is because we just
recently received some really devastating news, that the IRS
plans to move 2,000 jobs out of the biggest city in our
district. And, you know, we've got 3 years to react to that.
Hopefully, the IRS would find some other use for the facility,
because they don't intend to reduce the number of employees
overall.
But I have this dread that I'm going to be here in 3 years
if--for instance, if the IRS doesn't find another use for the
facility, my concern is that we would add insult to injury,
because this sprawling, single-story structure that's right in
the middle of our downtown, in some of the most valuable real
estate, might get tied up indefinitely. And that really would
add insult to injury.
So I'm trying to work forward to that point when the IRS--
hopefully they stay, hopefully they find another use for this
facility. But if they don't, what we need to make sure of is it
doesn't end up like some of this real estate that Chairman Mica
has identified in Florida and here in Washington, D.C.
So I want to thank the chairman for looking into this. I
think it's a great topic. And I want to thank the witnesses for
being here today to help us figure out how, when government
does change--sometimes it doesn't change fast enough, but when
it does change and it finds out how to operate more
efficiently, that we make sure that we don't tie up these
properties and keep them from the private sector, keep them
from some other higher use.
But, anyway, I look forward to hearing from the witnesses
today and thank the chairman and the vice chairman.
Mr. Mica. I thank the gentleman, and we'll work with you.
That could be devastating, and you want to turn that property
around to its best use if you are hit with such a turndown by
the agency.
I thank the members. And, as I said, we'll leave the record
open for 5 legislative days for members who'd like to submit a
written statement. And I'll ask unanimous consent, if the
minority does not appear today, to have their statement put at
this point in the record.
Without objection, so ordered.
Mr. Mica. We'll now recognize our panel of witnesses and
thank them for participating.
I'm pleased to welcome the Honorable David Mader, and he is
Controller of the Office of Management and Budget; the
Honorable Gregory Parham. Mr. Parham is the Assistant Secretary
for Administration at the Department of Agriculture. Mr.
Michael Gelber, he's the Deputy Commissioner of the Public
Buildings Service at the General Services Administration; and
Mr. David Wise, Director of Physical Infrastructure at the
Government Accountability Office.
I'd like to welcome all of our witnesses. Some of you have
been here before; some of you may be new. This is an
investigations and oversight subcommittee of Congress. If
you'll stand, we'll swear you in.
Raise your right hand.
Do you solemnly swear or affirm that the testimony you're
about to give before this committee and subcommittee of
Congress is the whole truth and nothing but the truth?
Let the record reflect that all witnesses answered in the
affirmative.
Again, thank you.
Now, the ones who have been here before know we try to
limit your opening statement to 5 minutes, if you have
additional data, information, or a statement that you'd like to
be made part of the record, just a request through the chair or
one of the members. We'd be glad to accommodate you.
With that, we'll recognize our witness from the OMB.
Thank you for being with us. You are recognized, sir.
WITNESS STATEMENTS
STATEMENT OF THE HON. DAVID MADER
Mr. Mader. Thank you, Chairman Mica and members of the
subcommittee, for the opportunity today to testify and update
this subcommittee on the changes that we are implementing to
improve the government's real property management and disposal
program.
Since my hearing in 2014 with the chairman, we've made
significant progress in reducing the Federal footprint and
institutionalizing a real property management program across
the government. Today, I will update you on the status of two
important administration initiatives that have improved the
efficiency of the government's real property portfolio.
OMB began its efforts with the ``Freeze the Footprint''
policy initiative in fiscal year '12, and it was in effect
between fiscal year '13 and '15. The objective of that policy
at the time was to freeze agencies' office and warehouse
portfolios to ensure that the government's portfolio did not
increase.
I'm pleased to report that the administration, thus far,
has exceeded its goal of freezing the footprint. In fact, we
have reduced the government-wide-portfolio by 24.7 million
square feet from fiscal year '13 to '15, which represents a
3.3-percent reduction from the baseline that we established in
fiscal year '12.
We estimate that the government will avoid $300 million in
rent and operation and maintenance costs as a result of this
initiative. Just to sort of give members an idea of what 24.7
million square feet looks like, think about 3.8 Pentagons.
That's what we've saved between fiscal year '13 and fiscal year
'15.
Second, while the ``Freeze the Footprint'' policy was still
underway, we recognized the need to institutionalize a lasting
strategic real property management program for the Federal
Government. In March of 2015, OMB released the ``National
Strategy for Efficient Use of Real Property'' and its companion
``Reduce the Footprint'' policy that covers all CFO Act
agencies. So, basically, this is all civilian agencies and the
Department of Defense. The national strategy institutionalized
a government-wide goal to right-size our Federal real property
portfolio by defining the strategic framework which agencies
will use to manage their portfolio from here forward.
To implement this strategy, OMB issued the ``Reduce the
Footprint'' policy to provide agencies specific performance
goals and measures. The policy, which was effective in fiscal
year '16, requires agencies to implement a 5-year rolling
planning process that sets annual square foot reduction
targets. It prioritizes disposal of unneeded and inefficiently
used properties by requiring agencies to set annual square foot
disposal targets for all buildings types.
The reduction targets function as an agency performance
measure, and, when combined with some additional benchmarking
that we've been doing over the last couple years, we now have 3
years of data going forward to start holding agencies
accountable for their reduction plans. These performance
measures for fiscal year '16 have resulted in a goal of
reducing another 8 million square feet of space in the current
fiscal year.
The policy also creates a portfolio analysis process by
which agencies, with the support of GSA, will analyze
underutilized and unutilized properties. The 5-year goal for
the fiscal year '16 through '20 plan is to reduce another 61
million square feet of office and warehouse space.
With regard to property disposal, the government-wide
program has achieved solid results over the last 2 fiscal
years, and my colleagues from GSA will address that in more
detail.
We appreciate the support from Congress for the legislative
solutions that permit agency retention for the sale proceeds
for reinvestment in additional disposals, provide expanded
authority for GSA to support agencies' work to prepare
properties for the declaration of excess, and to offer relief
for some aspects of the current disposal process.
And I think, Mr. Chairman, this speaks to a lot of the
comments that you made in your opening comment. We can do so
much administratively. And I think the bills from Chairman
Chaffetz, from Chairman Denham--and I have been personally
working with the House and Senate in trying to get both
chambers to agree on some kind of legislation to move forward.
In addition to the legislative solutions, we must invest to
make the necessary reconfigurations, relocations, and disposals
that will result in future cost avoidance. While we've made
good progress, significant efficiency opportunities remain to
be realized.
One significant challenge has been the historically low
levels of funding appropriated to the Federal Building Fund
since fiscal year '11. Between fiscal year '11 and fiscal year
'15, the Congress underfunded the Federal Building Fund by more
than $5 billion. This has prohibited GSA from making necessary
repairs to Federal buildings and delayed the construction of
critical new Federal facilities.
The President's '17 budget would restore GSA's authority to
fully utilize incoming rent funds to construct new facilities,
such as a consolidated Department of Homeland Security
headquarters, as well as maintain the existing GSA Federal
buildings that need major renovations and basic repairs. We ask
the Congress to continue to support GSA's capital program and
the critical projects that are identified in the fiscal year
'17 President's budget, including a $100 million request for
GSA's consolidation fund.
We look forward to working with the Congress on legislation
and funding in fiscal year '17 and beyond that will enable us
to make even greater progress and accelerate our mutual
interest of the reducing the underutilized and unutilized
property.
Thank you for the opportunity to testify, and I look
forward to your questions.
[Prepared statement of Mr. Mader follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Mica. Thank you.
And I think I'm going to go to Mr. Gelber--wait, wait,
wait. I've got the two oversight. We'll go to the oversight,
Mr. Wise, and then we'll go back to GSA, and then we'll get you
last, Mr. Parham.
Okay. Mr. Wise, you're recognized, from GAO.
STATEMENT OF DAVID WISE
Mr. Wise. Chairman Mica and members of the subcommittee,
thank you for the opportunity to discuss our work on the
management of excess and underutilized Federal real property.
In 2003, we added Federal real priority to our biennial High-
Risk List, in part due to longstanding management challenges,
including disposal of excess and underutilized property.
I've got three key points to make today. Over the past
several years, the administration has taken a number of steps
to improve management of the government's real property
portfolio. Second, agencies face longstanding challenges in
disposing of excess and underutilized real property. And,
third, implementing key GAO recommendations and proposed reform
legislation could help address these challenges.
Since 2012, the government has made efforts to improve real
property management. The government has developed and worked to
improve the Federal Real Property Profile, the government-wide
database.
In 2015, OMB issued its Real Property National Strategy,
which aligns with many of the desirable characteristics of the
effective national strategy the GAO has identified, including
describing the purpose, defining the problem, and outlining
goals and objectives. The 2015 strategy is an important step
forward, as it requires agencies to set annual space reduction
targets and adopt space use standards.
Prior to issuing the national strategy, OMB issued ``Freeze
the Footprint'' and ``Reduce the Footprint'' directives. These
directives have assisted agencies to better utilize existing
space and identify and dispose of unneeded space.
Despite the progress, significant challenges remain. For
example, a lack of reliable FRPP data makes accurately
measuring the amount of excess property challenging. While OMB
and GSA have taken steps to improve the FRPP, such as issuing
guidance and implementing data validation procedures, GSA has
not fully analyzed agencies' collection or reporting practices
or the limitations of the data.
Certain key FRPP data elements, such as utilization,
continue to be inconsistently reported by agencies. As a
result, FRPP data may not fully reflect the extent of real
property challenges faced by agencies nor the progress they may
have made in addressing such challenges. In prior work, we
found inaccuracies in warehouse utilization data as well as
results from the ``Freeze the Footprint'' initiative.
Legal requirements can also present challenges to disposal.
As the government's agent, GSA follows a prescribed process for
the disposal of Federal properties reported as excess by
agencies. This process includes requirements that the property
be screened for potential use by other Federal agencies,
homeless providers, and State and local governments for other
public uses.
Costly environmental requirements may outweigh the
financial benefits of property disposal, especially for
agencies such as the Department of Energy. In some cases,
competing stakeholder interests can impact the process.
Stakeholders may include State, local, and tribal governments,
business interests in the local communities, historic
preservation groups, and the general public. Finally, limited
accessibility can influence the process. For example, a
building on a closed VA campus is unlikely to draw much
interest.
The Cotton Annex in Washington, D.C., is a good example of
disposal challenges. This 118,000-square-foot building, located
just south of the National Mall, has been vacant since 2007. As
we reported in 2016, GSA's recent attempt to exchange the
property for construction services failed when GSA was unable
to obtain sufficient value from the exchange, making the fate
of this unneeded building unclear.
GAO recommendations. In an August 2016 letter, GAO conveyed
several open key recommendations to the GSA Administrator
relating to excess and underutilized property. These included:
one, an April 2016 recommendation aimed at improving the
quality and transparency of FRPP data; two, a November 2014
recommendation that GSA articulate a strategy for its role in
promoting effective and efficient warehouse management
practices across the Federal Government; and, three, a
September 2014 recommendation that GSA and DHS work jointly
with regard to the DHS headquarters project on the Saint
Elizabeth's campus in order to develop a comprehensive needs
assessment and update cost and schedule estimates. We will be
assessing the agency's latest plan when it's completed.
Finally, proposed real property reform bills could help
address the challenges of Federal excess and underutilized
property. For example, the Federal Assets Sale and Transfer Act
of 2016 could help address stakeholder influences by
establishing a public buildings reform board to identify
opportunities for the Federal Government to significantly
reduce its inventory of civilian real property and reduce its
costs.
Additionally, the Public Buildings Reform and Savings Act
of 2016 could also promote consolidations and disposals by
requiring that GSA, one, justify to Congress any new or
replacement building space in the prospectus process, including
reasons why there cannot be consolidation or co-location into
other government-owned and -leased space; and, two, dispose of
specific properties in the Washington, D.C., area, including
the Cotton Annex.
Although both bills have passed the House of
Representatives, neither has been enacted.
Chairman Mica and members of the subcommittee, this
concludes my statement, and I'll be pleased to answer any
questions.
[Prepared statement of Mr. Wise follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Mica. Thank you. And we'll catch you with questions
after we've heard from the other two witnesses.
We'll hear from our GSA representative now, Mr. Gelber.
STATEMENT OF MICHAEL GELBER
Mr. Gelber. Good morning, Chairman Mica and members of the
subcommittee. My name is Michael Gelber, and I am Deputy
Commissioner of the U.S. General Services Administration Public
Building Service. Thank you for inviting me to this hearing on
vacant Federal properties.
GSA's mission is to deliver the best value in real estate,
acquisition, and technology services to government and the
American people. To meet this mission, GSA is working with
Federal agencies to improve space utilization, reduce real
estate costs, and deliver space that allows our partner Federal
agencies to better achieve their missions.
Additionally, we are working with the Office of Management
and Budget and the Federal Real Property Council to improve the
Federal Government's inventory of real property, identify
opportunities to better use underperforming properties, and
assist agencies in the development of strategies to divest of
their unneeded assets.
Over the last 5 years, from fiscal year 2011 through fiscal
year 2015, GSA has disposed of over 940 properties, both those
managed by GSA as well as other landholding agencies,
generating over $275 million in proceeds. GSA disposes of
Federal real property through public sales, public benefit
conveyances, negotiated sales, and Federal transfers.
This past April, GSA sold the Metro West facility in
downtown Baltimore, Maryland, for more than $7 million at a
public auction. The sale of this 1-million-square-foot
facility, which previously housed the Social Security
Administration, will save the taxpayer more than $3 million per
year. Disposing of this building will serve as a catalyst for
economic development on the west side of Baltimore.
In Richland, in the State of Washington, GSA worked with
the city to dispose of a portion of a parking lot at the
Richland Federal Building. The city expressed a strong interest
in this downtown parcel and will be using the site for new city
hall. The city offered GSA cash and a city-owned half-acre
parcel immediately adjacent to the Richland Federal Building.
GSA offers properties to communities through its Public
Benefit Conveyance Program. In Buffalo, New York, GSA has been
working with the city to use the historic Dillon Courthouse for
a law enforcement purpose. The conveyance of this property will
reduce the Federal footprint by approximately 180,000 gross
square feet of space and reduce maintenance costs by over
$650,000 annually.
In addition to traditional disposal processes, GSA uses
other tools to redevelop properties that no longer serve the
government's needs. For example, as the chairman mentioned, in
Miami, Florida, GSA entered into a long-term outlease with the
Miami-Dade Community College for the historic Dyer Federal
Building and Courthouse. As part of the outlease, the college
will renovate the property for its use while preserving its
historic features. This agreement will enable the building to
continue to be a vital part of the Miami community for years to
come and save the taxpayer $1.7 million in annual maintenance
and operation costs.
GSA is leveraging the value of Federal assets through
exchanging these properties in return for construction services
or newly constructed buildings. In Cambridge, Massachusetts,
the Volpe National Transportation Systems Center is located on
14 acres in a high-technology hub of the city and no longer
adequately serves the mission of this facility. Earlier this
month, qualified developers submitted proposals to transform
this property in exchange for a newly constructed research and
technology facility for the Department of Transportation on a
portion of the current site. This project will result in the
delivery of new and improved space for transportation research,
as well as economic development opportunities and tax revenue
for the local community.
GSA is also supporting the ``Reduce the Footprint'' policy
by creating and enhancing several analytical tools to help
agencies identify possible opportunities for disposal,
consolidation, and co-location. GSA's Real Property Management
Tool allows agencies to identify expiring leases and occupancy
agreements and recognize cost savings that could be realized
from the disposal of underutilized and inactive assets.
Agencies can also use this tool to view benchmarks, such as
rent per square foot, operating and maintenance costs per
square foot, square feet per person, and compare agency-
specific data with government-wide averages.
Another tool, which GSA launched this June, is the Asset
Consolidation Tool. This tool allows an agency user to identify
what Federal space exists in a certain geographic area, such as
a ZIP Code, a particular city, county, or within a mileage
radius of a particular building. This information enables
agencies to make targeted searches for space that other
agencies currently occupy in a given area.
While GSA has made significant progress and improvements in
managing Federal real property and more aggressively disposing
of unutilized assets, there are still a number of longstanding
challenges that need to be addressed. These include incentives
for Federal agencies to identify and execute disposals,
statutory requirements prior to disposals, aligning non-Federal
stakeholder interests, costs associated with the disposal
process, and remote property locations. GSA is working
diligently with agencies to overcome these hurdles and working
with OMB to assist with its efforts.
GSA is committed to carrying out its mission of delivering
best value in real estate. I thank the committee for the
opportunity to testify today, and I look forward to answering
your questions.
[Prepared statement of Mr. Gelber follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Mica. Again, thank you.
And we'll hear from our last witness, Assistant Secretary
of Agriculture Parham.
Welcome. You're recognized.
STATEMENT OF THE HON. GREGORY PARHAM
Mr. Parham. Thank you, Chairman Mica, and thank you to the
members of the committee for allowing me to testify today on
the Department of Agriculture's efforts to address those
properties that have been determined to be excess in the USDA
portfolio.
As one of the largest property-holding departments, USDA is
well aware of the need to continually improve the management of
its land and facilities to maximize the value of these assets
for American taxpayers. In fact, the Department, under the
leadership of Secretary Vilsack, went as far as establishing a
target in its current strategic plan to reduce its overall
space holdings. This was the first time that the Department has
had such a target, and its inclusion has helped to strengthen
USDA's commitment to enhance stewardship of Federal resources,
which have been a core principle of Secretary Vilsack's tenure
at USDA.
To demonstrate this commitment, the Department has taken a
number of actions in recent years related to better management
of facilities and the elimination of excess properties. One
example worth mentioning, sir, is the recent disposition of the
Subtropical Agricultural Research Station in Brooksville,
Florida. Between 1929 and 2012, USDA's Agricultural Research
Service utilized the Brooksville location to study genetic and
environmental interactions in beef cattle.
Upon the closure of this facility in 2012, the Department
sought opportunities to dispose of the property in a manner
that would be meaningful to the surrounding community. As the
property consists of over 3,800 acres of agricultural land and
included 19 buildings, there was a tremendous opportunity posed
by the potential disposition of the research station.
Fortunately for the Department, Congress also noted the
opportunity and provided to USDA special authority to transfer
the property at Brooksville and other similar research stations
across the Nation to higher educational institutions.
By utilizing the statutory authority, the Department was
able to enter into an agreement with Florida Agricultural and
Mechanical University. Through this agreement, the Department
transferred in October 2015 the entire Brooksville location to
Florida A&M, which agreed to use the property to create
educational opportunities for beginning farmers and ranchers.
Not only does such an agreement enhance USDA's effort to
support the next generation of growers and producers, but it
also represented one of the single largest land transfers to
one of the 19 historically Black land-grant universities
established in the second Morrill Act of 1890. The result of
this land transfer has been positive for the university and the
farmers that it will serve and has also been a success for the
Department.
Despite the successful outcome in the transfer of
Brooksville, the Department faces challenges in the disposition
of other excess properties across the country. The specifics of
such challenges may vary by location, but the Department has
identified some common barriers that limit our ability to move
more swiftly to reduce holdings of excess properties.
These barriers primarily result in situations where the
costs far exceed the benefits of disposing of unneeded assets.
In many cases, the Department must incur significant costs to
prepare a facility for disposition. Such costs may include the
rehabilitation of a facility to make it commercially attractive
or to tear down and remove buildings and structures if land is
to be conveyed.
In addition, multiple USDA properties require some level of
environmental remediation prior to making the property
available for another owner. Such remediation is necessary to
abate and clean up hazardous chemicals that were released on
the property either through the Department's action decades ago
or as a result of actions taken by a prior owner of the
property. In some cases, such abatement can cost millions of
dollars that must be paid from current funds, creating a
challenge in managing budgetary priorities.
Another challenge is the lack of authority for the
Department, apart from the Forest Service, to retain any
proceeds from the potential sale of excess properties. As the
Department may accrue significant costs in preparing a facility
for sale, there is tremendous disincentive to dispose of
properties when limited or no funding is available to offset
the costs incurred.
A further challenge that is common for many USDA excess
property locations is that they are often situated in rural, if
not remote, locations. As such, the commercial value for
facilities in areas far away from population centers means that
the demand for such facilities is often low.
One location not located in a remote area in which I am
aware that the subcommittee has a keen interest is the
Beltsville Agricultural Research Center, or BARC, in
Beltsville, Maryland, as you stated earlier. It's a research
facility of nearly 6,500 acres located just off the Beltway in
the Maryland suburbs of Washington, D.C. This facility houses a
number of farm sites and laboratories where USDA conducts
research on agriculture practices of benefit to American
farmers and ranchers.
As a result of its proximity to Washington, D.C., there has
always been a strong interest in exploring opportunities to
convert portions of the facility for other uses, which
partially explains how the facility is now less than half of
the original size.
Within BARC, there are hundreds of buildings and
structures, some of which no longer support the mission needs
of USDA and have fallen into a state of disrepair due to the
lack of resources to maintain or upgrade or demolish the
facilities.
Another key factor when considering options for the BARC
facility is the current set of restrictions in place that limit
the Department's ability to dispose of any portion of BARC. In
fiscal year 1988, Congress included a provision in the
Department's appropriation legislation that restricted USDA's
ability to dispose of any property at BARC. That provision
remains in place today. In effect, this restriction requires
that Congress approve in advance any transaction that would
move property from the BARC portfolio.
Therefore, it would--it should be noted that the
legislature in the State of Maryland has also created a statute
that limits the use of BARC land to agricultural purposes or
open space should they be transferred out of Federal ownership.
As a result, the commercial interest in the BARC lands will be
limited due to this restriction.
Lastly, I will mention that the Department has identified
at least $18 million of environmental remediation activities
that must occur at various locations at BARC. These costs,
combined with the other challenges expressed generally for the
Department and specifically for BARC, significant affect USDA's
ability to dispose of any property in Beltsville.
Regardless of these challenges, however, the Department is
committed to finding opportunities to improve the management of
the Federal excess that it controls. As discussed previously,
the barriers that the Department faces when considering how it
can dispose of excess properties factor into the cost-benefit
analysis done when considering disposal options. The Department
is willing to work with the subcommittee and our colleagues in
OMB and GSA to identify potential solutions across the country.
I look forward to today's discussion on this important
topic of excess property and to answering your questions. Thank
you very much.
[Prepared statement of Mr. Parham follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Mica. Well, thank you.
And I thank all of our witnesses. And we'll go right to
questions, and I'll start.
Mr. Parham, you're aware that on Tuesday, February 12th,
2013, I visited, along with congressional staff, the Beltsville
Agricultural Research Center? Yeah. And we have 6,500 acres
there.
It's very nice that you point out what you did in Florida
and Brooksville in 2012--that was done in 2015. But I was
there, asked to see if we could come up with some plans to do
something. I saw office buildings with vines growing over them,
empty buildings.
And then, today, the staff reported to me on the huge
number of vacant buildings that still exist. I've never seen a
plan to do anything about that.
I sent the staff out to see the condition. I didn't get to
go.
Have you got that little video?
I haven't seen it yet, so let's see what's there.
[Video shown.]
Mr. Mica. Okay. That one's empty.
Well, that looks pretty good.
That one's empty.
That one's empty.
Uh-huh, yep. Nobody there.
That looks pretty good. That's well-utilized Federal
property.
This is one I saw.
There are several of these buildings, structures.
More. It kind of goes on and on.
Have you been out there, Under Secretary?
Mr. Parham. Yes, sir. As a matter of fact, I, along with
the Administrator for the Agricultural Research----
Mr. Mica. This is the condition of our Federal properties.
Looking pretty good, hey?
I hadn't seen it in 3 years. I think we've made a lot of
progress--unfortunately, in the wrong direction.
Look at this, members.
This is very valuable. Now, Brooksville--I've been in real
estate--maybe you could get $5,000 an acre. This is worth an
incredible amount of money. Not that it has to be commercially
developed. It may be well-suited that part of it is a park or a
natural preserve.
But this is disgraceful, that we have Federal properties
around the country--and the Department of Agriculture--again,
went out there, visited, requested that we come up with a
proposal. If there are impediments, we need to know. If there's
a plan--it's just not acceptable. I'm sorry.
Mr. Gelber, one of the things that we came up with was we
proposed--and, actually, one of the predecessors in GSA, I
think public buildings officials--we said there are thousands
of people who deal with disposing--they're professionals--
disposing or evaluating real estate and property and its best
use and what you can do with it. And I asked GSA to come up
with some sort of a way to bring those folks in, look at
properties that we have, and then we could utilize their
talents to look at what we had and come up with
recommendations.
We started a Federal Real Property Council as a result of
that. Are you aware of that?
Mr. Gelber. Yes, sir.
Mr. Mica. And does it still exist?
Mr. Gelber. Yes, sir.
Mr. Mica. Yeah. Well, I met with the members about a year
after they'd been put together for that purpose, and very few,
just a few million dollars' worth of properties, a handful of
properties had actually been handled. Do you know the status of
the progress of that?
Mr. Gelber. It's a continuing effort, sir.
Mr. Mica. Yeah, but it's a very--I mean, it's pitiful, the
response.
And I have people that were involved in disposing of all of
the S&L properties and things, huge numbers of properties, a
great talent on that, and they tell me, you know, there's
inertia in GSA and the Federal Government.
You've seen the bill that's been proposed. And I think most
of you--a couple of you commented, this is what we need to do.
This pretty much codifies what we tried to get started, which
you could do administratively. Yes, there are some impediments,
but, no, again, the efforts have not come to fruition like we
would like to see.
Mr. Wise, you've done some inventories, I guess, of public
buildings, but we really don't have a complete inventory of
Federal buildings that are vacant, do we?
Mr. Wise. No, sir, we don't.
Mr. Mica. No. And some of the worst offenders are the
Department of Defense. Well, actually, VA, we have a pretty
good inventory; I saw that. But it's pages and pages of vacant
properties. Some of you may have cited the difficulty with
those properties, because sometimes they're in a complex or
sometimes they're in the Rust Belt where we no longer have the
veterans to occupy the medical facilities, for example. Is that
correct?
Mr. Wise. That can be an issue for sure.
Mr. Mica. Yes.
Mr. Wise. We talked about that, I think, in past hearings.
And we mentioned in our statement for the record today that you
occasionally, maybe more than occasionally, run into problems.
When you have a property that's located, a building on a closed
campus----
Mr. Mica. Right.
Mr. Wise. --it has--it will draw a limited amount of
interest, just because the accessibility is in issue----
Mr. Mica. Right. But, one, we don't have an inventory of
vacant Federal properties or underutilized Federal properties.
That's a given. Two, we don't know the condition of the
properties we have. And I think you found that in your
evaluation. Is that correct?
Mr. Wise. Yes, sir. That gets back to an issue that we've
talked about in a number of our reports, and that's the problem
dealing with the overall database.
And I think that many of the problems we talk about, when
it comes to the Federal real property management, really kind
of circle back to that foundational issue, which is there are
still problems with having a clearly accurate and comprehensive
real property database. I know that OMB and GSA have been
working hard to try to improve that, but we have still found
continuing issues with how agencies reported the data as it
cycles back up into the larger database.
And so that's a continuing problem, meaning that, for
Federal real property managers, if you don't really know what
you've got and what condition it's in, then how do you make
rational management decisions.
Mr. Mica. Uh-huh. Well, I heard one of the things that is
cited by the administration is they need more money for the
repairs and for also this process. But aren't there also the
opportunity for public-private partnerships, where the capital
can be provided by the private sector who acquires the
property?
Mr. Wise?
Mr. Wise. We did a recent report on P3 and found that,
while P3s have been very common in the infrastructure world,
especially when it comes to transportation and highways, that
sort of thing, we did not find many, if any, examples--very few
examples of anything going on in the real property world.
Theoretically, I think it certainly is a possibility, but we
haven't found it to be a reality at this point to any great
extent.
Mr. Mica. Well, again, it depends on how you define it. The
Trump Hotel, that's a public-private partnership. We're losing
$6 million. We had a Federal Government controlling the
building, losing about $6 million to $8 million a year. The
square footage, 400,000 square feet, half of it empty. A newer
annex behind, empty for 15 years. Anybody in the private sector
would never let that happen. We did turn it over. We will now
be getting a monthly revenue and a percentage, I think, of
gross, or whatever the deal is, turning that around. That's an
example.
Maybe it isn't a public-private partnership, but we have a
public-public partnership, where we turned the property at the
Miami-Dade--or the Federal courthouse in Miami turned over to a
State institution, a college. A million and a half to keep
empty, well, we'll no longer do that.
I mean, we can look for these opportunities, but it's
painful, and it takes so long. The property in Miami, again, we
just turned over this May, is almost a decade. And going back
and forth and up and down. I've worked on just some of the ones
we outlined in our report, which is now many years old. And
we're resolving on the Cotton Exchange that has gone on, and
that that was cited here.
Mr. Under Secretary Parham cited the possibility of the
Department of Agriculture with university. But there are
opportunities, because we're sitting on incredible Federal
assets, all of them costing billions.
Hell, we could--excuse me, I won't say that. Heck, we can
take the income, the revenue, just from these properties and
turn it over. They say Congress isn't funding. Well, the
opportunities are there with public-private partnership,
public-public partnership, and also assets, maximizing them and
getting a return.
We've actually made money tearing down, since our hearing
at the Cape, some of the buildings and selling some of the
unused material for scrap, which we've made money and cut our
costs of maintenance and security because the building's gone.
I mean, it just goes on and on. Nobody in the Federal
Government seems to be very creative in this.
There have been some attempts by OMB in expanding, again,
the number of square feet. And you told me you're targeting now
61 million square feet for the future? Is that----
Mr. Mader. Yes, sir, for 2016 through 2020, 61 million
square feet of just office and warehouse space, because that,
we feel----
Mr. Mica. Good.
Mr. Mader. --is really where significant savings are.
Mr. Mica. And then the President's initiative, which I
support, better utilization of existing space. Been working
with you on the FTC building, consolidation of that into the
Department of Commerce building, and then utilization of the
old FTC building as a National Gallery rent space. And you have
a huge amount of rental space with the FTC.
Just a question: With the FTC in the new leased space--it's
the Constitution building, I believe. That lease that GSA had
gotten into was a million square feet. And the lease was
botched, the lease acquisition was botched, as I recall, and
the courts ordered GSA to honor the lease, which moved part of
the FTC in. And that's several years back now.
That lease expires, and I would like to see what we can do
in consolidating some of that space in the Constitution
building along with the existing space that's being utilized in
the old FTC building into the Department of Commerce, of which
we're renovating a million square feet. But there are no final
plans for about 200,000-plus square feet, where we could have a
consolidation.
And, particularly, if you could report back to me, too,
eliminating some of the duplicate spaces that are utilized in
the buildings--child care; one important one is data centers;
auditorium; and conference space--I would appreciate it. And
I'll ask the staff to follow up with a specific line of
questions.
Can you help us, Mr. Gelber?
Mr. Gelber. Yes. We'd be happy to work with your staff on
that.
Mr. Mica. Thank you. Thank you.
I have other members.
Did you want to go next, Mr.DeSaulnier?
Mr. DeSaulnier. I just wanted to make a comment that I'm
supportive of what the chairman is after here. In my experience
in California, both the local and State level, we have the same
problems.
And one question to Mr. Wise is, as you look at this, how
you look at developing best practices for us, but you interact
with the State and local agencies who, because of things like
the McKinney Act, have a relationship with what we do with this
property.
So, in one instance, in my district, over 20 years ago we
worked out an agreement to transition some property to the
police department, the sheriff's department, and the fire
department for a public safety training facility. The local
community is very supportive because we're taking it out of
residential areas and putting it on, to be fair, what was an
old military base, so it was part of the BRAC process but it
was somewhat hyphenated.
So, 20 years later, I still get comments about, when are we
going to move in? So that interaction between other levels of
government, since it's already in the statutes, and how you may
recommend to us how we could change that.
And then, secondarily, just, I mean, California, when we
were in the recession, because we were unprepared in the
General Services Department--you may recall the Schwarzenegger
administration had a deal to sell five or six very large pieces
of property, State property, in San Francisco and Los Angeles
and lease it back. And when the legislative analysts came back
with the analysis, it was such a horrible deal, even though at
that time we were issuing IOU warrants because of our cash flow
problem, we didn't do it. And thank goodness we didn't.
But it's an illustration of where, if all levels of
government were acting with best practices--and the
intersection, given the recession, is a very extreme example,
but these things aren't consequences, as the chairman says,
where there's just a lost opportunity. There is a process.
There is the possibility for real crisis and opportunity. So I
think it would be a great thing that we stay on this and make
sure that we develop these best practices.
But to Mr. Wise, maybe you could just elucidate a little
bit about what you're doing to interconnect the dots with State
and local government.
Mr. Wise. Well, overall, I can't really comment too much on
the State processes for dealing with State property that's----
Mr. DeSaulnier. No, I mean, the interaction with the
Federal Government.
Mr. Wise. Yeah. Well, State and local governments are
obviously part of the screening process. As you know, under the
current legislative framework, any Federal property that an
agency decides is no longer needed goes through the screening
process, to include, as you alluded to, the McKinney-Vento for
homeless, State and local governments, as well as, you know,
other public entities.
There can be complications to these things. You've got
local stakeholders, you've got historical preservation, you've
got environmental issues that all come into play. This is why,
as I think the chairman talked about and as we mention in our
statement, some of the legislative reforms, we think, could be
helpful in getting towards dealing with some of these problems.
But, overall, the current situation is--it can be a
cumbersome--I think as you discuss in your question, it's a
very cumbersome process, and----
Mr. DeSaulnier. So my question was more to--is more
encouragement--so it may be more rhetorical, from what I'm
getting from your response--is the encouragement to us to work
with State and local agencies and their organizations here in
D.C. Because what we all get, I think, when we go back to our
districts or when we talk to our local government is, whether
it's a perception or it's a reality, but I think it's a little
bit of both, they don't want to deal with it because it's too
cumbersome.
Mr. Wise. Yeah.
Mr. DeSaulnier. So there are lost opportunities for all of
the entities there within the statutes and just because the
perception of the bureaucratic process is too difficult.
Mr. Wise. Yeah.
Mr. DeSaulnier. So I know you're considering that as you go
along, but however we can facilitate that conversation I think
would be helpful.
Mr. Wise. No. Thank you. That makes a lot of sense.
I can give you one concrete example where the process did
work quite well. In the town where I grew up in south-central
Pennsylvania, there was a new courthouse built across from the
old courthouse. Now, the city government was way, way expanded
beyond what it could absorb in the old city hall, which had
been built in the 1920s. So what happened? The old courthouse,
through public conveyance, went to the city government. Many
offices scattered all over town--water department, housing
department, et cetera, et cetera, traffic department. All were
able to come in after that building was renovated to then be
able to get away from all these leases and the extra expenses
they entailed.
So there was an example where the city was able to get a
public conveyance and it turned out to be, I think, pretty good
public policy. So hopefully that can--I understand the problems
you're getting at, but sometimes the system does work to the
benefit of the taxpayers.
Mr. DeSaulnier. We want that to be more the norm rather
than the exception, which is what the perception is, I think.
Mr. Wise. Okay.
Mr. DeSaulnier. So when you can point out examples of that
in an area that the land cost is very expensive, that's a
perfect thing, where if all of these agencies are working
together, it's in the best interests of the taxpayers.
Mr. Wise. Sure.
Mr. DeSaulnier. Thank you.
Mr. Wise. You're welcome.
Mr. DeSaulnier. Thank you, Mr. Chairman.
Mr. Mica. Thank you.
And, again, a lot of what we do, sometimes we get into some
pretty tough stuff, and they go back and forth in this
committee, and some of it's partisan. This is meat and
potatoes, this is--you know, we have the potential for saving
billions of dollars, and we are trillions in debt. This isn't
very glamorous. But just look at the progress we've made. We've
had to hammer away, but I thank you. The bipartisan cooperation
has been very effective in moving this forward.
I started out one time with, I think, like, 16,000. That
was the number we had initially identified, just under GSA, of
vacant or underutilized properties. And I think when we did the
first hearing, I crossed it out and we put 15,999. Well, we're
going down the list. That's a tough way to do it.
This bill, though--and you weren't here earlier; I had it
made part of the record--is a bipartisan effort. Passed the
House and is now in the Senate. And it does all the things
we're discussing here--streamlining some of the disposal
process, giving you the tools that you need to do this. So we
can make progress.
With that, Mr. Grothman, our vice chair.
Mr. Grothman. Right. Interesting topic. I'd like to thank
the chairman for bringing it up.
What we're told here is right. We have about 7,000 Federal
properties--and I take it these are just Federal buildings, not
vacant properties--7,000 properties that are unutilized or
underutilized. Just GSA. Amazing. Amazing, amazing, amazing.
Waste money, waste money, waste money.
And how many of those buildings--and somebody give me a
shot at guessing--how many of those buildings, like we saw up
here, are just, in essence, abandoned? I mean, every year, the
value of the properties drop because they're not keeping up the
electrical or even repairing the windows? Does anybody have an
opinion on that? Give me a shot?
Mr. Wise?
Mr. Wise. We don't have any--the numbers that exist are
numbers that are, I think, developed by the administration. So
I think the question probably should be directed at the
administration.
Mr. Grothman. Is it unusual to have buildings in which we
just let them--even let windows break and let, you know, the
rain come in? Is this a common thing?
Mr. Wise. Well, it certainly is existing in Beltsville, as
the video showed, and there have been other cases where we have
seen--when we did some work a few years ago looking at--it was
actually work looking at the accuracy of some of the FRPP data,
we saw some places, especially in, I can recall, in one of the
national parks that we saw some kind of abandoned huts and
little buildings that--I think some of the problem to do with
that, sir, is that--and I think this was discussed in some of
the previous statements--is that the cost to deal with these
things is sometimes greater than just letting them go----
Mr. Grothman. Okay.
Mr. Wise. --because they don't have a use for it, and
you've got----
Mr. Grothman. Thank you.
Mr. Wise. --environmental issues to deal with and no money
for demolition----
Mr. Grothman. Great.
Mr. Wise. --and to take care of them.
Mr. Grothman. When is it determined--I mean, how long does
a building have to be vacant before it's determined we better
sell this thing?
Mr. Wise. That's up to the individual agencies, I think.
Mr. Grothman. In general?
Mr. Wise. I would probably defer on that question since
it's not something that we've really looked at in any detail.
Mr. Grothman. Okay.
Once it's determined that we ought to get rid of a
building, how long does it take to get rid of it?
Mr. Wise. Well, again, it could take years. And, as we
mentioned, under the current legislative framework, there's a
pretty complicated process that needs to go forward, including
all the issues to do with public conveyance. You've got issues
to do with environmental----
Mr. Grothman. You don't have a guess? Is there an average
you can think off the top of your head?
Mr. Wise. It just ranges. It can be quick, or it can take
years. I mean----
Mr. Grothman. What does ``quick'' mean?
Mr. Wise. Sorry?
Mr. Grothman. What does ``quick'' mean?
Mr. Wise. Well, quick could be anywhere from a few months
to a number of years. I mean, there's no discernible pattern
that I know of.
Mr. Grothman. Okay. One thing that sticks out when I look
at this, first of all, you've got to give a shot to the State
and Federal Government; then you've got to do something or
other to see if the homeless need it.
Mr. Wise. Right.
Mr. Grothman. I don't understand the purpose of either one
of those. I mean, it seems to me, if I have a building and I
want to sell it, I don't say, first of all, I've got to call
the local city and see if they want it and I've got to call the
local homeless shelter and see if they want it.
Is there any reason we shouldn't get rid of both of those,
what I look at as just wasteful things?
Mr. Wise. Well, that's up to Congress because that's the
current legislative framework.
Mr. Grothman. I know that's what it is, but do you see any
benefit?
Mr. Mader. You need----
Mr. Grothman. Mr. Mader, you----
Mr. Mader. Congressman, you need to change your
legislation, and that's what we've been----
Mr. Grothman. Well, I know, I know, I know.
Mr. Mader. I know, but--and that's what the proposed
legislation from the House does.
Mr. Grothman. It looks like they're still keeping this
homeless thing. And I'm not sure, are they still keeping----
Mr. Mader. What we've been working with Chairman Chaffetz
and the House is in streamlining it, because there is a value
to availing these properties for use for the homeless. What
we've been trying to do is to actually streamline that process.
Mr. Grothman. What's the value? I mean, if I have a house
and I want to sell it and I want to get out the best I can, you
know, if the local homeless shelter or the local city want the
property, they can bid on it or contact my broker.
Mr. Mader. Under the legislation--you know, to Mr. Wise's
comment, and I'll ask Mr. Gelber to talk more about it--the
public conveyances, they're not paying for it. It's actually
being transferred to them, similar to the example that our
friends from Agriculture gave.
So, again, you know, I have to reemphasize, as frustrated
as the members are and the chairman, I've been doing this for 2
years since I came to the administration. I'm frustrated, too,
that we can't get the House and Senate to agree on legislation
that everybody agrees on: that we need savings coming back to
do more disposals, we need McKinney-Vento streamlined. I mean,
we're as frustrated as you are, sir.
Mr. Grothman. As I understand, it's being held up, what, in
the Democratic cloakroom on the Senate side? Is that what's
going on now? I think. That's what somebody told me.
In your experience, when you deal with these--another
thing. We have these 7,000 properties here. Of those, how many,
if you bought the property, about, do you think you'd buy the
property for the land, and how many do you think the building
still has value?
And I think there are many, many buildings that don't have
value. I mean, you let a building go for 5 years, 6 years,
particularly if the thing was built 50 or 70 years ago in the
first place, my guess is usually the land is more valuable than
the building.
But do you know how many of these 7,000 buildings have
value apart from the land?
Mr. Mader. I don't have that level of detail.
Mr. Grothman. Could you guess wildly? Half?
Mr. Mader. I wouldn't even hazard a guess.
Mr. Grothman. Okay.
Kind of shameful. Well, we'll go ahead with--give the
remainder--I guess I've used up my time. So we'll let the
chairman----
Mr. Mica. Thank you, Mr. Grothman.
We'll now recognize Mr. Massie.
Mr. Massie. Thank you, Mr. Chairman.
I actually heard some good ideas here. I did hear some
creativity. I wanted to follow up on that.
Mr. Mader, you said something that sounded pretty catchy to
me, ``Freeze the Footprint.'' Can you tell me more about that?
Is that a policy or a statutory thing? Or how are you pursuing
that?
Mr. Mader. Congressman, as I mentioned, in 2012--and a lot
of this was driven at the time by the decreasing budget, and I
think agencies have recognized that there's value in addressing
their real property program. And so we said in 2012--and it
became effective in fiscal year 2013--it's like, okay, nobody--
these are DOD and civilian agencies--nobody will increase their
footprint with office and warehouse space.
And, as I mentioned----
Mr. Massie. Let me ask just quickly, does that mean owned
footprint or also leased?
Mr. Mader. No, leased too.
Mr. Massie. Okay.
Mr. Mader. So leased too. So, basically, we overachieved.
You know, not only did we freeze it, but we actually reduced it
by the 24.7 million square feet.
And then we said, look, that was a one-time event; what we
need is a management strategy to go forward. We need agencies
to manage these assets in an aggressive way. So, hence, the
national strategy, which required each of the agencies to
prepare this 5-year plan.
Now, a component of that 5-year plan was, oh, and also, by
the way, tell us how you're going to reduce your inventory of
office and warehouse space. And we required that those plans be
signed by the deputy secretaries of every Cabinet-level
department.
And, this past summer, we actually went out and did an on-
site review with each of those agencies to talk about, you
know, how are you progressing against the goals that you set?
What are the obstacles?
So I think, Congressman, we've put in place a good
management practice going forward. And, again, as I said, this
is a rolling plan. So 2016 to 2020, great. Now we're getting
2017 through 2021.
Mr. Massie. It sounds so good to me, I'd like to put it in
statute. And I think people would get creative, more creative,
within the government when they needed to expand somewhere and
there had to be some sort of conservation of mass, if you will,
where, okay, before we can do this--and we need to do this, and
we want to do this--we've got to find some property and solve
the problems that have been articulated here, we've just got to
bust through and solve these problems, whether it's legal or
statutory requirements like Mr. Wise talked about--I know in my
district there's some VA buildings that used to be housing for
officers in the military a long time ago, but we've got all
these historic requirements, lead abatement, asbestos
abatement.
Mr. Wise, what sort of statutory things could we do to bust
through those problems? Because you end up with a situation
where you've got real estate and it's valuable to the city or
to developers there, but once you impose all the constraints on
it, its value is below zero sometimes.
Mr. Wise. Well, one of the things that I think has been an
ongoing concern is that--and I think you kind of hint at that
in your question--is that you get a lot of stakeholder issues
that come into play when you talk about what to do with a
conveyance or what to do with a certain property. And as I
think Mr. Mica talked about and Mr. Mader also talked about,
some of the recent legislation that has passed the House could,
to some degree, I think, address some of these things.
For example, you know, the Federal Asset Sale and Transfer
Act that was passed this year, that act, one of the things that
it does is it bundles properties together. So that helps
mitigate the individual stakeholder interests that come from
the local business or the local government or all these other
groups that can come in--tribal groups, State and local
groups--that can then end up really kind of jamming up the
process or they'll get involved in public hearing court cases
of one sort or another that can really slow things down.
But if the properties are bundled together for a
congressional decisionmaking, then that helps mitigate some of
these stakeholder influences. And we think, from what we can
see from the legislation, that would be a step forward in
helping to help smooth out the process.
Mr. Massie. So it may take an act of Congress, or an act of
Congress could help----
Mr. Wise. Well, there's been----
Mr. Massie. --get it right?
Mr. Wise. Yeah, there's been reform legislation going
back--I mean, I've been working on these issues I guess for
about 8 years----
Mr. Massie. But, I mean, what I heard you say is, instead
of sort of general reform, just start a list of properties and
we, you know, write them down here in Congress and put them
legislatively, okay, we're going to bundle this and----
Mr. Wise. Yeah, well, the current framework is what it is.
And so we see the results of that. And, to some degree, I
think, as the chairman's pointed out, there's bipartisan
support to look for reforming that process in order to make it
more efficient. And there's been a number of bills--and we can
go back to--I think you talked about this, Mr. Chairman, your
bill, Mr. Denham and you, with H.R. 1734, back about 5 years
ago, that had some of the similar characteristics of the 2016
act.
So I think there's definitely congressional recognition.
Unfortunately, none of these reform bills have been able to get
passed by both the House and the Senate. They've all passed the
House, but they've gotten stuck in different places in the
Senate for various reasons. And so that's been one impediment
to trying to enact reforms in how the government should or
could manage its real property portfolio.
Mr. Massie. Mr. Chairman, would you indulge me for 1 more
minute?
Mr. Mica. Oh, take your time. We have plenty of time this
morning.
Mr. Massie. The final thing that I wanted to talk about--
this has been touched on, I think, by most folks here--is
getting an accurate inventory of this is really important. I
think if we get rid of the logjams and we set up the incentives
the right way and then introduce this clearinghouse, this
database, that the private sector will be farming that, you
know, they'll be mining that list continuously.
And that's why, Mr. Gelber, I was excited when you
mentioned working on software to locate this inventory. You
putting your constraints, almost like a search engine, it
sounds like. That would be extremely valuable, particularly if
the database is accurate, if the database lists the constraints
on each of the properties, you know, in a consistent way across
all of the various departments, and if it's available to the
public.
The first thing is I want for it to be available to
Congressmen so each of us could go into that software and look
and say, okay, here's something I need to go visit in my
district, and then go talk to the local stakeholders, try and
anticipate some of these court cases or whatever that may come
up.
But, anyway, can you tell us about that software and a
little bit about the challenges in developing it and where
you're at with it right now?
Mr. Gelber. I would be happy to, sir.
As with any database, one of the key issues is the accuracy
of the data. And we are working with our colleagues across the
executive branch to ensure that data is as accurate as
possible. We have instituted several verification and
validation tools that would identify anomalies in the data.
Then we can go back to agencies and ask questions about a
particular property or a particular set of properties that, for
one reason or another, the numbers just don't seem to add up
properly for other types of properties that are similar to that
around the country.
In addition, we're allowing agencies to use the data to
analyze both their own inventory but compare their inventory to
other Federal agencies to see if, in fact, their operating and
maintenance costs are higher or lower than other agencies, if
the utilization of a particular property is not as efficient as
it could be, when a particular lease would end, and then, using
that information, reach out to other Federal agencies in a
particular community to say, ``We have a property that you
might be interested in,'' or, as an agency, ``I'm looking for
space in this community. You have a property that we may be
interested in.''
And so these tools, as you mentioned, are very similar to
the traditional search types of tools that you see in the
commercial marketplace that allow people to mine data and look
at data to more effectively make decisions.
Mr. Massie. I mean, if it's an open dataset, I can almost
imagine a start-up that would write that app for you because of
the incentives, if we had the incentives set up right. There
are probably 10 start-ups dealing with, you know, finding and
helping transfer property--if there's some financial incentive.
Now, if they're just going to turn it over to the city or the
county or local law enforcement, there may not be that
financial incentive.
But, anyway, I would love to be a beta-tester for that
software if you'll let Congress beta-test that before you go
live, understanding it's going to have a lot of glitches and
stuff. I think it'd be a helpful tool for our staff to go in
and try and anticipate some of these places.
Mr. Gelber. That's something we're reviewing at this point.
There are still questions about some of the data may not be
appropriate to share with the public in general.
Mr. Massie. Correct.
Mr. Gelber. And as we go through this process of evaluating
information and using information, we want to make sure that,
as we share information, it's shared for good, if you will, but
that actors who may not be as predisposed to--you know, hoping
the government makes good decisions, but using that information
for other purposes, we want to make sure that we don't share
the data inappropriately at this point.
So it's something we're reviewing and discussing within the
executive branch as well as with Congress.
Mr. Massie. All right. Well, thank you very much.
I see the chairman was very generous. I'll yield back the
time I don't have.
Mr. Mica. I thank you, Mr. Massie. And we'll work with you
on trying to get ahead of that IRS possible departure from your
district, because I'm sure they have a huge footprint as far as
square footage and space and then a huge economic impact.
Mr. Massie. If I can talk to that, it's an enormous
footprint. It's two city blocks, a single-story building,
surrounded by private development, which is, you know, much
taller buildings and parking.
And, like I said, I want to reiterate we'd love for the IRS
to stay. We'd love for them to find some other use for that
building. But, sort of, my foreboding sense is that I could--
maybe one day I'll be in Congress as long as you, Mr. Chairman,
and I'll be sitting in that seat asking some witnesses 20 years
later why this single-story building's got vines on it. So I
want to prevent----
Mr. Mica. Well, again----
Mr. Massie. --that dystopian future.
Mr. Mica. --and just as some institutional advice for being
here, if you see this coming and you can work with these
agencies--and you had Mr. Mader talking about, well, we have
need for placing Federal agencies in square footage, and it all
doesn't have to be in Washington, D.C.
Here is an example--I don't know your square footage--where
you could work in anticipation of transition to another agency
that doesn't have to be here. They want to spend an incredible
amount of money on relocating all of Homeland Security in one
location. It kind of reminds me of putting all the western
fleet at Pearl Harbor. But some areas that don't need to be
right in the capital center here may have a reuse capability.
Again, I think you can sometimes get ahead of this, but you
have to do an inventory because there are all these separate
entities operating independently. Getting with GSA, finding out
what the property needs are, OMB and maybe others, and
identify, and maybe transitioning in a smoother fashion and
utilizing some fairly valuable property that probably in your
locale could be operated a lot less also as a square-footage
cost, employment cost, the whole realm, for saving the Federal
Government and saving your community.
So just a little advice.
I worked on the closure of a Veterans medical complex in my
community. And we got them to keep part of it open, and then
they had to do an assessment. But I wrote them 5 years ago, and
I said, ``Hey, this is going to become empty when we open the
new one. Let's have a plan.'' But I'll tell you, it always
don't work that way. We are still repurposing, and we are into
having already the new facility open, have a vacant 120-bed
nursing home vacant, which I just turned over to the State of
Florida from the Federal Government because they can open it
and operate it faster.
So you can get ahead of these things. I mean, again, I'm
just trying to help you, Mr. Massie, and that is certainly a
big responsibility in your district. So words of advice,
whatever they're worth.
Mr. Massie. Thank you, Mr. Chairman.
Mr. Mica. And the same thing with Mr. DeSaulnier. He
pointed out some things. He reminded me that we had been up to
New York and looking at some projects, the old post office
there, which is being converted now.
And I thank you.
He helped call attention. We had been up there many times
for a post office that had been vacant for 30, 40 years, will
now be a center of commerce, a station, at a fraction of the
cost and with a public-private partnership. That property got
turned over, I think, to the New York Development Authority,
but still a lot of Federal responsibility in that project.
So those are some of the things--Mr. DeSaulnier, did you
have anything else?
Mr. DeSaulnier. No, I just--that also is an example of one
of the most valuable pieces of property in the United States
sitting there being not used, underused, for 20 years, where
there was a general interest in doing something positive about
it. So, to the degree that we can get on top of those things--
and I know you're trying to--that would be beneficial.
Mr. Mica. And this bill certainly will help. And you cited
that legislation we've struggled with here, so hopefully we can
get our Senate colleagues to act on that.
Just two quick updates, Mr. Gelber. Okay, the Coast Guard
we had located over here on the waterfront, and they moved into
their new building, when was it, at the new location?
Mr. Gelber. I believe they moved in in late 2014, possibly
the beginning of 2015.
Mr. Mica. So 2014, 2015?
Mr. Gelber. That's my understanding. We can get the exact
dates to your staff.
Mr. Mica. And they're fully moved, right?
Mr. Gelber. They're currently out of the locations that
they were in previously, in the--I believe it's referred to as
the Buzzard Point area of Washington, D.C.
Mr. Mica. Yes. And what's the status of that property?
Mr. Gelber. That property is a leased facility, so it's
owned by a private entity. And so I don't know----
Mr. Mica. Is it vacant?
Mr. Gelber. I don't know, sir.
Mr. Mica. I think it's vacant.
Mr. Gelber. As I said, it's owned by a private entity and
not in the inventory.
Mr. Mica. I know, but I think you're paying a lease on it.
Can you let us know the status of that?
Mr. Gelber. We can, sir. I believe----
Mr. Mica. Yeah. Here's an example of one coming vacant. I'm
pretty sure it's been vacant since at least the beginning of
last year, and I think we're still paying rent on it. Sometimes
we don't plan these things very well.
Then can you give, also for the committee and the staff, I
want an update on that building. And then, let me see, we've
got an--oh, what's the latest and greatest on the FBI building?
Mr. Gelber. That's a procurement that's currently in
process. Bids have been submitted to the government, and we're
currently reviewing those bids, sir.
Mr. Mica. Uh-huh. And have they narrowed it to one of the
States? I think it was between Maryland and Virginia. Or is it
still open competition?
Mr. Gelber. The actual site selection will be part of the
award of the contract, and that has not occurred yet.
Mr. Mica. Okay. Maybe you could just give us that in
writing too. I like to keep up with these things, and then we
put a date on them, a response from the committee, and then we
can come back, or whoever is in charge, and make certain that
we're making progress and we've documented where we are and
where we need to go.
Well, there being--Mr. Massie, did you have anything else?
Thank you.
There being no further business before the subcommittee
today, I would like to thank our witnesses for participating. I
look forward to working with you. You have an important
responsibility. We could save billions of taxpayer dollars. We
can make idle Federal assets very productive and a good return
for the taxpayer.
So, with that, there being no further business, this
subcommittee hearing is adjourned. Thank you.
[Whereupon, at 10:50 a.m., the subcommittee was adjourned.]
APPENDIX
----------
Material Submitted for the Hearing Record
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]