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

SITTING ON OUR ASSETS: THE VACANT
FEDERAL COURTHOUSE IN MIAMI

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

(112-98)

FIELD HEARING

BEFORE THE

SUBCOMMITTEE ON
ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT

OF THE

COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES

ONE HUNDRED TWELFTH CONGRESS

SECOND SESSION

__________

AUGUST 6, 2012 (Miami, Florida)

__________

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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

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

Subcommittee on Economic Development, Public Buildings, and Emergency
Management

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

CONTENTS

Page

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

TESTIMONY

Hon. Frank M. Hull, Circuit Judge, United States Court of Appeals
for the Eleventh Circuit, and Member, Committee on Space and
Facilities of the Judicial Conference of the United States..... 8
David Wise, Director, Physical Infrastructure, U.S. Government
Accountability Office.......................................... 8
John Smith, Regional Commissioner, Public Buildings Service, U.S.
General Services Administration................................ 8

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Hon. Frank M. Hull............................................... 34
David Wise....................................................... 42
John Smith....................................................... 50

SUBMISSIONS FOR THE RECORD

Letters to Hon. John L. Mica, a Representative in Congress from
the State of Florida, and Chairman of the Committee on
Transportation and Infrastructure, in support of his efforts to
sell more than 14,000 Government surplus properties, sent by:

Rosendo Caveiro, CPA, Senior Director, Multifamily
Advisory Group, Cushman & Wakefield, August 16, 2012... 56
Douglas G. Dennison, National Sales Coordinator, Rowell
Auctions, Inc., August 17, 2012........................ 57
Michael T. Fay, Chairman-Founding Partner, Colliers
International South Florida, August 16, 2012........... 58
Craig Haskell, CEO, Value Hound Academy.................. 59
Gonzalo Herrera, District Sales Manager, Keyes Real
Estate Company, August 16, 2012........................ 60
Walter Liff, President, Auctioneer, Action Auctions,
August 15, 2012........................................ 61
Michael Pappas, President, Keyes International Center,
August 17, 2012........................................ 62
Robert J. Pliska, CRE, CPA, MBA, Managing Director,
Sperry Van Ness/Property Investment Advisors, August
15, 2012............................................... 63
Howard W. Steinholz, President/Principal, The Urban
Group, Inc., August 15, 2012........................... 64
Stanley G. Tate, Chairman, Tate Enterprises, August 17,
2012................................................... 65

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SITTING ON OUR ASSETS: THE VACANT
FEDERAL COURTHOUSE IN MIAMI

----------

MONDAY, AUGUST 6, 2012

House of Representatives,
Subcommittee on Economic Development, Public
Buildings, and Emergency Management,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to call, at 10:06 a.m., in
the David W. Dyer Federal Building and U.S. Courthouse, 300
N.E. 1st Avenue, Miami, Florida, Hon. John L. Mica (Chairman of
the committee) presiding.
Present: Representatives Mica and Denham.
Also Present: Representative Diaz-Balart.
Mr. Mica. Good morning. I would like to welcome everyone
and call to order the Subcommittee on Economic Development,
Public Buildings, and Emergency Management.
I am Congressman John Mica. I am pleased to be able to
chair the full Transportation and Infrastructure Committee of
the House of Representatives. This is one of our subcommittees.
I am pleased to be joined this morning by the chairman of the
subcommittee, the gentleman from California, Mr. Denham. Within
the portfolio of the committee and Mr. Denham's subcommittee,
we do have the important responsibility of one of our three
major areas of overseeing public buildings. These are not
Department of Defense and they are not Post Office facilities,
unless they are controlled by the General Services
Administration, but all the balance of the properties.
The General Services Administration is the largest property
owner in the world. It is trustee for all of the public
properties and assets of the United States and our chief
procurement agency.
We are pleased to be in Miami today as a continuance of
some of the emphasis of the committee, some of our work, and I
will explain that in just a second.
Let me again say welcome, Mr. Denham, and I also thank Mr.
Diaz-Balart, a former distinguished member of the committee and
subcommittee, a chair. We are very proud of his service on this
committee. He went on to be a member of the Appropriations
Committee of the House of Representatives, and I think it is
very fitting that he join us today because while we authorize
projects, he funds projects in that important role and
responsibility.
So I would like to ask unanimous consent that
Representative Diaz-Balart be permitted to sit with the
committee at today's hearing, offer testimony and participate
in questions. Without objection, so ordered.
So, pleased to have you this morning.
Mr. Diaz-Balart. Thank you.
Mr. Mica. I know you welcomed Mr. Denham to Miami, Chairman
Denham. We are pleased to have him come all the way from
California and be with us today and assist not only with this
hearing, but next week he will be chairing a hearing on the
same subject in Los Angeles. Our committee is taking the issue
of vacant or underutilized Federal properties from Washington,
and we have done hearings there today, to Florida with this
first one outside of the Nation's capital, and onto the west
coast. So we are going to go from sea to shining sea.
We have, under the purview of the GSA, more than 9,000
buildings or properties. The Federal Government also has in the
neighborhood of 14,000 properties, buildings that are vacant or
properties that are underutilized. We have done three hearings
in our Nation's capital while Congress is in session to focus
on vacant buildings in the capital. This is not just some
Johnny-Come-Lately type of an investigation or oversight but
actually our committee, when Mr. Diaz-Balart was on the
committee, before we became the majority about a year-and-a-
half ago, we produced a report entitled, ``Sitting on Our
Assets: The Federal Government's Misuse of Taxpayer-Owned
Assets,'' and within that, the very first category of abuses
that were identified and targeted and actually have become the
blueprint for this committee's work was the problems with GSA
sitting on incredibly valuable assets, not only in Washington,
DC, but across the United States, just like we will find out
here in south Florida, and then on the other side of the
continent, in Los Angeles next week.
Mr. Denham and I did three hearings, the first one in a
vacant annex to the Old Post Office in Washington, vacant for
15 years, costing $8 million a year, two blocks from the White
House. We managed within a year to turn that around from a
money-losing asset to now with the potential of a site
employing 1,000 employees, and probably $8 to $10 million a
year in revenue, and taking an unproductive Federal property
and turning it around. I am very pleased with that effort.
Our committee then moved to a vacant building between the
interstate and the Mall, a wide swath of property with, I
believe, an 89,000-square-foot building, vacant for 5 years,
the Cotton Annex that sat vacant. And then in our last hearing
in the Nation's capital, we held a hearing in a vacant power
building, a power station building behind the Ritz Carlton in
Georgetown, Washington, some of the most expensive real estate
on the entire east coast, 2.08 acres sitting vacant for 11
years.
Now, the good news is when Mr. Denham and I did our
hearing, the day before--and maybe you can pull this up--the
day before, we forced GSA to begin a marketing campaign. So
they actually put up a ``Coming Soon, For Sale'' sign the day
before our hearing, which is remarkable that GSA would not take
an initiative to take a valuable piece of property and
transform it into a performing asset.
So we have done three hearings in the Nation's capital.
Today is our fourth. Mr. Denham and I use this little chart. We
had 14,000 properties. Now we only have 13,996 to go. Next week
we will get that down to 95.
The good news about this property, as unfortunately it has
been vacant since 2007, and we have also inspired GSA to move
in trying to come up with a better utilization plan. On Friday,
they announced their plans to try to seek--it says, ``GSA seeks
ideas to develop Miami Courthouse.'' So again, 180,000, maybe
178,000 square feet of prime office and court space facilities
in the heart of Miami, probably one of the most robust cities
not only in the State of Florida but in the United States,
sitting idle.
So here we find ourselves in this courthouse this morning.
This is the David Dyer Federal Courthouse, vacant since 2007.
It has annual operating expenses that are lost to the taxpayers
of $1.2 million operating costs. If you multiply that by the
years vacant, the dollars start to add up.
Incidentally, I brought for my colleagues--this was
presented to me. We have done hearings on GSA. Of course, you
have all seen the guy in the hot tub who thumbed his nose, and
the expensive conferences they did, first in Las Vegas, and the
guy thumbed his nose at the committee, the Congress and the
taxpayers. Our most recent scandal is in our investigation to
uncover waste to their conferences was a one-day, quarter-of-a-
million-dollar fiasco. These are actually two of the $20,000
drumsticks. I don't know if you have ever seen $20,000
drumsticks, but they paid $20,000 for drumsticks for a Virginia
conference, 1 day, $104,000 to a consultant to put the 1-day
conference together, and $35,000 for picture frames. I don't
have one of the $35,000 picture frames, but someone did present
me--these are authentic, and actually they are engraved to
commemorate the occasion of the conference that was held in
Virginia.
That is the situation that we face with GSA.
Unfortunately--well, fortunately for the taxpayers, the first
level of abusers has been removed. The Administrator, the
Public Buildings Commissioner, Mr. Neely, one of the regional
administrators and one of the chief offenders, and a host of
others have been removed. Last week we held a hearing in
Washington, Mr. Denham and I, and we are on our second level of
GSA officials involved in, again, these wasteful conferences,
and we found, unfortunately, no one wanted to appear. They
brought forward an employee who had only been in the position
for about 3 months. The Administrator was on vacation and
couldn't be disturbed. A deputy did not choose to come because
the deputy and some others are now involved in the second
conference. So we have had difficulty in eliciting information,
testimony, documentation, or even witnesses to our hearings.
So that is the situation that we find ourselves in this
morning, and again a courthouse that has grown to be a huge
burden on taxpayers, an agency that is mired in neutral on
trying to dispose or better utilize these facilities.
I must add a caveat to my commentary and give GSA a little
bit of a break in that Congress also holds responsibility
because sometimes they do not cooperate with the agency in
moving forward. However, there was an authorization for moving
forward with this particular project some time ago. The
administration--let me just check so I have the accurate
figures. The stimulus provided GSA with $5.9 billion 3 years
ago, stimulus money to renovate buildings like this. But again,
GSA turned its back on the taxpayers, turned its back on this
building to turn a money loser into a revenue gainer for the
taxpayers.
Now we are up to an estimated cost of $60 million. This has
sat idle, and I think it has some mold and other issues. The
new courthouse that was built next door, the Wilkie D.
Ferguson, opened in 2007 when this closed, was overbuilt by
238,000 square feet, and had a cost overrun of $49 million. It
still has substantial vacant space. We will hear more about its
potential for utilization as the hearing proceeds.
So with that, the order of business will be that I yield
now to Chairman Denham. I thank him again for his undaunting
leadership in pursuing these matters. I told him this morning
on the way over, of all the freshmen, Mr. Diaz, all the new
Members of Congress, I think he is by far the most outstanding
performer. He has done a remarkable job, provided leadership.
He had some experience as an elected official in the California
legislature. But I couldn't be more pleased to have a leader on
our committee, a new Member of Congress, just an absolutely
incredible job again in pursuing this matter and other matters.
He has a portfolio that has very broad jurisdiction.
So with that, Mr. Chairman, Chairman Denham, I would like
to yield to you.
Mr. Denham. Well, thank you, Mr. Chairman, and good
morning. Let me first start by saying I was able to pick up the
ball and run with it because of your leadership. The document
that you had put together on GSA sitting on its assets is
something that has been a playbook that we have been able to
run with ever since the beginning of the 112th Congress. This
is something that has gone on for far too long.
You know, I have actually taken the position that the
question that should really be asked is couldn't we do without
GSA altogether? Can we actually abolish the agency and have
private industry pick up that ball and run with it?
So I am proud to have Mr. Diaz-Balart here, who is on the
Appropriations Committee that will oversee the funding of GSA.
I think one of the questions that we will be asking in the
113th Congress is what level of appropriation does GSA need? If
GSA is not going to follow the President's memorandum, if they
are not going to follow his Executive order on pay freezes,
bonuses and overtime, if they are not going to follow the
President's Executive order on excess properties, and if they
are not going to follow the Vice President coming together with
all of the department heads on the conferences and the wasteful
spending, the question really is should we cut off their money
altogether?
So I am proud to have Mr. Diaz-Balart here, who actually
sat in this position under this subcommittee prior to going to
the Appropriations. This will be a joint effort between
Appropriations and the funding for GSA in the future, as well
as this committee that oversees all of the public buildings
altogether.
We are here in Miami for two reasons, to continue our
investigation into the billions of dollars wasted on vacant
buildings just like this one, and for the public to see the
likely outcome if GSA builds a new $340 million courthouse in
Los Angeles, where we still have two existing courthouses, one
that is partially full, one that is just about vacant, and yet
even with less judges, they want to continue to move forward to
build a new courthouse.
This is a perfect example of how things should not be done.
Here we have a beautiful, historic building that is sitting
dilapidated, mold. You can see its historic and beauty here,
and yet we are allowing it to fall apart because GSA is not
focused on the best use for its assets.
I am also told that we have over 3 million square feet of
leased space in the Miami area. So the question is why is a
building like this sitting vacant? If it is not needed, let's
sell it off. If we do need it, then let's relocate the
individuals that are in other buildings around the area into
this facility.
But we have a job to do for the taxpayers and making sure
that their dollars are spent correctly. So seeing something
that is not only sitting vacant but falling apart in the
process and costing us millions of dollars is inappropriate.
I want to just highlight a few different properties.
Fourteen thousand is a small number compared to the overall
portfolio the GSA has. Those are the excess properties. Yet,
properties like this, properties like the Old Post Office that
sat vacant for over a decade, the Cotton Annex, many, many
others that aren't even on that list. Again, we have a job to
do, to sell off these properties, to relocate agencies that are
in leased space, and we are going to hold GSA's feet to the
fire because, as the chairman already said, these properties
are not getting liquidated, they are not getting sold, they are
not getting redeveloped or, in the case of Georgetown, even
offered up to sale until we hold a hearing. So we will hold as
many hearings as it takes to get the best outcome for the
taxpayer.
We have a whole separate issue with these courthouses. I
have toured many of them across the Nation. Up in New York, we
have seen courtroom sharing as they are renovating the
courtroom next door. I am told now that even though they have a
new courthouse and an old courthouse that is being renovated,
rather than utilizing that excess square footage for the huge
amount of leased space that we have in the New York area, they
are looking at taking a very successful courtroom-sharing model
and expanding into space that they don't need.
Here we have seen the same thing with four courtrooms, four
buildings, and yet not only overbuilding for excess square
footage but this one sitting vacant. In L.A., we will go take a
look again next week to see what GSA's plan is for that one.
But again, wanting to build a new courtroom, a new huge office
building when you have one that is sitting vacant, one that is
sitting underutilized, is just a bad use of taxpayer dollars.
And with that, in conclusion, let me just say obviously I
am very disappointed that you have an agency that continues to
ignore the Commander in Chief. The President of this great
Nation has issued an Executive order, two Executive orders and
a memorandum on GSA on conferences, on buildings, on saving
money for the taxpayer dollars, and yet we have an agency that
continues to ignore that.
I am also disappointed today that the new acting director,
who we continue to give every opportunity to show how things
are being changed, is not here today. I understand that he
couldn't be here last week as well because of a personal family
obligation. But let's be very clear, you have had several
weeks--we have had several months now to notice not only this
hearing but the one in Los Angeles, and this committee fully
expects the new acting director, Dan Tangherlini, to be there.
With that, I yield back.
Mr. Mica. I thank the gentleman.
I am pleased now to recognize Mr. Diaz-Balart.
Mr. Diaz-Balart. Mr. Chairman, let me first thank you for
this hearing, but more importantly for what you have done for
Florida, for Miami-Dade County, and for the Nation. I think
very few people have been as effective in rooting out waste as
you have, Mr. Chairman. It was one of the distinct honors of my
years in public service to be able to serve under your
leadership in your committee. When I went to the Appropriations
Committee, then you upgraded by having a much better chairman
than I clearly was or could have been.
And you, Mr. Chairman Denham, also for your steadfast
leadership. You have been a real champion for the taxpayer. If
the American people just were to spend a little time here today
and they were to see, look at those windows and look at that
painting and look at the ceiling, this could be the Biltmore
Hotel in Coral Gables, but it is not. It is a vacant piece of
property that is a national treasure.
It is vacant, so not only is it not being utilized, not
only is it going into disrepair, but the taxpayers are paying
to maintain this empty building. Then, of course, it was
replaced by a building next door that, as the chairman said,
was 20 percent overbuilt.
Now, I wish, we all wish that this was the exception to the
rule, that this is a weird aberration and this just happens to
be this weird building somehow that fell through the cracks. It
isn't. This is everywhere throughout the country, including, as
Chairman Mica and Chairman Denham just mentioned, including in
the capital of the United States, where you have prime
properties that sit vacant for years, one next to Georgetown,
in Georgetown. But again, it is not an aberration.
I need to thank you gentlemen for the leadership that you
are providing in trying to stop this throwing away--it is not
even waste. It is beyond wasteful. It is really beyond
wasteful, just throwing taxpayer money away while buildings
like this sit vacant. Again, there is just no explanation.
Also, your staff, I want to thank your staff. I have had
the privilege of working with your staff, and they are among
the best on Capitol Hill.
So I am looking forward to listening to our expert
witnesses today to see why is this not the exception, why is
this almost the rule, and what steps, specific concrete steps
are being taken to not only avoid this happening in the future
but also to make sure that properties like this don't sit
vacant, aren't costing the taxpayer money.
I am looking forward to their testimony. But I will tell
you that this is among the most frustrating and infuriating
things that one witnesses in the Federal Government, when you
see buildings like this vacant, when you see buildings that are
overbuilt, when you see buildings where taxpayer money is just
being thrown into and there is, frankly, no excuse for it, and
then to have to hear--and I don't mean to be overcritical, but
some of our colleagues even who are constantly saying that the
Federal Government doesn't have enough money, that we need to
raise taxes. Really?
Come here. Come look at this building. Come look at this
empty, beautiful building in the heart of downtown Miami. Or go
to the heart of Washington, DC, and see buildings like this
that are sitting empty. As bad as the $20,000 drumsticks are,
and they are, and it is frankly unacceptable, immoral, even
more money is being wasted every single day while buildings
like this sit empty. And then we need to raise money, more
money for the Federal Government? We have to raise taxes? For
God's sake, get real.
I am so grateful to you, Chairman Mica and Chairman Denham,
for the leadership that you are providing, for making sure that
the American taxpayer's money stops being wasted and that
buildings like this don't just sit empty year after year.
I saw, Chairman Mica, that GSA now has advertised that they
are looking at ways, what to do with this building. How many
years after this building has been sitting vacant? It is great
to see that every time your committee and your subcommittee do
a hearing, all of a sudden that building that you are
highlighting becomes interesting, and all of a sudden people
realize that it is even here.
But again, this is not the exception. This is not the
exception. It is immoral. It is unacceptable. I cannot thank
you enough for your leadership, and I look forward to the
testimony of our distinguished panel. Thank you.
Mr. Mica. Well, thank you again, Mr. Diaz-Balart, for your
service on our committee, your leadership as the former chair
of this subcommittee, and also Mr. Denham, for taking time.
Right now a lot of folks are away, but you are both actively
involved in this project to highlight, as we are trying to do,
some of the waste, inefficiency, and just lack of attention by
a Federal agency.
In an effort to try to remedy this situation, it is nice to
talk about things, but we also want a positive accomplishment.
We have got to find out first how we got ourselves into this
situation and then find out how we can better utilize taxpayer
assets, and to do that we have assembled a panel before us
today, and I am grateful for the three witnesses who have taken
time and are appearing today. I will recognize them first. Let
me introduce them.
We have first the Honorable Frank M. Hull, circuit judge of
the United States Court of Appeals of the Eleventh Circuit. We
have Mr. David Wise, director of the Physical Infrastructure
team of the U.S. Government Accountability Office. Then we have
Mr. John Smith, the Region 4 commissioner of the Public
Buildings Service, General Services Administration. Those are
our witnesses. I welcome you.
The custom before our committee is to present sort of a
summary. You probably have some prepared remarks here. You are
welcome to deviate from them and submit as much information to
the committee as you wish. So what I will do is I will
recognize you, then we will hear from all three, and then we
will go through a little series of questions from Members. That
will be the order of business.
So again, welcome, and while I expected a gentleman, we
have a very distinguished gentle lady and judge from the bench,
the Federal bench. We are just delighted to have you come, I
think, from Atlanta today and be with us.
I guess when you are in a Federal courthouse, you say, oh,
I am not an attorney, but they always say, ``May it please the
court.'' Unfortunately, this situation doesn't please the court
or the taxpayers, or the Congress. So we have got a little bit
of a situation to deal with, but we are just very grateful that
you would take time, Your Honor, to be with us and represent
the court in this matter.
So I would like to recognize you and welcome you at this
time.

TESTIMONY OF THE HONORABLE FRANK M. HULL, CIRCUIT JUDGE, UNITED
STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT, AND MEMBER,
COMMITTEE ON SPACE AND FACILITIES OF THE JUDICIAL CONFERENCE OF
THE UNITED STATES; DAVID WISE, DIRECTOR, PHYSICAL
INFRASTRUCTURE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; AND JOHN
SMITH, REGIONAL COMMISSIONER, PUBLIC BUILDINGS SERVICE, U.S.
GENERAL SERVICES ADMINISTRATION

Judge Hull. Thank you. Good morning, Chairman Mica,
Chairman Denham, and Congressman Diaz-Balart. My name is Frank
Hull. My mother is Frank, my grandmother is Frank, and my
great-grandmother was Frank. I come by it honestly. My daughter
is Molly.
[Laughter.]
Judge Hull. Named for my mother-in-law. I am a wise judge.
As you mentioned, I serve as a judge on the United States
Court of Appeals for the Eleventh Circuit, which hears appeals
from Georgia, Alabama and, of course, Florida. Florida is our
largest jurisdiction and provides most of our caseload,
although we do have a significant number of cases from the
other two states on appeal.
However, today I actually am appearing in my capacity as
one of the members of the Judicial Conference's Space and
Facilities Committee. The Judicial Conference is the
judiciary's national policymaking body.
At the outset, I appreciate the opportunity to appear, but
I think it is important for me also to stress the Federal
courts could not do their job without infrastructure, and we
cannot do our jobs without the help of this committee. This
committee has been very helpful in assuring that we do have
adequate courthouses, adequate facilities to handle what has
really been a tripling of the caseload in the Miami community.
So I think, particularly to Congressman Diaz-Balart, I want
to express our appreciation for helping the judiciary be able
to handle and plan for this growing Miami community caseload.
It has tripled both in criminal cases and in civil cases, and
without the infrastructure, we could not do our jobs. So I
sincerely thank this committee at the outset.
Now, let's discuss what the issues are today, and I will
start with the Dyer Building. The Dyer Building, as you know,
was built in 1933. It served the Federal courts extremely well
for many, many years. But as the caseload grew and we did get a
lot of new judges in Miami, the Federal district court outgrew
this building appreciably. But that wasn't just the main
problem. The main problem was security.
The biggest problem for the district court in this building
was that there is only one main corridor. Prisoners, the
general public, and court staff all shared the same corridors.
The U.S. Marshals Office rated it highly unsafe. There were
serious problems. So the court outgrew the building, there were
significant security problems, and so Ferguson was planned and
built. And we moved--that is, the Federal courts moved into
Ferguson, I believe approximately in 2008, Chairman Mica,
although I don't think 1 year matters here or there. But the
Federal court did move from Dyer into Ferguson in 2008.
The Federal court's position is that the decision with
regard to the Dyer Building is GSA's decision. So I will spend
my time primarily talking about the Ferguson Building.
The Ferguson Courthouse was planned back in the late 1990s
and the early 2000 time period. The planning, design, and the
construction process took approximately 8 years, and as I said,
we moved into it in 2008.
Today, every courtroom and every chamber in the Ferguson
building is being utilized except for one vacant courtroom and
one vacant chamber. There is a judge vacancy on that court.
This is an existing vacancy. It will be filled, and then that
new replacement judge will be assigned that courtroom.
In addition, it is very important to point out that we have
seven active district court judges in the Ferguson Courthouse
who are eligible for senior status. They are like me. They are
in their early 60s. They are eligible for senior status at age
65. So we are going to have seven new active judges within 3 to
5 years. I am not talking about new judgeships. I am talking
about existing judgeships. So we are going to have to house,
and we will house, the new seven active district court judges
in Ferguson when those take senior status.
So what we are doing is we are taking this hearing at a
point in time, 2012, 4 years after Ferguson has come online. Is
it totally full? No, it is not totally full today. That is very
correct. But what do we do? Don't we need to build for some
excess capacity? We have built for excess capacity. The
building came online in 2008, and I suggest to you well before
2018 they will not only be full in Ferguson but there will be
significant courtroom sharing. We will look back, particularly
in this day and time of critical lack of resources, and see
that this has been good planning--to have Ferguson have some
excess space which will be tomorrow's needed adequate space.
There are two other things. I want to be brief, and I am
not going through my whole statement, so don't worry about
that. I am going to be very brief. We have a lot more data in
the statement. But there are two things that the judiciary has
done to change its policies. As a result of the GAO report, we
learned a lot. As a result of questions from this committee, we
learned a lot. The examination and scrutiny of this committee
has been extremely helpful to the judiciary, and as a result we
have changed some policies, and here is one key change.
When Ferguson was planned, there were no courtroom sharing
policies. Today, the judiciary has courtroom sharing policies.
We have adopted them in 2008 for senior judges, for magistrate
judges, and now we have adopted them for bankruptcy judges. So
that is a huge policy change and hopefully will make our
planning better in the future.
The second big policy change for the judiciary, as a result
of all of this, has been that we formerly used a caseload
methodology. So what we did is we predicted Miami will grow. We
predicted the caseload will grow. If you have a certain amount
of new cases, you need a new judge. We figured out the number
of new judges needed, and then we planned space for new judges.
We were good at predicting the growth in Miami. We were
good at predicting the caseload growth. But what we were not
good at predicting is how many new judges we would get.
Congress has not created the new judgeships. That is a fact. So
we are no longer planning for judgeships based on caseload and
new judges because that has proven to not be workable--we have
not gotten them. Right now, there is a request for three new
judgeships for Miami, OK? So that was part of the planning for
the Ferguson. But we are no longer planning for future
judgeships. We are only planning for existing judgeships, with
some small growth built into a building. Also, you don't want a
building 100 percent full the day you open the building because
it is going to have a 50-year life.
So I think it is very important that the judiciary has a
good working relationship with this committee. We are
interested, highly interested in the work of this committee. We
are grateful for the work of this committee, and we have
refined our planning policies.
Lastly, I want to talk about peaks and valleys, and I want
to use two analogies. One is the power grid, and the other one
is the fire department.
The judiciary has to be ready. When there are speedy trial
demands, we have to have the courtrooms. We have to be
prepared. We cannot plan for the power grid for spring when we
don't need air conditioning. We have to plan the power grid for
peak demands in August. We cannot afford to be overwhelmed. We
have to have places and judges to try the cases.
So we plan for the peaks. We actually don't plan for the
valleys because we have to be able to handle the August peak.
The fire department is another good analogy. It is not
perfect. It can be attacked. But even if there is only one fire
every week in Miami, we don't just have one fire station. You
plan in case, on 1 day, there are two fires, and that is what
happens with us. We are providing a valuable Government
service. We cannot be overwhelmed. We have to be ready.
So has our planning been perfect? No, it has not been
perfect. Have we learned a lot of lessons, and are we going
forward with a better planning process? The answer is yes. I
think it is highly appropriate that we build not only for
today, which we have done in Ferguson, but that we have some
growth space. The demographics are that Miami is going to grow
35 percent in the next 10 to 15 years. It is going to happen
again. And as a result of the work of this committee and the
courts working together, we are going to be ready to handle
that caseload.
So I thank you very much, and I am more than happy to
answer any of your questions. We want to establish a good
working relationship with the committee because we have the
same interests. Thank you.
Mr. Mica. Thank you, Judge Hull.
We will turn now to Mr. David Wise, and he is the Director
of the Physical Infrastructure team of U.S. GAO.
Welcome, and you are recognized, sir.
Mr. Wise. Thank you. Chairman Mica, Chairman Denham, and
Congressman Diaz-Balart, I am pleased to be here today to
discuss the Federal Government's efforts to collect data on its
excess and underutilized real property assets and the need to
better and more effectively manage these assets.
In 2004, the President issued an Executive order
establishing the Federal Real Property Council, chaired by the
Office of Management and Budget. The Executive order required
the FRPC to work with the GSA to establish and maintain a
single, comprehensive database describing the nature, use, and
extent of all real property under the custody and control of
executive branch agencies, except when otherwise required for
reasons of national security.
The FRPC created the Federal Real Property Profile to meet
the requirements and began data collection in 2005. In 2010,
Federal agencies reported about 3.35 billion square feet of
building space to the Federal database, which has a vast
portfolio that the Federal Government faces substantial
management challenges.
The courthouse where we are sitting today is an example of
the large challenges facing the Federal Government in
effectively managing its real property.
My statement today will make three main points. One, the
Federal Government needs better data and a national strategy to
improve Federal real property management. Two, potential cost
savings achieved from efforts to improve property management
are unclear. And three, agencies still face longstanding
challenges to managing their real property portfolios.
The FRPC has not followed sound data collection practices
in designing and maintaining the FRPP database, raising
concerns that the database is not a useful tool for describing
the nature, use, and extent of excess and underutilized Federal
real property. The FRPC has not ensured that key data elements,
including buildings' utilization, condition, annual operating
costs, mission dependency, and value, are defined and reported
consistently and accurately.
For example, we documented buildings reported to the FRPP
as underutilized even though they were fully occupied. We also
documented others that were vacant but reported as utilized. In
addition, we observed severely dilapidated buildings that were
reported as being in excellent condition. At 23 of the 26
locations we visited, we identified inconsistencies and
inaccuracies related to these data elements. As a result, FRPC
cannot ensure that FRPP data are sufficiently reliable to
support sound management and decisionmaking about excess and
underutilized property.
The Federal Government has sought ways to generate cost
savings associated with improving management of excess and
underutilized properties. However, the potential savings are
unclear. For example, in response to requirements set forth in
a June 2010 Presidential memorandum for agencies to achieve $3
billion in savings by the end of fiscal year 2012, GSA reported
approximately $118 million in lease cost savings resulting from
four new construction projects. However, the GSA has yet to
occupy these buildings, and the agency's cost-savings analysis
projected these savings would occur over a 30-year period, far
beyond the timeframe of the Presidential memorandum.
Even though the cost savings achieved from efforts to
improve property management are unclear, the Federal agencies
that we reviewed have taken some actions to better manage
excess and underutilized property, including using these
properties to meet space needs by consolidating offices and
reducing employee work space.
As we reported and testified in the past, Federal agencies
still face longstanding challenges to managing these
properties. These include the high cost of property disposal,
legal requirements prior to disposal such as those related to
preserving historical preservation and the environment,
stakeholder resistance, and remote property locations that are
difficult to sell or dispose.
To address these concerns, we recommended that OMB, in
collaboration and consultation with FRPC member agencies,
develop and publish a national strategy for managing Federal
excess and underutilized real property. In addition, we also
recommended that GSA, in collaboration and consultation with
FRPC member agencies, develop and implement a plan to improve
the FRPP consistent with sound data collection practices, so
that the data collected are complete, accurate, and consistent.
This concludes my prepared statement. I would be happy to
answer any questions from the committee.
Mr. Mica. Thank you, and we will hold questions until we
have heard next from Mr. John Smith, who is Region 4
Commissioner of the Public Building Service of GSA.
Welcome, sir, and you are recognized.
Mr. Smith. Thank you, Mr. Chairman. Good morning, Chairman
Denham, Chairman Mica, Congressman Diaz-Balart. My name is John
Smith. I am the Regional Commissioner for the GSA's Public
Building Service in the Southeast Sunbelt Region. Thank you for
the opportunity to join you here today at the David W. Dyer
Federal Building and United States Courthouse, a property GSA
will be repositioning and one that highlights the unique
challenges of moving real property.
The administration has set aggressive goals to better
utilize Federal real property, and GSA's Southeast Sunbelt
Region is doing its part to help achieve savings on behalf of
the American taxpayer.
In GSA's capacity as one of the many landholding agencies,
we supply office space to other Federal agencies in support of
their mission. GSA has 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.
Following the President's memorandum entitled, ``Disposing
of Unneeded Federal Real Estate,'' which charged civilian
agencies to utilize space, reduce operating costs, and dispose
of unneeded property more effectively to save $3 billion by the
end of 2012, GSA has played a role in both generating savings
from its own real estate, as well as helping other agencies to
find savings. The administration recently announced that the
Federal Government will not only meet but will exceed this $3
billion goal.
While GSA has a large real estate portfolio to manage, the
broader Federal Government portfolio is far more extensive. Of
almost 900,000 buildings and structures reported in the fiscal
year 2010 Federal Real Property Profile, GSA controls 9,400 of
these assets. GSA's Southeast Sunbelt Region is responsible for
1,500 of these assets.
As a result of our efforts, GSA leads the market with our
vacancy rates and utilization; 3 percent of our portfolio has
been classified as an under or not utilized asset. In the
Southeast Sunbelt Region, 2 percent of our portfolio is under
or not utilized. Although we work diligently to identify
unneeded assets for disposal, it is important to note that not
all properties labeled as underutilized are available for sale.
For example, some underutilized assets can be buildings under
renovation. When we find underutilized space in areas where
there is a continuing Federal need, GSA works aggressively to
renovate and reuse the asset to achieve greater utilization.
In the Federal Real Property Profile, GSA identified 124
assets as excess to our own agency's needs and began the
disposal process for these assets. Of those 124 assets, the
Southeast Sunbelt Region had only 1.
Our low numbers of underutilized and excess assets are a
testament to a major restructuring in our portfolio implemented
over the past decade aimed at right-sizing our real estate
portfolio. In the last 10 years, we have disposed of more than
280 GSA assets, valued at over $260 million. Thirty-four of
these assets were from the Southeast Sunbelt Region, generating
almost $25 million.
One example of a recent disposal in the Southeast Sunbelt
Region is the James O. Eastland Federal Building and Courthouse
in Jackson, Mississippi. The Eastland Federal Building, which
has 115,000 gross square feet of office space and related space
and is situated on 1.5 acres of land, was listed in the
National Register of Historic Places in 1976 as a contributing
property to the Smith Park Architectural District. The property
was sold through an online auction for about $1.4 million, and
was conveyed to a local Jackson, Mississippi developer, David
Watkins, on March 1, 2012, to be transformed into an institute
for the arts.
Today, the committee has chosen to host a hearing at the
historic Dyer Courthouse, a property for which we are actively
exploring repositioning strategies. The Dyer Courthouse was
constructed in 1933 and listed in the National Register of
Historic Places in 1983. Until 2008, the building was
substantially occupied by the courts and court-related
activities.
In 2008, GSA completed construction of the new Wilkie D.
Ferguson U.S. Courthouse, and tenants of the Dyer Building
vacated to occupy the newly constructed courthouse. As part of
GSA's efforts to right-size the portfolio, and in accordance
with the direction provided by the administration on disposing
of unneeded real estate, GSA intends to reposition this
property in the near future.
On August 1, 2012, GSA issued a Request for Information
seeking ideas from members of the development community
interested in redeveloping and preserving this property.
Developing a strategy to reposition the courthouse will not be
without some unique challenges. The utility infrastructure,
parking lot, courtyard and tunnels are shared with its adjacent
property, the C. Clyde Atkins U.S. Courthouse, and the cost to
separate connections and create two separate stand-alone
operations is estimated to be in excess of $10 million. GSA
will look at all potential repositioning strategies and engage
the private sector to find the strategy with the highest chance
of success and the highest return to the taxpayer.
As one of many landholding agencies in the Federal
Government, GSA continues to manage our inventory aggressively
to dispose of unneeded properties and increase the utilization
of our buildings. We continue to work in concert with the
administration and other landholding agencies in the Government
to utilize real estate more effectively.
The Southeast Sunbelt Region is pleased to be able to
assist with these efforts. The Dyer Courthouse is one property
that helps highlight the challenges of developing long-term
asset strategies in changing fiscal times, and the unique
characteristics of the property that can present hurdles to
repositioning. GSA looks forward to finding the best strategy
to reposition this property and working with the committee to
continue our efforts to utilize Federal real estate more
effectively.
I welcome the opportunity to be here, and I am happy to
answer any questions.
Mr. Mica. Thank you, and I thank all three of our
witnesses.
We will now turn to questions, and I am going to yield
first to Mr. Denham, Chairman Denham.
Mr. Denham. Mr. Smith, why do you think we are having this
hearing today?
Mr. Smith. Sir, I believe we are attacking the problem of
unneeded real estate.
Mr. Denham. I just heard your testimony. It sounds like we
don't have a problem. I mean, if GSA is doing everything great,
which this is the first time I have heard anybody in front of
this committee that has taken that position, if you are
actually going to hit at least $3 billion and GSA is following
each of the Executive orders that the President has laid out,
it would appear that there would be no reason to have this
hearing.
You talk about aggressively disposing of property. When did
this property go up for evaluation?
Mr. Smith. Sir, this property was vacated in 2008, and at
the time we were looking for design money to relocate costly
leases back into this facility.
Mr. Denham. OK, so 2008. It is 2012. Four years. Is that
aggressively disposing of property?
Mr. Smith. Sir, the region did aggressively request funding
all the way through recovery because the idea of being able to
take some of the 3 million square feet of lease space here and
consolidate it into this facility still had applicability. We
did not receive the funding for that. And after the Recovery
Act, then we started to move to another disposition.
Mr. Denham. You received nearly $6 billion in stimulus
dollars. How much more money do you need beyond the $6 billion?
Mr. Smith. Sir, it wasn't enough to prioritize every
building, and the Dyer did not receive the prioritization
there.
Mr. Denham. OK. I am going to go through these really
quickly here because my main questions were for Mr. Wise and
Mrs. Hull.
The Old Post Office in Washington, DC, how long did that
sit vacant?
Mr. Smith. I don't have the information on that, sir. I
believe----
Mr. Denham. Well over a decade. I will tell you, well over
a decade. To me, that is not aggressively disposing of a
property.
The old Cotton Annex in Washington, DC, which we held a
hearing there as well, sat for over 5 years. That is not
aggressively disposing of property. And the Georgetown power
plant, which took us having a hearing in before they even put
up a For Sale sign is not aggressively disposing of property.
So let me ask you one last question before I switch.
Three billion dollars. You are going to hit a $3 billion
number, which was the President's goal. Where are you coming up
with the $3 billion number? Is that just in disposal costs in
fiscal year 2012?
Mr. Smith. Sir, GSA has its own number. We aren't making
the $3 billion. We are helping other agencies with that. I
don't have all the details on exactly what costs were counted
with that. I do know we have aggressively looked at every cost
that we have and included specific costs within the facilities
that we will be saving money on.
Mr. Denham. Is it money coming back into the Federal
Government to reduce our debt, or is it cost avoidance?
Mr. Smith. My understanding is that it is a combination of
both.
Mr. Denham. And during that same time period, this year,
2012, did we also enter into a lease for $500 million for the
SEC, and now most recently a $350 million lease for unneeded
space up in New York?
Mr. Smith. Sir, those are outside of my region, so I
can't----
Mr. Denham. They are not outside of mine. This committee is
looking at all of them. So I take great offense when somebody
sits here in front of this committee and says things are going
great, because they are not. The conference that was held this
week, the 77 conferences that have happened since the President
issued his Executive order, the $1 million conference that
happened in Las Vegas last week, and now to see an agency going
around Congress and signing a $350 million lease when it breaks
three different laws within our Constitution, to me that is not
aggressively disposing of property. To me, that is offensive as
a committee chairman that an agency is not only going to ignore
Congress and ignore this committee, but ignore the Commander in
Chief.
So I don't believe the $3 billion is a real number. In
fact, I think that GSA is going backwards on a number of these
different issues, doing illegal leases and doing leases that
are putting the taxpayer on the hook for money we don't have.
Mr. Wise, the $3 billion that is being talked about as
being saved this year, is it a 2012 savings?
Mr. Wise. Well, Congressman, as I mentioned in my
statement, the whole issue about savings is one that is very
difficult to quantify with certainty because, as we discussed
in our Excess and Underutilized Property report, we found that
agencies were counting many different things as savings. As you
mentioned in your question, some of it had to do with cost
avoidance, and as I mentioned in my statement, the GSA goal,
nearly half of it has been quantified as saving money from
leases for new buildings constructed that they haven't moved
into.
Mr. Denham. Let me simplify my question. To me, a savings
is I can take money and I can put it in the bank for a rainy
day or I can pay off my loan. We have a huge debt right now. In
fiscal year 2012, is there money that has been generated from
liquidation of properties that can reduce our current debt by
$3 billion?
Mr. Wise. Well, we simply don't--we weren't able to tell
from the information that we were able to gather from GSA. We
only were able----
Mr. Denham. How many properties have been sold this year?
Mr. Wise. For GSA, I don't have that answer right now.
Mr. Denham. $3 billion worth?
Mr. Wise. Well, it is impossible to know based on what they
told us. We only have the figure that they gave us for the
amount of money that they said they are saving relative to the
Presidential memorandum, and they were not very forthcoming in
trying to give us details about that information.
Mr. Denham. Mr. Wise, if you don't know, and Mr. Smith
doesn't know, how can the President know that his Executive
order was actually met, and how can he prove that to the
taxpayer?
Mr. Wise. Well, that is why we stated in our report very
clearly that the savings are questionable. We aren't really
able to say with certainty whether they all add up. We just
couldn't get the information, and there were many different
agencies counting many different ways of savings in order to
say that they were reaching this goal.
Mr. Denham. Thank you.
Ms. Hull, let me just address one last question before I
turn it back over to the gentleman to my left. On this
courthouse, I have huge concern about this courthouse because
of what it means to me in my home State of California, seeing
L.A. open a new courthouse or build a new courthouse when we
have a similar situation of less judges now than we did 10
years ago, and having currently two courthouses, one sitting
vacant and one that has excess room. I have some questions that
are relative to this courthouse here.
I agree with you. I am a business owner. I look at a 5-,
10-year projection. You have had to deal with Congress and the
amount of judges they said they were going to have. I
understand that you have to build a suitable size for the
future. So my question is not necessarily should they have
built a building that is 20 percent vacant right now, or 20
percent beyond what was currently needed. I get that you have a
plan for the future.
My question is, if they have 3 million square feet of
leased space in the local area, just like in L.A. they have
over 1 million square feet of leased space, why wouldn't we
have filled that space for the last 4 years so that it is 100
percent occupied?
Judge Hull. Are you talking about space leased to the
judiciary? I don't think that is leased to the judiciary.
Mr. Denham. No, no. It is not. I am saying that they
overbuilt the----
Judge Hull. I can only speak for the judiciary space.
Mr. Denham. The question is could they have co-located the
FBI or the bankruptcy court, or is there any other tenant out
of the 3 million square feet that are in this local area that
could have filled that?
Judge Hull. OK, I just wasn't understanding your question.
That could have been placed where, Congressman?
Mr. Denham. In the 200--is it 238,000 square feet that is
sitting vacant in the new building? How much vacant space is
sitting in the new building?
Judge Hull. I would be happy to tour you through the
building, but it has been filled out. It has chambers and
courtrooms, and for future planning we have two shell
courtrooms. So it is just the walls around the courtroom. That
is one thing we have done with planning. Don't build up that
courtroom until you have that judge. So it is----
Mr. Denham. It is a shell.
Judge Hull. It is a shell. Thank you. I appreciate all the
help I can get.
Mr. Denham. This is the 10th floor of the Ferguson
Building?
Judge Hull. Help me with the question. I am sorry. I am not
trying to avoid it. I am trying to answer it. I am just not
understanding it.
Mr. Denham. Well, my point is, if the 10th floor of the
Ferguson Building, which has the possibility to build four new
courtrooms, if it sat vacant, if it is just a shell for the
last 4 years, why couldn't we have put office space in there
and housed other employees from other agencies from around the
area?
Judge Hull. I think it is just a cost-benefit analysis that
has to be done, which is beyond my pay grade, frankly. If you
are going to build an annex to have more courtrooms, and then
you build out interiors for office space in the two shelled
courtrooms, you will later have to deconstruct that and build
the courtrooms again.
Also, I think there are security concerns. There is a high
level of security in that courthouse. There are multidefendant
trials here. I don't want to take a lot of your time
documenting all that. But I am looking at the 10th floor. Judge
Martinez is an active judge. He has a full caseload. He is on
that floor. We do have two shell courtrooms. You are correct
there, and that is a question, should you put another tenant
there while you wait for it to be built out. I mean, that is a
fair question.
But I believe the determination has been made that, in a
cost-benefit analysis, that moving people in, moving people out
and so forth, you would be destroying the space to then build a
courtroom and chambers, and I think the building would have to
be redesigned. You would want them to come in on the ground
floor. If you were going to have tenants in a courthouse, you
would want to put them on the first couple of floors, and then
the court up above. You wouldn't want to put them right in the
middle of the building.
Is that responsive?
Mr. Denham. Thank you.
Judge Hull. It may not be a good answer, but I want to be
responsive.
Mr. Denham. It is an answer.
Judge Hull. I want to be responsive.
Mr. Denham. Thank you.
Mr. Wise, can you give us a brief response to that
question?
Mr. Wise. Yes. First of all, I would like to thank John
very much for making his staff available yesterday, on Sunday,
so we got a very comprehensive look at the entire facility
around here, the various courthouses, including Dyer and Wilkie
Ferguson.
But relative to your question about Ferguson, in our view
and as we testified in the past, Ferguson doesn't appear to be
full. As the judge noted in her testimony, there are two shell
courtrooms, plus there is one courtroom that is not being used,
and there are also two senior judges that have a very limited
amount of cases that they actually hear.
So from the perspective of current, notwithstanding what
may happen in the future, it certainly doesn't appear to be
full at this point.
Mr. Denham. I am out of time here, but I just wanted to
clarify. There is excess space. There has been excess space for
4 years, and you do believe that some tenant, out of the 3
million square feet that is leased here in the greater Miami
area, that some tenant we could have found to put in there for
the last 4 years. Is that fair?
Mr. Wise. You are asking me?
Mr. Denham. Yes.
Mr. Wise. As far as what tenant could come in here, I can't
speculate, but I can say that it doesn't appear that the
Ferguson Courthouse is full.
Mr. Denham. Thank you.
I yield back.
Judge Hull. And I can only say it is going to be filled
sooner rather than later. That is clear. There is one vacant
courtroom there, but there is a vacancy on that court, and
there is a replacement judge coming. Again, there is excess
capacity there, Chairman Denham. We are not running away from
it.
Mr. Denham. I understand.
Judge Hull. OK. It is for future growth.
Mr. Denham. I understand. We need to make good decisions as
we are growing, and certainly as we are building. My greater
concern is that this is not a Miami issue, that this is a GSA
issue that goes countrywide. We are facing the same thing in
L.A. and New York and many other big cities around the Nation.
So my concern, while it is still a concern to have that
vacant space there for the last 4 years, obviously we are
holding the hearing here because this is a problem. Much like
in California and L.A., we have an empty building like this,
and we have a newer courtroom that has levels of that facility
that are sitting vacant, and GSA wants to go outside of
Congress to build a brand new courthouse next door.
So the question goes way beyond the brand new courthouse
that has levels that are sitting empty. The question is why
aren't we selling off the older one, the historic building, or
redeveloping it, or utilizing it for some type of benefit to
the taxpayer, rather than just letting this one sit and not
only cost us over $1 million a year but getting mold in the
process? Let's build a community. Let's create jobs. And let's
lower our debt in the process.
I yield back.
Mr. Mica. Mr. Diaz-Balart.
Mr. Diaz-Balart. Thank you, Mr. Chairman.
Let me thank the three of you for being here today and,
Your Honor, for traveling here from outside. Thank you for your
service to the country.
Let me thank Mr. Wise. I know that the GAO, sometimes you
must feel that people aren't listening, but Congress is so
appreciative, and these three members here are so grateful for
the job that you do, and all your folks do, day in and day out.
And Mr. John Smith, again, thank you. As Mr. Wise has said,
even for allowing your people to be around on Sunday. Again,
thank you for being here.
Before I start my line of questioning, I am a little bit
confused about the Ferguson Courthouse. Is there sharing, or is
there not sharing? Mr. Wise, from what I hear from our side
here, there is no sharing in the courthouse. Is that correct?
Mr. Wise. Yes. My understanding is there is currently no
sharing.
Mr. Diaz-Balart. Right, and that----
Judge Hull. Absolutely, that is correct.
Mr. Diaz-Balart. OK.
Judge Hull. That is what I think I said in my statement, or
I tried to.
Mr. Diaz-Balart. All right. I just wanted to make sure I
heard that right. Thank you.
Judge Hull. Yes. It wasn't planned at the time the
judiciary had those policies. The first sharing policy was in
2008.
Mr. Diaz-Balart. Mr. Chairman, why don't you--I will always
yield to the chairman.
Mr. Mica. Well, I thought you had said that at the circuit
level you were sharing?
Judge Hull. The circuit is in the King Building, Chairman
Mica, and there is sharing. Because of the nature of a circuit
court, we sit with judges 3 at a time, and we have only 1
courtroom in Miami, and all 17 judges share that one courtroom.
But the work of the circuit court is vastly different.
Mr. Mica. OK. Thank you.
Judge Hull. But there is considerable sharing. All the
circuit judges not only share that courtroom, but we share
chambers.
Mr. Mica. But it is not possible to do it in----
Judge Hull. Not in the way the circuit court does. The
district court operates totally different.
But let me be clear, we are committed going forward in our
planning process to courtroom sharing, and I think Congressman
Diaz-Balart makes a very good point. Right now in Ferguson,
there is not sharing. We are going to have seven active judges
take senior status. We are going to have continuing increases
in caseloads. We have one vacancy. We are going to have a
replacement judge for sure. Down the road for these buildings,
I suggest it is not going to be long, before they are going to
be over capacity.
But today, there is not sharing at this point in time.
Mr. Mica. I thank the gentleman for yielding.
Mr. Diaz-Balart. Thank you, Mr. Chairman.
Judge Hull, you mentioned in your testimony that the
Ferguson, the new courthouse, was constructed to replace this
courthouse, the Dyer Courthouse. But in the prospectus
submitted to this committee in 2001, it indicates that this
building was going to be continued to be used. Specifically,
that proposal for the Ferguson Courthouse asserted that the
Dyer Building would house one district judge, one magistrate
judge, four bankruptcy judges, the Public Defender's Office. So
clearly at the time, it didn't sound like a replacement. It
sounded like basically expanding this space.
Now, you mentioned, and it makes a lot of sense, obviously,
about the security issue, and we all understand that. But if
that is what was stated before in the prospectus, that those
entities that I just mentioned were going to be housed here,
then why did this building, why was it totally vacated when
that is not what was stated as the justification for the new
building?
Judge Hull. Well, I can directly answer that.
Mr. Diaz-Balart. Good.
Judge Hull. The Federal district trial court moved to
Ferguson because that is where you have all your major--well,
all the criminal trials. And the plan at that time, as I
understand it, not being involved in it but trying to study the
record in preparation for this hearing, was that we were going
to backfill Dyer. The backfill was going to require some
renovation money, and the renovation money was requested in
2004 and in 2007, and it was not funded.
Now, whether that is right or wrong, I don't speak to that.
But you are absolutely correct. The original plan was to
backfill Dyer, to bring public defenders in here, to have very
limited but I would say some trial space for a district court,
and to bring the bankruptcy judges here, because they don't
have the criminal security issues, and that has not happened.
The bankruptcy judges have stayed where they are. They
haven't been moved. And as I understand it--I will have to
check with my legislative counsel here to make sure I am
correct--but I believe money was requested by GSA to backfill
in 2004, in 2007, and now, because of courtroom sharing, we
don't need to backfill here, OK?
So we have King and Atkins and Ferguson. Those are all very
good facilities, and they will serve this community, I believe,
well, thanks to your help in getting those facilities.
Mr. Diaz-Balart. Great. And again, Your Honor, I understand
that you are dealing with----
Judge Hull. And this is a moving target, and I am trying to
be responsive.
Mr. Diaz-Balart. Trust me, we understand that.
Judge Hull. OK.
Mr. Diaz-Balart. So don't worry about that. We understand
that.
Judge Hull. OK.
Mr. Diaz-Balart. I think we understand where you are at.
Mr. Smith, the GSA's press release for the RFI boldly
states, ``GSA seeks ideas to develop the Miami Courthouse.''
That is now, after 5 years. I am assuming that is not the first
time that was done. Has GSA itself done evaluations as to what
would be best for the taxpayer, number one? And number two is,
when were other RFIs submitted, and how were they submitted,
and did you not get a response for those or what? Or were they
not submitted before?
Mr. Smith. Sir, I believe this is the first RFI we have
done for the Dyer Building. It is a--it is not a common
practice, but it is used with disposal process throughout the
Nation.
The other efforts and the reason we don't have RFIs coming
out earlier is we had requests in for design money and
construction money, and as the judge explained, there were
previously plans to backfill this space. If we couldn't
backfill it with judiciary or other courts, then we have enough
lease space in the Miami area that we would have consolidated
those into this area as well.
The problem with that is we did have some authorization for
design. We didn't get appropriation for design. We also looked
to our central office to fund several times into this building
because we do have adequate space here, but it does require
several million dollars to build it out for other tenants.
Mr. Diaz-Balart. Mr. Smith, I have to admit to you that I
thought I was throwing you a softball. I mean, I really did. I
thought, well, obviously, there have been other RFIs before
this, that this is not the first one, and I really thought that
I was throwing you a softball. Now I will tell you that I am
almost speechless, which is rare for me, that all of a sudden--
--
Mr. Denham. It is rare.
Mr. Diaz-Balart. It is rare, as my colleagues will tell
you. So the day that the hearing is here is when, all of a
sudden, the RFI goes in. Now, we are finding that as we go
across the country. I, frankly, am speechless. I am absolutely
speechless.
Now, I keep hearing the fact that, well, there is an issue
of funding. Look, it was fully authorized. How do I put this
kindly? Six billion dollars is real money. GSA was given an
additional--$5.9. I stand corrected. GSA was given an
additional $5.9 billion with, frankly, a lot of flexibility. So
it was authorized. Out of the blue, GSA is given an additional
$6 billion, additional. It is hard to keep hearing that, well,
the money wasn't there.
And again, I have to tell you this, Mr. Chairman, both
chairmen, when I saw this, I figured, OK, this is kind of a
reminder of--the committee is here, so it is a reminder to GSA
to do this RFI. Now when I hear that this is the first time
this has been done since this building has been vacated is
unbelievable.
Can you imagine if this was in private hands? I mean, this
looks like the Biltmore. We could be in one of the ballrooms of
the Biltmore, except for this furniture. And it took this long
for the GSA to even move forward?
With all due respect, sir, I am almost speechless, I really
am.
During the last 5 years, has GSA looked--are there any
internal studies or reviews or evaluations completed by GSA in
the last 5 years for either selling or re-using or developing
this building?
Mr. Smith. Yes, sir. The initial plan was to try and
relocate leases into this building. When that fell through, we
also tried to determine--the complexity of this is that the
power plant for this building powers the Atkins Building. It is
expensive, and I said in my statement it is at least $10
million to separate the utilities for these two pieces.
This is an historic building, it is a national treasure,
and it needs to be preserved as well. One of the issues with
the disposition of it is the security and the separating of the
utilities, which makes it rather difficult.
Mr. Diaz-Balart. I understand that. But again, the RFI was
released whenever--I mean, this week? Last Friday. With all
those technical issues that you are telling me about, this was
done just last week, which is, frankly, crazy.
Going back to Chairman Denham's question, I guess there are
Government agencies that lease properties here in south
Florida, in the Miami area?
Mr. Smith. Yes, sir. We have a little over 2.5 million
square feet of lease space.
Mr. Diaz-Balart. 2\1/2\ million square feet, which we are
paying for, the taxpayers are paying for the leased property,
when we have this vacant building.
How aggressive was the effort to try to relocate? If you
tell me now that it is a lack of money, again I go back to the
$6 billion. That may not sound like a lot to the Federal
Government, but $6 billion of additional, over-the-top money
just parachuted in, that is real money.
So can you explain to me how aggressive, what was done to
try to get those other agencies that have properties that are
being leased throughout the county to come here once you got
the $6 billion? What was the effort to try to get part of that
$6 billion to do that?
Mr. Smith. Sir, GSA prefers to have its tenants in owned
buildings, and we are very aggressive in moving toward that,
and we have been for a number of years with our portfolio
restructuring. It is the preferred avenue. It is cheaper for
us, and we know in the long term it is better to own than to
lease, unless there is a short-term requirement.
The recovery funds were prioritized throughout GSA, and we
did a lot of great work with that $5.9 billion. Dyer did not
fall into the priority of that. But it is our effort and we had
attempted--the region requested funding, and we fought hard for
it at the central office for it to be prioritized in that
manner. But there were a number of needs beyond just what we
had here, and we didn't prioritize high enough on that list.
Mr. Diaz-Balart. Judge Hull, let me ask you this. You
mentioned in your testimony that the judiciary no longer
occupies this building and it is up to GSA to determine what to
do with it, and nobody is denying that. Do you know, does the
court have a process to actively consider what is going to
happen with the building that is being vacated, as opposed to
just GSA is going to deal with it? What role does the court, if
any, have in that, and should it be more involved in that, with
once it vacates a building which, in essence, it occupied for a
long time? Or is that, frankly, just basically no, folks, stay
away, that is GSA's responsibility and we will deal with it? Do
you know how that plays out?
Judge Hull. Well, I think the court does try to work hand
in hand with GSA. They are our landlord. We are the tenant. We
try to work together.
As I mentioned earlier, there was a plan. Yes, we do try to
consider what we are going to do when we vacate something. Are
we going to immediately turn it back over so it can be leased?
That happens. Are we going to use part of it and lease part of
it? That happens.
The plan here was to backfill it with some court usage, but
then the funding did not occur. I don't know what else to say.
Plus, we learned a lot about planning. We adopted courtroom
sharing policies. So that has impacted everything. We have
adopted a different methodology for planning.
So, yes, we try to work with GSA. We did for a few years
work with them trying to get some money for remediation here,
but we were not successful. So what I am saying at this point
in time--not from the get-go, but this point in time--yes, it
is now a decision of GSA. I hope that is helpful.
Mr. Diaz-Balart. Thank you. Yes, absolutely.
Thank you, Mr. Chairman. You are being very generous in
allowing me to ask this many questions.
Mr. Smith, the committee has identified a number of
buildings during its investigation that are either vacant or
underutilized, and yet, as the chairman said, that are not
listed as such in GSA's database. The Cotton Annex in DC, it
has been vacant for 5 years, but it is not listed. This vacant
building has been listed as mission critical. Can you explain
that?
Mr. Smith. Sir, the Federal Real Property Profile, which
these properties are listed in, is a snapshot in time. It is an
annual report, and it may or may not be accurate from 1 year to
the next because of dispositions that happen. I believe this
would have been listed as mission critical with our efforts to
consolidate leases into this facility because we had plans for
it, and that is probably the cause for that listing.
Mr. Diaz-Balart. Thank you.
I yield back, Mr. Chairman. Thank you very much.
Mr. Mica. Thank you.
A couple of questions. The first is to Mr. Smith.
It has actually been known since 2001 that this property
would be vacated. It took several years to construct the
building. Prior to 2007, I guess, it was finished, and they
moved into the other building. Do we have a requirement that we
have a utilization plan for buildings that are going to be
vacated and we know far in advance?
Mr. Smith. Sir, I believe the design funds had been
requested prior to the courts moving out of this building.
Mr. Mica. So, actually, we go beyond the 5 years. We are
probably looking at 7 years or more in which they had an
opportunity to do something with this building. Is that right?
Mr. Smith. I didn't have this portfolio then, sir, but we
do ask for a----
Mr. Mica. Well, 5 plus 2 would be 7 at least.
Mr. Smith. We do ask for funding prior to buildings being
vacated.
Mr. Mica. And we heard that substantial funding, $5.9
billion, with great discretion was made available to renovate
buildings, and nothing was done with this building to get it
ready to be utilized for leasing or whatever. Is that correct?
Mr. Smith. It didn't fall high enough in the priority. A
number of buildings that we had did not fall into those
priorities.
Mr. Mica. Well, here again you testified--our staff says we
have $2.5 to $3 million worth of leased property in south
Florida, and then you just said a few minutes ago that it is
your policy and it is better to own rather than lease. Does the
Federal Government have title to this property?
Mr. Smith. Yes, sir. And that----
Mr. Mica. Does that constitute ownership?
Mr. Smith. Say again, sir?
Mr. Mica. Does that constitute ownership, if we have title
to this property?
Mr. Smith. Yes, it does.
Mr. Mica. Yes, that is pretty obvious. And we would save
money if we could be utilizing this building, as opposed to
paying some landlord since we own it, right?
Mr. Smith. Sir, we can't just move people directly into a
facility.
Mr. Mica. No, and you can't move people into this building.
I mean, this is a very sad day for the taxpayers because this
building has sat vacant for 5 years. It has also cost the
taxpayers at least $1.2 million a year. That is $6 million. I
started off and all the attention has been on a quarter-of-a-
million-dollar conference, another one three-quarters-of-a-
million, and that is huge waste, significant waste. But here,
that totals $1 million. We have wasted $6 million in
maintaining this building, and not maintaining it very well,
because I know the day that people left here, the mold and the
other conditions were not the way they are today. Is that
correct?
Mr. Smith. Sir, we put as much effort as we can to minimize
the operational cost, and to preserve assets like this, and the
Congress has been very supportive of us to do that.
Mr. Mica. This is an historic building and it has value.
Actually, it is in a lot better shape. I was a developer. I
could get this building leased and operational with some
revenue. I mean, Miami is a very competitive--Florida is a very
competitive market for commercial or professional space, and it
has value, but it sat here vacant costing, again--this is $6
million. Unfortunately, this is a repeated pattern from sea to
shining sea. We will be in Los Angeles next week. We just did
three in Washington, DC. We could do one a day probably for a
month in Washington, DC.
So it is a very, very sad day. It has been a very sad 5
years that we would let an historic building further
deteriorate to the condition of this building. And it is a
beautiful historic building. I walked around it today and
examined it, so I am very concerned.
Let me ask you a question. This might get a little
personal. Did you get a bonus, any of the bonuses from GSA?
Mr. Smith. Yes, sir.
Mr. Mica. You did. So you got a bonus. Can you tell the
committee how much they gave you a bonus?
Mr. Smith. I would have to get back to you, sir. I don't
recall the exact amount.
Mr. Mica. A guesstimate? Is it $5,000? $10,000?
Mr. Smith. It showed up in my paycheck. I don't really pay
much attention to it. It is not what motivates me to do this
job.
Mr. Mica. Well, again, someone else made the decision on
you getting the bonus, in contravention to the Presidential
edict. It is just like everything else with GSA. We have
fought, Mr. Denham and I, from the week we took over a year-
and-a-half ago, the very first hearing. We knew something was
wrong when the administrative costs of GSA had ballooned 300
percent in a year, and we asked for information on what they
were doing with the money. They gave us back single sheets and
one-line answers. It took investigations from the Inspector
General's Office, and finally, even after stonewalling time and
time again, we finally got some information on one outrageous
conference with the notorious Mr. Neely in his hot tub,
thumbing his nose at the committee and the Congress. That took
us, what, Mr. Denham, over a year, a year-and-a-half? Well, not
a year-and-a-half. A year and 2 months.
So we are very frustrated. I am frustrated on the bonuses.
We asked questions. Our investigators, some of them here today,
asked questions about the bonuses that were given. They said
$10 million to our committee and our staff. Thank God for the
press. They asked for a Freedom of Information request before
ours about the same thing and found another $33.5 million in
bonuses, a total of $43 million in bonuses, and you got one. It
turns out GSA has 1 percent of the Federal employees. How many
employees, staff, 12,000 or 15,000? Thirteen thousand, 1
percent of the Federal employees, and you all got 10 percent of
all the bonuses, which were not even allowed by an edict of the
President of the United States.
Now, you begin to wonder who is in charge when you see a
magnificent structure like this sitting idle, people getting
bonuses, and assets in the billions of dollars across the
United States--and we are supposed to be trustees for the
taxpayers--going to rot, or mold in this instance. And you told
me, Mr. Smith, you told the committee--let me see. What was the
amount you told the committee that you were talking about, what
you disposed here? Thirty-four properties, $25 million; is that
right?
Mr. Smith. I believe that is correct, sir.
Mr. Mica. In your region, that you see. Twenty-four million
is nothing. It is astounding. They must have been pretty small
parcels and not very good deals for the taxpayers.
But just on a regional basis, there are thousands in every
one--how many regions are there?
Mr. Smith. There are 11 regions.
Mr. Mica. Eleven regions. Well, then I am right, we are
probably in the 1,000-plus properties. But don't worry, folks,
we got rid of 34, and we brought in $25 million for the
taxpayer. Man, we are really on our way.
Thank you for highlighting this. It is astounding.
Mr. Denham, you know, we did this little thing at the power
plant, the Power Building, a beautiful building in Georgetown.
They put that sign up the day before. I have to congratulate
GSA, they are really moving forward in an expedited basis. When
did this come out, sir? Friday?
Mr. Smith. August 1st.
Mr. Mica. So at least it wasn't the day before. I guess
that is a weekend and people don't work, so they got that done.
Well, it is totally frustrating. It has got to be
frustrating for the American taxpayer.
Mr. Wise, is there something in the law we are missing that
doesn't give GSA the discretion to do this? When we gave them
the authorization, way back even before they testified, to do
something about this property, there was $5.9 billion given to
GSA with great discretion by the administration, stimulus
money, 3 years ago. It sounds like we could fit in enough money
to make this property utilized, and that was 3 years ago,
before the mold was probably in the back of the building.
We saw the mold in the back there. It is absolutely
disgusting that a property would be allowed to deteriorate that
is taxpayer--you know, we are in charge of this stuff. It is
just three of us out of 435 in the House and 100 in the Senate,
but we are in charge of this. The people are expecting us to do
something responsible.
Mr. Wise, is there something we are missing that we didn't
give discretion? Do I need to change the law? What do we need
to do?
Mr. Wise. Well, Congressman, specifically referring to
Dyer, we were looking at excess and underutilized property. In
the work that we did, since Dyer is not classified as excess,
it did not fit into our scope.
Mr. Mica. It's just sitting there.
Mr. Wise. But speaking in a more----
Mr. Mica. Sitting there deteriorating, sitting there
molding.
Mr. Wise. Yes, that is pretty much what is happening.
Mr. Mica. And if we hadn't held this hearing today, this
wouldn't even have been issued Friday. Is that right?
Why isn't it on the list? Well, again, it doesn't have to
be on the list. It is an historic building. It could have
utilization. I could answer a whole bunch of these questions,
but my question is have we missed the mark as Congress? I know
we have missed the mark in not having people aggressively go
after this before Mr. Denham and I, and Mr. Diaz-Balart. Here
is the report here that I made up for this year. ``Sitting on
Our Assets: The Federal Government's Misuse of Taxpayer-Owned
Assets,'' October 2010. We were in the minority.
If you go to the first page, we just didn't make it up.
GSA--the Dyer Building is in this report, too, I just told my
staff.
So again, I come out of the private sector. None of this
makes sense, but we have got to get a handle. What is really
irritating me, and I told you, that you are an appropriator.
Now, listen to what they have done. We have tried for 2 months
to hold hearings. We finally held one last week. We couldn't
get anyone to come in because they were on vacation. One of the
principals who is involved in this in the second tier of GSA
leadership took a medical leave. The Deputy Administrator
wouldn't come in because she is on tape drumming at the
conference.
Then we wanted someone--Mr. Denham and I are convinced that
the private sector could do a better job. But what is
absolutely incredible about this, and we have tried to get
witnesses to come in, they will tell us off the record that
they could do a better job and we could find a better model,
but none of them will come in and testify because they have
been so intimidated by GSA, which is the primary property
holder in Washington and the country, that they will not
testify.
So we find ourselves in an interesting situation here in
Miami, one more example of incredible, wasteful spending, not
just in the millions but this is the tip of a multibillion-
dollar fiasco across the country.
I don't know what else to do but continue our hearings. We
will do them week after week. We will work down the list of the
structures. Something has to motivate these people. Now we have
an acting administrator, we have the agency in disarray, and we
have everybody being rewarded. One reason the guy didn't show
up last week was he got, what, a $50,000 bonus? And, no offense
to Mr. Smith, he got a bonus. So I guess, I don't know, maybe
we just continue paying more for getting less and poor
performance. That may be a new formula.
I yield back to--let me yield time now to Mr. Denham,
Chairman Denham.
Mr. Denham. I think the answer is we hold them accountable,
from the top down, which is why I am glad that Mr. Diaz-Balart
is here, because it is important that our two committees work
together. We are going to continue to hold hearing after
hearing across the Nation addressing each of these different
issues, and ultimately if we are not going to be--if GSA is not
going to reform, we will reform it through the appropriations
process.
I understand that you feel like you haven't had enough
money, but we are going to make sure you have even less if you
can't reform what you are currently doing.
This is why it is important for the agency administrator to
be here today, last week, next week, because what we are
dealing with here is not just a regional problem. This is not
one courthouse that is an issue. I understand that the $6
billion in stimulus money may not have been prioritized
correctly. I would not have spent money on border stations on
the northern border that have a border crossing of 50 people or
less, and we spent $15 million. That would not have been my
priority. I understand that is outside of your region as well.
But where my concern lies with these courthouses is, in
this instance, GSA took all of its money and built a new
courthouse, an oversized courthouse. Planning in the future,
fine. Utilize not only that excess space but, more importantly,
leave yourself enough money so that you can keep this building
in nice shape so that you can move a new tenant in here.
Now, this is not just your problem or a regional problem.
Right now, today in Billings, Montana, we have just completed a
new courthouse within the last 2 years and leaving the other
courthouse vacant. So we are replicating the same problem today
that you have had to deal with for the last 4 years. At the
same time, the hearing we are going to hold next week in Los
Angeles even takes it much further. They are going to spend
$340 million that they don't have on a building that is too big
and unneeded, without having any redevelopment money for the
historic courthouse that is going to sit vacant like this one.
GSA is not learning from past lessons, and that is what
should have every taxpayer concerned. That is why we need the
agency administrator here, because it is not just a regional
problem, it is not just a Miami problem. This is an issue
across the Nation with misspending money and then furthering
the problem because you are leaving vacant courthouses empty.
Let me ask each of you a question. Actually, let me start
with you, Mr. Smith. How many people work in the four buildings
in this complex?
Mr. Smith. I don't have that answer, sir.
Mr. Denham. Mr. Wise, how many people in the----
Mr. Wise. I don't know, Congressman.
Mr. Denham. Ms. Hull, do you----
Judge Hull. I am sorry. I have no idea.
Mr. Denham. So there are four buildings in this complex,
and none of you know how many employees are in there.
We have about 1 million square feet of office space. If you
have no idea of how many employees are in there, I bet you
can't tell me what the utilization rate is.
Mr. Smith, what is the utilization rate of----
Mr. Smith. Sir, we measure utilization rate by the number
of occupancy agreements that we have in the facility.
Mr. Denham. So how many occupancy agreements do you have?
Mr. Smith. Well, these buildings would be considered fully
occupied. There are some vacancies----
Mr. Denham. Is this building fully occupied?
Mr. Smith. This building is not.
Mr. Denham. Is the Ferguson Building fully occupied?
Mr. Smith. It has a slight vacancy rate in it. It has the
two shell courtrooms.
Mr. Denham. Mr. Wise, what is the utilization rate?
Mr. Wise. In the courts here? Again, Congressman, as I
mentioned earlier, due to the way we scoped our assignment on
excess and underutilized properties, we didn't do any
courthouses because they weren't listed as excess. As a result,
we do not know how they relate to the FRPP and the utilization
rate and other factors that go into those data elements.
Mr. Denham. I understand this is a problem with the United
States Government. I could give you a utilization rate of every
single one of my warehouses because I make money based on the
utilization rate of how quickly we are turning our pallets. I
can tell you the utilization rate in my office space because
before I go hire a new salesperson, or before I hire somebody
in my operations, I know what my utilization rate is. My kids'
college fund depends on it. What is the future of our kids as a
Nation if we can't figure out how we are utilizing our
properties?
Now, as a Congressman, I can tell you the utilization rate
of every single one of my offices based on how many employees
we have. When we get some interns in, we are really cramming
some utilization rate.
I get it from a national perspective. It is a heavy task to
do, especially when you have a great deal of reform that is
needed. But you can't tell me in your region, you can't even
tell me what the utilization rate is between these four
buildings. How can you ever justify putting this on the auction
block or redeveloping it if you don't know what your
utilization rate is on the other three buildings? That is a
huge problem.
I yield to Mr. Diaz-Balart.
Mr. Diaz-Balart. I am speechless.
Mr. Denham. Again?
Mr. Diaz-Balart. Yes. It is just unbelievable. I am,
frankly, just speechless.
Mr. Chairman, when that $5.9 billion that was part of the
stimulus landed on the laps of GSA, a lot of that funding was--
the priority was to refit in order to make green buildings and
more energy-efficient buildings. Now, we obviously all want to
make sure that all buildings are as energy efficient as
possible, and if they can be lead certified, that is wonderful.
But one of the things that I am having a hard time dealing
with here is--and again, this is on the national level, but it
filters all the way down. So you have here and elsewhere
buildings that are empty that the taxpayer owns. You have,
then--you are maintaining those buildings, and unfortunately
not so well, because now this building has mold, which means
that if and when another usage would be found or another
tenant, you are going to have to now spend an additional
probably in the millions of dollars to get rid of that mold.
And yet, buildings, other buildings where taxpayer money was
spent to make them more green, while these buildings are
leaking green.
It is, frankly--and I have to tell you that when you were
talking about you as a private-sector man, how you do know what
your utilization is because that is how you make your
decisions.
So I, frankly, probably for the first time in my entire
public years of service, I am just--I don't know what to say. I
don't know what to say, but I do know what to do. Mr. Chairman,
it is so crucial, and I want to thank you and Chairman Mica for
your leadership in this, to make sure that when the
appropriations process takes place, clearly we are going to
have to take some serious steps to make sure that those funds
are prioritized, to make sure that if you look at the amount of
money that can be saved--Mr. Wise, do you know how much GSA
spends on maintaining vacant and underutilized buildings?
Mr. Wise. I do not have that information at hand,
Congressman.
Mr. Denham. Annually?
Mr. Diaz-Balart. Annually, yes. Do we know that?
Mr. Denham. It's about $2 billion.
Mr. Diaz-Balart. Governmentwide, it is about $2 billion? We
are emphasizing today GSA, but it is not the only issue out
there. About $2 billion.
So if you could utilize those buildings and not have to
maintain empty buildings, and started getting lease money for
it, rent money for it, imagine what you could do, imagine what
you could do.
Mr. Chairman, I am, again, for the first time in many, many
years of doing this, I am just totally--there are no words to
describe my--Your Honor, you deal with difficult cases. So I
don't know what you do when you have a case that is just really
frustrating. You just have to contain yourself. But this is
unbelievable. This is unbelievable, the attitude of--well,
again, I do not mean this as disrespect to Mr. Smith because we
don't know the circumstances. But when you have this kind of
thing happening and then bonuses are given out, the question
has to be asked what is the criteria for those bonuses? I don't
know.
We obviously will continue to work on this, but I think it
is so important, Mr. Chairman, to coordinate the appropriations
process with the work that this subcommittee and this committee
is doing, because we obviously have a serious, serious flaw.
Mr. Wise, lastly, Chairman Mica asked you about specific
legislation. Is there something that we are missing? And I
apologize. We are just--I can tell you that I am just in awe in
a negative sense. Is there legislation that we could do to
allow--are there obstacles to GSA being able to do some of
these things to fix some of these problems?
Mr. Wise. Well, Congressman, as you may know, there is
legislation that is in various stages of the legislative
process. There are several proposals. The administration has a
proposal, the Civilian Property Realignment Act. Congressman
Denham had worked on and sponsored a House bill, 1734. We
testified earlier that CPRA represents steps in a direction
that would help work on some of the problems associated with
real property management, getting at issues such as the
stakeholder influences, and could result in some cost savings.
The Senate also has a proposal. I think these are steps
that could work towards the direction of helping to improve the
management of the Federal portfolio and rightsize through a
BRAC-like process. We talked about that at the previous
hearing, Congressman Denham.
So there is some movement in that direction that I think
could be viewed as positive.
Mr. Diaz-Balart. Thank you, Mr. Chairman.
Mr. Denham. Mr. Smith, we were talking about the Civilian
Property Realignment Act. Do you think that would help your job
in setting up a BRAC-like commission?
Mr. Smith. Sir, we support the administration's position,
and we also think that any----
Mr. Denham. What is the administration's position?
Mr. Smith. The current legislation that is out there, and
that if there is a civilian BRAC, that it needs to have some
means of incentivizing agencies, taking care of stakeholder
interest, and also cutting the cost of disposal upfront. As I
believe Mr. Wise has discussed in his report, some type of
force structure. BRAC has been pretty successful because they
start with a force structure, and if the Federal Government
were to have something similar to that, that would be extremely
helpful.
Mr. Denham. Thank you.
Chairman Mica.
Mr. Mica. Thank you.
Mr. Smith, who made the decision to put this notice out
Friday?
Mr. Smith. Sir, that came between my office and the Office
of Property Disposal in central office in Washington, DC.
Mr. Mica. Did you initiate it, or did Washington ask you to
initiate it?
Mr. Smith. It comes from our region. We initiate the
activity in this region, and we talk to the Office of Property
Disposal, which has a governmentwide mission. They not only
dispose of governmentwide properties, but they dispose of all
GSA properties. So it is a joint venture between us and that
office.
Mr. Mica. But it basically was prompted because of the
hearing?
Mr. Smith. No, sir. It is part of our process.
Mr. Mica. So it just was accidental?
Mr. Smith. It was coincidental. It was the decision of us
to go forth. We are looking--this is actually the start of the
marketing for this, and we are looking at any and all
possibilities to--this is a complex property, it is an historic
property we need to preserve.
Mr. Mica. I went to Miami Dade Community College. Is it
still, or is it a State college? One of the campuses is across
the street. It would probably make some great classrooms. But
now we have incurred, I think with the deterioration of the
building, even more cost. So we have paid $6 million by simple
calculation to keep it vacant and lost the opportunity to
utilize this.
When I went to Miami Dade in the beginning, we had some
converted chicken coops up on 95th Street or 102nd, before they
moved over to the Opa-lacka to finish the base where they built
the campus up on the north side. But we would have given our
eye teeth for anything even near the quality of even the
deteriorated structure we are in today.
Mr. Wise, again, if you could supply the committee--if
there is anything you could supply the committee with,
recommendations, maybe you could counsel with others who have
looked at this situation, see if we are missing something as
far as the law.
My purpose isn't to come here and just berate GSA, but this
can't happen again. Of course, Mr. Denham and I and Mr. Diaz-
Balart, we want to hold people responsible and accountable. But
we also don't want this to happen again. We don't want this to
continue to happen. I don't know if we can make it through
13,996 properties.
Mr. Denham. This is the new one that was just done with the
stimulus dollars, and the L.A. Courthouse is the one that is
proposed to be done. It is an ongoing issue. It does continue
to happen.
Mr. Mica. I'm sorry. Mr. Diaz-Balart?
Mr. Diaz-Balart. Mr. Chairman, that is exactly what I was
about to bring up. Again, it is insanity that we are here in
this empty building, and there are others around the country.
But it is not only the problem that we already have from
existing empty buildings. In L.A., there is a courthouse that
GSA looks like it is moving forward to build, which means that
there is going to be a 700,000-square-foot building that will
be vacated. So it is not like, OK, these were mistakes that
were made. It continues to happen.
Now, the GSA, Mr. Chairman, as you know, can stop that
tomorrow and say let's not spend the money on a new courthouse
and leave vacant another 700,000-square-foot building that they
are going to have to maintain as well. Let's spend less money
and maybe fix up the existing courthouse.
So this is not just--we are not talking about sins of the
past. This continues to happen now as we speak. And that is why
it is unbelievable, Mr. Chairman. Thank you for your----
Mr. Mica. Well, then again, we have seen the agency abuse
their authority or not use their authority and then people
being rewarded for it. I am not picking you out solely, Mr.
Smith, but I would like you also to provide for our
information, for the committee, the amount of your bonus.
And, staff, make that part of the record of this hearing.
If he doesn't provide it, get it from GSA.
I want to thank Judge Hull for also participating. The
courts have an important responsibility, and it is the
responsibility of Congress to make certain that you have
adequate infrastructure and housing accommodations and
facilities to carry out your important work, some of the most
important work, I might add, in our society. People have a
refuge of justice in the United States, but we do need to look
at how we provide those facilities.
I think you have provided us with some information about
changing some of the database, the manner in which we in the
past have calculated the use, the requirements, and the future
needs that are so important, and you don't want to sell
yourself short when you do build a new structure. But by the
same token, you don't want to leave buildings behind, and we
have done that time after time in this whole process.
Staff, I would also like to look at the 2.5 million square
feet we have leased, see when some of those leases became due,
just for the record, in the last 5 years. I am certain that
there could have been some better utilization. The testimony we
had here today by GSA was it is better to own than to lease,
and here they violate their own premise and also stewardship of
taxpayer dollars when we are letting this sit idle and paying
to lease somewhere else. I am certain some of those
opportunities became available.
And then working with the community. This is co-located
with Miami Dade in the heart of downtown, and this can be
better utilized. But the sad part is now we have remediation
for mold. We have a building that sat idle for 5 years. It
still probably has a great potential life. It is an absolutely
gorgeous, historic structure, well built, and will be here
probably longer than the Ferguson Building and some of the
others.
I read, too, the history of it. I guess one of those up
there is one of the architects or designers of the building. I
think he was painted into that mural of the history. But it was
built with poured concrete to withstand hurricanes. This is
solid as a rock as they get in the State of Florida, an
historic, beautiful building incorporating some of the native
limestone and others. So it is on the National Historic
Register, and I don't know if we can cite GSA for abuse of an
historic property, but certainly misuse of taxpayers' dollars
and the stewardship that they inherited.
So thank you, Judge Hull, for coming down. We will continue
to work with you. You had an opportunity here, and in exchange
our issues with authorizers, and I can't be more grateful for
Mr. Diaz-Balart as an appropriator for being here, and also
this is an unusual gathering because you have the former chair,
chair, current chair of the full committee, and all three of us
are determined to do whatever we can to make certain that we
improve this whole process.
Mr. Wise, thank you for your work. We continue to work with
you, trying to root out some of the answers we seek to do a
better job.
Mr. Smith, you can tell we are not happy campers with GSA.
Sorry you had to take the brunt of this today, but we are
expecting more out of an agency that plays a very important and
vital role for the taxpayers and for the Congress and part of
the United States Government.
So with that, without objection, I am going to leave the
record open for 2 weeks. If you would like, you can submit
additional testimony or your written testimony.
Without objection, so ordered.
And we will also be in that period addressing additional
questions to the witnesses for the record.
There being no further business before the Subcommittee on
Economic Development, Public Buildings and Emergency
Management, and before the House Transportation and
Infrastructure Committee, this meeting is adjourned.
Thank you.
[Whereupon, at 12:01 p.m., the subcommittee was adjourned.]