[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
FEDERAL TRIANGLE SOUTH: REDEVELOPING
UNDERUTILIZED FEDERAL PROPERTY THROUGH
PUBLIC-PRIVATE PARTNERSHIPS
=======================================================================
(113-43)
HEARING
BEFORE THE
SUBCOMMITTEE ON
ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY MANAGEMENT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 19, 2013
__________
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, Jr., Tennessee, Columbia
Vice Chair JERROLD NADLER, New York
JOHN L. MICA, Florida CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana STEVE COHEN, Tennessee
BOB GIBBS, Ohio ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York JOHN GARAMENDI, California
DANIEL WEBSTER, Florida ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida JANICE HAHN, California
JEFF DENHAM, California RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky DINA TITUS, Nevada
STEVE DAINES, Montana SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina
------ 7
Subcommittee on Economic Development, Public Buildings, and Emergency
Management
LOU BARLETTA, Pennsylvania, Chairman
THOMAS E. PETRI, Wisconsin ANDRE CARSON, Indiana
JOHN L. MICA, Florida ELEANOR HOLMES NORTON, District of
ERIC A. ``RICK'' CRAWFORD, Arkansas Columbia
BLAKE FARENTHOLD, Texas, Vice Chair MICHAEL H. MICHAUD, Maine
MARKWAYNE MULLIN, Oklahoma TIMOTHY J. WALZ, Minnesota
MARK MEADOWS, North Carolina DONNA F. EDWARDS, Maryland
SCOTT PERRY, Pennsylvania RICHARD M. NOLAN, Minnesota
MARK SANFORD, South Carolina DINA TITUS, Nevada
BILL SHUSTER, Pennsylvania (Ex NICK J. RAHALL, II, West Virginia
Officio) (Ex Officio)
CONTENTS
Page
Summary of Subject Matter........................................ iv
TESTIMONY
Panel 1
Hon. Jeff Denham, a Representative in Congress from the State of
California..................................................... 3
Panel 2
Hon. Daniel Tangherlini, Administrator, U.S. General Services
Administration................................................. 6
L. Preston Bryant, Jr., Chairman, National Capital Planning
Commission..................................................... 6
David L. Winstead, Chair, Public Development and Infrastructure
Council, Urban Land Institute.................................. 6
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Hon. Jeff Denham................................................. 31
Hon. Daniel Tangherlini.......................................... 38
L. Preston Bryant, Jr............................................ 56
David L. Winstead................................................ 64
SUBMISSION FOR THE RECORD
Hon. Daniel Tangherlini, Administrator, U.S. General Services
Administration, answers to questions for the record from the
following Representatives and Delegate:
Hon. Lou Barletta, of Pennsylvania........................... 42
Hon. Eleanor Holmes Norton, of the District of Columbia...... 45
Hon. Andre Carson, of Indiana................................ 45
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
FEDERAL TRIANGLE SOUTH: REDEVELOPING UNDERUTILIZED FEDERAL PROPERTY
THROUGH PUBLIC-PRIVATE PARTNERSHIPS
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TUESDAY, NOVEMBER 19, 2013
House of Representatives,
Subcommittee on Economic Development,
Public Buildings and Emergency Management,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:03 a.m., in
Room 2253, Rayburn House Office Building, Hon. Lou Barletta
(Chairman of the subcommittee) presiding.
Mr. Barletta. Today's hearing is on Federal Triangle South
in Washington, DC, and how we can use public-private
partnerships, or P3s, to redevelop underutilized Federal real
property.
There are key challenges that we face today with managing
the Federal real property inventory. One challenge is to get
Federal agencies to think differently about the space they use.
While the private sector understands that space is money and so
has moved towards smaller, more efficient space solutions, the
Federal Government has been slow to adopt this philosophy.
This committee worked in recent years on a bipartisan basis
to reduce the Federal real property footprint and to get
Federal agencies to use space more efficiently. We succeeded in
getting agencies to reduce their space requests submitted to
this committee, and the administration has issued directives on
freezing the Federal space footprint.
While there are still agencies that seem to be slow in
getting the memo, many others have started realizing that the
more they pay for space, the less funding they have for people
and their core missions, but even as we move towards freezing
or even reducing the space footprint, the reality is Federal
agencies are going to continue to need space to do their jobs.
The question is: how do we ensure we are optimizing the
utilization of that space and reducing the costs to the
taxpayer?
Much of the Federal space inventory is aging and
inefficient, and with current budget climate and record
deficits, we must look for alternatives to traditional Federal
construction for new space. That is why when I became chairman
of this subcommittee, I began to explore how P3s could be used
in Federal real estate.
Earlier this year, we held a hearing focusing on options
for a new FBI headquarters, and I hosted a roundtable to begin
a dialogue with public and private real estate experts on P3s.
In recent years, there has been significant interest in
exploring the use of P3s and redeveloping the area known as
Federal Triangle South here in the Nation's Capital. This site,
adjacent to the National Mall, has a combination of
underutilized and vacant properties.
The current Federal tenants include the Department of
Energy, FAA, and GSA. The buildings that are used are
inefficient and costly to maintain and sit on underutilized
prime real estate in the heart of DC.
As a first step towards redeveloping this site in 2012, GSA
issued a Request for Information, an RFI, seeking input from
the private sector. If done correctly, redevelopment of this
area leveraging private investment could benefit the Federal
taxpayer, the tenant agencies, as well as the local community.
Unfortunately, there are underutilized and vacant Federal
properties across our entire Nation. There are not only direct
costs to the taxpayers in maintaining and operating them, but
they also impact the communities in which they sit, often
limiting private investment and development of prime real
estate.
I hope that proposals like the one for Federal Triangle
South can be a template for how we can use P3s to address the
problem of underutilized and inefficient Federal real estate
across the country.
I look forward to hearing today where we are in the process
of redeveloping Federal Triangle South, what benefits would be,
and how we can use P3s to address the problem of underutilized
properties.
I want to thank you all for being here today.
I will now call on ranking member of the subcommittee, Mr.
Carson, for a brief opening statement.
Mr. Carson. Good morning. I would like to thank Chairman
Barletta for his leadership in calling today's hearing on
Federal Triangle South, a part of Federal land located just a
few blocks west of the U.S. Capitol, which contains over a
million square feet of Federal office space.
Today's hearing asks an important question: what can we do
to develop and maintain the Federal real estate portfolio? In
an ideal world, Congress would vote for a robust annual
appropriation for GSA's revolving fund to support a proper
investment in the existing portfolio. These funds would be used
to renovate existing structures; and instead of engaging in
costly long-term leases, new buildings could be constructed
where there is long-term need for real estate by a Federal
agency.
Unfortunately, because of Congress' repeated cuts in GSA's
construction and renovation budget, and because of arcane
budget scoring rules, GSA has not been able to fund projects
that maintain the aging inventory of buildings. My first
choice, which is the most cost-efficient choice, was to simply
allow GSA to use the funds it collects from other agencies to
maintain its portfolio.
The next choice is using public-private partnerships to
extract value from aging assets located in valuable areas
around the country. These partnerships should be used to either
fund the construction of new buildings or renovate existing
structures in the GSA real estate portfolio. We know that GSA
is capable of presiding over terrific public-private
investments. In the District of Columbia, there are two good
models: the highly regarded GSA renovation of the Hotel Monaco,
formerly the Tariff Building, and the Old Post Office Building.
These projects demonstrate that GSA could make excellent
use of otherwise antiquated and virtually useless Federal
structures and turn them into income producing properties. We
should be able to repeat the process that led to these
successful projects and revitalize the existing public building
service portfolio.
The subcommittee crafted new tools to develop GSA property
using public-private partnerships. In 2007, Congress enacted
and the President signed Public Law 108-447. This granted GSA
the authority to engage in leaseback arrangements and exchanges
for Federal property that could facilitate a public-private
partnership. To date, GSA has yet to implement this authority
to redevelop any of its underutilized properties.
This needs to change because there are opportunities across
the country that could bring the Government an excellent return
on its investment. We hope to hear from today's witnesses about
their concrete plans for extracting value out of Federal
Triangle South by using public-private partnerships. This could
ultimately provide more energy and space efficient workspace
for Federal agencies and save taxpayer dollars.
So I thank each of our witnesses for their testimony today,
and I yield back the balance of my time.
Mr. Barletta. Thank you, Ranking Member Carson.
On our first panel today is former chairman of this
subcommittee and current chairman of the Subcommittee on
Railroads, Pipelines and Hazardous Materials, Representative
Jeff Denham.
I ask unanimous consent that our witness's full statement
be included in the record.
Without objection, so ordered.
Since your written testimony has been made a part of the
record, the subcommittee would request that you limit your oral
testimony to 5 minutes.
Chairman Denham, you may proceed.
TESTIMONY OF HON. JEFF DENHAM, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF CALIFORNIA
Mr. Denham. Thank you, Mr. Chairman, and thank you, Ranking
Member Carson. Both of you guys have been leaders on this
issue.
Specifically the work I wanted to thank you for is the
authoring of the Public Building Savings and Reform Act of
2013. It is a bipartisan matter, and we need to see much more
of that, especially on reducing our debt.
We have got over a trillion dollars deficit and
skyrocketing debt, and we must examine every area of Government
and look for ways to cut that spending.
I would also like to thank Chairman Shuster for working
with me on this issue to ensure that it receives the proper
oversight and attention. Since taking the helm of this
committee, Chairman Shuster has worked to create bipartisan
solutions for our Nation's problems, which is fitting for this
topic that we are here to discuss today.
I am here today to talk about a bill that I authored and
continue to work on with the assistance of Chairman Barletta
and Chairman Shuster, who have been strong voices in cutting
Government. H.R. 695, the Civilian Property Realignment Act, or
CPRA as it is referred to, would create a nonpartisan,
professional commission to root out ways to inefficiencies in
the way that we manage our public building.
The principles of this bill are the driving forces behind
the effort to redevelop the Federal Triangle and serve as a
model of how we manage property nationwide.
I first proposed a civilian commission at the
subcommittee's first hearing in February 2011, and the
President proposed a commission in his 2012 budget. In recent
years, the GAO identified billions of dollars of waste through
mismanagement over building and an overreliance on costly lease
space to meet long-term housing needs.
And on a bipartisan basis, this committee has struggled to
house Federal employees in the most cost effective manner
possible, though I am proud to say that due to the actions of
this subcommittee, GSA leasing prospectuses are becoming much
more efficient and saving taxpayer dollars. I believe the
potential to save billions, tens of billions of dollars is
real.
I am very pleased that the President made Federal real
estate a national priority by including it in his State of the
Union in 2011 and his official budget to Congress.
Additionally, both houses of Congress have included this idea
in their budget concerns and their budget documents.
To be successful the commission will need to do five
things: consolidate the Federal footprint, real estate
footprint; house more Federal employees in less space; reduce
our reliance on costly leased space; sell or redevelop high-
value assets that are underutilized or too valuable for housing
Federal employee like the Old Post Office that Trump is
redeveloping here in DC; and then finally, dispose of surplus
property more quickly.
In my first term, I had a post office in my district,
certainly controversial, but believe that we have got to sell
off those things that just are not being used today. Today we
are redeveloping that, creating jobs in our local community and
actually having a new business that will be right there across
from the courthouse.
These properties can be redeveloped creating those local
jobs, but also that ongoing boost to our local economies. So I
believe a commission that uses these five principles to guide
its decisions can have an immediate savings of upwards of $15
billion. We have got to have a solution that incorporates all
five principles.
For example, if the commission has a fire sale of worthless
properties in one of the worst real estate markets in our
lifetime, then we should not expect to save a lot of money.
Simply dumping these vacant properties on a market is not a
long-term solution. What we need is a CPRA, which is designed
to reshape the way that this country manages the Federal
footprint, and fortunately, this administration recognizes the
same problem.
At the end of the day, the total cost of housing the
Federal Government is directly proportional to how much real
estate we hold. To save money, we have to consolidate that
footprint. To consolidate, we must house more employees in less
space. Fortunately there are tremendous opportunities to have
savings in this area.
GSA is working to reconfigure its headquarters building to
triple the number of employees working there from 2,000 to
6,000 in the same building, allowing GSA to vacate two other
buildings.
The private sector has been increasing its utilization
rates for over a decade, and a commission can achieve the same
results in the Federal Government. Reducing expensive leased
space is another principle necessary for a successful
commission. The Federal Government spent well over a billion
dollars to lease space for the Department of Transportation's
headquarters, yet the Government could have purchased several
buildings for this amount and housed thousands of employees for
much less money.
Perhaps one of the greatest areas for taxpayer savings will
be in the redevelopment or sale of high-value, underutilized
properties. The Postal Service used a private developer to
transform a rundown, money pit with a great location into $150
million in revenue and a fully renovated building without any
taxpayer money.
While the Government retained ownership of this property,
in other cases selling may generate the greatest savings for
the taxpayer. There are high-value properties all across the
country that are being used inefficiently and oftentimes have
large amounts of vacant space. Maximizing this value is what
CPRA seeks to achieve, and I am proud that not only do we have
bipartisan support in the House and Senate, but the President
actually wants to engage on this issue. We can save billions of
dollars by working together.
Mr. Barletta. Thank you for your testimony, Chairman
Denham, and for your work on these issues, and I would like to
note that Senator Warner has introduced a companion bill to
yours in the Senate. I think that is a big step and shows your
approach has strong support in the House, Senate and in the
White House.
Your comments have been very helpful to today's discussion.
Mr. Denham. Thank you.
Mr. Barletta. Thank you for coming.
On our second panel today we have the Honorable Daniel
Tangherlini, Administrator of General Services Administration;
Dr. L. Preston Bryant, Jr., Chairman of the National Capital
Planning Commission; and Mr. David Winstead, chair of the
Public Development and Infrastructure Council of the Urban Land
Institute.
I ask unanimous consent that our witnesses' full statements
be included in the record.
Without objection.
Since your written testimony has been made a part of the
record, the subcommittee would request that you limit your oral
testimony to 5 minutes.
Administrator Tangherlini, you may proceed.
TESTIMONY OF HON. DANIEL TANGHERLINI, ADMINISTRATOR, U.S.
GENERAL SERVICES ADMINISTRATION; L. PRESTON BRYANT, JR.,
CHAIRMAN, NATIONAL CAPITAL PLANNING COMMISSION; AND DAVID L.
WINSTEAD, CHAIR, PUBLIC DEVELOPMENT AND INFRASTRUCTURE COUNCIL,
URBAN LAND INSTITUTE
Mr. Tangherlini. Thank you very much, and good morning,
Chairman Barletta, Ranking Member Carson, Congresswoman Norton
and Congressman Nolan. I also want to thank Chairman Denham for
his testimony and leadership on this issue.
I also appreciate you inviting me to appear before you
today.
We are here today to explore the increased utilization of
public-private partnerships both at GSA and across the
Government. Public-private partnerships are essential to what
GSA already does. In a very real way our Public Building
Service is a public-private partnership.
Approximately 92 percent of the revenue in the Federal
Buildings Fund is invested in the private sector. These funds
pay private sector landlords for existing lease obligations,
service companies to operate and maintain our buildings, and
design and construction firms to repair and construct our
facilities.
At GSA, we are dealing with a building inventory that
includes some of the oldest buildings in the country, buildings
that not only need repairs to keep them in working order, but
often require renovations to ensure that they are up to the
standards of 21st-century Government.
Unfortunately in recent years, as Ranking Member Carson
pointed out, GSA has been unable to use rent that we receive
from our partner agencies to fund the high-priority mission
needs of Federal agencies and to make basic repairs to the
public buildings we hold in trust. In fact, we are now faced
with cuts that would limit GSA's ability to meet even our
existing lease obligations.
In the face of these continued challenges, I am committed
to exploring all of GSA's authorities to reduce the cost of
real estate, meet our partner agencies' needs, and repair and
maintain our public buildings. GSA partners with private
industry to deliver needed space and service to our agency
partners. Beyond our traditional ongoing partnership with
private industry, GSA is interested in further exploring the
use of flexible authorities that do not require upfront
funding.
To that end, with the direction from Congress and this
committee, in particular, this year GSA used its authority
under Section 111 of the National Historic Preservation Act to
out-lease the Old Post Office. The funds that GSA receives from
the Old Post Office lease will be deposited in the Federal
Buildings Fund and could be used for repair and upkeep of
historic Federal buildings across GSA's inventory, saving
additional taxpayers' dollars.
We are also actively exploring new approaches to leverage
the value of our older, outdated buildings to get new, highly
efficient space for our partner agencies. We have put in motion
several potential exchange projects, including the J. Edgar
Hoover Building here in Washington, DC, and of course, the
project that is the subject of today's hearing, Federal
Triangle South.
Federal Triangle South is actually a series of projects
that could use exchange to leverage the value of several
buildings in Southwest DC to fund new, highly efficient space
for the agencies currently housed there. Right now the
buildings that comprise this area represent a significant
challenge, as well as an opportunity for both GSA and the
agencies that occupy them.
The Cotton Annex is empty. The GSA Regional Office Building
Seventh and D Streets, SW., is an inefficient and unattractive
space that was not constructed with the modern realities of a
mobile workplace in mind. The Department of Energy Building is
another facility that does not accommodate its tenants' needs
for space or facility amenities and underutilizes the valuable
land on which it sits.
The Federal Aviation Administration buildings are in the
best shape of any of these facilities, but they, too, are not
equipped to meet the needs of 21st-century Government.
On December 2, 2012, GSA issued a request for information
to identify creative solutions to the challenges presented by
these buildings, and on February 4, 2013, we received 10
responses. GSA has evaluated these responses and developed a
strategy on how best to proceed. GSA intends to release an RFP
in the very near future to exchange the Cotton Annex property
and the Regional Office Building for services. This exchange
would facilitate completing construction and further
consolidation of the GSA Headquarters, as well as advance
efforts to support DHS's consolidation at St. Elizabeths.
We will continue to explore options to address the needs of
other agencies in the Federal Triangle South area.
We are excited about the prospect of exchanging some of our
existing inefficient and outdated properties for facilities
that better serve today's needs. We believe that this will
facilitate the District's efforts to transform the properties
at Federal Triangle South and upgrade a thriving, mixed use
neighborhood.
Through this initiative, we can provide for both the 21st-
century space needs of Federal employees, while also creating a
place in which people will want to work, live, play and learn.
By exchanging underperforming Federal property for services to
upgrade and renovate other Federal facilities, we can help
replace a cold, sterile, utilitarian, single use enclave with a
vibrant, diverse, and special community of its own
I thank the committee for the opportunity to testify today,
and I look forward to answering your questions.
Mr. Barletta. Thank you for your testimony, Administrator
Tangherlini.
Chairman Bryant, you may proceed.
Mr. Bryant. Good morning, Chairman Barletta and members of
the subcommittee. My name is Preston Bryant, and I serve as
Chairman of the National Capital Planning Commission.
NCPC is the Federal Government's central planning agency
for all Federal lands and buildings in the greater Washington,
DC, area, and I am pleased to have this opportunity to speak
with you about NCPC's role in planning the area south of the
National Mall, and the purpose of my testimony today is to
highlight NCPC's what we call the SW Ecodistrict Initiative and
to provide context for GSA's Federal Triangle South project.
As the Nation's Capital and seat of the Government,
Washington, DC, has unique needs, and NCPC, our planning
agency, works to do three things: to protect our symbolic and
cultural heritage; to ensure that there is room for future
generations to locate new memorials and museums and host
national events; and third, in consultation and partnership
with GSA and others, to ensure that the Federal facilities meet
agency needs and provide for a safe, efficient, and attractive
workplace.
NCPC believes that the SW Ecodistrict Initiative is a
roadmap to meet these goals and a great example of the ability
of partnerships to achieve these greater results. We are
excited that GSA is an important partner in this process and
that they are using the SW Ecodistrict Plan to inform their
approach to Federal Triangle South.
The SW Ecodistrict Initiative stems from several earlier
NCPC studies to identify opportunities to fully modernize and
reconnect several Federal precincts around the National Mall.
Perhaps the greatest opportunity is the area we are talking
about today, and that is the area just south of the Mall. It is
110 acres of Federal and private properties and is bounded by
Independence Avenue on the north, Maine Avenue on the south,
Fourth Street to the east and Twelfth Street to the west.
GSA's Federal Triangle South Initiative comprises 35 acres
of these broader 110 acres. Today this area is identified by
super blocks with predominantly single use, aging Federal
office buildings. The size and design of these buildings, the
tangled network of infrastructure and, frankly, the
lifelessness after 6 p.m. public realm contribute to the
inefficient use of these lands and buildings.
Now there are several efforts underway to create a once in
a lifetime opportunity for transformation. This is consistent
with the administration's ``Freeze the Footprint'' policy. Now
the Federal Government is reexamining its property to create
more efficient workspaces for a modern workforce, dispose of
unneeded property, and reduce its operating costs. In addition,
there is a multibillion-dollar private project going on in the
same area.
In 2010, in close consultation with GSA, the National Park
Service, the Commission of Fine Arts and the District of
Columbia, we created a partnership of 17 Federal and local
agencies to think through the SW Ecodistrict Initiative. We
also consulted with residents, private sector businesses,
property owners, and service providers to fully explore how we
can synchronize projects, leverage resources, and develop
mutually beneficial partnerships.
Through this partnership and a lot of detailed technical
work over the last 3 years we have built a compelling case to
work with GSA and others to revitalize this important part of
our city. The SW Ecodistrict Plan recommends how best to
accommodate future Federal office space needs and use land
efficiently while creating a new, vibrant mixed use
neighborhood.
The opportunities abound. We can reduce operating and
maintenance expenses, reduce ongoing lease expenses, generate
new tax revenue for the District of Columbia, retain and
improve the efficiency of Federal office space and accommodate
more employees, create additional residential, hotel and
private office space, and create new sites for museums and
monuments adjacent to the National Mall.
The approach we are using for this plan is an areawide one
as opposed to a building-by-building approach, and by taking an
areawide approach, we can, for example, manage 110 acres of
stormwater. We can significantly reduce the potable water use,
and we can reduce greenhouse gas emissions by more than 50
percent.
High-level analyses have shown that the benefits to the
Federal Government and the taxpayer, to the District of
Columbia, and to private developers exceeds the costs. The
challenge, however, is the scale and complexity. This is a huge
project. Implementation can only be achieved through
collaborative action by both the public and private sectors,
and the SW Ecodistrict Plan identifies several opportunities
which we recognize will be difficult in the current economic
environment to do these.
We can, for example, as I mentioned, implement areawide
stormwater management systems; modernize and expand GSA's
central utility plant; make public realm improvements by
working with others in the neighborhood; and to redevelop and
rehab Federal property to meet GSA's needs for a modern
workforce. My further statement is in the record, and I will be
happy to take questions. Thank you.
Mr. Barletta. Thank you for your testimony, Mr. Bryant.
Mr. Winstead, you can proceed.
Mr. Winstead. Chairman Barletta, Congressman Carson,
Delegate Norton, I am pleased to be here. I am David Winstead.
The staff asked me to talk about my perspective on this
project and others from the viewpoint of the Urban Land
Institute. I am immediate past chair of the Public Development
and Infrastructure Council, which was formed in 2007. I was
Commissioner of Public Buildings at GSA in that year, and we
very much were looking for a forum of both public real estate
executives and private to talk about the structure of the best
deals, the authorities in looking at public-private approaches
to real property.
This council, I have shared with the committee various
white papers and case studies that were done looking at exactly
the structure of the kind of project the Administrator is
looking at. We actually developed a framework for policy
development and valuation of public-private real estate
ventures. We have looked at completed case studies as well as
hypothetical studies, such as the South Federal Center, as well
as a headquarter project and a couple of others.
Members of PDIC have a broad experience in real estate.
Former Commissioner Bob Peck has recently joined the council.
We realize the challenge that the Administrator and the
committee recognize in terms of shrinking resources, the
Federal Building Fund, the rental issues, and revenues. So
looking at private delivery and efficiencies in rentable space,
delivery and finance, and living within the Federal budget is
really key.
I struggle with, and I know Dan does, as well, the rent
relationship to the Federal Building Fund and the imposition it
has or the limits it has on the ability for Federal
construction.
There are two obviously RFIs and others. The Post Office
has been settled, but Federal Center South as well as the FBI
Headquarters Project are in the RFI stage, looking for interest
in the private sector and approaches.
Several case studies looked at surplus Federal real estate
or underrenovated Federal real estate and that backlog that GSA
still has. We have looked at utilizing private entities to
secure financing and development of needed projects on existing
federally owned land, achieving Federal land ownership through
purchase, exchanges as the Administrator mentioned, or
donation.
Ground lease models can vary from 30 to 65 years, which
allow for GSA lease which can be properly scored by OMB, and
the ownership of the asset remaining with the leaseholder
during the term and being able to structure it in a way that it
is not a below market purchase option at the end. So we have
looked at that in a number of different ways, and as I said
earlier, these cases are on our Web site, utilize ULI as a
nonprofit real estate association.
So I would urge the committee to look at these and take
advantage of them. I know that GSA is.
There are other projects that we have looked at, the ground
lease operating structures, for example, the Veterans Benefit
Regional Office in Atlanta; the Argonne National Laboratory in
Illinois; the Military Housing Program which has been very
successful, and the Ford Island Redevelopment, which is a
combination of both. Enhanced use leasing in Houston at the
Brook Army Medical Center, and also Camp Pendleton, and also,
as Dan mentioned, with the Post Office utilizing historic
preservation leasing authority such as the Monaco Hotel, Fort
Hancock and Virginia Medical Center.
ULI also has a local council. But I chaired the national
PDIC committee as I mentioned, that looks at this issue: how do
you take the viewpoint of the public real estate executive in
facing these kinds of real estate management needs and meeting
tenant interest of Federal agencies.
On March 27th of 2011, ULI participated with NCPC and GSA
and others in looking at the Federal Center South Project. I
think there was a lot of exchange back and forth about proposed
zoning and the upscale and mixed use nature of it, and how you
can leverage the value of select public office buildings and
land, and revitalize the areas to accommodate 14,000 Federal
tenants ultimately.
Although I did not participate in that charrette, Lisa
Rother who heads up the council staff-wise did, and I think she
found it was very valuable. I know GSA is looking at proposals.
So it is still very much in process.
Based upon some of the discussion I have had with Lisa, I
think the challenges that some of the ULI participants saw was
really in the land created from the transfer is going to be
inadequate for the requirements of all that build-out in the
Federal Triangle area. Two reasons for that are historic
preservation requirements, and the encouragement to put in a
street complex within the Federal Center South that will
diminish density to a certain extent. So a lot of this is
planning, and I am sure NCPC and DC Planning will engage.
The parcels along Independence Avenue are clearly
institutional Government functions. So they are really not in
play. The sense of it is that there is an awful lot of
interest, but one approach that might come out of that is
importantly matching parcels that create value with development
that meet Government needs and looking at that on a smaller
level, like parcel by parcel, to see how you can, in fact,
build out the vision that NCPC and the District will have.
I hope these comments are helpful. I would refer the
committee, and I know the staff is aware of this, to ULI's
efforts in this area. If the committee would like us to look at
anything in the future, we would be happy to do so.
Thank you.
Mr. Barletta. Thank you for your testimony, Mr. Winstead.
I just want to say yesterday I had an opportunity to tour
Southeast Federal Center, and I know Representative Norton
played a major role in that, and as a former mayor, it almost
made we want to be mayor again, you know, seeing the excitement
of taking a very challenging project because of the
environmental concerns there and turning it into a real tax
base again, and there is no question that projects such as this
could take the more difficult pieces of real estate and turn
them into an economic advantage where the local community is a
winner with increased tax revenue, and the taxpayer is also a
winner and the Federal agencies as well.
So you know, I think there is agreement here that this
could be a direction and should be a direction that our country
goes in for the benefit, and overcoming the challenges along
the way that we will have. And there will be some obviously,
but I think we are all committed to overcoming those.
I will begin the first round of questions limited to 5
minutes for each Member. If there are additional questions
following the first round, we will have additional rounds of
questions as needed.
And I will start, Administrator Tangherlini. Again, thank
you for coming.
How many responses did GSA receive from their Request for
Information on Federal Triangle South?
And what did GSA learn from those responses and the
feasibility of redeveloping that area?
Mr. Tangherlini. We received, as I said in my testimony,
about 10 responses from the private sector on Federal Triangle
South, and what we learned was that there is actually an awful
lot of market enthusiasm for working with GSA, with NCPC, with
the city, with the public sector more broadly, to look at
opportunities to really leverage the available land there and
to help us revisit the way we make investments to serve the
agencies that we provide facilities to.
So what we took away from that was that there is a project
or projects that are actually viable, that are doable, that can
start a long-term vision, delivering our long-term vision that
I think the city and NCPC should be commended for sitting down
and actually trying to develop.
Mr. Barletta. Administrator Tangherlini, is GSA working
with DOE and FAA? And how open are they to your redevelopment
plans?
Mr. Tangherlini. We are working very closely with DOE, FAA
and FAA's parent agency, the Department of Transportation, and
frankly, all of them are very interested.
We are also working, by the way, with the Department of
Homeland Security, which is a tenant of ours in the Regional
Office Building, and working closely with our own region,
frankly.
Look. Everyone out there knows that there is the
possibility that they can get more productive, more sustainable
21st-century space to deliver on their mission. The irony of
the Department of Energy Building being as energy inefficient
as it is is not lost on the Department of Energy. They want
better facilities so that they can meet their growing, not to
mention demands for services and things we are asking them to
do.
So they see this as an opportunity in partnership with GSA,
in partnership with the private sector to get what they need in
terms of facilities to deliver on their mission.
Mr. Barletta. And we understand that the buildings that
currently house DOE and FAA are costly to maintain. They have a
backlog of repairs and are inefficient. How would the use of
public-private partnerships help address these issues and
benefit the taxpayer?
Mr. Tangherlini. Well, we think starting with an empty
building like the Cotton Annex that, frankly, we can return
that back to economic value within the community.
What you saw down in the Southeast Federal Center was land
that was not being put to its highest and best use being
converted into land that could attain its economic potential
and value. That required every bit of 15 years of hard work to
get that done, but it started with a vision. It started with a
concept, and then it was a project-by-project effort.
We think that the private sector can help us make the
investments necessary to meet the needs of these agencies by
engaging in a partnership and perhaps exchanging value, taking
something that is worth value that is not fully being realized,
such as the floor area ratio of some of the buildings out there
that are not being fully utilized; put that back into the
marketplace; and get back services and facilities that meet the
needs going forward.
Mr. Barletta. Thank you.
Chairman Bryant, I understand that the NCPC has also been
examining how to better utilize underused and underdeveloped
property. In your view are the current uses of this site
maximizing the value for the taxpayer?
Mr. Bryant. This perhaps is as much Mr. Tangherlini's realm
as mine, but the short answer is no. That is why we began
looking at this precinct, these 110 acres, more than 3 or 4
years ago.
There are many buildings that do not occupy or fully use
their existing site. DC has a height limit, but there are some
buildings that could be taller. They are not reaching the
current height now.
We have worked very closely with the private sector. Again,
as I mentioned, there is a major waterfront development being
planned, a multibillion-dollar development. So we have been
working in conjunction with private sector developers who are
active in the area to make sure that our plan and our vision
complements what they are going to do so that we can better
utilize and max out these sites.
So the short answer is, no, they are not fully utilized and
they can be improved.
Mr. Barletta. Thank you.
I would like to now recognize Ranking Member Carson for 5
minutes of questions.
Mr. Carson. Thank you, Chairman Barletta.
Administrator Tangherlini, will an RFP for Federal Triangle
South represent the approach that the GSA is expected to take
with the exchange being contemplated for the downtown FBI
Hoover Building?
How long will the taxpayer's interest be protected in that
deal?
If the Hoover Building does not cover the cost of full
consolidation of the FBI, how will GSA pay for additional
costs?
And lastly, how will GSA vet this plan for financial
viability?
Mr. Tangherlini. Those are great questions. Frankly, what
we are trying to do in each of these instances is recognize the
limits that have been imposed on GSA in terms of our ability to
tap into the Federal Buildings Fund and move forward and make
the kind of necessary investments that we should be making to
provide 21st-century facilities for agencies to meet their
needs.
And so looking at our authorities we are asking ourselves
how can we work closely with the private sector to meet those
needs.
What we have proposed as a possible development scenario
for FBI and as parts of Federal Triangle South is the idea of
an exchange using existing GSA authorities, asking what the
market would give us in exchange for the actual possession of
that property. Frankly, we will not know what the gap will be
until we actually get expressions of interest from the private
sector, and so we have to leave as an opening a question of how
would we fill that gap if there is one.
Mr. Carson. Is this plan viable if interest rates rise to
historical norms?
Mr. Tangherlini. You know, that is a great question. What
would be the viability of any private sector participation in a
PPP if interest rates changed dramatically?
That is why it is very important for us to move quickly
while we have the favorable interest rate environment we have
right now.
Mr. Carson. Mr. Winstead, in your testimony you discuss
previous Federal projects that are good examples of public-
private partnerships. Are there any examples that use the kind
of swap GSA is proposing with Federal Triangle South?
Can you please describe how those deals were effectively
structured?
Mr. Winstead. Congressmen, there are a couple. I think the
two that are most relevant are the Argonne National Lab, and I
gave you a copy of the case study where it was really premised
on a public-private exchange where DOE's Atomic Energy Act was
provided authority to have an arm's length transaction where
there was an exchange of land value and secured financing
through in that project the Illinois Finance Authority, which
organized an RFI and went out with a ground lease where the
special purpose entity had a long-term lease of the space and
the to be constructed facility with required parking.
The operating lease was reviewed and constructed based on
the value of the property and the lease. So that is one
example.
Another one is looking at the VA office in Atlanta,
Georgia. It is called the VARO Office Building, which was
developed by the Authority under public-private partnership.
Again, you had the value of the land and looking at a ground
lease exchange where the Authority commitment included
providing financing through the issuance of taxable revenue
bonds and secured developer by means of an organized
competition.
Once the ground lease was secured, the financing was
arranged and the Authority entered into a lease of space with
the VA for its use of to be constructed office building in
Atlanta. So there are existing cases, and I have provided those
to the committee and would be happy to provide more.
I think I covered in my remarks the ones that we have
looked at and are aware of. I would mention that in terms of
Federal Center South, one of the biggest struggles, and I had
an inside view of this for 3 years, is this issue of deferred
maintenance of Federal buildings. I think the concentration of
these properties in this incredibly monumental spot of
Washington, DC, next to the Mall and trying to open that vista,
really do have values. If you can look at them, I think one of
the concerns that the ULI charrette yielded was you have to
almost look at it parcel by parcel in order to really create
and maximize the values.
But there are examples and structures I am privy to, and I
am sure the staff is, of how to approach these projects on that
basis. The FBI RFI is now out there, and that is going to be an
exchange of the Hoover Building, discounting construction over
a long-term ground lease that will bring the value to the
taxpayer, you know, maybe $50 million a year in rent.
So there are cases, these specifically, and we can provide
others.
Mr. Carson. Thank you.
Mr. Chairman.
Mr. Barletta. The Chair recognizes Representative Norton
for 5 minutes.
Ms. Norton. Thank you, Mr. Chairman, and I appreciate very
much that you are holding this hearing at this time.
Mr. Chairman, this is a city 10 miles square. I do not know
how many acres you would say the District of Columbia is, but
when there are large tracts of land in a city that does not
have a great deal of underdeveloped land, and it turns out to
be Federal land, that is on us and it is on GSA. So it is a
very important hearing.
I want to thank all of you for your testimony because I
found it all very helpful. I want to particularly thank Mr.
Tangherlini for taking the GSA in an entirely new direction.
Some of us who have been on the committee and subcommittee for
some time have been concerned that GSA has long been a powerful
agency, but reluctant to use its authorities even when this
subcommittee gave it new authorities.
The chairman mentioned the Southeast Federal Center. I grew
really frustrated that there were 57 prime acres there and the
Federal Government could not figure out what to do with it, and
they had really quite mundane notions about, well, you know,
let us put some Federal workers down there, and the Federal
workers did not want to go down there so that there it lay.
We have an Ecodistrict. Now, this is one is really
shameless because that is near the Mall and really even more
centrally located, sitting there just waiting for somebody to
come forward, and this subcommittee has had hearings on it
before.
Now, Mr. Tangherlini, you have moved the GSA to really
thinking about leveraging private sector, and its funds to
accomplish public sector ends, like reducing the Federal
footprint, even getting Federal revenue. I wrote you concerning
what is really the Ecodistrict here, but I wrote you concerning
a leveraging opportunity that I was concerned might be passing
us up. And that is that the CSX Corporation, which is building
a train. I mean, the Panama Canal is going to go from here all
the way up the east coast and through the District, and it has
a right-of-way along Maryland Avenue, and it must proceed when
it gets here.
Now, I was concerned that the CSX could get here with GSA
sitting on its assets instead of leveraging this great
opportunity that CSX very much needs, putting the GSA really in
the catbird seat. There are one or two minor buildings in their
way, and meanwhile you want to essentially build areawide.
You responded that you were engaged in Maryland Avenue
discussions. Maryland Avenue is a central avenue running
through this area we are talking about, but you said the
reconstitution of Maryland Avenue is a complex issue on many
facets, including but not limited to local land use planning.
Well, we have heard from Mr. Bryant. We know that the
District of Columbia greets this. So we know that is not in the
way now.
So I have got to ask you: first of all, where is CSX? How
far up the east coast has CSX come? Do you know that? Is it
anywhere near Washington, DC, now?
I ask this question, Mr. Chairman, because CSX is going to
come and go whether or not GSA acts. It is just going to go
right through here. So I am concerned simply about the timing,
and I understand that we cannot do the whole Ecodistrict on the
CSX leverage, but you said something in your testimony that
intrigued me. You indicated that you wanted to move first on
the Cotton Annex and an adjoining building that I think is a
GSA building.
Does that indicate that you are trying to move in time to
take advantage of this opportunity that CSX needing some of
your property offers you?
Mr. Tangherlini. The short answer at some level is yes. I
am not the best person to speak to what the status of the CSX
double-stack project is.
Ms. Norton. Well, I would think that that would be of
some--and I am going to ask you to find out, Mr. Tangherlini.
Mr. Tangherlini. Right.
Ms. Norton. If you found out, for example, that CSX was
already in Virginia, I do not know the path it is going to even
come, but it is coming from south to north; if you found that
they were somewhere in Virginia, it seems to me that that would
factor in, or somewhere in North Carolina, that that would
factor into your own timing for how you proceed.
So if you do not know, could you find out and let the
chairman know within 30 days where the CSX--just leave aside
here we are--where is CSX coming up the road? How far has it
gotten? Is it within shouting distance of the District of
Columbia? And if so, what would you do?
Mr. Tangherlini. Well, so notwithstanding where they are in
their project, what I was trying to convey is that we are
moving very aggressively with identifying a project that we
think relates to the issues that were raised. We want to
maximize----
Ms. Norton. So why did you choose these two buildings
first?
Mr. Tangherlini. So those two buildings, frankly, are the
easiest buildings, one being empty, one being one that we
occupy, for us to move forward. They are ones that adjoin the
tracks and do relate directly to the first stage in the
Maryland Avenue project.
We have been working very closely with the District of
Columbia about Maryland Avenue and how they would actually work
closely with us to allow Maryland Avenue to be extended
through. We have been working very closely with the NCPC. We
have been very attentive to what the environmental impacts are
and what the environmental impact process is, and so that is
why we are able to consider the various different elements of
the plan and move forward on some and further research others.
Ms. Norton. Just a final question. You look at the
Southeast Federal Center. While the Government cleaned it up,
the Southeast Federal Center yields revenue for the Federal
Government.
Mr. Tangherlini. Right.
Ms. Norton. It has essentially paid for itself, and I need
to know whether you believe that the Ecodistrict can be
developed without Federal funds through the use of 412
authority, other authorities you may have.
To the greatest extent possible, do you think that this
district could be developed in a way similar, say, to the way
in which the Southeast Federal Center was developed with our
Federal funds?
Mr. Tangherlini. We think that there are dramatic
possibilities for economic development in the Ecodistrict. The
NCPC and the city have done an awful lot of work to look at
what the economic potential both locally and nationally are.
That is why we believe moving forward on some particular----
Ms. Norton. That was not my question. My question was the
Southeast Federal Center was developed without Federal funds,
except the cleanup. And my question is: given your leveraging
and your other authorities, do you believe that the Ecodistrict
could be developed without Federal Funds?
Mr. Tangherlini. That is our hope, and that is why we want
to go into the market with these buildings and understand what
the actual value and what the interest of the market is. So
that is our hope. That is our interest. Frankly, it is clearly
our desire.
The question is: what is the market going to demonstrate?
And we see that this is an opportunity to do something quickly
that addresses the issues that you raise about the
infrastructure investments that need to happen and that give us
an understanding of what the market is interested in in giving
us back.
Ms. Norton. Thank you, Mr. Chairman.
Mr. Barletta. Thank you, Ms. Norton, and we will have a
second round of questions if you have more.
And I would like to just second Ms. Norton's point and
would like to hear a response to her question and whether or
not an evaluation was done and what those conclusions for CSX
are.
Now I would like to recognize Mr. Mica for 5 minutes.
Mr. Mica. Thank you, Mr. Chairman.
We are using the cheap system today.
Well, it is good to see you back, Mr. Tangherlini and
others, in our continuing saga. As you know, when our side was
in the minority, we produced the report that was entitled
``Sitting on Our Assets: The Federal Government's Misuse of
Taxpayer-Owned Assets,'' and it has provided a guideline.
And when I chaired the Transportation Committee, we asked
Mr. Denham to help take the lead in going after this. We have
done a series of hearings on empty public buildings in
Washington, DC. We did the Post Office at least twice, and I
want to commend you for getting that going. That is going to
turn that asset, I believe. We will get about $250,00 a month
off the lease from an asset that was depreciating and cost
taxpayers $8 million to $10 million a year, a half empty,
400,000 square-foot building and an annex that had been vacant
for 15 years.
I see the power plant is up for sale. We did the hearing on
the empty power plant, $19 million realized putting it online.
And the Cotton Exchange is not as pretty a picture. We did
the hearing there I am told in August of 2012, and that is part
of this Southwest Triangle.
You did follow up, as I am told, with a Request for
Information last December. Now, do you have a specific time,
and you had some interest there, when you are going to do the
RFP?
Mr. Tangherlini. As I mentioned in my testimony, sir, we
hope to actually get it done I said very soon. We have
committed by the end of January, and so we are hoping to have
something out by then.
Mr. Mica. By the end of January?
Mr. Tangherlini. Yes, sir.
Mr. Mica. Again, I was not here for the earlier testimony.
Is that a partial Request for Proposal on the Cotton Exchange
or is it the whole Southwest Triangle?
Mr. Tangherlini. No, no. Our proposal at this point, and
that is what we are still working on, is either the Cotton
Exchange and the Regional Office Building or the two of the
buildings.
Mr. Mica. OK. This is a very slow process. Is there
anything legislatively that we could do to help you speed it
up?
Mr. Tangherlini. Well, I actually think that given the fact
that we have to make sure that we coordinate very closely with
the city, with NCPC, understand what the marketplace can bear,
be careful about understanding the historic nature of the
properties, those are things that we have to work through, and
I agree that it would be ideal if we could move faster. I am
not exactly sure what part of the very complicated process that
is holding us up.
Mr. Mica. Well, if there is anything legislatively, I want
you to report back to the committee.
Mr. Tangherlini. OK.
Mr. Mica. Because, again, it is a very, very slow process.
You are missing some of the market opportunities, but I think
you are on the cusp. The market is still red hot in the
District, and it is very valuable property, and it can be
turned from a nonperforming asset. The Cotton Exchange is at
least 6 years empty. We did the hearing on the empty Cotton
Exchange.
Mr. Tangherlini. Right.
Mr. Mica. As you know, I am not a happy camper about the
FTC and the Constitution Building. We are going to have a
hearing. Is that next week? OK. December it has been moved to.
We had this little thing. I do not know any reason why we
cannot get the entire FTC into that property.
Have you signed the contracts or any lease agreements with
any of the endowments, for any of the endowments to occupy the
Constitution space?
Mr. Tangherlini. I am not sure what the status is.
Mr. Mica. OK. I want to know that. There is no reason they
cannot all be in there. You can save $400 million to $500
million by consolidating the FTC. You are bringing in two
current vacant properties, and they came in with a request for
additional space.
I have had folks over there. We have looked at it, and
there is no reason why the balance cannot be moved into it. I
have talked to the appropriators. I am going to do everything I
can to stop anybody else from the FTC but the FTC going in
there. I just want to make it clear.
I know you have been put in somewhat of a political bind,
but there is no reason that that entire operation cannot be
consolidated. So when we do the hearing in a couple more weeks,
I expect answers. I expect to try to move them in there.
The whole thing is a fiasco to begin with when you rent a
lease of a million square feet, and end up with an agency not
using it. I know you are doing the best to fill this space, but
our job is to do the best possible for the taxpayers, and we
can save a tremendous amount of money by that consolidation.
So I have not let up. I am not going to stop, and we will
find a way to get that in there, and I appreciate your
cooperation. If we have to move some political mountains, we
will do that, too, and you are going to cooperate, right, Mr.
Tangherlini?
Mr. Tangherlini. I will do my best, sir.
Mr. Mica. Thank you.
I yield back the balance of my time.
Mr. Barletta. Thank you, Mr. Mica.
The Chair recognizes Mr. Mullin for 5 minutes.
Mr. Mullin. Thank you, Mr. Chairman.
Mr. Tangherlini, I appreciate you coming in here. Obviously
you are rather popular today in this meeting, and you have got
a tough situation. You have got a tough road ahead of you, and
our goal, I believe, is to see how we can work together.
You have two people you have got to answer to, plus your
job to do. I do not envy you, and I wish you the best of luck,
truly.
And so my question kind of has to do with how can we work
together. So I understand that the GSA already has the
authority to sell and redevelop underutilized properties; is
that correct?
Mr. Tangherlini. That is true.
Mr. Mullin. All right. And so when you enter a public-
private partnership to offset the costs associated with
renovating or creating these spaces, you have the authority to
do that, too, right?
Mr. Tangherlini. We have certain authorities that can help
with that, yes.
Mr. Mullin. OK. Are there any things that prolong or slow
down the agency's abilities to do that?
Because obviously, you have a tremendous amount of
property. I actually own two property companies myself, and
vacant property is probably the biggest pet peeve I have, and
there has to be money to be able to do it, which if you are
able to offset it with, you know, public-private partnerships,
it seems like you have the ability to do so.
So what else is holding it up?
Mr. Tangherlini. Well, I would like to make a couple of
points that might clear up some misconceptions. The General
Services Administration manages an awful lot of property.
Mr. Mullin. Yes.
Mr. Tangherlini. A third of a billion square feet of
commercial real estate. So we are one of the biggest commercial
real estate land managers in the world.
But we only represent about 10 percent of all the land
actually controlled by the Federal Government, and our vacancy
rate is actually very low. It is roughly around 3 percent.
Mr. Mullin. No offense.
Mr. Tangherlini. None taken.
Mr. Mullin. But you are comparing yourself to worse and
worse.
Mr. Tangherlini. OK.
Mr. Mullin. So why would we compare ourselves to something
that is already bad. Let us think about what you have. You have
a third of it, right? Is that what you said?
Mr. Tangherlini. No, no. We have 10 percent.
Mr. Mullin. Ten percent. OK. So you have 10 percent of it.
So we have a saying in our company: pay attention to the
pennies and the dollars will take care of themselves. So let us
pay attention to your pennies then.
Mr. Tangherlini. No, I agree. All I am saying is that we
are working very hard on the vacant property that we have, but
it is actually very small amount of the GSA portfolio, and so
that is why we have been working very closely through OMB to
work with other agencies to find vacant and underutilized
property that other agencies have so that we can help them
bring it to market.
So, for instance, in California we have been working very
closely with NASA.
Mr. Mullin. We are getting away from the question. The
question was what is prolonging or slowing it down. What are
the hurdles that are in front of you keeping this from actually
happening?
Mr. Tangherlini. And my point was that it is actually
happening. Now, we do have requirements, often legal
requirements, such as the NEPA Act, which makes sure we are
careful about how we impact the environment in communities in
which we operate. We have historic preservation laws which make
sure that we do not take these assets which people have
invested in over a long time like the Old Post Office and not
treat them appropriately and respectfully.
These are the things that actually lend to some additional
time in the Federal Government doing redevelopment versus what
it might take in the private sector.
Mr. Mullin. So what is your average turnaround on a piece
of property? What is your average property set bank it?
Mr. Tangherlini. I do not actually have a number for you
right now, but I could find it.
Mr. Mullin. Have you got a guess? I mean, I can guess and I
am up here all the time. I do not even really get to manage it
anymore and I can give you an idea.
Now, granted, I am not controlling as much as what you
have, but still it is what we have, and I can still give you an
estimated approximate time.
I mean, are we talking about months, year, years?
Mr. Tangherlini. I can tell you for the properties that
have been brought to my attention in the time I have been at
GSA for the last year and a half, we have turned around all of
those properties in the last year and half, either getting an
RFI or an RFP or negotiating with our local jurisdictions.
But as you heard in my conversation with Congresswoman
Norton, even getting to the RFI, that does not get us
necessarily to the actual development happening. That at least
lets us gauge market interest, and then from there we have to
go into the historical preservation evaluation. We have to do
the environmental work. That can take, you know, in the case of
FBI we estimate it will be about 2 years to get through that
process.
Mr. Mullin. Environmental work because of the material
used, like asbestos towels, stuff like that?
Mr. Tangherlini. No, more actually if you are going to move
a building, relocate a building, sell something of historic
significance. You have to gauge the impact that that has either
on the community, gauge the impact that has economically, and
potentially gauge the impact that that has environmentally on
traffic, on pollution, et cetera.
Mr. Mullin. I want to work with you however possible. So if
you run up against hurdles that my office can be helpful with,
would you please reach out to us?
Mr. Tangherlini. Yes, sir, I will.
Mr. Mullin. I am not here to just throw arrows at you. In
all seriousness, it is something that we could work together.
It is something I do know a little about, and I would look
forward to working with you as much as we can.
Mr. Tangherlini. Great. Thank you.
Mr. Mullin. Thank you, Mr. Chairman.
Mr. Barletta. Thank you, Mr. Mullin.
We will now begin our second round of questioning, and I
will recognize myself for 5 minutes.
Mr. Winstead, so far GSA has made a number of proposals
primarily focused on its exchange authority as opposed
leaseback arrangements and similar authorities. How important
is it in leveraging private dollars to look at all the tools in
GSA's toolkit?
Mr. Winstead. Mr. Barletta, I think that comments that Mr.
Tangherlini has made and Delegate Norton mentioned, the
administration has really pushed the gauntlet in this area. The
results of leadership of Ms. Norton we got in 2005 language
that, in fact, gives us the 412 authority, thus strengthening
the retention of revenues from the sale or properties and go
back into investment of existing buildings from sale lease-back
or exchange.
One of the concerns from the private sector side noted by
Congressman Mullin deals with this delay issue and
inconsistency. In my opinion, the view of these innovative
financing deals from the perspective of OMB and CBO has varied.
I think that, you know, it is an artful form, and I know David
Hahn very well and have met with him since I left GSA to
discuss consistency.
But it is a very artful form to make these things
structured from both a financing standpoint and tax standpoint
work. I think others in the private sector and some behind me
understand this art form and resulting delays of decisionmaking
and reviews of prospectuses that really do prevent a lot of
projects moving as quickly.
It is not GSA's fault. It is these other reviews and CBO
and OMB level from my perspective. So, you know, I do think it
is important to use these other authorities. In my testimony,
and I provide to the committee examples of enhanced use leasing
exchange as well as ground lease structures. I think it is a
very positive time that we are starting to see these RFIs come
out in a very fast order to move both potential redevelopment,
as well as to look at exchange in value.
I, frankly, think that there is a huge market out there for
that. GSA does not have the authorization to deal with the
renovation of these buildings. If you can take one of these
properties or several of these properties in the South Federal
Center and convey that information and value of that property
for construction services, I think it is a very, very good
move, and there is a lot of interest in the market. I can give
you a sense of that.
Mr. Barletta. Thank you.
You know, a concern that the notion that GSA could exchange
billions of dollars of inventory for services without further
action by this committee or appropriations is unprecedented and
raises significant questions about appropriate oversight of
taxpayer dollars and the role of Congress and the role that
Congress has there.
Administrator Tangherlini, GSA has proposed using its
exchange authority in a number of cases. However, as you know,
GSA has a number of exchange authorities, each of which has its
own requirements and limitations.
Which exchange authorities do you say are intending to use
for the FBI Headquarters and potentially for Federal Triangle
South?
Mr. Tangherlini. I think I will get back to you with the
specifics about the actual sites, but Section 412 and Section
585, we have other exchange authorities that are related to our
organic statute.
I would like to point out though that I wish I could take
credit for inventing this idea. These are authorities that
have, frankly, been given to us by Congress, and we have used
roughly a dozen times. The best example is, frankly, in San
Antonio where we traded properties and facilities for the
construction of a parking garage just last year.
And so I think the real issue is how do we work as closely
as possible with this committee, with the Appropriations
Committees to make you aware of what we are trying to do so
that we can continue to reinvest in these assets while we
continue to face, frankly, the limitation that is being imposed
on us by the inability for us to access the rent, the market
based rent, which we are legally required to collect from each
agency, while we have not been able to access that rent so that
we can make reinvestments in those facilities.
That deficit, frankly, that reinvestment deficit is at $4.5
billion and counting right now. So I want to work very closely
with this committee, with the Appropriations Committees. We are
not going to do anything, you know, secretly. We are going to
do it through RFIs, through RFPs. We are going to work closely
with staff in these committees. We are going to come these
hearings. We are going to answer questions, respond to letters,
and do whatever we can, at the same time maintaining our
stewardship responsibility to these assets that the American
people have bought and invested in.
Mr. Barletta. Sure. You know, realizing that the parking
garage was a $5 million project, this is obviously much bigger.
Could you provide for the committee, in writing, if you can, an
official legal analysis on GSA's exchange authority, on what
basis GSA believes it can enter into an exchange for services
on namely to construct a new facility without an approved
prospectus or approval through the appropriations process?
Mr. Tangherlini. Yes, we will provide that information.
Mr. Barletta. OK. Thank you.
The Chair recognizes Ranking Member Carson.
Mr. Carson. Thank you, Mr. Chairman.
Mr. Winstead, in your testimony you highlighted several
Federal projects that use public-private partnerships to
develop Federal-owned parcels. What are some of the challenges
in your mind in protecting taxpayer interest in these kinds of
deals?
And what is your recommendation for us so that we can
ensure that taxpayers receive fair value in exchange for
Federal properties?
Mr. Winstead. Congressman, I think that the biggest issue
in this whole alternative finance strategy is really the issue
of clarity of equities and the risk assumption of the parties
between the Government and contractor or developer. And what
the ULI council has done--and I can provide examples--is a
structure of how you can make sure with full view of taxpayer
and all parties involved are dealt with in terms of both the
responsibilities of the developer or offeror, in terms of
obtaining financing, what those financing costs are, what, in
fact, the fixed return is and clarity through that deal.
Candidly, both ULI and our council, as well as the national
Public-Private Partnership Association, have very much stressed
this, and you really cannot get away with it any other way.
I mean, the process in which you approach and how you
structure these deals, looking at both legal, tax, financial
and disclosure issues, can start very early on. You get a
comfort level.
The only other comment I would make is, you know, we have a
kind of perfect storm here at this point. Unfortunately
Administrator Tangherlini cannot tap that $2.5 billion that he
needs to renovate the buildings, but we do have an incredible
amount of private capital interested in the real estate markets
from everywhere. Although I watched the Washington market drop
at our last meeting of ULI from the top 10 for the first time
in 3 or 4 years, it still is one of the best markets in the
world.
So the opportunity is there, and I think we would be happy
to provide both legal documents of how these past ones have
been structured to the committee. We would be happy to work if
the committee were to ask us or GSA, but it is really a
question of looking at disclosure upfront about what, in fact,
are the risk allocations, returns for both parties, and
building in that obviously the returns for the off-award
developer.
Mr. Carson. Thank you.
Mr. Bryant, has the District of Columbia endorsed the
Ecodistrict Redevelopment Plan?
Mr. Bryant. Yes, sir, I am pleased to say that over the
last 3 or 4 years the District of Columbia government,
specifically, the DC Office of Planning, has been a true
partner, and they have been part of the 17-agency partnership
where we have done all the planning, all of the envisioning
together, and the District has, indeed, endorsed the plan going
forward.
You know, the SW Ecodistrict at 110 acres, it is largely
Federal. It is 60 percent public buildings, 40 percent private
buildings. Thirty-two thousand people work there during the
day, but after 6 o'clock it is a ghost town. Very few people
live in the area. It has got significant infrastructure needs.
So the District has joined us in looking at the economic
development potential. We could get 4 million square feet more
in the ecodistrict for public and private use. That translates
to, you know, taxpayer dollars, public real estate taxes. It
could generate, depending on the infrastructure investment,
somewhere between $150 million and $300 million over 30 years
for the District in just property taxes, not counting sales
taxes and others.
So, you know, the District government has been very much
involved and very supportive of the process.
Mr. Carson. How essential is zoning to the success of this
project?
Mr. Bryant. Zoning discussions are underway right now, and
there is going to have to be a new zoning designation, but that
is entirely the District's prerogative, and they are working
with the National Capital Planning Commission on all zoning
related questions as well.
So we are moving together forward on those issues.
Mr. Carson. Mr. Chairman, I yield back.
Mr. Barletta. Thank you.
The Chair recognizes Ms. Norton for 5 minutes.
Ms. Norton. Thank you, Mr. Chairman.
Mr. Tangherlini, some of the process that you have been
able to make may come from the fact that you yourself come from
OMB and understand OMB. But you also understand real estate. I
must tell you that OMB has been a roadblock to this committee
and to development. The Old Post Office, now who took the hit
Mr. Winstead will tell you was the GSA because the GSA was not
the problem. The reason I had to put an actual bill in for the
Old Post Office was that the OMB personnel, the kind of line
personnel, had outrageous ideas. One of them was there are
already some Federal agencies in there. There were two or three
small Federal agencies. It was unfit for Federal agencies or
any other kind of agencies.
OMB has tended essentially to look at real estate as just a
commodity. It does not understand real estate. So I have to ask
you, as you have raised our hopes whether you have been in
touch with OMB or whether you expect OMB will be in sync with
you as you begin to go down roads that OMB would have regarded
as unholy for GSA to even proceed toward.
You know, is this a dream in your head or are you talking
with these people who stood in the way?
Let me tell you these are the people who, just to give you
an idea, Mr. Chairman, of just how retrograde OMB has been in
allowing GSA to use the kind of authority it is trying to use
know, we built a Department of Transportation Building. It is a
huge, terrific new headquarters. Whoever heard of building a
headquarters on a 15-year lease so that they are going to have
to come back to the Government to get more money to pay the
developer for their lease?
Nobody in his right mind would have done that, but the OMB
rules essentially cost the taxpayers' money. So I have to ask
you: are we going to have that roadblock or what have you,
because you come from OMB and perhaps they have greater
confidence in you and you understand real estate and OMB, have
you worked through some of these issues with OMB?
Mr. Tangherlini. So I have worked very closely with OMB in
every one of our RFIs and every one of our RFPs we have put
together with the review and comments of OMB. We have tried to
be very inclusive of OMB so that we recognize that together
actually our job is to deliver on administration priorities and
the administration's direction.
And this administration has been very committed to
investing in infrastructure and reducing the Federal footprint.
At the same time though, OMB faces challenges that come out of
other legislative requirements, and OMB and CBO are actually in
charge of maintaining the scoring rules that come out of things
like the Budget Enforcement Act and subsequent amendments.
The rules we deal with now relate to agreements that have
been arrived at over time between OMB, CBO, GAO and the
Congress about how we are going to score congressional action.
Ms. Norton. And do you think that there are scoring
roadblocks to what you are proposing?
Mr. Tangherlini. So we think actually everything we have
done has been consistent with scoring, and so the question is
to have a broader discussion about what are the principles that
underlie scoring. What are we trying to achieve through
scoring? How do we measure the long-term impacts of certain
ways we score things versus others?
And that is the kind of dialogue, frankly, a hearing like
this allows us to get into at an intellectual level rather than
at a conflict level. And I think too oftentimes we have engaged
in conflict. Hopefully what we will get is good information. We
will get good dialogue.
Ms. Norton. Oh, there was not any conflict. There was not
any conflict. There was just an ironclad notion that if it
scored, no one wanted to go through the process you just said,
which is what are you trying to achieve, what would cost the
Government more money, is it consistent with rules. That
dialogue never occurred. It was not that this committee had
conflict with scoring.
Mr. Tangherlini. No.
Ms. Norton. It is that we are faced with, ``Shut up. It
scores.''
Mr. Tangherlini. Right.
Ms. Norton. And you are saying that is not how these deals
are going to be handled.
Mr. Tangherlini. Well, and I think the evidence suggests
that we are trying very hard to be as creative and as
thoughtful and as flexible as possible. You know, the offer
that David proffered working with ULI to further this
discussion is, I think, also further evidence of the progress
we are having, where people recognize that perhaps the way we
are doing things is not going to work with the way we need to
get them done.
Ms. Norton. Mr. Tangherlini, we have just opened the Coast
Guard Building.
Mr. Tangherlini. Right.
Ms. Norton. It was a very proud moment, named for the only
Medal of Honor winner of the Coast Guard, and the Coast Guard
has fully moved in. They are the first agency to go down there.
Are you considering ways to complete the Department of
Homeland Security with this terrific start there with the other
buildings?
For example, the Secretary is slated to come next in one of
the reuse buildings. Could you tell the committee what you are
doing?
Mr. Tangherlini. Absolutely. Starting with the President's
2014 budget request, which would have allowed us to move into
Phase 2, and through everything else we are trying to make sure
that we realize the vision of the more than $400 million that
the taxpayers already invested in the St. Elizabeths campus. We
are not going to get the benefit as taxpayers of that initial
investment if we do not make the subsequent investments and
begin to allow the Department of Homeland Security to actually
create a cohesive and consolidated headquarters unit.
As I mentioned, as one of the proposals for the first
project we are proposing as part of this broader Ecodistrict
plan is to take some of the revenue or the value generated by
the transfer of the exchange of one of our buildings and put it
into the St. Elizabeths campus. We are trying anything we can
to make sure that we keep fealty with the investments that the
American people have already made in St. Elizabeths.
Ms. Norton. That is excellent to hear you say.
Not to mention that the Department of Homeland Security is
paying for rent in 60 different locations and is having to do
short-term and long-term extensions now because it is waiting
to see when the rest of it will move.
I would just like to ask you about two vacant properties in
the District of Columbia that this committee has mentioned in
prior hearings. We had a whole hearing on 49 L Street.
Mr. Tangherlini. Right.
Ms. Norton. I have a special interest in 49 L Street
because it is part of the Southeast Federal Center or Yards
District, this new district in Southeast, huge. It must have
been a warehouse or something, and for some time it was held
because you thought it would become a veterans court, but for a
long time it was clear that that was not going to happen.
But I have not heard anything since we had a hearing
perhaps was it last year on 49 L Street.
Mr. Tangherlini. So we have been working very closely----
Ms. Norton. If I may say so, the community was so concerned
that since this place was surrounded by development that they
themselves came up with a plan to develop it, and that is why I
would like to know where we are on that.
Mr. Tangherlini. So we have been working very closely with
local authorities and other planning authorities, and we think
we are very close to actually having an announcement as to what
we will do next with 49 L, but we heard the issues and concerns
raised by you and other members of this committee at the
hearing that was held there, and we have been working
diligently to make sure that that building as well----
Ms. Norton. Do you expect that to come forward this year?
Mr. Tangherlini. Probably not this calendar year, but I
expect it to come forward very, very soon.
Ms. Norton. And there is one other property, Tenth and H
Street, NW., which is near the Secret Service Building.
Mr. Tangherlini. Yes, the Webster School.
Ms. Norton. Yes.
Mr. Tangherlini. And I can tell you that that is one that
has been a concern of mine in several of my jobs, and I can
tell you that I will make a commitment that we are going to do
something about the Webster School. We are working closely to
try to put together a panel to give us ideas and suggestions of
how we both meet the needs of the Secret Service in terms of
their security, but also meet the needs of the community in
terms of not having a blighted, vacant but also historic
building sitting right at the corner of essentially Main and
Main now after the old Convention Center redevelopment has been
realized.
Ms. Norton. Yes. You do need a panel. You need somebody to
look closely at it, taking into account all of the concerns,
and if you give your attention to it, I think you can solve
that problem.
Mr. Tangherlini. I agree.
Ms. Norton. Thank you very much.
Mr. Barletta. Thank you.
Let me just say the exchange is not a panacea. They are
complicated, and they have more risk than traditional
approaches like leasing. I would hope that you will keep the
lease-back tool on the table.
Mr. Tangherlini. Well, you know, absolutely. I would like
to explore ways that we can keep other parts of the authority
and not just hit one note on the piano. That having been said,
to the extent that we have authority and opportunity in these
instances, I think we should also be smart about leveraging
them as quickly as possible so we do not miss market
opportunities, and then explore a broader conversation that
will allow us to maybe explore the opportunities to leverage
other tools that the Congress has been so kind to provide us.
Mr. Barletta. I just have a couple more questions, and if
the panel has any more, they could also ask them.
Mr. Winstead, can you talk about one of the authorities GSA
has under Section 412, the ground lease with a lease-back, and
explain how it is possible to utilize this authority under the
scoring rules?
Mr. Winstead. Mr. Chairman, there are structures that have
been in place and there are components that are well known and
have been vetted from both the legal standpoint and tax related
issues and revenue. I think the recent conversation with the
Administrator is pointing at the issue of concurrence and
engaging the minds at OMB and CBO in a partnership on this,
looking at the scoring rules protecting future taxpayers, which
is why the scoring rules and budget rules are there--to not
have obligations that blow up in the future on taxpayers.
But there are ways to do this, and I have provided the
committee staff the details of that involving an exchange of
property. Looking at ways in which the parcel where the
building is constructed, can be titled to the Government,
leased to a private party for no less than the ground lease
structure, 65 years, where the building would be leased for 20-
year terms. The occupancy lease does not offer a purchase
option, a bargain basement structure, which is of concern. One
of the criteria in the scoring rules is satisfied by the
building being leased on newly constructed with a life cycle of
40 years.
And then Step 4 would be really structuring the net present
value or the minimum rents on a combined lease that is
equivalent to about 65 percent of the fair market value. So you
are below the threshold of the 90-percent rule, and the
majority of the Government-leased properties is for general
purpose office space. I think that is the case in both Federal
Center South, as well as the FBI RFI.
Now, granted they have huge security requirements, but
they, in fact, can be termed as general office use buildings.
GSA, by the way, in recent years, has seen reduction of
space and is doing much more open space configuration of
workspace, which is applicable both to Government tenant use as
well as private sector use.
A sixth criteria to approach it is a strong private sector
interest which is out there in Government lease properties,
which underscores the reality that this can be construed as
general office space, not special purpose Federal space.
So you are satisfying these criteria, in my judgment, being
able to take a land exchange value to create savings to the
Government, and ULI did a case study 2 years ago which I
provided the committee that approach. It looked at both Federal
construction; it looked at leased construction; and it looked
at leased construction on Federal land. It involved private
sector people, public sector people, and basically looking at
about 2 million square feet of space. There was actually a
savings because of the ability to have a ground lease and
accrued credit to the lease which eliminates essentially that
issue of bargain basement pricing or gift at the end.
So these models are out there. There are lawyers that can
construct it as well as tax experts. There is interest in the
private sector to do these, and I would just stress that, as
the Administrator said, ULI has a strong District Council here
in Washington. We would be happy to work with the committee or
get CBO, OMB and GSA obviously involved.
But there are ways that it can be done. They have been
proven to be done, and they can satisfy scoring rules and
create value for the taxpayer.
In the case of the case study we did for a 2 million-
square-foot building, it showed a consolidation lease savings
of around $50 million, which was huge. So, you know, I would be
happy to share that with you if you have not seen that case
study.
Mr. Barletta. The bottom line is do you think this can work
for the FBI and allow for consideration of the FBI from
consolidation from 3 billion to 2 million square feet? Because
I think that is where the savings comes from.
Mr. Winstead. Well, it has been quite a few years since I
was looking at their lease structure, and I would not be privy
to it anyway, but I do believe there are savings. Clearly the
Federal Government in exchange of value of a building like the
Hoover Building, that there are savings that can be accrued
because of the new construction cost of a new building, generic
in many ways in workspace and obviously greener. So it is going
to have savings in terms of the functions of the building and
cost of maintaining it every year.
So there is interest. I do not know what the interest is or
the level of it, but there is clearly interest that has been
expressed to GSA. Again, if you can take an administration that
is very focused on this and ensure that both the real estate
agency and the OMB people are working in unison, which they
seem to be, I think it is a real opportunity and the market is
ripe.
Interest rates are historically low. I remember in 1995
when I used to have to go to the legislature in Maryland as
Secretary of Transportation, talking about the construction of
transportation facilities out of our transportation fund versus
the ability to do it under public-private. In those days you
could not sell it from a public policy standpoint because
interest rates were 7 percent. So they go, ``Well, why would
you do that if you can take the money out of the transportation
authority, put tolls on it, and pay for it through the
authority?''
That is not the case now. I mean, it is a very ripe market
with a lot of interest.
Mr. Barletta. Thank you.
One last question. Mr. Tangherlini, you mentioned a little
earlier an historic review for the Hoover Building. Are you
suggesting there is an historic review pending or a problem?
Mr. Tangherlini. I am not. I am just saying that that is
one of our obligations, is to go through the full NEPA process
and all of the other processes, many established by statute,
that ensure that we are very, very careful and thoughtful
before we dispose of something that the American people paid
for and made investments in over time.
And so to some extent that is going to be one of our
challenges as a public entity, is that we are always going to
have to be a little more thoughtful, a little more careful, and
as a result a little more slow than the private sector because
we have this higher bar of responsibility.
Mr. Barletta. Great. I just wanted to clear that up.
Mr. Tangherlini. OK.
Mr. Barletta. If there are no further questions?
Mr. Carson. One more question for Administrator
Tangherlini.
What is the best way to fund the maintenance of the GSA
real estate portfolio? And what has been the impact of Congress
not fully appropriating the rent that GSA receives from other
Federal agencies that are housed in GSA-owned space?
Mr. Tangherlini. It is a great question, and I appreciate
your asking it because oftentimes you hear conversations about
how we want Government to operate more like a business, and
there are a few places actually in Government where we operate
more like a business than, frankly, in the Public Building
Service and the Federal Buildings Fund of the United States
General Services Administration.
By law, the Congress had the wisdom to suggest that we need
to collect market-based rents, rents that we determine using
valuation, market-based evaluations of what the rents are in
the marketplace. We charge that to the agencies. That is
deposited back into the Federal Buildings Fund so that we can
then reinvest it in the buildings. We pay our rent. We reinvest
it in the buildings.
The problem is for the last 4 years as part of the issues
we have had generally with appropriations, we have never
received the full appropriation in the amount of money we have
collected as rent from those Federal agencies. So we have not
been able to reinvest it in the buildings.
We received a sizable amount of money in the Recovery Act,
but we have actually over time not received as much back in
rent as we got in the Recovery Act. So at this point we are no
longer making the kind of major repair and alteration, even in
some cases minor repair and alteration, never mind longer term
capital investment in the assets that we have.
Mr. Carson. Thank you.
Thank you, Mr. Chairman.
Mr. Barletta. I would like to thank all of you for your
testimony today. Your comments have been helpful in today's
discussion.
If there are no further questions, I would ask unanimous
consent that the record of today's hearing remain open until
such time as witnesses have provided answers to any questions
that may be submitted to them in writing, and unanimous consent
that the record remain open for 15 days for any additional
comments and information submitted by Members or witnesses to
be included in the record of today's hearing.
Without objection, so ordered.
I would like to again thank our witnesses for their
testimony today. If no other Members have anything to add, the
subcommittee stands adjourned.
[Whereupon, at 11:37 a.m., the subcommittee was adjourned.]