[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
FEDERAL TRADE COMMISSION AND GENERAL SERVICES ADMINISTRATION THWART
COST SAVING CONSOLIDATION
=======================================================================
HEARING
before the
SUBCOMMITTEE ON GOVERNMENT OPERATIONS
of the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
DECEMBER 3, 2013
__________
Serial No. 113-74
__________
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COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM
DARRELL E. ISSA, California, Chairman
JOHN L. MICA, Florida ELIJAH E. CUMMINGS, Maryland,
MICHAEL R. TURNER, Ohio Ranking Minority Member
JOHN J. DUNCAN, JR., Tennessee CAROLYN B. MALONEY, New York
PATRICK T. McHENRY, North Carolina ELEANOR HOLMES NORTON, District of
JIM JORDAN, Ohio Columbia
JASON CHAFFETZ, Utah JOHN F. TIERNEY, Massachusetts
TIM WALBERG, Michigan WM. LACY CLAY, Missouri
JAMES LANKFORD, Oklahoma STEPHEN F. LYNCH, Massachusetts
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
PAUL A. GOSAR, Arizona GERALD E. CONNOLLY, Virginia
PATRICK MEEHAN, Pennsylvania JACKIE SPEIER, California
SCOTT DesJARLAIS, Tennessee MATTHEW A. CARTWRIGHT,
TREY GOWDY, South Carolina Pennsylvania
BLAKE FARENTHOLD, Texas TAMMY DUCKWORTH, Illinois
DOC HASTINGS, Washington ROBIN L. KELLY, Illinois
CYNTHIA M. LUMMIS, Wyoming DANNY K. DAVIS, Illinois
ROB WOODALL, Georgia PETER WELCH, Vermont
THOMAS MASSIE, Kentucky TONY CARDENAS, California
DOUG COLLINS, Georgia STEVEN A. HORSFORD, Nevada
MARK MEADOWS, North Carolina MICHELLE LUJAN GRISHAM, New Mexico
KERRY L. BENTIVOLIO, Michigan Vacancy
RON DeSANTIS, Florida
Lawrence J. Brady, Staff Director
John D. Cuaderes, Deputy Staff Director
Stephen Castor, General Counsel
Linda A. Good, Chief Clerk
David Rapallo, Minority Staff Director
Subcommittee on Government Operations
JOHN L. MICA, Florida, Chairman
TIM WALBERG, Michigan GERALD E. CONNOLLY, Virginia
MICHAEL R. TURNER, Ohio Ranking Minority Member
JUSTIN AMASH, Michigan JIM COOPER, Tennessee
THOMAS MASSIE, Kentucky MARK POCAN, Wisconsin
MARK MEADOWS, North Carolina
C O N T E N T S
----------
Page
Hearing held on December 3, 2013................................. 1
WITNESSES
Mr. David Robbins, Executive Director, Federal Trade Commission
Oral Statement............................................... 5
Written Statement............................................ 7
Mr. Chris Wisner, Assistant Commissioner, Office of Leasing,
Public Buildings Service, General Services Administration
Oral Statement............................................... 11
Written Statement............................................ 13
APPENDIX
Statement of Rep. Mica........................................... 44
Statement of Rep. Connolly....................................... 46
Building Profiles Submitted by Mr. Mica.......................... 47
FEDERAL TRADE COMMISSION AND GENERAL SERVICES ADMINISTRATION THWART
COST SAVING CONSOLIDATION
----------
Tuesday, December 3, 2013
House of Representatives,
Subcommittee on Government Operations,
Committee on Oversight and Government Reform,
Washington, D.C.
The Subcommittee met, pursuant to notice, at 10:08 a.m., at
Constitution Center, 400 7th Street, S.W., Washington, D.C.
20001, Hon. John Mica [chairman of the subcommittee] presiding.
Present: Representatives Mica, Meadows; and Connolly.
Staff Present: Will L. Boyington, Press Assistant; Ashley
H. Callen, Deputy Chief Counsel for Investigations; and Sharon
Casey, Senior Assistant Clerk.
Mr. Mica. Good morning. I would like to call this hearing
of the Subcommittee on Government Operations of the Committee
on Oversight and Government Reform to order. Pleased that I
could have our distinguished ranking member, Mr. Connolly, from
Virginia, Mr. Meadows, our colleague from the State of North
Carolina, join us on the dais today. And we have several
witnesses that--for a subcommittee hearing, which is entitled
Federal Trade Commission and General Services Administration
thwarting some cost-saving consolidation. We will review that
matter in today's hearing.
The purpose of our oversight hearings is to--just
generally, Mr. Issa always opens with his statement--
accountable of taxpayer dollars. And, certainly, I think this
hearing will show that we are attempting to do the best job
possible with those limited dollars, tight budgetary
constraints, and that the people have a right to know how their
money is spent, and expect a proper reform, us being good
stewards of their hard-earned taxpayer dollars.
I am going--the order of business is we will have opening
statements from Members. Then we will hear from the witnesses.
And then we will have questions. If anyone has any lengthy
statements to put in the record--I have to welcome--I will ask
the witnesses to limit their testimony to five minutes, try to
move the hearing along as quickly as possible.
Let me first start by giving a little bit of history. We
are gathered today--and I will call this the Constitution
Building--in the Constitution Building. And this is going to be
the site of about two-thirds of the operations of the Federal
Trade Commission. Some years ago, the Federal Trade Commission
came to the Committee on Transportation, which has jurisdiction
over GSA, and asked--requested additional square footage. They
were looking at expanding the two locations that they had
outside of the current FTC building.
The old FTC building, which was built in the 1930s, is not
too far from here on Constitution. It is also referred to as
the Apex Building. It contains about 300,000 square feet,
approximately. About half of it is used, because it is a 1930
building. The outside is quite beautiful and classic; the
inside is 70 years-plus old, and very poor utilization, as even
evaluated by GSA.
When they came and asked for additional space, again, they
had the Apex Building, their headquarters building. They rented
two other locations. And in those locations, one behind Union
Station--sometimes referred to, I guess, as NOMA--they had a
217,000 square-foot rental building, and the lease is expired
on that. In addition, they had another location, where they had
additional space. So they had three locations, but were asking
for additional space.
When it came before the committee, the Transportation
Committee, we examined it. We said that we ought to look at
consolidating it all into one operation. There was also
interest by the National Gallery of Art, which is directly
across the street from the FTC building, to take that building
and utilize it as, actually, the National Gallery North.
Have we got a copy of that report? Do we have copies of
that report? And on the front page, people can look at this.
You see the FTC building, which is triangular. The West Wing of
the National Gallery, and the East Wing. And this is a plan
that the National Gallery of Art came up with, to actually make
this the North Wing of the National Gallery. It would be
connected by a tunnel over to the West Wing, as we now have
with the East Wing. The National Gallery of Art rents about
60,000 square feet, has need for about 150,000 square feet in
the future.
So, there aren't too many places that they can go to
acquire that space. The space in the old FTC headquarters
building is inadequate, outdated. They actually offered to
raise private funds to renovate the building, and we estimate
those funds would be worth approximately $140 million to
renovate that space, more or less. And they came up with this
plan, which is incredible, as far as utilization.
Unfortunately, the General Services Administration went
forward and is in the process of leasing 203,000 square feet of
space in the building that we are in right now. This building
has an interesting history. And there was about a million
square feet leased, and that lease fell through--actually, the
courts upheld the lease, and the Federal Government was
obligated to pay for space here for, I believe, a 10-year
period. So, they started leasing some of that, GSA did.
Of the space that we have in this particular building--let
me see here--we have--FTC is currently looking at leasing
203,000 square feet. According to the report that we have here
from GSA, there is a total of--let's see here--I think a total
need of about 380,000 square feet that are needed. We will get
the exact figures as we go forward with this.
But, in any event, what they are doing is proposing to
bring in two smaller agencies. One they--and the National
Endowment for Humanities, National Endowment for the Arts, and
occupy the balance, most of the balance, of that space that is
available, rather than bringing in the FTC headquarters, which
would allow substantial consolidation of space, and a dramatic
savings for the taxpayers. And we will go over some of those
figures as we get a little bit more into detail.
There will be substantial savings in consolidation. And the
Data Center, they run a shuttle--is there a little picture of
the shuttle? Does somebody have that? Between the three
buildings that they currently have. This is the FTC shuttle.
So, things like this will be eliminated if all this operation
was consolidated into one area.
Now, everyone who has walked in this building has seen it
as a--probably one of the nicest facilities in Washington, D.C.
I brought a few slides. Not all the Members or staff have been
through the old FTC building, the Apex Building. Can we show
some of those slides? This is actually the current buildings.
Again, the old FTC building and current headquarters leased,
and also leased space--this is--these two are what they are
consolidating on the right into this facility. And we have the
FTC building--again, the old one--with about--it is actually
about 150,000 square feet that they occupy at this time.
Let's go to some of the interior. This is--you see the
building you are in. We would like to consolidate them all.
This is what it looks like in some areas of the old 1930s FTC
building. Here is old phone booths. Look at the hallways. Look
at the radiator complex. The building--this is part of the
electrical system in the old building. It is almost
embarrassing that the Federal Government would house employees,
federal employees, in a building of this age and in this
condition. Are there any other slides?
[No response.]
Mr. Mica. So, again, this is a--the building we are in--
203,000 square feet they are consolidating two of those
operations into. What I want to discuss today is the
possibility of finishing the consolidation, bringing all the
FTC into a modern complex that would adequately house their
staff, their operations, and be a very proud facility for an
important function of government.
Mr. Mica. So, those are some opening comments. We will go
over this a little bit more. I want to open an opportunity to
the ranking member for some introductory opening comments. Mr.
Connolly?
Mr. Connolly. Thank you, Mr. Chairman, and thank you so
much for holding today's hearing. The Federal Trade
Commission's historic Apex Building and the National Gallery of
Art's West and East Buildings, together, form an iconic
streetscape at the end of the Federal Triangle. Today we
consider proposals to transfer the FTC headquarters building to
the NGA.
I am new to this issue, compared to yourself. And key
agency stakeholders have been working on this matter for six
years. I am interested in hearing from all sides this morning
on the potential savings, potential cost, and operational
impacts associated with the proposed transfer of the Apex
Building from the FTC to the NGA.
You, Mr. Chairman, have been an avowed supporter of the
arts, which I very much appreciate. And you have sought to
expand the National Gallery into the Apex Building to enable
the museum to grow and expand its offering to the American
public, while consolidating leases and cutting costs.
I also understand that the FTC and the U.S. General
Services Administration believe that the transfer would not be
advisable with respect to operational and financial
considerations, in addition to historical considerations
related to the fact that the late President Franklin Delano
Roosevelt actually built the celebrated Apex Building in 1938
specifically to serve as the home of then-newly-established
FTC.
I want to thank our witnesses for participating at the
hearing this morning, and look forward to examining the issues.
I also want to thank the Constitution Center for hosting this
hearing. This is a beautiful facility, as you indicate, Mr.
Chairman. And I look forward to getting educated on both the
pros and cons of the proposed move.
Mr. Mica. Thank you, Mr. Connolly. I recognize Mr. Meadows
from North Carolina.
Mr. Meadows. Thank you, Mr. Chairman. I appreciate both of
you being here to testify. And, as the chairman has already
pointed out, obviously, this Subcommittee looks at how we can
be efficient and how we can make sure the taxpayer dollars are
well invested.
Today, as we look at this consolidation, what I am looking
for from each one of you is a compelling reason on why we
should spend the extra money. Just to be frank, is there a
compelling reason why we should be spending $150 million more
of taxpayer dollars, from either a strategic standpoint or a
functional standpoint?
We all know that these are difficult times, from a
financial standpoint. There is pressure on salaries. And yet,
if we have a way to save money, which it appears that this is,
I am looking for why we should be consolidating. I also served
on--with the chairman on the Transportation and Infrastructure,
subcommittees there. This is near and dear to my heart when it
comes to--I know real estate. I have had a career in real
estate.
And so, I understand there are subtle differences from time
to time on why you would make a decision or not make a decision
in terms of long-term strategic planning. But, quite frankly, I
am looking to--as our ranking member, Mr. Connolly, said,
hearing from both sides of the story. And then let's try to
make the best decision on behalf of the American taxpayers.
And I yield back to the chairman.
Mr. Mica. Thank the gentleman, and we will----
Mr. Connolly. Mr. Chair?
Mr. Mica. Yes?
Mr. Connolly. I just want to say to my friend from North
Carolina I have long been considered an honorary member of T&I.
Mr. Mica. Well, we appreciate your service, Mr. Ranking
Member, and we will make you an ex officio member. As the
former chair, welcome to the T&I.
[Laughter.]
Mr. Mica. Our next order of business will be to hear from
our two witnesses. We have Mr. David Robbins, Executive
Director at the Federal Trade Commission. Then we have Mr.
Chris Wisner. He is the General Services Administration Public
Building Service Assistant Commissioner for Leasing. I
appreciate both of you appearing before us. This is an
investigative oversight committee. We do swear in our
witnesses. So, if you would stand, raise your right hand.
[Witnesses sworn.]
Mr. Mica. Okay, and the record will reflect that both of
the witnesses answered in the affirmative.
So, with that, we will start with Mr. David Robbins,
Executive Director of the Federal Trade Commission. Recognize
him.
STATEMENT OF DAVID ROBBINS, EXECUTIVE DIRECTOR, FEDERAL TRADE
COMMISSION
Mr. Robbins. Chairman Mica, Ranking Member Connolly,
Representative Meadows, thank you for having us today. My name,
as you said, is David Robbins, and I am the Executive Director
of the Federal Trade Commission.
This Committee today is looking at the consolidation of
Constitution Center of the FTC buildings that we currently are
renting at New Jersey Avenue and M Street. The FTC has been
working very closely with the General Services Administration
to secure and build out space at Constitution Center, this
wonderful facility, as you have said. The Commission believes
that the new space is properly configured to sustain its
mission in a cost-effective manner, consistent with space
utilization regulations and the Administration's initiative to
make more efficient use of the government's real estate, known
as Freeze the Footprint.
FTC is primarily a law enforcement agency with broad
jurisdiction over major sectors of the economy. Among its
missions, the FTC reviews proposed mergers, investigates and
pursues those engaging in unfair methods of competition and
unfair or deceptive acts or practices, and returns money to
injured consumers when possible.
The FTC also educates consumers and businesses on how best
to protect themselves, advances policy through research and
advocacy and public workshops, and works with foreign
counterparts to harmonize competition and consumer protection
law across the globe. I think it is also fair to say we take
very seriously our responsibility to be good stewards of the
taxpayer dollars, as well.
The space at the Constitution Center will house staff of
the Bureau of Competition, the Bureau of Consumer Protection,
the Hart-Scott-Rodino pre-merger notification filing office,
the records and filings office, the inspector general's office,
and other support functions. We are an agency consisting
primarily of lawyers and economists who, in the course of our
work, often meet with outside parties, frequently work in teams
and with experts, and handle large amounts of documents and
data consisting of highly confidential business and personal
information. We work collaboratively, and often under deadline.
The Constitution Center space will meet these particularized
needs of the agency, while at the same time reducing its space
utilization rates.
The FTC's space at Constitution Center has been designed to
accommodate 905 FTC occupants. FTC staff moving to Constitution
Center will have significantly smaller offices and less overall
space than they have now. The agency is using an aggressive
space utilization rate of 119 square feet per employee. And, by
way of comparison, in the two currently-leased spaces, the
utilization rate is approximately 167 square feet. There will
also be a net savings in rent, once we consolidate those two
facilities into Constitution Center, not an increase in costs.
The Commission is aware of the interest of having all FTC's
employees housed in Constitution Center, so that the FTC
headquarters building can be given to the National Gallery. As
both GSA and the FTC have explained, however, that is neither
physically nor financially feasible. The only current occupied
space--unoccupied space in Constitution Center is the southwest
quadrant. As it stands, FTC will occupy a substantial portion
of this quadrant to accommodate the employees from its two
currently-leased satellite facilities.
As I understand it, NEA and NEH are also due to occupy a
portion of this quadrant in late winter. Even if these
agencies, though, were forced to give up their offices to the
FTC, there simply is not enough space in the southwest quadrant
to house all of FTC's operations in Constitution Center.
GSA is determined that the FTC requires a minimum of
446,054 square feet for its entire space needs in D.C. The
entire southwest quadrant totals only 358,537 square feet. Even
if, though, all FTC's D.C. operations could be fit into the
southwest quadrant of Constitution Center, their cost to the
American taxpayer would be prohibitive. GSA has calculated that
over 30 years it would cost nearly $172 million more to house
all of the FTC in the leased space.
Additionally, significant costs would be incurred to move
FTC staff from the headquarters building to such a space. GSA
has estimated over $50 million, and we believe it would be in
excess of that.
Moreover, while not having a direct impact on the FTC,
there are additional costs to taxpayers of giving away the
FTC's headquarters building, including the loss of its
estimated fair market value, which is roughly $92 million, and
the loss of $6 million that the FTC pays into the Federal
Building Fund each year.
The FTC's headquarters building is in good condition,
notwithstanding those pictures, and needs no significant
renovations, repair, or maintenance, and is expected to meet
our needs for some years to come.
Finally, at this time construction of the space here in the
Constitution Center is more than 40 percent complete, and
changing our plans would have quite substantial impact.
In closing, I just want to reiterate the FTC's commitment
to the Freeze the Footprint initiative, while meeting our
mission-driven needs. We will continue to work with Congress,
GSA, and the Office of Management and Budget to complete
construction of the Constitution Center space in a manner that
maintains FTC's effectiveness and efficiency. I would be happy
to answer any questions you might have.
[Prepared statement of David Robbins follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Mica. Thank you.
We will recognize Mr. Wisner with GSA now.
STATEMENT OF CHRIS WISNER, ASSISTANT COMMISSIONER, OFFICE OF
LEASING, PUBLIC BUILDINGS SERVICE, GENERAL SERVICES
ADMINISTRATION
Mr. Wisner. Good morning, Chairman Mica, Ranking Member
Connolly, and members of the subcommittee. My name is Chris
Wisner, and I am the Assistant Commissioner for Leasing at the
GSA's Public Building Service. I appreciate being invited here
today to discuss GSA's efforts to provide cost-effective and
highly-efficient space for our partner federal agencies, and
GSA's plan to ensure that the existing lease obligation we
assumed on behalf of the SEC at Constitution Center is properly
utilized.
As the PBS Assistant Commissioner for Leasing, I helped
manage GSA's efforts to assume the balance of SEC's existing
lease obligation at Constitution Center, and minimize the cost
to the taxpayers in this location. Constitution Center is an
example of our efforts to assist an agency that entered into an
agreement using its independent leasing authority.
In 2010, the SEC, under its own authority, signed an
agreement leasing--to lease approximately 900,000 square feet
in this building. Shortly thereafter, the SEC indicated that
this space was not needed. The Federal Housing Finance Agency
and the Office of the Comptroller of Currency agreed to take on
approximately two-thirds of the space.
In 2011, GSA reached an agreement with the SEC to assume
control of and backfill the remaining 358,000 square feet in
Constitution Center. Since that time, GSA has worked to
identify potential backfill tenants and minimize the financial
exposure to the government that would result from this space
sitting vacant. GSA is taking advantage of the lease hold
interest in Constitution Center to consolidate space for the
Federal Trade Commission, the National Endowment for the Arts,
and the National Endowment for the Humanities.
FTC will be moving from their two expiring lease locations
at 601 New Jersey Avenue, N.W. and 1800 M Street, N.W., in
Washington, D.C. GSA and FTC have used this opportunity to
reduce FTC's footprint, improving FTC's utilization of office
space from 167 square feet per person in the old leases to only
119 square feet in Constitution Center. The balance of this
space will be used to provide needed housing for NEA and NEH,
without--whose relocation is essential to GSA's agreement to
redevelop the Old Post Office.
As you know, GSA recently reached an agreement to out-lease
the Historic Old Post Office, securing an investment of $200
million in private-sector funds in the restoration of the 114-
year-old federal building. This investment will allow GSA to
convert the Old Post Office into a mixed-use development that
will serve the local community, preserve the historic facility,
and save taxpayer dollars.
The agreement is contingent on GSA's ability to vacate the
existing federal tenants from the Old Post Office. Relocating
NEA and NEH in a timely fashion is imperative to GSA's ability
to implement the proposed redevelopment agreement for the Old
Post Office, and failure to deliver the unencumbered site will
result in significant financial penalties for the government.
Upon delivery of the Old Post Office to our private sector
partner, we will receive a base rent of $250,000 a month,
escalating the consumer price index over the next 60-year
lease.
The funds that GSA receives from the Old Post Office out-
lease can be used to repair and upkeep of historic federal
buildings across GSA's inventory, saving additional taxpayer
dollars.
GSA's portion of the Constitution Center will have zero
vacancy, once we complete construction of tenant improvements.
Construction is underway for all tenants, and FTC space is
approximately 40 percent complete. The NEA and NEH, as well as
the FTC employees currently housed at 601 New Jersey Avenue and
1800 M Street are scheduled to move into this building in March
of 2014.
At the direction of Chairman Mica and the House Committee
on Transportation and Infrastructure, GSA examined alternatives
for Constitution Center aimed at consolidating FTC's entire
Washington area presence, including FTC headquarters functions
currently housed in the historic Apex Building at 600
Pennsylvania Avenue, N.W.
Accommodating FTC's projected needs in Fiscal Year 2015,
even under GSA's improved space utilization standards, would
require 446,054 rentable square feet. Even at current, on-board
staff levels, FTC would require more space than is available to
GSA and Constitution Center. In addition to the space
limitations, relocating the FTC employees currently housed in
the Apex Building would increase moving costs by nearly $50
million. At the same time, the 30-year net present value cost
of moving FTC headquarters operations from federally-owned
space into a lease would exceed $70 million.
Given the size limitations and cost associated with a move,
consolidating the FTC's entire Washington area presence into
Constitution Center is not feasible.
Thank you for inviting me to appear before you today. Given
GSA's expertise in leasing, we look forward to working to
continue our dialogue on how to maximize utilization at
Constitution Center and throughout GSA's inventory. I am
pleased to take your questions.
[Prepared statement of Mr. Wisner follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Mica. Appreciate both of the witnesses, and we will
turn right to questions.
All right, you are leasing 203,000 square feet here, right?
Mr. Wisner. As of July 2012 we leased 358,000 square feet,
which we assumed from the SEC.
Mr. Mica. And in this space, in this--in Constitution you
have 358,000 square feet, but you are going to occupy 203,000
square feet for the FTC?
Mr. Wisner. It is approximately 250,000 square feet for the
FTC. That is the space that the FTC will be----
Mr. Mica. Okay. What we are told is 203,000 square feet.
Mr. Wisner. I can get----
Mr. Mica. Which would leave 150,000 square feet. We are
pretty close.
In the slide that we had a few minutes ago, we had the Apex
Building, where the headquarters is, 160,000 square feet. And
if you rent 203,000 or more, that still leaves you with about
150,000, 140,000 square feet in this building. And that is what
you intend to give to the--how much do you intent to give to
the Humanities and to the Arts?
Mr. Wisner. Chairman Mica, the space for the NEA and NEH is
about 100,000 square feet.
Mr. Mica. So, again, in talking to Mr. Moran and others,
the appropriators, that he is not a very happy camper. First of
all, it looks like it is being purposely done to put NEH and
the Arts in here to occupy part of that space, and ignore
consolidation of FTC.
I mean there is no reason why you cannot fit the balance of
what is in the old building. In fact, in the old building you
have things that would be--in this new building--and, again,
two of the FTC operations--you have in this building a
cafeteria, do you not?
Mr. Wisner. Yes, there is.
Mr. Mica. Do you have day care in this building?
Mr. Wisner. Yes, there will be an FTC day care center.
Mr. Mica. You would have----
Mr. Wisner. I apologize, sir. I was wrong. There is not an
FTC day care center in this building. I was incorrect.
Mr. Mica. Oh, it would be at the other one?
Mr. Wisner. Yes.
Mr. Mica. Okay. But that could be consolidated. You have a
whole list of activities here that could be consolidated. You
cannot find, again, a consolidation of space that would be
saved by putting all of FTC together.
The Data Center, obviously, could be consolidated. Could it
not?
Mr. Wisner. I will have to defer to Mr. Robbins on the Data
Center consolidation, but I don't believe they can----
Mr. Mica. Well, I can tell you. Mr. Connolly and I looked
at the consolidation of the Data Centers. And they have two of
them, and at great expense.
The biggest expense in moving is the moving of the Data
Center. You have $34 million in moving the Data Center from New
Jersey and the other building. I guess most of it is in New
Jersey. Is that the cost of moving it? How much is moving the
Data Center? Staff, do you have that information? How much is
moving the Data Center?
Mr. Robbins. So the overall IT cost, not only for the Data
Center, but for also building out all of the networking in the
building, as well as the AV and other kind of wireless
facilities is going to roughly be $20 million.
Mr. Mica. Okay. And that is from New Jersey and the other
building?
Mr. Robbins. New Jersey and M Street.
Mr. Mica. Okay. And, again, if you had one consolidated
data center, it would be cheaper to operate, probably less
space required, and, again, the savings from consolidation.
You wouldn't see any savings from consolidations in that,
Mr. Wisner?
Mr. Wisner. The cost to move out of the Apex Building would
be----
Mr. Mica. Not the cost to move, the cost to operate. Is it
going to be cost to move?
Mr. Wisner. The cost to replace the Apex Building with
leased space would be about $170 million over 30 years. So----
Mr. Mica. The cost of what?
Mr. Wisner. To replace the Apex Building. To----
Mr. Mica. I am not talking about replacing the Apex
Building. I am talking about--right now, I am talking about
consolidations, to put everything right in the building that we
are in here that you are thwarting.
Again, we passed resolutions. This resolution was passed by
the House committee of jurisdiction, which was the
Transportation Committee. It was passed the 16th of February,
2011. And it cited, again, consolidation of these facilities.
Is it GSA's policy just to ignore? Tell the Congress and the
committee just to go jump in the Potomac River?
Mr. Wisner. No, sir.
Mr. Mica. Okay. Well, again, you have----
Mr. Robbins. If I may, Mr. Chairman, just one on the Data
Center.
Mr. Mica. Well--you what?
Mr. Robbins. So one note on the Data Center. So the Data
Center operations, or the technology operations we are
consolidating here, are not our main data center functions. We
are consolidating AT labs, our litigation support facilities,
et cetera. It is not the same thing. And, as I understand it,
there isn't sufficient space in this building, if we even
wanted to move----
Mr. Mica. Okay.
Mr. Robbins.--our current Data Center here.
Mr. Mica. Okay. This----
Mr. Robbins. Respectfully, I am just trying to make sure
you have the information.
Mr. Mica. You are leasing 203,389 square feet of usable
space here. You have 655 employees you are putting into this
building from both New Jersey and M Street. So that is an
average of 310 square feet per person. That is an average.
Okay. And you describe most of what you are doing is paperwork.
Mr. Robbins. So----
Mr. Mica. Attorneys. I don't see having industrial
manufacturing, I don't see----
Mr. Robbins. You are right, we----
Mr. Mica.--space that are required----
Mr. Robbins. You are right. We are not doing heavy
manufacturing----
Mr. Mica. And you did cite that there is a diminution in
the square footage, so there is a lot of extra space in this
area. So is some of that conference rooms and other things that
you would be using? What is the balance of the space? How much
did you say per-person square feet utilization, 100-something?
Mr. Wisner. The new utilization in this building will be
about 119,000 square feet per person.
Mr. Mica. A hundred and nineteen----
Mr. Wisner. I am sorry, sorry, 119.
Mr. Mica. But, again, the total that you are acquiring--
just do the math. Even a second-grader can do the math. It is
310, if you take the 655 and divide it. So there is a lot of
space here that can be used for consolidation----
Mr. Robbins. Mr. Chairman Mica, I would just note a couple
things. One is one of the things that enables this agency to
fit into smaller space with our staff who are going to be
coming here is that it presupposes that there is going to be
meeting space, conference space, and other special use spaces--
--
Mr. Mica. What is the total number of employees that you
have, total number of employees you have? I have here, as of
March 2013, the latest, 1,159 FTC employees. And then you have
some contract people that you also house.
Mr. Robbins. So the FTC----
Mr. Mica. Is that right, 1,159?
Mr. Robbins. So the FTC's FTE ceiling is 1,176. And, like
any other agency, we have people who leave, and then we have to
backfill----
Mr. Mica. No, my concern was how many employees do you
have. Do you have 1,159 FTC employees? Yes or no? And then you
have some additional contractors----
Mr. Robbins. As I----
Mr. Mica.--is that correct?
Mr. Robbins. I believe the current number in the D.C.
area----
Mr. Mica.--1,340's.
Mr. Robbins. I believe that the current number of
employees--so FTE employees--is 1,035, actually, currently.
Mr. Mica. Okay, 1,035 in D.C.
Mr. Robbins. In D.C. So----
Mr. Mica. Okay. And--in D.C. Well, that's even less than
what I have here, because you are talking about this is total
in D.C.
Mr. Robbins. Chairman Mica----
Mr. Mica. So 1,035----
Mr. Robbins. Chairman----
Mr. Mica. And we will give you 250.
Mr. Robbins. So----
Mr. Mica. That would give you 1,300. If I gave you 200----
Mr. Robbins. Chairman?
Mr. Mica. Hey, just let me finish. If I gave you 200 square
feet--he is talking about giving them 119 square feet--if I
gave you 200 square feet, do the math of that. It is, what----
Mr. Robbins. Here is the problem.
Mr. Mica. How many?
Mr. Robbins. So----
Mr. Mica. It is 240,000 square feet we will give you to
house employees.
Mr. Robbins. Chairman Mica----
Mr. Mica. At 200 square feet a piece, 240,000 square feet.
There is 358,000 square feet, and you are telling me you cannot
get the balance of the operation in here? That is bull.
Mr. Robbins. So, the FTC currently has an inventory of----
Mr. Mica. This is an abuse of taxpayer money unlike
anything I have seen. And to renovate a building that is 1930s
and have someone else pay for it--and don't sit there and tell
me that the building is worth $90 million, that, in fact, we
are giving it away. Where does the property stay? Where would
that property stay, the FTC building?
Mr. Wisner. The appraised value is about $92 million in
2011.
Mr. Mica. Okay, $92 million. But where does it stay? It
doesn't change hands. It is still in trust for the people of
the United States. It is part of the inventory, is it not?
Mr. Wisner. It would leave the GSA federal properties
inventory.
Mr. Mica. But it is part of the--it is fee simple to the
United States of America. It is not to anyone.
Mr. Wisner. It would not be of use to the federal employee
base.
Mr. Mica. Not of use? And, again, you can't consolidate and
get the balance in here, in the little scam you are playing, to
bring in two agencies that use part of the space--and again, it
is what we asked you to do in 2011 that made sense. Again, you
are saving--they currently lease 60,000 square feet, don't
they, the National Gallery of Art?
Mr. Wisner. Sir, they are occupying about----
Mr. Mica. They lease 60,000 square feet, and they need
additional space. They are across the street. There is no place
that is really for them to go to expand their galleries. They
have this plan and, again, you are thwarting the plan.
Well, I won't go a second round. I think I get a little bit
excited about this----
Mr. Robbins. Chairman Mica, if I may, you had mentioned the
number of people, so I just wanted to clarify one thing. So it
is true, in terms of FTE. But, like any modern organization, we
have a mix of staff, full-time employees, temporary employees,
contractors in our buildings. Currently, we have an inventory
of 1,517 seats across our three operations----
Mr. Mica. One thousand how many?
Mr. Robbins.--1,517, and we have planned for 1,630.
Mr. Mica. In Washington, D.C. In Washington, D.C.----
Mr. Robbins. Correct.
Mr. Mica. You just told me that you had 1,100,
approximately. I give you----
Mr. Robbins. It is a difference between employees and
people who work in our facility, Mr. Chairman.
Mr. Mica. Again, if we used his figures, 119 square feet,
and we have you multiply that, I was giving you 200 and I could
get to 250,000, and it still leaves 250 minus 300-some square--
358,000 square feet. It still leaves you an incredible amount
of space for expansion, for activities, for conference rooms,
for hearing rooms, not to mention any savings from
consolidation of having some of the operations that are listed
here being covered.
Mr. Connolly, thank you.
Mr. Connolly. Thank you, Mr. Chairman. As a newcomer to
this issue, I am now confused. So let me try to educate myself.
Mr. Wisner, the building we are in right now, Constitution
Center?
Mr. Wisner. Yes, sir.
Mr. Connolly. Who owns it?
Mr. Wisner. It is owned----
Mr. Connolly. You need to speak into the mic.
Mr. Wisner. Excuse me. It is owned by a private-sector
organization. It was originally owned by the Nassif
Corporation, and now it has been sold to another organization.
Mr. Connolly. So we don't own it. Do we own the FTC
building currently?
Mr. Wisner. Yes, we do own the FTC building.
Mr. Connolly. The decision was made to move from there
primarily to here and some other locations for what reason?
Mr. Wisner. The decision to consolidate out of the two
lease locations was made to make the SEC lease whole, which is
the SEC leases--this Constitution lease, which we inherited
from the action that the SEC took.
Mr. Connolly. So there was recognition that the current
site was inadequate.
Mr. Wisner. Of the two leased spaces? No.
Mr. Robbins. Can I break in? And I apologize, respectfully.
Mr. Connolly. I ask you both----
Mr. Robbins. The----
Mr. Connolly. You have got to speak into the microphone. I
cannot hear you.
Mr. Robbins. The FTC has three buildings, as we have
discussed, in--at D.C. The Apex, or headquarters building,
which was never planned to be moved, because it is very cost-
effective for us. The kind of square-foot lease cost to that is
much lower than getting into a commercial lease, which I think
everybody has recognized, across government.
The two properties we were consolidating here are current
commercial leases, as well, which are expiring. And one has
expired and we are in holdover, and it is costing us millions
more to stay there.
Mr. Connolly. Okay. Point well taken. But I am actually at
a more fundamental level. What is the square footage at the
Apex Building right now?
Mr. Wisner. The Apex Building is about 305,000 square feet.
Mr. Connolly. Three hundred and five. And you have moved a
lot of operations here for what reason?
Mr. Wisner. We have not moved operations in the building
yet; it is currently under construction.
Mr. Connolly. Well, but, I mean, the plan is to do that.
Mr. Wisner. Yes. We will be moving the NEA and NEH from the
Old Post Office----
Mr. Connolly. No, no, no, no. I am talking about the FTC
right now.
Mr. Wisner. The FTC locations that we are consolidating are
the two leased facilities at New Jersey Avenue and 1800 M
Street. We need to get out of those two facilities and
consolidate into this lease.
Mr. Connolly. Is it your position, from GSA's point of
view, that the Apex Building is a functional building?
Mr. Wisner. The Apex Building is a functional building. It
is a performing building. And it does not require additional
investment at this time.
Mr. Connolly. The Chairman showed some slides trying to
highlight, you know, it looks like a building that needs
remodeling and updating to meet normal 21st century office--
commercial office standards. Do you dispute that?
Mr. Wisner. I am not familiar with those particular
pictures that were out there. The condition of the building
that we have from our analytic shows that it is a high-
performing building. I don't believe that it needs significant
investment at this time, sir.
Mr. Mica. Mr. Connolly?
Mr. Connolly. Yes, sir.
Mr. Mica. Could I answer in the record, here? This is by--
an assessment by GSA. The Federal Trade Building has been
classified as a 2B--a tier 2B asset for Fiscal Year 2013 by
GSA's national office. Tier 2B assets are under-performing
financially, and fail to return a six percent equity. This is
part of what I just request unanimous consent at this point
that we insert this in the record.
[No response.]
Mr. Mica. Thank you. Without objection, so ordered.
Mr. Mica. Yield back.
Mr. Connolly. Why was the decision made to put NEA and the
National Endowment for the Humanities in this building?
Mr. Wisner. The NEA and NEH are part of the Old Post Office
facility. As you know, we are in the process of striking--we
have struck a deal with a private-sector organization that will
be reinvesting that property. We needed to exit out of the Old
Post Office building. We have a significant penalty in that
building if we stay over in that building.
There was space available here, in the Constitution Center,
to consolidate their location and to downsize them. There was
no other significant block of space that we had available
within the portfolio at the time that that decision was taken.
So it made complete sense to move the NEA and the NEH and
consolidate them out of this location.
Mr. Connolly. And so, we are dedicating, in this building,
100,000 square feet to those two?
Mr. Wisner. Approximately 100,000 square feet, yes, sir.
Mr. Connolly. Was there any consideration ever by either
GSA or FTC that that was an opportunity cost, that by not doing
that we could consolidate a lot more of FTC here?
Mr. Wisner. The FTC, in total, would not fit in this
location. I don't know if there was the opportunity cost that
you are talking about studying that----
Mr. Connolly. Well, just a second, Mr. Wisner. You have
currently 305,000 square feet at the Apex Building?
Mr. Wisner. The Apex Building is about 305,000 square feet,
gross space, yes.
Mr. Mica. Only half of it is usable.
Mr. Connolly. And not all of that is used by FTC.
Mr. Wisner. No, all of it is used by the FTC. They occupy
253,000 square feet of rentable space.
Mr. Connolly. Two fifty-three?
Mr. Wisner. Yes, sir.
Mr. Connolly. So, if you--and you have got--and you said to
the chairman that you think here 250,000, roughly, square feet
will be dedicated to the FTC mission.
Mr. Wisner. Yes, sir.
Mr. Connolly. If you didn't lease to NEA and NEH,
hypothetically, you could add another 100,000 to that.
Mr. Wisner. That is the total amount. Yes, sir.
Mr. Connolly. So then you could get to 350,000 square feet,
in theory.
Mr. Wisner. Approximately.
Mr. Connolly. For--without any modifications to the
building, which might free up some more square footage,
depending on what you did, for the FTC mission.
Mr. Wisner. Yes, sir.
Mr. Connolly. And you said that we--what you need--maybe,
Mr. Robbins, you said this--you need 446,000 square feet.
Mr. Wisner. Yes, sir.
Mr. Connolly. And is that to accommodate growth? I mean
that is an increase over what you currently have in toto now.
Mr. Wisner. That is the number that we calculated in July
of 2012, when this decision was made.
Mr. Connolly. But what is the delta that that represents
between what you currently occupy and what you project you
need? Often, when we make these kinds of moves, both in the
private and public sector, we want to add capability, we want
to be able to do things we can't do now. And so we kind of go
for the max, rather than the minimum.
So, that 446,000--what I am trying to get at is--what delta
does that represent over current de facto numbers?
Mr. Wisner. I believe you are asking the difference between
the total lease at Constitution Center and the total
requirement for the FTC.
Mr. Connolly. No, I am asking the difference between 446,
which I think, Mr. Robbins, you stated, is what you--is the
square footage you need. And I am trying to get at does that
need include some change from the number you have currently? I
am trying to get my arms around--is that 50,000 over and above
what you currently have in order to better meet your needs,
or--I mean, certainly, you are not telling us that it
represents zero change.
Mr. Wisner. No. It would have been--incorporated the change
or growth that we anticipated with the FTC in July of 2012.
Mr. Connolly. And what is that change?
Mr. Wisner. It would have been--I think we were counting
about 1,006 total employees that would have to be seated.
Mr. Connolly. In square footage.
Mr. Wisner. In square footage? I will have to get back to
you that on [sic], sir. I don't--I can't----
Mr. Connolly. Do you know, Mr. Robbins?
Mr. Robbins. I don't, off the top of my head. I apologize.
Mr. Connolly. Well, okay. So we have a question about the
delta.
Mr. Robbins. If I may, one other thing.
Mr. Connolly. Yes. I have to ask you again to speak into
the mic.
Mr. Robbins. I apologize. I am with you. So, one of the
things----
Mr. Connolly. Could be my hearing.
Mr. Robbins. I will get better at this microphone thing, I
promise.
When looking at whether to consolidate headquarters
building with--and this is something that was looked at with
GSA many years ago, when we were starting down this process, we
came up with this requirement. But not only did we come up with
this requirement, we looked at what would be the delta, if you
would, between government-owned space cost and the cost to get
into leased space. And the financials just don't make any
sense. And you don't have to take my word for it. I know, over
the past couple of years, a couple of bills were introduced in
Congress, and CBO scored those bills, and there was a net cost
to taxpayers, not a net savings.
Mr. Connolly. Yes.
Mr. Robbins. And so, we did a cost benefit analysis, if you
would, like any business would. And it would cost more to the
taxpayer for us to get out of headquarters building, if--what
our analysis showed.
Mr. Connolly. Mr. Robbins and Mr. Wisner, I spent 20 years
in the private sector, and I spent 14 years in local
government, and I have been involved in many, many relocations
of government agencies and of my own private-sector company. So
I have gone through this kind of analysis.
And I am not unsympathetic to the fact that there is an
opportunity when you relocate or you consolidate, not only for
savings, but to also allow you some capabilities maybe you are
constrained with--meeting rooms, audio visual, amphitheaters,
auditoriums, and so forth--and those aren't good or bad. They
are capabilities we seek to be able to function in a more
professional way. And, you know, I don't think government
should be a bunch of hermits in a cave. Maybe some of my
colleagues do, but I don't.
But, on the other hand, we are trying to get our arms
around what really--you know, how much is extra in the sense of
over and above current operations that we are seeking in that
446. Because we are trying to--you know, we are trying to
better understand can this building largely accommodate the
FTC, in theory, if we wanted to, if we didn't want to put NEH
and NEA here, in theory. And, if you want to get back to us,
great, but we have got to sort of get the numbers right for us
to do analysis with you about what can and cannot be done.
Now, Mr. Robbins, in your testimony I missed part of what
you said. You said something was 40 percent complete. Was it
the move?
Mr. Robbins. The construction of the space here in
Constitution Center.
Mr. Connolly. Here.
Mr. Robbins. Exactly. For those two leases of the property.
Mr. Connolly. So we are already invested is your point.
Mr. Robbins. Well invested.
Mr. Connolly. Well invested. Okay. And the move--I am
sorry--the consolidation here, roughly, is going to cost around
$15 million for build-out?
Mr. Wisner. No.
Mr. Robbins. So for the two leased properties we are
talking about, it is $75 million to move them here.
Mr. Connolly. $75 million.
Mr. Robbins. Yes.
Mr. Connolly. Now, you talked about if we were to give up
the Apex Building to accommodate the National Gallery, it would
cost us $170 million over 30 years. Is that correct?
Mr. Robbins. So when GSA ran the numbers, the net present
value, over 30 years, as I understand it, was that figure, yes.
Mr. Connolly. That does not include the $75 million we are
investing in the consolidation here.
Mr. Wisner. No, sir, it does not.
Mr. Connolly. And tell us a little how you arrived at that
$170 million. Because, I mean, just, you know, a naked look at
that number, it sounds scary.
Mr. Wisner. It is the total lease cost over 30 years to
replace the space that would be required if we left the Apex
Building in the lease market in Washington, D.C.
Mr. Connolly. Ceteris paribus, all other things being
equal----
Mr. Wisner. I am sorry, sir?
Mr. Connolly. Ceteris paribus, all other things being
equal?
Mr. Wisner. Yes, sir.
Mr. Connolly. I speak Latin, a little. Okay. I guess I
would want to know--just trying to get my arms around this a
little, and then I have got to yield back, Mr. Chairman, but I
think we need to know more about that $170 million cost figure,
rather than just accept it at face value.
Mr. Wisner. Yes, sir.
Mr. Connolly. Not that--not trusting you, but we want to
understand how you arrived at such a figure.
Mr. Wisner. Yes, sir.
Mr. Connolly. And, secondly, I think we need to understand
that delta. How much of the 446 you say your need is--I am not
disputing it--represents a delta. And there could be an
excellent reason for that delta, or much of that delta, but we
have just got to know what it is, so that we have a better
handle on the numbers we are dealing with.
Mr. Wisner. Yes, sir. We can get back to you for the
record.
Mr. Connolly. And would I be allowed one final question,
Mr. Chairman?
Mr. Mica. Go right ahead.
Mr. Connolly. Being from Virginia, where rents are cheaper
and life is perfect, did we look at the relocation of NEH and
NEA to suburban Virginia or, for that matter, suburban
Maryland, instead of making the decision to put them here?
Mr. Wisner. Sir, I think we looked at the entire portfolio
within the National Capital Region, but I can get back to you
with the specifics of the----
Mr. Connolly. Yes, because I would like to also know what
was the thinking with--because if you put NEH and NEA here,
perhaps there is a good reason to do that. I would like to hear
it. You, of course, preclude 100,000 square feet that could be
Accommodating the FTC. And the chairman has suggested that that
wasn't done accidentally, that perhaps that was done in order
to preclude any further pressure by Congress or anyone else in
further consolidation of FTC here. So I would like to know the
rationale for why we are commingling FTC operations with NEH
and NEA here.
And, with that, Mr. Chairman, I yield back, and I hope----
Mr. Mica. And at this point in the testimony, I am asking
unanimous consent--and I will get the information from Mr.
Moran, the gentleman from Virginia, appropriation, who, I
think, cited opportunities in Virginia to lease at a lower cost
to relocate those agencies, if we were looking just at the item
of cost that were available. So that opportunity, according to
Mr. Moran--and I talked to him yesterday--he will put something
in the record about what he did to tell them what was available
and, again, ignored--and----
Mr. Connolly. And, as you know, Mr. Chairman, having helped
us with transit with Northern Virginia, all served by transit.
Mr. Mica. Yes. I love Virginia.
The gentleman from North Carolina.
Mr. Meadows. Thank you. I need to ask a few questions. I am
confused. And I can be your best ally or your worst nightmare.
And so cap rates from a internal perspective, you are looking
at a six percent cap rate? Did I hear that?
Mr. Wisner. The cap rate on the net present value for the
30-year lease, or the cap rate for the return on investment?
Mr. Meadows. The 30 years.
Mr. Wisner. Yes, sir. I believe it was six percent.
Mr. Meadows. All right. So did you not find that----
Mr. Wisner. So we----
Mr. Meadows. Did you not find that out of line?
Mr. Wisner. No, I do not.
Mr. Meadows. So you think that is----
Mr. Wisner. There are multiple market rates, but I can
certainly get back to you, sir, I apologize.
Mr. Meadows. Is that--is it your testimony that the six
percent cap rate in Washington, D.C. is market----
Mr. Wisner. Sir, I would like to check the number and get
back to you specifically on the net present value calculations
that we did.
Mr. Meadows. You do this for a living?
Mr. Wisner. I do this for a living, yes, sir.
Mr. Meadows. So is that market rate or not?
Mr. Wisner. I can get back to you on the numbers, sir.
Mr. Meadows. Okay, all right. So you got 100,000 square
feet that you classify as unusable, characterize that unusable
100,000 square feet----
Mr. Wisner. I am not familiar with the 100,000 square feet.
There is----
Mr. Meadows. Well, it was your testimony, one of yours----
Mr. Wisner. Yes----
Mr. Meadows.--that you had unusable at the Apex----
Mr. Wisner. Sir, the rentable square feet of the Apex
Building is about 253,000 square feet.
Mr. Meadows. I see----
Mr. Wisner. So there is about 50,000 square feet that is
between the gross and the----
Mr. Meadows. So 100,000--so you are saying there is 50,000
of unusable space.
Mr. Wisner. 50,000 between the gross and the usable. Yes,
sir.
Mr. Meadows. So characterize that for me, if you would.
Mr. Wisner. I think there are some--there are hallways and
there is some historic locations within that facility that we
need to maintain, sir.
Mr. Meadows. So those would be--because, normally, if you
are just talking about open area, that would not necessarily be
square footage. I mean that may be volume, but it is not square
footage. So you are saying these are actually hallways, square
footage?
Mr. Wisner. Yes, sir.
Mr. Meadows. Okay. So we are here dealing with this problem
because somebody screwed up and entered into a lease and then
tried to default. Is that----
Mr. Wisner. They did not default. The SEC did not need this
space after they----
Mr. Meadows. So you approved that lease.
Mr. Wisner. The SEC, under their own authority, sir----
Mr. Meadows. Did the GSA do that?
Mr. Wisner. No, GSA did not have anything to do with that.
GSA----
Mr. Meadows. So it was under their own individual----
Mr. Wisner. Independent authority. Yes, sir.
Mr. Meadows. And so, are we charging them back for their
mistake?
Mr. Wisner. No, sir. The property was excessed under the
agreement to GSA, and GSA's responsibility was to dispose or to
find another tenant for the space, sir.
Mr. Meadows. So, is there any scenario, Mr. Robbins--and I
know the projections--is there any scenario which you can see
to consolidate your operation under one roof?
Mr. Robbins. In the Constitution Center building, which I
think we have looked at closely with GSA, the answer is no.
Mr. Meadows. And why is that?
Mr. Robbins. There isn't enough space in this building.
Mr. Meadows. Based on what?
Mr. Robbins. The square footage that is here, and the
requirement----
Mr. Meadows. Based on square footage of----
Mr. Robbins. No, so based upon--so part of the process we
went through with GSA----
Mr. Meadows. Right.
Mr. Robbins.--was to develop what was our need, as an
agency----
Mr. Meadows. Because I heard earlier you were talking about
internal rates, the rate versus----
Mr. Robbins. Oh, so that is just the minimal square feet--
--
Mr. Meadows. Saving----
Mr. Robbins. So I think--and I would ask Chris to correct
me if I am wrong here--the rough square footage cost to us of
the Apex Building is, I think, $23 per square foot. And in a
general commercial lease, it is $49 per square foot. So just a
cost doesn't add up. It doesn't make sense. So, even if we were
to fit into smaller space, you have to go a long way in order
to have it make sense from a financial perspective.
But then, on top of it, when you look at the kind of square
footage in this building, which I think we said is something
along--the one quad, which is roughly 358,000 square feet, and
our need, which is 446,000 square feet, there is just a large
deficit.
Mr. Meadows. At 400-plus----
Mr. Robbins. Yes.
Mr. Meadows. And my friend from Virginia, who was right in
saying, you know, what is the delta, I mean--and for both of
you to give a figure like that with rate accuracy is troubling,
when we don't know where it came from. Do you know----
Mr. Robbins. So it came----
Mr. Meadows.--Mr. Wisner said he didn't know where it
came----
Mr. Robbins. So--you [sic] will have to apologize. I have
been back at the FTC for about four months. My understanding, I
came from the FCC. And I am also living in Virginia. I love
Virginia. It is--lots of great things we are talking about
today.
Mr. Connolly. Wait, wait, wait. Which district?
[Laughter.]
Mr. Robbins. I live in Arlington.
Mr. Connolly. Arlington?
[Laughter.]
Mr. Robbins. But I would say a couple things. One is the
process of any long-term capital planning includes sitting down
and figuring out how many people do you have, what are your
needs, and then you figure out a plan around that. And it takes
a while to do. And we are, as I said, 40 percent complete in
that building. The delta between kind of what is in this
building of one quad, which is 358,000 square feet, and the
plan we came up with, right, is significant.
If I could put it in people terms----
Mr. Meadows. Significant in terms of----
Mr. Robbins. Exactly right. But let's put it in people
terms, all right? So----
Mr. Meadows. I want it in square footage terms. What is the
difference----
Mr. Robbins. So 446 minus 358 is 87,000 square feet.
Mr. Meadows. So you increased your space requirement----
Mr. Robbins. No. So that is just the space that is
available here, in the building, versus what our requirement
was. We haven't increased our requirement. It is just the delta
between what is available here and what our requirement is. So
that is kind of how I would describe that.
But if I put it in people terms----
Mr. Meadows. Okay, let's put it in people terms.
Mr. Robbins. Sure.
Mr. Meadows. And I know you gave the answer on the----
Mr. Robbins. That is okay.
Mr. Meadows.--so let's go to people terms. How many square
feet are you giving to each employee per office?
Mr. Robbins. So, here in the Constitution Center, as we
have discussed, our utilization rate is 119. Our largest
offices, and there is only about 20 of them----
Mr. Meadows. What is ``utilization''? I mean--because that
is a technical term. So are you saying that each office, they
would have, on average, 119 square feet per office?
Mr. Wisner. Yes, sir.
Mr. Robbins. That is my understanding, yes. So, that is in
this building. Clearly, in New Jersey and Constitution--and M
Street, as we have described, the current utilization is much
higher. It is 167, I think. So we are kind of being able to
realize a much smaller footprint for our staff here.
But if I could just put it in people terms for a second,
all right, so our estimate is--our plan has been to build to
1,630 kind of seats here in the D.C. area. We currently have
1,517. There are going to be 905 seats----
Mr. Meadows. So you are going to increase your number of
employees by 10 percent.
Mr. Robbins. So when we developed our plan, the agency was
growing----
Mr. Meadows. That was a yes or no question.
Mr. Robbins. I understand. So we are growing, yes. We
projected a growth rate when we came up with our plan, because
we were growing at roughly 30 people a year when we developed
our plan----
Mr. Meadows.--authorization that would give you the ability
to increase that number of employees, and that doesn't track
with your trends on where you did that. So why would you do
that?
Mr. Robbins. So actually, if you look at our FTE rates, our
FTE rates over the past kind of five years have been growing,
albeit last year was different. And sequestration has had its
effect. But we are talking about long-term capital planning
here, not, you know, what we are doing one night versus the
next.
Mr. Meadows. That is not your job; that is GSA's job.
Mr. Robbins. I understand. But we are already well into the
investment and the build-out of this space for the two leased
properties I have discussed, which is going to result in a net
savings, as I have mentioned, of $5 million, roughly, in annual
rent.
But again, if I put it in people terms, so 905 kind of
seats in this kind of quad that we will be in, seven floors.
Mr. Meadows. Right, okay.
Mr. Robbins. And we have roughly 600 or 700 people in our
Apex Building. We are not going to fit 600 or 700 people in
three floors. It just doesn't work.
And then, when you look at the special uses we have in the
headquarters building, we can talk about the Data Center, we
can talk about Commission meeting rooms, we can talk about kind
of the types----
Mr. Meadows. Nice meeting rooms, certainly.
Mr. Robbins. Well, we have a Commission meeting room,
because we are a commission, a bipartisan commission that meets
regularly to make decisions for the agency.
Mr. Meadows. So what you are saying is you wouldn't move
over here because you have a commission.
Mr. Robbins. No, I am not saying that. I am saying that
that is just one of the other special spaces that, if you are
going to fit 700 people into three floors, that is not going to
work, from a people perspective. Then, when you add on these
special spaces, it just doesn't make sense.
And then, when you look at the dollars and cents, it just
doesn't make any dollars and cents----
Mr. Meadows. All right, I am going to hold you to that,
because I want to look at the dollars and cents, all right?
Mr. Robbins. Fair enough.
Mr. Meadows. Because that is really what this is about.
Mr. Robbins. Yes.
Mr. Meadows. It comes down to a disastrous decision----
Mr. Robbins. Yes.
Mr. Meadows.--to lease this building, and then figure out
what----
Mr. Robbins. Even if you only looked at the move costs,
which I think are north of $50 million, what is the
justification to get into a more expensive lease? It just
doesn't make any sense.
Mr. Meadows. I hear you. Here is what I would like, is a
detailed analysis of the $50 million. And I am not talking
about--I am talking about a detailed analysis on that $50
million.
Mr. Robbins. And just----
Mr. Meadows. Because we all make assumptions.
Mr. Robbins. It is a minimum of $50 million. I am not
suggesting that--you may see something more than that.
Mr. Meadows. I heard testimony of $50 million. You said $50
million----
Mr. Wisner. It is at least $50 million, sir.
Mr. Meadows. All right. So I want a detailed analysis.
Mr. Robbins. Understood.
Mr. Meadows. The second part of that is the reason why you
heard passion from the chairman is two reasons. One is, quite
frankly, the GSA had a very real job of managing its assets,
buildings all around the city, and so that is part of the
passion. The other is there was a resolution that said to
consolidate the operation. And this flies in the face of the
will of the people.
And you know, when you really look at it--so if your jobs
are there, and your job, Mr. Robbins, was on the line, and we
said that we are going to pay you a big-dollar bonus if you
would figure a way to consolidate this into one operation,
could you do it?
Mr. Robbins. So I would hope that you would want to hold me
to the stewardship standard that we talked about earlier, which
is, is it in the best interest of taxpayers. And that is what
we have been looking at.
Now, maybe there is something about the numbers that you
know that I don't know. But we can't seem to find a way to save
taxpayer money----
Mr. Meadows. Well, there seems to be--and I want to throw
it out here, I will close with this, and I appreciate my
colleagues' indulgence--there is a political component to this
that--and this seems to be an area that doesn't get talked
about.
And so, have either of you had any talk around the water
cooler you have heard of when it comes to whether you
consolidate, move the operation, not move the operation, move
from the Apex Building or not? Is there any of that that says,
``Well, we just want to hold on to what we have got?'' All
right? ``Because the potential future needs that we might have,
this is too nice to give up.'' Has any of that conversation
happened?
Mr. Robbins. So not with me, Congressman. I happen also to
be a lover of the arts, and I think the National Gallery is a
wonderful institution. It just doesn't make sense to give them
our building.
Mr. Wisner. No, sir, I have not.
Mr. Meadows. All right. So there is--so what you are saying
is, dollars and cents, this is the best move for the American
taxpayer.
Mr. Wisner. Yes, sir. In this particular case, for this
particular lease, and consolidating, yes, sir.
Mr. Meadows. All right. If you could get me the details of
that. The other is that I do not want us to look at a delta
that would increase our square foot footprint. And so, we need
to look at how we handle that.
Under sequestration, and under--I think it is not right to
start looking at increases of employees of close to 10 percent.
You know, when you start to look at that, based on the trends,
and you have anywhere from a full-time equivalent of 1,159--
which is actually more than what you gave in your testimony----
Mr. Robbins. If I may, so if Apex is a given, between New
Jersey and M Street consolidating here, we will have a net
decrease in 23,000 square feet between the consolidation. So
there is a decrease in space utilization, a decrease in the
space we will be renting when we move here, and a decrease in
the rent.
Mr. Meadows. All right. And so then I would ask you, Mr.
Robbins, is--you have got a staff of people you project is----
Mr. Robbins. GSA is much bigger than us, but----
Mr. Meadows. But this is your operation, so I would look at
what are the increased costs of having it housed in three
different places. I mean is there an increased incremental
cost? Because----
Mr. Robbins. Of course. Mr. Mica--I mean Chairman Mica
mentioned one. For instance, the shuttle. It does cost us money
each year. I think roughly $100,000 each year to operate a
shuttle. It is money that we are spending. It is real money.
But when you look at the cost benefit of how much will it cost
us to move out of headquarters versus consolidating here into
Constitution Center, aside from the fact that there is not
enough space, the dollars don't add up. The net savings you may
get from eliminating a shuttle, for instance, don't net out to
getting below move costs and other costs.
Mr. Connolly. Mr. Chairman?
Mr. Mica. Mr. Connolly.
Mr. Connolly. If I could just be allowed to--a thought, I
certainly applaud the fact that we are looking to get the best
deal we can for the U.S. taxpayer. But we should not--well, two
aspects of that. One is it is always arguable what the best
deal for the taxpayer is. Right? I mean we could say, ``Let's
move all of our government operations to the Dominican
Republic, because it is cheaper there.'' We could get much
better rent deals in--somewhere in the----
Mr. Mica. Transportation costs would be----
Mr. Connolly. Transportation might hurt, but we will have
fewer meetings. And technology allows us to Skype and all other
stuff. So there are lots of considerations that go beyond just
dollars and cents in the analysis. There is functionality,
there is proximity, there is the ability to interact by having
consolidation, and so forth. There are values that may be
intangible, but no less real.
There is also consideration, certainly for Congress, beyond
the taxpayer consideration--not that that is trivial. And that
is looking at the--this picture, and asking one's self, ``What
is the ideal use for that particular location for the American
people?'' And what is our responsibility, as Congress, to
answer that question?
Now, if we were starting from scratch, would we put the FTC
in that location? If everything else was in place, would that
be what we would do? Probably not. I am not quite sure what
FDR's thinking was about the FTC at the time. Obviously, it was
an important agency, from his point of view, and it got a lot
of prominence. And if I were at the FTC, if I were, for
example, a commissioner at the FTC, I might really like my
location, and not want to change it, for lots of reasons. You
know, it is a very prominent location that has status and all
that good stuff.
So, I just say that because sometimes we can get into the
weeds about dollars and cents and miss the bigger picture. And
I commend to both of my Republican colleagues, you know, the
current Capitol we have today, the expansion of the United
States Capitol, the replacement of both chambers and that dome,
was championed by a man named Jefferson Davis. The only good
thing he ever did in his life. And he did it right up until the
day he resigned from the United States Senate to join his
fellow traitors in the Confederacy.
But --and he also was up against lots of people saying,
``What are you spending all this money for on flub-dubs, and we
can live with the chamber where no one can hear anyone because
of the acoustics,'' and he had a vision that--and so did
Lincoln--that, you know, that the Capitol was a very important
unifying element, and was--it was necessary to invest the tax
dollars, even though it cost us. Even though you could probably
today--GSA might argue, if we had GSA doing the analysis back
in, you know, the 1850s, GSA might have said, ``Just not worth
it,'' you know? Unnecessary expenditure, and so forth. Aren't
we glad they made that decision? I am not trying to blame GSA,
you weren't around then, but--so, I just commend to my
colleagues there are other considerations.
It is essential we have a cost benefit analysis, of course.
But once we do, we also have to look at some other questions
here. And I think the chairman certainly has put that broader
vision question in front of us, as well, and it has to be
answered. I don't know that FTC or GSA can answer that
question, but certainly Congress can.
I thank my colleagues for allowing me to intervene.
Mr. Mica. Thank you. Let's go back. I want to recap here.
Okay. We are moving 655 employees from two rental spaces, New
Jersey and M Street, right?
Mr. Wisner. Yes, sir.
Mr. Mica. And you are telling me they are going to utilize
119,000 square feet a person in the plan that you are
advocating, right?
Mr. Wisner. The utilization rate, yes.
Mr. Mica. That is what you testified.
Mr. Wisner. Yes, sir.
Mr. Mica. The utilization. And we have a balance of 671
employees in the headquarters building occupying a usable space
of--there is 160,000 of 305,000, because it is an old building.
And I can--I would love to--I need to walk you all through it,
to see it. Again, the under-utilization. And, again, we will
put in the record here----
Mr. Robbins. We would love to have you come visit.
Mr. Mica. I have been there many times. I can give the damn
tour.
So, again, it is a dump. It is a dump.
Mr. Robbins. I beg to differ.
Mr. Mica. It is a dump. I mean, compared to what you are
looking at here. You are putting federal employees in
substandard office space, in my opinion. Okay? That is my
opinion. They have the opportunity for probably some of the
best office space here. We are leasing space at those two
locations now, consolidating leasing space. We should save
money.
The National Gallery of Art is leasing 60,000 square feet,
needs 140,000, 150,000 square feet in the future, which is
right across the street. We can't put something together like
that. There are savings from not leasing, paying for that
least, of at least 60,000 square feet in the future--say
100,000 square feet--that they do not calculate.
They do not calculate, but we do, of the building--the
building, in my opinion--I have been in this since 1974, in
real estate--yes, it is usable, but it has a life cycle, and it
will cost $140 million to bring that up, at least. If GSA does
it, my God, it will cost two or three times that. I think the
National Gallery can do it----
Mr. Robbins. We have no plans--as far as I know, neither
does GSA--for those expenditures on the Apex Building.
Mr. Connolly. Mr. Robbins----
Mr. Mica. Wait, let me just----
Mr. Connolly. I didn't hear what you said.
Mr. Robbins. So I believe Chairman Mica just said that
there was a plan to spend $140 million on the Apex Building,
and----
Mr. Mica. No, no one said--no.
Mr. Connolly. No, no, he said----
Mr. Mica. I said in the future you are going to have to
spend quite a bit of money to--I mean to renovate it. It is
going to need--it is 70 years old. Yes, some--I looked at--I
have been down in the bowels of it, I have seen what can be
salvaged.
Mr. Robbins. I am just saying----
Mr. Mica. But it needs renovation to accommodate modern-day
conveniences. Yes, the commissioners have nice views of the
Capitol, and I know that is important and prestigious. But
again, you are going to 120 square feet per person. And if we
take the 655 and the 617, you get to 1,326. Mr. Robbins said,
``Well, we are going to need 1,500.'' Well, if we use his----
Mr. Robbins. 1,630, I am sorry.
Mr. Mica. What?
Mr. Robbins. I said 1,630.
Mr. Mica. Well, 1,630. And we do the math, that is 160,000
and 34,000--would be 196,000 square feet you would need for
employees, if the employees are being provided space on the
basis of which--of what Mr. Wisner is putting people in here
for. You said 119, and I give you 120. So, that is 190,000
square feet, and there are----
Mr. Robbins. I am just----
Mr. Mica. There are 358,000 square feet here?
Mr. Wisner. Yes, sir.
Mr. Mica. 358,000 square feet. And you cannot get--we will
give you 200,000 square feet, and even up the square footage.
For 158,000 square feet, you can't do that? And then you
already have the other cafeteria here. Don't they have a
cafeteria?
Mr. Wisner. Yes, sir.
Mr. Mica. They don't need a cafeteria if they come here.
The consolidation of these other activities that we had listed.
Again, please don't try to tell me that you cannot give plenty
of space--much more, even, than you are providing--to your
employees in a modern building. And there are savings, again,
in the long-term, the renovation of that building, which will
need to be done.
The second thing is that cost of leasing for the National
Gallery would be eliminated. There are savings----
Mr. Robbins. But you replace a lease for the National
Gallery with a lease for the FTC.
Mr. Mica. We have calculated and recalculated this. And
then, to top it off, to shove in here the two agencies to take
enough space to thwart what we asked you to do in 2011. Mr.
Moran had even given you options.
I want also to list--you have thwarted our staff in not
giving us--you said there is no property available in D.C. that
could accommodate those two agencies.
Mr. Wisner. The vacancy rate----
Mr. Mica. They are about 50,000 square feet a piece, right?
Mr. Wisner. Approximately, yes, sir.
Mr. Mica. Yes. But you are telling this Subcommittee of
Congress, under oath, that there is no other property that you
could put them in.
Mr. Wisner. At the time----
Mr. Mica. You could put them in property that we own and
save money. And we own property that you could put them in
here. I want you to provide me, the subcommittee, with a list
of every property. You can't come before us and tell us that
there is no property. We have--there is property all over this
town, some that we own, some that we leased.
Have they given us that list, staff? Answer me. The staff
said no. I want the list. I will come down and sit in the
office until I get the damn list.
Mr. Wisner. Yes, sir, you will have it.
Mr. Mica. I am absolutely outraged at what is going on here
with this. This is a perfect example of why American people
should be fed up with government, to see this nonsense. There
is no reason at all all the FTC operations cannot be
consolidated.
I want to invite every member of the FTC staff here, and I
will host a reception here, and I will do it beginning in
January. I want them to come and see what you are denying the
rest of the people in--again, the current FTC Apex, what you
are having them go to work in every day, as opposed to what
they can do. I am going to be here, and I am going to invite
every one of them, and I will give you the time and date, okay?
We will do it after work or before work, because I want them to
come and see. Your union should be outraged that you are
putting this sham on, again, people who work hard, deserve
decent space. And again----
Mr. Robbins. I share your interest in taking care of FTC
employees, Chairman Mica.
Mr. Mica. I want them to come and see this facility that we
are going to put 655 of their brothers and sisters in, and then
leave them in what I consider a dump----
Mr. Robbins. I share your interest in making sure FTC staff
are taken care of. We work every day to make sure that that
happens.
Mr. Mica. Well, work every day to get them all consolidated
here. You have 150,000 square feet. You can give them more
space than you are giving now on average here, just by sheer
calculations. An idiot, a first-grader, can do the math on
that--190,000 square feet. He is giving them 119. Is that
somewhat inadequate? Is 119 inadequate?
Mr. Robbins. With respect, we don't believe we can fit the
rest of our operation in----
Mr. Mica. Okay, we will go to 200,000 square feet. That
leaves you 158,000 square feet for all the other things, not
deducting the things that will be already here, the cafeteria
and the other items that we cited.
Again, you can fool some of the people some of the time.
You can BS people some of the time. And you are not going to
BS--I will find a way to--and the other thing, too, is that I
want put on hold the NEH and also the Arts move into this
building. I want that put on hold.
I want to talk to Moran. If we have to put it in
appropriations, whatever we are going to do. You get me the
list of other locations. And I want to see some locations in
Virginia with actually lower rent than you are paying here. I
know they are available, are they not?
Mr. Wisner. I am not familiar with that, sir.
Mr. Mica. Okay. Well, you don't know the D.C. rental
market. I can tell you they are available. Probably some great
places in Mr. Connolly's district or Mr. Moran's district.
Mr. Wisner. Sir, I must state that the NEA and NEH space is
about 35 percent complete in this facility.
Mr. Mica. What? What did you say?
Mr. Wisner. The NEA and NEH construction in this building
is about 35 percent complete.
Mr. Mica. You have no housing plan, according to staff, for
NEH and NEA. You haven't provided it to us.
Mr. Wisner. I can look into that and get you that, sir.
Mr. Mica. Is this correct, what you gave me? We have no
housing plan?
Mr. Wisner. It is committed, sir.
Mr. Mica. We have no housing plan. We do not have--can you
get us that?
Mr. Wisner. I can get that, sir.
Mr. Mica. Again, I have see the jerry-rigging of the cost
of moving spaces without any calculations or savings. Mr.--you
want to go again, or do you want to let Mr. Meadows----
Mr. Connolly. I have no further questions.
Mr. Mica. Mr. Meadows?
Mr. Meadows. Thank you, Mr. Chairman. Let me just ask a few
things.
Mr. Wisner. Yes, sir.
Mr. Meadows. We have all this discussion, and you have
already committed the space to NEH. Is it a moot point, is it
not?
Mr. Wisner. The space is under construction currently, sir,
yes.
Mr. Meadows. And so, you made that decision in spite of the
fact that you knew the wishes of the American people was
otherwise? Why did you make that decision?
Mr. Wisner. Sir, I cannot answer that.
Mr. Meadows. Were you aware that that was not the wish of
the American people?
Mr. Wisner. No, sir.
Mr. Meadows. Are you aware of the 2011 resolution?
Mr. Wisner. Yes, sir.
Mr. Meadows. So you were aware. And you consciously made a
decision to lease it to somebody else? Why would you do that?
Mr. Wisner. There was a requirement that we get out of the
Old Post Office to avoid the cost in that location----
Mr. Meadows. That----
Mr. Robbins. If I may break in for one moment?
Mr. Meadows. Sure, Mr. Robbins.
Mr. Robbins. Because I think the will of the American
people is incredibly important. I know it has been mentioned a
couple of times. I know on the Senate side there was language
in the Appropriations Committee reports that actually would
have prohibited our transferring the Apex Building to somebody
else.
Mr. Meadows. Right.
Mr. Robbins. I realize it was only a committee report,
but--so there were--obviously, we take seriously the will of
the people, as expressed in Congress.
Mr. Meadows. I will remind the gentleman that one----
Mr. Robbins. Absolutely.
Mr. Meadows.--does not constitute the will of the American
people.
Mr. Robbins. I completely agree, that Congress did have two
bills over the past few years to consider. And after CBO's
scoring of these things, I guess--although I obviously don't
know--the net cost didn't outweigh the benefit to the American
people, and so Congress decided, in its wisdom, not to pass
those bills into law, which would have directed us all to take
a different course.
Mr. Meadows. So, basically, you made the decision, or your
agency made the decision to house NEH and--here.
Mr. Wisner. Yes, sir.
Mr. Meadows. And under what rationale? I mean is it cheaper
for them to be here? Because it is obviously not cheaper for
the FTC to be here.
Mr. Robbins. It is actually cheaper for us for those two
leased facilities, but not for our own----
Mr. Meadows. Right, but they are in their own facility, as
well. Is it cheaper?
Mr. Wisner. They are in federal space that must be vacated
to allow for this renovation to occur.
Mr. Meadows. So we are making money?
Mr. Wisner. We--I will have to get back to you on the----
Mr. Meadows. Based on the numbers--you said $250,000 was
the lease in----
Mr. Wisner. The monthly income will be $250,000, once we
hand it over to the private-sector entity, yes.
Mr. Meadows. All right, $250,000 a month.
Mr. Wisner. The agreement states--we will have to get back
to you.
Mr. Meadows. Because here is what I find, and what I am
troubled by. And while this sounds like this is water under the
bridge and we need to just figure out a best way to accommodate
Mr. Robbins and--but I don't want to further exacerbate that,
and it sounds like that is what we are doing, we are making
decisions for an Old Post Office that I love--I love that
building--but we are not in the business, you know, of managed
properties for profit. And you should be, but you are not. I
mean I have looked at your numbers, and you are not.
And so, what I am troubled by is we are making decisions to
house people here, getting rid of a federal building, so we can
lease it to a multi-purpose use, I guess, is what you would say
that that--the Old Post Office is. So we are moving them out,
putting them in a leased facility. And yet we were in a hearing
yesterday where they were talking about leasing--wanting to
increase--buildings in this quadrant because we need more
square footage for this and that. Do you not believe, Mr.
Wisner, that there is a better, more cost-effective way to
manage our public buildings than what is currently being
utilized? Do you think the GSA could do a better job? Or do you
think the private sector could do a better job of managing the
federal assets?
Mr. Wisner. I think we do a good job of managing the
private----
Mr. Meadows. I didn't say did they do a good job. Could
they do maybe a better job?
Mr. Wisner. I think there is always room for improvement,
sir.
Mr. Meadows. All right. So would--your recommendation is to
do away with the GSA and let the private sector----
Mr. Wisner. No, sir. That is not what I said. I said there
is always room for improvement.
Mr. Meadows. I didn't think you did, but--so, how do we
make sure that we are most cost effective? Because a lot of
this today is pent up frustrations is what we are hearing. It
is saying we have made stupid decisions in the past, let's not
make them again.
Mr. Wisner. Yes, sir.
Mr. Meadows. I am all for great space. I have got 12
people, at times, in an 800-square-foot office. And Mr.
Connolly is more senior than I am, and so he has a bigger
office than I have, and----
Mr. Connolly. I probably have less space, I am in Cannon.
Mr. Meadows. Well, I have the smallest office on Capitol
Hill. So--but that being said, I am all for giving--from a
functionality standpoint, Mr. Robbins, I want you to have what
you need. I have had nice offices that I paid for myself. But
when it comes to managing--Mr. Wisner, if there is one thing I
want you to take from that, it is that making decisions on
behalf of the American people need to be made as if you were
spending your own personal dollars.
Mr. Wisner. Yes, sir.
Mr. Meadows. And that is not happening. I am telling you
decisions are being made every day in this city that we
wouldn't make--moms, single moms back in my district, wouldn't
make the same decisions. And they are not even trained to do
this, but they know, dollars and cents, that it doesn't make
sense.
And so, my admonishment to you and my encouragement to you
is that it is time that you start working a cost-effective way
for the American people to make sure that the cap rates we get
are market--I am telling you. I go all over this city. The cap
rate that you tell me is not an effective cap rate. It may be
effective in terms of the Federal Government. But the private
sector pays a whole lot more than that.
And so, I would challenge you to look at that, and let's go
after this, make sure the FTC gets what they want, what they
need--more what they need than what they want, because I think
that what happens is that we all have--and Mr. Robbins, I
challenge you. I want you to look for the future needs of
1,650--you would have plenty here. What I need you to look at
is certainly the 5-year, 10-year plan. But in that is realize
the other dollar that is spent is--somebody back home in my
district is paying for.
Mr. Robbins. That is exactly what we have tried to do here.
Mr. Meadows. I yield back.
Mr. Mica. How many parking spaces are there at the Apex
Building? Forty? Fifty?
Mr. Robbins. Give me one moment.
Mr. Mica. Forty, fifty. I have been down there. The staff--
there is----
Mr. Robbins. I believe there is 44.
Mr. Mica. Forty-four. What kind of parking is available
here? The 655 that are coming in here, I think almost all of
them will have access to parking.
Mr. Robbins. I know that we will have----
Mr. Mica. Is that right, staff? What are we told?
Mr. Robbins.--from the parking that is available in the
building. I think it is shared with----
Mr. Mica. How many spaces here will be available----
Mr. Robbins. Remember, we are consolidated from New Jersey
building and M Street, and those folks already have parking,
which they are accessing.
Mr. Mica. God forbid we should have someone other than the
commissioners and 100 paid staff having a parking space. You
are keeping them in the old----
Mr. Robbins. I share your concern of FTC employees, and we
want to take good care of them in all that we do.
Mr. Mica. I am sure--just told Mr. Connolly it must be full
of asbestos, too. I will have to check that. All right. Well--
--
Mr. Robbins. I am not aware of any asbestos issues within
the headquarters building, Mr. Chairman.
Mr. Mica. Well, we will check that out. I haven't followed
through all of the ceilings and stuff. I am sure I can find
some or bring some in. You can tell I have a distinct interest
in this. And there are some things that--you know, 600 people
go in that building a day, 40 park there. The National Gallery
will have four or five million people that don't need a car
that will see the nation's treasures, which, again, we haven't
for several generations done any upgrading of our National
Gallery to house our national treasures.
Yes, it was an important building when Roosevelt dedicated
it. And he did it to consolidate the scattered FTC operations
in Washington. So, again, this is 2013, looking to the future,
and consolidating at least three operations. And they came to
our committee requesting a fourth, and that is when we came up
with some of this proposal some years ago.
So, I think, in the long term, it would greatly benefit the
FTC. I told Mr. Connolly more people will know about the FTC
building and its headquarters and its operations once you move
out from that location than ever, because four or five million
people go in there, it will be a space dedicated to the history
of the FTC and its use of that building and its function, far
more--most people, they just put a few signs up in the last few
years----
Mr. Robbins. The FTC seeks to serve every American citizen.
There are hundreds of millions across this nation, for example,
that have registered on the national Do Not Call registry. We
serve every American citizen, whether they are visiting D.C. or
not.
Mr. Mica. And you house the kind of--and you do a good job
and you have a great purpose. No one is disputing that. What I
am disputing is the utilization of the space and consolidation
of the agency in a cost-effective manner, to the benefit of our
citizens and taxpayers and all the rest.
So, without further ado, thank you for--I want to thank Mr.
Connolly, particularly, for his endurance, and Mr. Meadows for
his compliance. And thank our witnesses. This is not the end of
this story, but we will leave the record open for a period of
10 days. Without objection, so ordered.
Mr. Connolly. Mr. Chairman?
Mr. Mica. Yes?
Mr. Connolly. Just for the record, our two witnesses have
promised to get back to us with several----
Mr. Mica. Oh, yes. Oh, yes. We will have a deluge of
questions, and hopefully getting responsive answers.
This hearing of the House Government Reform and Oversight,
Subcommittee on Government Operations is adjourned.
[Whereupon, at 11:45 a.m., the subcommittee was adjourned.]
APPENDIX
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Material Submitted for the Hearing Record
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