[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
FEDERAL REAL PROPERTY: ELIMINATING WASTE AND MISMANAGEMENT OF REAL
PROPERTY ASSETS
=======================================================================
HEARING
before the
COMMITTEE ON OVERSIGHT
AND GOVERNMENT REFORM
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
JULY 29, 2014
__________
Serial No. 113-143
__________
Printed for the use of the Committee on Oversight and Government Reform
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Available via the World Wide Web: http://www.fdsys.gov
http://www.house.gov/reform
______
U.S. GOVERNMENT PRINTING OFFICE
90-964 PDF WASHINGTON : 2014
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800;
DC area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC,
Washington, DC 20402-0001
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
C O N T E N T S
----------
Page
Hearing held on July 29, 2014.................................... 1
WITNESSES
The Hon. David Mader, Controller, Office of Federal Financial
Management, U.S. Office of Management and Budget
Oral Statement............................................... 8
Written Statement............................................ 10
Mr. Michael Gelber, Deputy Commissioner, Public Buildings
Service, U.S. General Services Administration
Oral Statement............................................... 14
Written Statement............................................ 16
Mr. David J. Wise, Director, Physical Infrastructure Team, U.S.
Government Accountability Office
Oral Statement............................................... 21
Written Statement............................................ 23
Mr. James M. Sullivan Director, Office of Enterprise Office
Management, U.S. Department of Veterans Affairs
Oral Statement............................................... 35
Written Statement............................................ 37
APPENDIX
Answers to Reps. Mica and Meadows questions for the record from
Mr. Michael Gelber, GSA, submitted by Rep. Mica................ 62
VA response to QFRs.............................................. 64
OMB response to QFRs............................................. 67
FEDERAL REAL PROPERTY: ELIMINATING WASTE AND MISMANAGEMENT OF REAL
PROPERTY ASSETS
----------
Tuesday, July 29, 2014,
House of Representatives,
Subcommittee on Government Operations,
Committee on Oversight and Government Reform,
Washington, D.C.
The subcommittee met, pursuant to call, at 10:12 a.m., in
Room 2203, Rayburn House Office Building, Hon. John Mica
[chairman of the subcommittee] presiding.
Present: Representatives Mica, Meadows, and Connolly.
Staff Present: Melissa Beaumont, Majority Assistant Clerk;
Adam P. Fromm, Majority Director of Member Services and
Committee Operations; Laura L. Rush, Majority Deputy Chief
Clerk; Jessica Seale, Majority Digital Director; Andrew Shult,
Majority Deputy General Counsel; Jenna VanSant, Majority
Professional Staff Member; Devon Hill, Minority Research
Assistant; Julia Krieger, Minority New Media Press Secretary;
and Cecelia Thomas, Minority Counsel.
Mr. Mica. Good morning. I would like to call the Government
Operations Subcommittee hearing to order. I am pleased to
welcome everyone to the Government Oversight and Reform
Subcommittee hearing this morning, and the title of today's
hearing is Federal Real Property: Eliminating Waste and
Mismanagement of Real Property Assets.
I want to again welcome my ranking member, Mr. Connolly,
and subcommittee members Mr. Meadows and others who may be
joining us.
Thank you, too, for our witnesses, who I will introduce
shortly, for participating.
The order of business this morning is we will start with
opening statements by members of our panel. And without
objection the record will be left open for other members to
submit their statements.
We will then proceed to hear from each of our witnesses.
Normally we provide about five minutes. This isn't a
particularly big panel, but we ask that the members of the
panel please participate by trying to summarize in about five
minutes. You can ask, through the chair, any request for
additional information or data to be made part of the record
and it will be made part of the record. And we will swear you
in at the appropriate time, when we recognize you.
So, with that, I will begin the proceedings, and, again,
thank you for attending and participating.
This is a pretty important hearing. Sometimes it doesn't
get the attention of some of the other major investigative
hearings that we do, particularly in OGR, Government Reform and
Oversight, but it is important because the Federal Government
is the trustee and steward of billions, literally trillions, of
dollars in Federal property. Years ago I did a report entitled
The Federal Government Must Stop Sitting on Its Assets, and
that is one report we will reference in this record. We tried
not to just do the report, look at Federal assets that are
sitting out there idle, but also do something about the report
and its findings, and it found that there were 14,000
properties either vacant or underutilized that the Federal
Government has jurisdiction over just in the purview of GSA.
That report was done when I chaired the Transportation
Committee. This committee and the subcommittee has much wider
jurisdiction. Today we will hear from VA, from OMB, and other
agencies about what they have been doing to deal with this
problem and how we can do an even better job across the entire
spectrum of the Federal Government in addressing this problem
of assets sitting idle.
I might also preface this with this week we had a very good
week with one of the major assets that was featured on page 9
of that report, and that was the conversion of the Old Post
Office, the D.C. Post Office, which was built in the late
1800s. It has 400,000 square feet; half of it has remained
empty of the 400,000 square feet. A new annex that was built
some years ago has been vacant for 15 years.
We turned that around after two hearings that we conducted.
The first one as chair of the Transportation Committee actually
in the vacant space, the annex. Donald Trump, this week, and
others broke ground. They won open competition to renovate that
hotel. A thousand people will work, some in construction. It
will be a 350-room hotel.
The irony of it is the empty room where we held the hearing
was 38 degrees in the room, 32 degrees outside, but Mr. Trump
told me that that will be largest meeting and conference
banquet room on the East Coast, that area where we held the
hearing, which, again, a space that had been vacant for 15
years, costing the taxpayers $6 million to $8 million a year in
losses, and that is converted to $250,000 a month revenue plus
a percentage of some of the profit, so the taxpayer can benefit
by that. So that is one success.
Today we are going to hear from OMB, and this committee has
been waiting three years to obtain a list of underutilized and
excess properties. Now, that is the Office of Management and
Budget. We requested, three years ago, that we get a list of
underutilized and excess properties. The compliance has only
been in the last few days, as a matter of fact. And what we
found is the Federal Government currently holds 7,000 unneeded
properties, by their evaluation. And we don't believe that that
evaluation is even up to date, but the inventory that is on the
list is worth an estimate, again, by their calculation, $350
billion. This would be unacceptable by any standards.
Throughout my time and service in Congress, I have worked
to reduce the Government's outrageous loss, and I guess some of
it is because of my background in real estate. But when you see
incredibly valuable properties sitting idle, something is
wrong. And the mis-utilization and under-utilization of Federal
buildings has to be brought to a halt.
In this Congress alone, our subcommittee has held five
hearings related to the operation, maintenance, management,
disposal, cost for underutilized and excess real property. As a
result of our investigations, a large number of properties have
been turned around and starting to generate income, also jobs.
Another example is the power station property behind the Ritz
Carlton-Georgetown, 2.1 acres. After our hearing, it was vacant
for 10 years, costing $1 million to maintain, on average, a
year. Brought in almost $20 million, the GSA Public Buildings
Administrator stated at the opening of the Trump facility and
groundbreaking.
Needless to say, though, in its 2013 high risk report, GAO
found that the Federal Government still holds much more
property than it needs. While it is no excuse, GAO also found
that the lack of accurate useful data impedes GSA's agency's
ability to make informed decisions on how to manage real
property assets.
In order to conduct oversight to ensure that we better
utilize Federal property, I have worked with Chairman Issa and
also Ranking Member Connolly to gain access to, again, the
Federal database and information that OMB has had which details
underutilized and excess properties. We first requested the
data in December of 2011 and continued making requests, but
never received any information. On May 27th, again, just days,
weeks ago, almost three years after the original request, the
committee was forced to subpoena OMB for the data on
underutilized and excess properties, and now we finally--and I
thank everybody for their cooperation--we have final
compliance.
Now that we have the list, you can see why they didn't want
it made public. It contains some astounding data on the number
of unused properties. In fact, there are 4,209 underutilized
properties held by the Federal Government, which account for 24
million square feet, costing nearly $100 million. We think that
is the lowest. I think it is very higher to maintain and
operate. Over 1400 of these properties sit inactive or unused.
I had this blown up. There are 3,293 properties that have
been declared excess. These properties account for
approximately 15.3 million square feet, costing $37 million-
plus annually to operate. Not even half of the properties are
slated for disposal.
What is even more astonishing is the example of just one
agency. And we have VA here today. As Congress, this week,
struggles to find the resources and the funds to provide
adequate medical care for our veterans, and we will be
addressing that this week, the VA is sitting on 258
underutilized properties.
Where is that list? Look at this. This list goes on and on,
and many of these are hospitals. This is one page here of
underutilized assets. I also asked that they highlight the
hospitals and others in yellow, which they didn't do, but look
at this. Look at this, Gerry, Mr. Meadows. Look at this,
hospital, hospital, hospital, hospital. This is just one page,
and this happens to be IOUC in my State. But you could go
through this report page after page of vacant medical
facilities assets that the VA has as we struggle here to find
resources. But, again, some pretty valuable assets.
In fact, the Veterans Administration--again, I will just
highlight these--has 258 excess or underutilized properties
worth, they estimate, $1.62 billion. I think it is well over $2
billion. This is just what we have been able to uncover from
the data and information that we have gotten to date. The
inventory included 32 hospitals, 148 family housing facilities,
multiple dormitories. We have veterans sleeping under bridges,
in their cars, and fields, and we don't have domiciliary care;
and we have these empty facilities that the VA has. It really
is not appropriate by any measure.
But, unfortunately, some of the data that OMB has given us
we think is not accurate. GAO has reported that OMB's list that
is provided does not provide a complete picture of the uses and
extended underutilized excess real property held by the Federal
Government. It certainly is not up to date.
Do we have the picture of the Orlando VA Clinic?
This is a nursing home. I am standing in front of a nursing
home in Central Florida, and since the beginning of the year
that nursing home, 120 beds, has been vacant, and a 60-bed
domiciliary unit behind that has been vacant. I wrote two years
ago that we were building a new hospital, new facilities; we
needed to plan ahead. They did not plan ahead.
Now, that is the bad news. The good news is today--and I am
most grateful for this. Sometimes when you hold a hearing there
are consequences. The 29th of July, Congressman Mica, response
to my letter, which started actually two years ago, they have
decided to keep that facility open and substantiate the need
for it. So I am please that VA has responded. I am pleased that
we have had one success in my backyard, but, again, we have 280
other instances and data that is not up to date.
The committee has found that many properties in the
database, that data that is provided is not complete; sometimes
the information is vague and repetitive. So we need to find
better ways to manage our assets. We have to have better ways
of OMB and the individual agencies monitoring the inventory;
and not just making lists, but also disposing of that property
appropriately or putting it to use, in the instance of our
veterans, for the veterans or for the taxpayer.
Congress and the Administration must work together to find
solutions how we can collect data better. We will hear today if
there are legislative impediments. We need better ways of
managing our assets. And we have heard from others we need
better means and tools to dispose of unneeded real property.
So, with those opening comments, I am pleased to yield, and
I thank him for his tireless efforts on this and many other
issues. Sometimes we have our partisan differences. This is one
the committee and Mr. Connolly, I have to thank him publicly,
have joined in for the benefit of our veterans and for the
taxpayer to make certain we move forward.
Mr. Connolly.
Mr. Connolly. Thank you, Mr. Chairman, and thank you for
those kind remarks. I echo what you said. Unfortunately, we
have another subcommittee downstairs that is going to be
eviscerating the Ex-Im Bank today, an organization that used to
have bipartisan support and promotes U.S. business interests
and helps us stay competitive when it comes to promoting U.S.
exports, but apparently now it's crony capitalism and
ideologically unacceptable.
Well, at any rate, I am glad we are not doing that here in
this committee. And you are absolutely right, I think this
subject, and the credit certainly goes to you for being so
persistent, Mr. Chairman. The whole question of excess Federal
property brings us together in a bipartisan basis, and I
certainly support your efforts and appreciate your leadership
in this regard, because I think it really is a Government-wide
challenge. It transcends this Administration; it goes way back.
Both parties deserve, I think, some blame and have to take
responsibility for the situation we now find ourselves in. The
good news is it is filled with opportunity.
I also want to thank our witnesses for being here, two of
whom are from Fairfax County. Mr. Sullivan is a constituent;
Mr. Wise wants to be. He lives just outside the 11th
Congressional District, so I know they are going to give wise
and perspicacious testimony, and we are going to be impressed
because of just who they are and where they come from.
For nearly a decade the answer to the question about
whether the Government can keep its house in order seems to
have been no. Two thousand thirteen marked the tenth straight
year that managing Federal real property was featured on the
U.S. Government Accountability Office's high risk update.
According to the GAO, the Federal Government owns thousands of
buildings it really no longer needs. In 2010 alone, maintenance
of those buildings cost $1.7 billion. Of course, these are all
rough estimates since the fundamental weakness undermining the
Federal Government's efforts to effectively manage its real
property is its inability to maintain an inventory with
accurate and accessible data.
Our subcommittee found that one needs not travel far to
find glaring examples of real property mismanagement. For
example, Mr. Chairman, our April 2013 field hearing was held,
as you indicated, in a vacant GSA warehouse that cost $70,000
per year to operate and maintain. It has remained unused since
2009, five years. I think everyone could agree this is really
an example of taxpayer waste that ought to be rectified.
GAO audits have found that in certain real estate markets
the total square footage of excess Federal real property would
be large enough to house virtually every Federal agency in that
region. However, in these very same real estate markets the
vast majority of those agencies are using precious resources on
leases with private landlords. This type of mismanagement and
bad juxtaposition of available assets not being utilized or
underutilized I think ought to be unacceptable on a bipartisan
basis. Every dollar spent on an unnecessary lease is a dollar
diverted away from mission-critical functions.
In this current era of austerity, operational
inefficiencies such as these have real world consequences for
the citizens they serve and they represent a profound
opportunity cost for the Federal Government.
What are the causes of inefficient Federal property
management? GAO found that property disposal costs can outweigh
the financial benefits of conveying ownership to private
parties. In addition, certain legal requirements, such as
preserving historical properties and conducting environmental
remediation, can make the property disposal process very
lengthy and unattractive.
Further, while I strongly believe local governments and
local taxpayers must have a voice in the disposal of excess
property, it is also true that stakeholder interests may
conflict with property disposal and reuse plans, making
disposal and reuse difficult.
As the former chairman of the Fairfax County Board of
Supervisors, I was proud to work with local stakeholders,
developers, and the GSA to successfully execute one of the most
successful Federal property transfers we have experienced
between the Federal Government and the local community, and
that was, of course, the Lorton property. For nearly a century,
the Lorton Federal Prison was an eyesore and a blight, and a
security threat on one of the most beautiful parcels of land in
Fairfax County, 3,000 acres; wasting space and cut off from the
public.
Following extensive efforts by the Fairfax County
government and my predecessor, the Honorable Tom Davis, who
chaired our full committee, we were able to facilitate a
complex land transfer, and today the Lorton prison site has
been transformed into Laurel Hill, a dynamic community, the
fastest growing part of our county, featuring new housing,
schools, public parks, a town center, and a premier municipal
golf club that hosted the prestigious United State Amateur
Public Links Championship last year. It has transformed the
southern part of our county.
My hope is that with a sustained bipartisan effort by this
subcommittee, Mr. Wise will be able to come before us next
February to report that the Federal real property management
has actually been removed from the high risk list. That would
be a great achievement for us, and I believe today's hearing
demonstrates a continuing partnership with the chairman to
conduct rigorous oversight aimed at finally establishing a
national strategy for Federal real property management and
overhauling the Federal real property profile to ensure we are
able to credibly measure progress moving forward.
I thank, again, our witnesses for joining us today.
And again, Mr. Chairman, I am proud of our partnership and
I thank you for your leadership in this matter.
Mr. Mica. Thank you. And I understand your in and out
responsibilities. We have small numbers on this subcommittee,
huge jurisdiction, but also some very big and successful
results, and you cited some of your efforts.
Now, one of the champions of beating up the offenders of
bad management in Government, Mr. Meadows, the gentleman from
North Carolina. Welcome, you are recognized.
Mr. Meadows. Thank you, Mr. Chairman, for that unique
introduction.
Really, what I am looking for is at what point do we define
success and we finally accomplish it, because we have had
hearings in a bipartisan way. I think both Republicans and
Democrats want us to utilize the assets that we have properly.
The numbers that we have, Mr. Mader, I would be interested
in hearing from you are those depreciated values? Are those
current market values? If they are current market values, how
in the world do we come up with those? I am a real estate guy,
and for me to see billions of dollars worth of assets sitting
underutilized is troubling. But it is not just troubling
because we have a cost associated with maintaining those
properties, so it is not just an asset that is not being used,
but it is one that is costing us each and every day.
So I look forward to just hearing from each one of you on
how we can hopefully align the responsibility. Our last
hearing, I was troubled to find that it is not just the GAO, it
is all different agencies managing different parts of the real
estate portfolio, and you don't know who is in charge. And,
honestly, there is not really an incentive for selling a piece
of property if your agency is not going to get the money back.
I find that I would hold on to mine if I was going to sell my
asset and it was going to go over to some agency, so from a
policy standpoint, if there are recommendations that you can
make for us to look at in a bipartisan way to address this, I
am all for creating an efficient management. But also know that
we won't do that unless there is a financial incentive to do
so. So how we can do that and manage it properly, I am
interested in hearing that.
With that, I will yield back to you, Mr. Chairman.
Mr. Mica. Thank you.
Again, we will leave the record open for other members.
We will go ahead now. Our next order of business will be to
introduce our witnesses. Then I will swear them in.
First we have David Mader. He is the Controller of the
Office of Financial Management of the Office of Management and
Budget.
We have Mr. Michael Gelber. He is the Deputy Commissioner
of Public Buildings Service of the General Services
Administration.
Then Mr. David Wise, the Director of Physical
Infrastructure Team at GAO, the Government Accountability
Office.
Then, finally, welcome Mr. James Sullivan, Director of the
Office of Enterprise Office Management at the Department of
Veterans Affairs. Welcome, sir, and you are, again, serving us
well and the taxpayers by coming and testifying today.
This is an investigative panel. We do swear in our
witnesses, so if you would stand, please. Raise your right
hand.
Do you solemnly swear or affirm that the testimony you are
about to give before this subcommittee of Congress will be the
whole truth and nothing but the truth?
[Witnesses respond in the affirmative.]
Mr. Mica. All of the witnesses answered in the affirmative,
so, again, welcome. I think I gave you the ground rules.
The other thing we will do is we will wait until we have
heard from everybody, then we will get into questions, so we
don't question each witness individually.
So first we will start with our leader from OMB, Mr. Mader.
Welcome. You are recognized, sir.
WITNESS STATEMENTS
STATEMENT OF THE HONORABLE DAVID MADER
Mr. Mader. Thank you, Chairman Mica, Ranking Member
Connolly, and Congressman Meadows, for the invitation today to
testify on excess and underutilized property listed in the
Federal Real Property Profile.
This is my first congressional testimony since being
confirmed as OMB Controller by the Senate on July 17th of this
year, and I look forward to working with you and the committee
members and staff on this very important issue.
Each year, the Federal Government expends taxpayer dollars
needlessly on Government properties it no longer needs to meet
mission requirements. For this reason, the President, in 2010,
issued a memorandum to the heads of all executive agencies
titled ``Disposing of Unneeded Federal Real Estate,'' which
directed them to take aggressive action to reduce their real
estate footprint. Since then, agencies have identified excess
and underutilized property, and have begun initiating disposal
actions. While this is a good start, much work needs to be
done.
The Administration has developed a Government-wide strategy
to address real property that is laying the groundwork to help
agencies achieve a greater reduction and recognize greater
savings.
Our progress to date represents a significant improvement
to the Government's real property management capability and the
actions that will reduce administrative spending. Our national
real estate strategy provides a roadmap to reform real property
management, improve the efficiency of the portfolio, and to
control administrative costs. The strategy consists of three
components. First, freeze the growth in inventory; second, to
measure performance and identify opportunities to improve the
efficiency and the effectiveness of data quality; and, third,
to reduce the overall inventory by reducing actions to
consolidate, co-locate, and dispose of real estate assets.
The first prong of our strategy is to freeze the Federal
real property growth. Under Our Freeze the Footprint policy,
agency performance is measured against their fiscal year 2012
office and warehouse square footage through an annual
evaluation, which establish a baseline for us to measure going
forward and the results of each of the agencies' performance--
and I think you mentioned, Congressman Meadows, that there were
multiple agencies that occupy and have responsibility over
this--but these agencies will post their results on
Performance.gov each year.
I am pleased to report that we have significantly
overachieved our original plan of freezing the footprint. In
fact, as a result of these initial efforts, the Federal
Government reduced its overall office and warehouse space in
fiscal 2013 by more than 10 million square feet.
Measure is the second prong. And as part of the President's
second term Management Agenda, the Administration developed
cost and quality benchmarks for core administrative operations,
including real property. We leveraged the existing agency
executive councils, in this case the Federal Real Property
Council, to develop common standards and benchmarks to measure
space utilization, performance, and cost. These benchmarks,
coupled with existing Government-wide data, are helping
agencies to identify opportunities for real property
consolidations, space utilization enhancements, and disposal as
they are institutionalized within and become standard operating
procedure.
The third prong represents the ultimate goal of our
efforts, and that is to reduce the size of Government-wide real
property inventory. While over 10 million square foot reduction
represents a good down payment, we will continue our work with
agencies under Freeze the Footprint policy to identify
opportunities for property disposals, as disposals, as you
noted, reduce both the portfolio size and, more importantly,
reduce the costs associated with operating and maintaining
these assets on a forward-going basis.
To make truly transformational progress in reducing the
Federal portfolio, we need Congress's help. The Administration
continues to support the Civilian Property Realignment Act as a
tool to help improve the management of Government's real estate
portfolio and accelerate the disposal of excess properties. We
continue to believe that the enhancement of CPRA would greatly
enhance our ability to deliver results to taxpayers and to
complement our national real property strategy. There are at
least two fundamental principles that we want to explore as we
right-size the Federal footprint.
First is the streamlining of processes. New real estate
management tools should streamline process requirements to move
a project from initiation to completion. Streamline
requirements would enable the Government to realize
administrative cost-savings more quickly and dispose of more
properties at a faster pace.
Second, investing to reduce costs. Agencies often renew
leases in multiple terms in old cost-and space-inefficient
buildings because they lack the investment to relocate to
better space and smaller space. We believe tools can be crafted
that will enable agencies to exchange cost-inefficient space
for much smaller amount of new space as leases expire and
realize long-term gains.
As we implement the Administration's National Real Property
Strategy, we look forward to working with you to achieve our
mutual interests of a more effective and efficient delivery of
Government services.
Thank you for inviting me to testify today, and I look
forward to answering your questions.
[Prepared statement of Mr. Mader follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Mica. We certainly are looking forward to discussing
your proposals. That was music to our ears on what you said. We
will have some more questions about specifics. We will hear
from all the witnesses first.
Let's go to Mr. Gelber. He is the Deputy Commissioner of
Public Buildings Service at GSA. Welcome. You are recognized.
STATEMENT OF MICHAEL GELBER
Mr. Gelber. Good morning, Chairman Mica, Ranking Member
Connolly, Congressman Meadows. My name is Michael Gelber and I
am the Deputy Commissioner of GSA's Public buildings Service.
GSA's mission is to deliver the best value in real estate
to Government and the American people. To meet this mission,
GSA is pursuing innovative real property proposals that will
increase space utilization, reduce costs, and deliver better
space to partner Federal agencies.
Additionally, as part of our efforts to serve our Federal
partners, we are working with OMB to improve the Federal
Government's inventory system of real property, as well as
assisting agencies to dispose of their unneeded assets.
GSA is one of more than two dozen major landholding
agencies in the Federal Government. Of the more than 870,000
buildings and structured reported by agencies in fiscal year
2013, GSA manages just 9,002. This number accounts for
approximately 427 million of the 3.3 billion square feet of
space under the Government's control, or slightly less than 13
percent.
GSA works to provide space to partner Federal agencies at
the best possible value. We do that in part by helping agencies
to better understand how proper planning, use of shared space,
and new workspace arrangements can help them to effectively
fulfill their mission while improving our bottom line. For
example, Congress provided $70 million in fiscal year 2014 for
GSA consolidation projects. Using these funds, GSA is executing
19 projects in 13 States that will save the Federal agencies
$17 million in rent payments annually and reduce the Federal
footprint by 507,000 square feet. In fiscal year 2015, the
Administration is requesting $100 million in support of these
worthwhile and cost-effective consolidation efforts.
Additionally, GSA is using new tools to leverage the equity
of underperforming buildings that are in our inventory to get
new and highly efficient ones. We currently are pursuing
several real property exchanges that stand to provide
considerable savings to the taxpayer.
We are also using tools to redevelop properties that no
longer serve the Government's needs. With direction from
Congress, GSA used its authority under Section 111 of the
National Historic Preservation Act, a project Congressman Mica
referenced, to out-lease the Old Post Office in Washington,
D.C. We reached an agreement with a private sector partner to
restore this 114-year-old building with $200 million in private
sector capital. This significant investment will convert the
Old Post Office into a mixed-use development that will serve
the local community and preserve the historic facility.
GSA also helps the Federal Government in the management of
real property by helping to aggregate data to better understand
the Federal inventory. In concert with OMB and the Federal Real
Property Council, GSA manages the Federal Real Property
Profile, or FRPP. The FRPP is a database that provides common
information on all of the Government's assets. The data in the
FRPP is an annual report, so the data is a snapshot taken at
the end of each fiscal year. This means it can be a useful tool
for inventory, but is not designed to be an asset management
system. Each individual agency is responsible for reporting
information into the FRPP. Since the database's creation, GSA
has worked to improve it by enhancing its technological
capability, clarifying terminology, and meeting with agencies
to help them better understand the technology and reporting
requirements.
Additionally, with our Government-wide disposal authority,
GSA has been working to assist agencies in expeditiously
disposing of their unneeded assets. In fiscal year 2013, GSA
sold or transferred 213 facilities across the Country,
generating over $97 million in sales. So far, in fiscal year
2014, GSA has sold or transferred an additional 223 facilities
across the Country, generating close to $30 million in sales.
As the Government Accountability Office has noted, there
are still a number of longstanding challenges to getting
agencies to better utilize their current inventory and dispose
of their unneeded assets. Among our challenges, these include
the up-front costs of disposals and the competing stakeholder
interests that can often slow down the process. The
Administration is working diligently to overcome these hurdles.
GSA is committed to carrying out its mission of delivering
the best value in real estate to the Government and the
American people. We are continuing our work to aggressively
manage our own assets, while also pursuing innovative new
processes to better utilize our inventory.
Additionally, we are using our Government-wide leverage in
partnership with the Office of Management and Budget to better
serve our Federal partners by improving our data collection
practices, assisting them with ideas for better space
utilization, and disposing of their unneeded assets. These
efforts will support the Administration's ongoing initiatives
to promote efficient Federal spending.
Thank you for the opportunity to appear here today. I am
happy to answer any questions you may have.
[Prepared statement of Mr. Gelber follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Meadows. [Presiding.] Thank you, Mr .Gelber
Now we go to the future 11th Congressional constituent of
Virginia, Mr. Wise.
STATEMENT OF DAVID J. WISE
Mr. Wise. Thank you, Mr. Meadows.
Mr. Connolly, I can only aspire to be in the 11th District.
But we do make great use of the Lorton Art Center and Occoquan
Park almost every weekend, so we are almost de jure or de facto
members.
Chairman Mica, Ranking Member Connolly, Mr. Meadows, I am
pleased to be here today to discuss Federal real property
management.
The Federal Government's real property portfolio comprises
approximately 900,000 buildings and structures, and is worth
billions of dollars. Federal real property management has been
on our high risk list since 2003 due to unneeded and
underutilized facilities, over-reliance on leasing, security
challenges, and unreliable data.
In 2004, the President established the Federal Real
Property Council and required it to work with GSA to establish
and maintain a single comprehensive real property database. The
FRPC created the Federal Real Property Profile to meet this
requirement and began data collection in 2005.
My statement today summarizes our recent work on, one,
excess and underutilized property; two, structures; three,
maintenance and repair backlogs; and, four, cost-savings
estimates.
Federal excess and underutilized property is an ongoing
challenge facing the Government, due in part to unreliable
data. In June 2012, we reported that the FRPC did not ensure
that key data elements were defined and reported consistently
and accurately, suggesting that the FRPP is not a useful
decision-making tool. Other challenges include the high cost of
property disposal and legal requirements prior to disposal,
which Mr. Mica referred to earlier.
In our report, we recommended that OMB develop a national
strategy for managing Federal excess and underutilized
property. OMB, at the time, did not directly state whether it
agreed or disagreed with our recommendation, but up to now we
have not seen a comprehensive national strategy. We also
recommended that GSA and the FRPC take action to improve the
FRPP. GSA officials stated that they intend to improve the FRPP
and have developed an action plan. We are in the process of
evaluating these actions as part of our 2015 high risk update,
which will come out approximately next February.
The Federal Government manages a wide variety of structures
which represent over half of the Federal Government's real
property assets, including roads and parking structures,
utility systems, monuments, and radio towers. In January 2014,
we reported that incorrect and inconsistent data on structures
limit the value of the FRPP. We concluded that the agencies we
reviewed should improve their data quality in order to document
performance and support decision-making. We also found that,
even if this data were more accurate, there is low demand for
this information, creating few incentives to actually improve
the data reliability.
We recommended to OMB and GSA that they improve data
reliability and assess the feasibility of limiting the data
collected on structures submitted to the FRPP. OMB and GSA
agreed with the recommendations and we will continue to monitor
their implementation.
Regarding deferred maintenance and repair needs, in a 2014
report, we found that selected civilian agencies followed most
leading practices in managing their facility maintenance and
repair backlogs except for transparent reporting about amounts
agencies are spending to maintain their assets and manage the
backlogs. The agencies reviewed reported fiscal year 2012
deferred maintenance and repair backlog estimates that ranged
anywhere from about $1 billion to $20 billion. However,
agencies do not share a common definition of deferred
maintenance, resulting in dissimilar backlog estimates. Thus,
estimates across agencies are really not comparable.
We recommended that OMB, in collaboration with the
agencies, collect and report information on agencies' costs for
annual maintenance and repair, and funding spent to manage
their existing backlogs. OMB agreed with our recommendation and
we will also continue to monitor progress on that.
Regarding cost savings estimates, in June 2010, the
President directed Federal agencies to achieve $3 billion in
real property cost savings by the end of fiscal year 2012
through a number of methods, including disposal of excess
property, energy efficiency improvements, and space
consolidation efforts. Agencies reported real property cost
savings of about $3.8 billion across these categories.
Our report in October 2013 found that space management
savings accounted for about 70 percent of the savings claimed
by the agencies we reviewed and that they primarily emanated
from activities that were planned or underway at the time the
presidential memorandum was issued. We also found that OMB did
not require agencies to provide detailed documentation of their
reported savings on Performance.gov., limiting transparency.
OMB guidance was also not clear on the types of savings that
could be reported, particularly because the term cost-savings
itself was not clearly defined. Some agencies did not deduct
costs associated with disposals, some did; some reported
savings outside the time frame of the memorandum.
Accordingly, we recommended that OMB establish clear and
specific standards to help ensure reliability and transparency
in the reporting of future real property cost-savings. OMB
generally agreed with the recommendations and we will also be
evaluating its actions as part of the 2015 high risk update.
Mr. Chairman, sustained progress is needed to address the
challenges that make Federal real property management high
risk. We will continue to monitor agencies' efforts to
implement our recommendations, which we believe are critical to
address these challenges. This concludes my prepared statement,
and I would be happy to answer any questions from the
subcommittee.
[Prepared statement of Mr. Wise follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Mica. [Presiding.] Thank you.
We will go next to Mr. Sullivan, who is Director of the
Office of Enterprise Management at the Department of Veterans
Affairs. Welcome, and you are recognized.
STATEMENT OF JAMES M. SULLIVAN
Mr. Sullivan. Good morning, Chairman Mica, Ranking Member
Connolly, and Congressman Meadows. Thank you for the
opportunity to appear today to discuss the Department of
Veterans Affairs management of its real property portfolio, in
particular, our ongoing efforts to reduce or eliminate unneeded
or vacant property. Today I would like to highlight the success
VA has had in repurposing and disposing of assets, especially
where these assets have resulted in housing for returning war
veterans and their families.
Before I begin, I must emphasize that our primary mission
is to provide care for the benefit of veterans. Veterans and
our veteran stakeholders view VA's real property assets as
theirs, and they have a very strong emotional tie to those
assets.
VA is the owner of one of the largest health care related
real estate portfolios in the Nation. VA manages over 174
million square feet, comprising 151 million owned and 23
million leased. VA has developed a highly structured data-
driven methodology to assess proposed infrastructure projects.
The Department's Strategic Capital Investment Process, better
known as SCIP, involves a systematic evaluation of all proposed
capital investments based on how well they address performance
gaps, including whether those gaps address disposal of unneeded
assets.
Through SCIP, we directly address the challenges posed by
an aging infrastructure with a range of solutions, including
reuse, repurposing, and disposal of assets. VA, through this
process, has identified a need of approximately $50 billion in
capital investments over the next 10 years to close these
critical performance gaps.
VA has made significant progress in efforts to reduce
vacant and underutilized building footprint, and has
aggressively pursued reuse and disposal strategies. This has
resulted in a 28 percent reduction in vacant space and a 37
percent reduction in underutilized space since 2008.
So where do we stand today at VA? As of the end of fiscal
year 2013, VA has approximately 242 vacant buildings,
accounting for approximately 4 million square feet, or
approximately 2 percent of our overall portfolio. VA has plans,
which have been submitted to Congress, to dispose or reuse of
131 buildings, or 2.8 million square feet, by 2018, leaving a
balance of 111 buildings, or 1.4 million square feet vacant.
This represents .8 percent of our total square footage vacant
at the end of that period. Those remaining structures, most of
them are historic in nature, present real challenges as we try
to dispose or repurpose those assets.
VA continues to pursue disposal consolidation and enhanced
use lease opportunities to support our mission and operation to
shed underutilized assets and improve efficiency. To date,
approximately 5.1 million square feet has been out-leased in
public-private partnerships through the EUL process. This has,
in part, resulted in 1700 operational family units or
individual units for use for homeless veteran housing.
VA's EUL program is an innovative real property asset
management tool which VA uses to deal with its vacant and
underutilized assets. It allows VA to out-lease such assets to
private and public sector entities for reuse and repurposing
for housing at little or no long-term carrying cost to the
Federal Government. Since the original EU legislation passed in
the early 1990s, more than 100 projects have been awarded. An
example of where VA has significant success with the EULs has
been in Dayton, Ohio, at its medical center. VA repurposed four
vacant buildings, at 130,000 square feet, for a homeless
center, transitional housing for veterans, and child
development center. Two additional projects are currently in
the developmental phase at Dayton.
In December 2011, VA's EUL authority expired. It was later
reauthorized, but with a very limited focus, only on housing
projects. While some EULs can be pursued using this authority,
a broader scope is needed to repurpose our assets that are not
suitable for supportive housing. VA submitted a request in
February 2014 to broaden this legislation to allow for greater
repurposing of opportunities. In addition to expanded EUL
authority, VA welcomes additional tools similar to the proposed
CPRA legislation which would provide further opportunities for
disposal of our most challenging assets. VA would also benefit
from legislation that would streamline the disposal process,
making it more consistent and easily repeatable.
To summarize, VA has a complex real estate portfolio and
seeks to maintain the optimal mix of investments needed to care
for our Nation's veterans. VA welcomes new or expanded tools to
address its most challenging assets and, where possible, cut
waste and reduce cost to the taxpayer.
I appreciate the opportunity to be here this morning, Mr.
Chairman, and happy to answer any of your questions.
[Prepared statement of Mr. Sullivan follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Mica. Thank you, and we will get right into questions.
First, I think Mr. Connolly and I, as we heard Mr. Mader's
testimony from OMB, you have only been there a couple of weeks
or months, what is it?
Mr. Mader. Less than eight weeks, sir.
Mr. Mica. Okay, great. But your testimony was music to our
ears with some of the things that you have targeted, because we
have been trying to move these assets for some time. I had the
copy of this report, Sitting on Our Assets: The Federal
Government, Misuse of Taxpayer-Owned Assets, which I was
telling Mr. Connolly I produced when we were in the minority in
2010 detailing a bunch of examples. One was the Old Post
Office. This is 2014, so it has taken us four years. We didn't
want to put this just on the shelf, we wanted to actually have
some things happen. But through that process we have learned
that there are impediments, some of them oftentimes we realize.
Now, do all of you own property? All of you own property?
Mr. Mader. Yes, sir.
Mr. Gelber. No, sir.
Mr. Mica. You don't own any property? But most of you own
property. How many people in the audience own property? Raise
your hand.
How many of you would give that property to the Federal
Government to manage?
Okay, now, I see a lot of humor, laughing. Very few people
would because they aren't very good or adept at it.
Mr. Connolly. I thought I saw Mark Meadows raise his hand
on that one.
[Laughter.]
Mr. Mica. But he is not going to give it to the Federal
Government.
One of the things I tried to do with one of the
predecessors to Mr. Wise, I guess, or working with her, was it
Robayne, Robyn, the former buildings commissioner? Mr. Gelber?
Mr. Gelber. Yes, that would be Dorothy Robyn. She was the
former Commissioner of the Public Buildings Service.
Mr. Mica. Well, she actually cooperated and we had a
hearing and talked about let's get some people who know how to
dispose of assets. There are people who do that in the private
sector every day in real estate for big corporations and
others. They put out this RFP for blanket purchase agreement
for real property sales. I got pretty excited about it. She
came and testified. The day she testified, she didn't know
anything about what they had done, but she had done it, which
was kind of interesting.
But, okay, so I met with those folks that they selected,
that you all selected, twice now, and I almost fell off of my
chair. They have been selected for some time. I asked them,
well, how many properties have you disposed of? It is just a
handful. I think $200,000 worth of, and the fees were almost as
much. In fact, we held a little roundtable recently in this
room to catch up where they are. We put in place some people
who can dispose of property and very little has been disposed.
Are you aware of that, Mr. Gelber?
Mr. Gelber. I am aware of the contract. It is a new
contract for us and we are looking to use it more frequently.
Mr. Mica. I mean, how about some time? I mean, it is almost
a joke. We have people who do this, have done it. Some of them
did it when we had the savings and loan fiasco, it was RTI, or
whatever it was, the acronym for it. But they have talent and
they are available. You all have put this out and they have
only done a handful of properties, I think a couple of
residences, others. So that didn't go as far as we would like
it to go.
Then we also learned some constraints, Mr. Mader. They kept
bringing up OMB, OMB. Well, some of the things that you
announced today that you would like to do, you have to
streamline the process. It has to be streamlined, because they
say it takes so long the way you score some things. The Cohen
building down the street has a million square feet. There have
been several companies that have proposed coming and renovating
it. We don't have the money for renovation. That is a million
square feet; it would be a billion dollars probably for us to
renovate it. But there is private capital that will do that,
and you can amortize that cost. They will come in, renovate it,
lease it back, and then you get ownership after 30 years, or
whatever you agree on.
Is that the kind of deal you think you could do?
Mr. Mader. Mr. Chairman, I don't want to speak for GSA in
this particular case.
Mr. Mica. But in streamlining the process----
Mr. Mader. We are looking for more creative ways to bundle
some of these assets.
Mr. Mica. The other thing, the folks that you retained said
one of the problems is the way this is scored by OMB, that you
want money up front on some of these properties or the value of
that property is all, saying, going to a lease from ownership;
you want to score that at the beginning. Is that the way you do
it now?
Mr. Mader. I believe so, yes.
Mr. Mica. And that is an impediment to getting it done.
There should be some relief, particularly if you can realize
that asset is back in the Federal domain later on.
Now, they have gone around that by doing some leases.
Actually, I heard one fairly clever way, and I am asking you to
help find these ways, not just to be clever, but to be
successful. Some of the properties that we do have have
questions about environmental cleanup and they have said they
have been able to carve some of that out, lease properties to
make the deal happen. Are you in favor of that from an OMB
standpoint, sir?
Mr. Mader. Mr. Chairman, I think from an OMB perspective I
think actually you cited a couple of good examples that GSA has
done quite recently, the Old Post Office, the power plant in
Georgetown, and now the discussion that is underway with regard
to the FBI building.
Mr. Connolly. We will just see how well they do with that.
Mr. Mica. But, again, sometimes OMB is cited as the
impediment. I am hammering them to get rid of the properties. I
am hammering them to find creative ways. They come back and sit
with me and say OMB, the process goes on and on; they won't let
you do this. Some of it may require changes in legislation. If
you see, sir, or you could provide the committee to any
legislative fixes you may need to tweak. I know we have the
McKinney Act and other things that have been put in
historically that also impede the process; well intended, but
they are not practical for this day and age. But if you could
come back to us with any legislative impediments you see.
The same for you, Mr. Gelber, from GSA, because GSA cites
the same thing.
I will give GSA some credit. Since we have been hammering
them, they have become a little bit more adept. But sometimes
when they even institute their own tools and get the
professionals, they have gone out and gotten these folks. These
folks are sitting on their hands and then I talk to them and
they say, well, we have impediments with GSA or finding our way
in streamlining the process. Because they can get rid of that
property. They can get the best deal for the taxpayer, and that
is what we are trying to do in this.
Veterans Administration, I thank you today. I don't know if
you knew that they were going to approve my property that has
been waiting for two years on. The timing was excellent. Tell
them all back there I appreciate it.
Mr. Sullivan. Thank you.
Mr. Mica. Timing is everything in this business. But I was
absolutely stunned to get the list. I mean, your one smaller
agency, they are huge. DOD is mammoth; the Post Office is
mammoth. There are many. But we have 280-some properties worth
more than $2 billion. We need to get those on the market, get
them utilized, look at whatever we can do with those assets.
You have cleared the deck for one in my district, which I am
most grateful for, but, again, this week we have a bill, what,
$17 billion, we have veterans medical care needs that aren't
being met, we have veterans sleeping in parks and on benches,
and I have a list that goes on and on, pages of vacant
properties.
Mr. Sullivan. Yes, sir. We have repurposed more than 5
million square feet to provide housing for homeless veterans
with many of those properties. The list that you have displayed
in the room are some of those that are currently in process.
For example, in Iowa, the ones you have listed are a property
which we have marketed three times for development or for sale,
and there were no takers on the property. Many of our
properties aren't only historic, but have little or relative
value. The values listed on that chart are what the replacement
value would be if we rebuilt that square footage ourselves, it
is not the market value. So we would be happy to work with your
staff and go through each one of those.
Mr. Mica. Well, Iowa was one example. I saw a huge number
in Massachusetts, New York.
Mr. Sullivan. In New York as well.
Mr. Mica. A lot of the west belt States do have vacant
medical facilities or properties that have not been disposed,
and, again, I think we need to look at everything we can to
either put them into performing assets, contracting with folks
to utilize the assets.
Mr. Sullivan. Yes.
Mr. Mica. I have a property now that I don't think VA
should occupy with VA employees. There are contractors who can
run medical facilities, domiciliary care and others that we can
contract with. And you are going to have additional funds from
Congress to act.
Mr. Sullivan. Correct.
Mr. Mica. So you are telling me, Mr. Sullivan, you are
going to be doing that?
Mr. Sullivan. Yes, we are, and we would be happy to provide
the data on all of those sites. Most of those are all underway
in terms of either demolishing the building or going out for
enhanced use lease program. A couple of them are also
congressionally director transfers; they are showing up as
inactive because they are in process.
Mr. Mica. This is a big thing, too. Now, OMB dragged their
feet on giving us the list. We think the list is not totally up
to date; it is not complete and it may be inaccurate in some
ways.
But the other problem we have, Mr. Mader, with the
agencies, every agency is a different breed of cat, and they
should keep an up-to-date list. That should be a budget
requirement. One, an up-to-date list. Then there should be some
plan for disposal of the properties. I would love to take you--
I don't know if Mr. Connolly went up. We took some up to
agricultural research centers, there are 300, I am sorry, 200
in the United States. We went up to one in Maryland, 7,000
acres, the size of the City of Key West; 600 or 700 buildings,
half of them empty. This is some of the most valuable real
estate in the United States of America.
Now, some of it may be congressional impediments, but that
needs to be turned around. But we asked if they had a plan,
Department of Agriculture, to dispose of some of these
properties or to turn the asset from non-performing to
performing. No.
So OMB is missing the boat. You have to hammer these folks.
You can't do everything, but you can get accurate information
and data; you can monitor, require; you can speed up the
process. But also you can require that they have some financial
responsibility in a plan to move forward in an appropriate
manner to either dispose of these properties or get them
utilized, or some game plan. There is a game plan. And I have
talked about Ag and we have talked about Veterans. DOD is mind-
boggling in size and scope. So maybe out of this hearing we
could get you to also come back and let us know what you are
doing in regard to that.
Would you like to comment, Mr. Mader?
Mr. Mader. Yes, I would, Mr. Chairman. First, on the issue
of definitions, we worked really hard in the last two years in
getting clarification as to what these terms mean. We think
that the accuracy of that database is improving. Is it perfect?
Absolutely not.
I think the other point with regard to the database, and
Mr. Gelber made this comment, when that was created in 2005, it
was created as a very static, once-a-year data collection, and
it was really just intended to be an inventory. And what we are
looking to do with GSA is to repurpose that so that we can
actually use it as a management tool to look at properties in a
real time basis so that we can actually start bundling or
looking at ways to better improve the process.
With regard to getting agencies' attention, I can tell you
that in the last four weeks I, along with the GSA administrator
and the deputy director for management at OMB, have visited
with about eight cabinet level departments, either with the
deputy secretaries or with very senior officials, as part of
our overall review of administrative costs. One of the key
elements in those discussions is their management of real
property.
So, Mr. Chairman, I want to assure you and the other
members that this has gotten everybody's attention, and people
recognize that with shrinking budgets, that we really need to
dispose of and better utilize what we have, because, as you
said in your opening comment, every dollar that goes to unused
property or underutilized property is a dollar not spent on the
mission.
Mr. Mica. Thank you.
Let me yield to our ranking member, Mr. Connolly,
Mr. Connolly. Thank you, Mr. Chairman.
And I echo the chairman's remarks, Mr. Mader. I think your
testimony was very welcome and I am glad to hear that we are
looking at a more rigorous rubric of trying to get our arms
around this. This is not, you know, nuclear physics; this is a
manageable, it is big, but a manageable problem. Now, we are a
microset, but I was the chairman of Fairfax County. We have
thousands of properties with tens of thousands of acres. We can
tell you at any given moment exactly how many pieces of
property we own, exactly how many schools, how much square
footage under roof, how many acres, whether it is our park
system or our public works or whatever it may. And it seems to
me we can't be satisfied until the Federal Government has an
accurate set of metrics that is enforced with every agency. We
can't have sort of two sets of books.
And I know you come from the same world I do, the
consulting world, and you would never advise a client that it
is okay to sort of have one division have one set of numbers
about its assets and the company at large reporting to its
corporate board another set. They have to be reconciled and
they have to be accurate. So I very much welcome your three-
pronged plan and hope for the best in terms of your success in
getting agency cooperation.
The chairman also mentioned the RTC after the savings and
loan crisis. I remember that very well. The Federal Government
took possession of all kinds of assets. By the way, we actually
owned a brothel in Nevada for a little while, and apparently,
however, we disposed of it.
Mr. Meadows. Better there than Virginia, right?
Mr. Connolly. Absolutely.
Mr. Meadows. Timing is everything.
Mr. Connolly. Timing is everything.
At one point, the Federal Government, because of that, not
the brothel, but owning all these assets of failed S&Ls, we
were the largest landowner on the planet. Nobody owned more
property than the Federal Government at that point. And I would
not put the RTC model in front of us here, because essentially
what they did was just bundled properties sort of irrespective
of their valuation and auctioned them off, and a lot of people
were able to take advantage of that and become very wealthy in
the process. Not the Federal Government. The ethos seemed to be
let's dispose of it as quickly as we can. I don't want us to do
that. I want this process to be a thoughtful process.
The other thing I would note is, from my own experience
actually doing it, actually taking possession of a Federal
property, and I go back to Fairfax County in Lorton, and Mr.
Wise has been there, and I assume you have been there probably
too, Mr. Sullivan. Our local government wanted to preserve the
land; we didn't want to develop it. That was critical. Now, if
we accept a premise that says, no, it has to be the highest and
best use of the land, you are condemning land to commercial
development; and that may not fit in with the local
comprehensive plan at all, nor may it be appropriate.
Had we gone with that ethos in the Lorton site, which is a
little over 3,000 acres total, the southern part of our county
would have gone tilt, because we simply could not handle the
congestion, the traffic that would have been generated from
commercial development. So we wanted to make sure that that was
preserved land; open space, passive and recreational space, an
arts center, reusing the buildings, the historical buildings.
So we finally negotiated that deal with the Federal
Government and I think it was a win-win. The Federal Government
didn't maximize profit, but 300 buildings, some of them
historic, now transferred to the responsibility of the
locality, and we were able to preserve 3,000 acres for the
community, including a new golf course, which is one of the
best municipal golf courses in the Country, ball parks, an arts
center, and the southern part of the county didn't go tilt.
So I hope as we approach the issue of what do we do with
excess property once we know how much we have, that we do it in
a thoughtful manner that takes into account the desires, needs,
and plans of the locality in which they are located. Because if
the heavy hand of the Federal Government comes down and just
says no, we are going to maximize our benefit irrespective of
your plans, then I think we are going to get a blowback that we
deserve. So I hope we will do this, and I commend it to you,
Mr. Mader, as you think about it in OMB guidelines, in a
thoughtful way that absolutely includes our local partners.
Mr. Wise, in previous hearings you have told us that there
are many Government surplus properties that are shockingly
listed as being in perfect or near perfect condition in our
Federal real property database, when in fact they are either
abandoned or dilapidated. Can you tell us what accounts for the
difference between the buildings' appearance and the
description in that database?
Mr. Wise. Congressman Connolly, the difference really is
accounted for, it is not just if something is in good shape,
but instead it is in bad shape or vice versa. This gets back to
our 2012 report that I alluded to in the first part of my
statement, in which case we found generally that the FRPP data,
which were kind of all over the map, we found underutilized
properties were full and full properties that were
underutilized, vice versa. It was just anything and everything
you could imagine in 23 of the 26 locations we went to, which
led us to the conclusion, after looking at so many different
properties, I think it accumulated to be about 180 or 190
different buildings, that there is a problem here; and it may
have many sources.
I think Mr. Mica and Mr. Meadows also talked about this in
their statements, that you have a lot of different definitions
out there. And I think after having done a number of these
engagements, the thing that sticks most in my mind is kind of
the lack of clear definition, the lack of consistency. You
take, for example, the Department of Interior, the Bureau of
Land Reclamation, or the National Parks Service. They interpret
different kinds of property in different ways; they define them
differently, they account for them somewhat differently.
Because many of these agencies, at one time, were independent,
and they were then brought under the roof of the DOI. And the
same thing can be true for many other departments.
So, as a result, and OMB, when we met with OMB staff, have
told us, well, they left some of this up to the discretion of
the individual agencies because they didn't want to be too
prescriptive. And I can understand that, but what has resulted
from that is clearly a lack of consistency and clear
definition, and that has been kind of the theme that permeates
throughout a lot of the real property engagements that we have
done over the past several years, at least, under my watch.
Mr. Connolly. I think, Mr. Chairman, this is really a very
significant point Mr. Wise raises here, because the executive
order authorizing GSA to create the FRPP in the previous
administration, the Bush Administration, Executive Order 13327,
said that creating the FRPP was intended to promote the
efficient and economical use of America's real property assets.
It specifically charged GSA, Mr. Gelber, ``The Administrator of
GSA, in consultation with the Federal Real Property Council,
shall establish and maintain a single comprehensive and
descriptive database of all real property under the custody and
control of all executive branch agencies except when otherwise
required for reasons of national security. The Administrator
shall collect from each executive branch agency such
descriptive information, except for classified information, as
the Administrator considers will best describe the nature, use,
and extent of real property holdings of the Federal
Government.''
Now, here we are 10 years later and, based on Mr. Wise's
and GAO's analysis, senior real property officers in many
agencies don't rely on the FRPP at all because it is so
inaccurate. I mean, not only inaccurate, but, as Mr. Wise said,
in some cases actually the opposite of what is asserted is
true. With the best of intention in trying to have a unified
approach to this subject, the FRPP is not an accurate document,
nor one that many people would rely on, frankly, to try to get
a picture of what we are dealing with in terms of our holdings
and excess property or underutilized property that we want to
address.
Could you address what GSA is doing about that? Because I
think, with the best of intentions, 10 years later, on its
face, the FRPP has failed.
Mr. Gelber. GSA fully acknowledges that the FRPP needs to
improve and that the definitions of the document, the
definitions within the database need to be revised and
tightened up so that when various individuals, various agencies
are reviewing the database, they are inputting the information
from a uniform standard. We are working with the Federal Real
Property Council, we are working with the Office of Management
and Budget to ensure that that occurs. My sense is agencies now
are realizing that this tool is truly a useful tool if used
appropriately and everybody uses it consistently, and through
the Federal Real Property Council GSA is committed to
continuing to improve the work. We are very thankful for GAO's
reports that point out where we also need to improve our
performance in this area.
Mr. Connolly. What I just heard you say was certainly
noble, but aspirational, frankly. I mean, how are you going to
enforce, what tools do you have to enforce, accurate reporting,
so that when a building is described, that in fact is accurate?
Mr. Gelber. Our tool, if you will, is the Federal Real
Property Council, which GSA sits on, along with the Office of
Management and Budget and the other 23 or 24 real estate
holding Federal agencies, where we come together, develop a
shared sense of what a definition should be, and then hold each
other, in effect, accountable for completing the database
accurately.
Mr. Connolly. Well, presumably, that was the intent with
the executive order issued in 2004.
Mr. Gelber. That is correct, and we are working to comply
with that order and improve our performance in that area.
Mr. Connolly. Mr. Mader, if OMB is to make enlightened and
well informed decisions, we have a situation where we don't
even know what the inventory is, because agencies don't have a
uniform way of, as you pointed out, metrics; exactly what are
your holdings, exactly where are they located, exactly what is
the square footage, and exactly what is the purpose today and
in the future, and how would you categorize that property in
terms of essential, all the way to excess we can dispose of.
And now, secondly, even describing the condition of those
properties, which is codified by the executive order still in
place, it is so inaccurate as to be not a useful tool.
Mr. Mader. Congressman, one of the motivations for my
taking this position actually was because of the portfolio,
including real property management. I guess there is an old
adage of what gets done gets measured; and I think in this
particular case what we need to do, and I think in fairness to
GSA, they are an enabler of the OMB policy, and I think OMB
needs to take a much more aggressive stance with the
landholding agencies. And as I mentioned, in the last couple of
weeks the conversations that have gone on now at very senior
levels of departments with regard to how do we better leverage
these assets, because, as we all know, budgets are not getting
larger. And what I have seen in these meetings is a real
commitment to making this program work going forward. And,
again, I think it is a partnership between OMB and GSA, as well
as the Real Property Council.
Mr. Connolly. One thing I might commend to you, just as a
thought, maybe what we need is a pilot program where we target
either a geographic area or a particular agency and we say,
okay, these 100 properties, or whatever it is, we are going to
try to make sure we have an accurate database, we have metrics
we all agree on, and we are going to have a strategy for what
we keep, what we upgrade, what we dispose of, etcetera; and if
it is a model, then it can go Federal-wide.
But the idea that we are going to encompass 900,000
buildings with tens of millions of square feet and get it all
right anytime soon is probably, again, a noble goal, but one
that we are going to fail on again; and it seems to me we have
to find a different way of approaching this that is more
efficacious. And I commend the thought to you or there may be
another approach, of course, but we have to find a way of
getting--this is a manageable problem. And I know you
understand because you come from the consulting world where
everyone is above average.
At any rate, my final point would be, Mr. Chairman,
sometimes we ourselves, up here in Congress, can be
contributing to the problem, because I am sure it is a rare
event, but when it is a property in a particular congressional
district, we may or may not be cooperative in trying to do the
rational thing.
Mr. Meadows. I am shocked. I am shocked.
Mr. Connolly. I know. No one here, but Mr. Gelber, I think,
referenced the FBI building. Well, you know, there is a
competition right now between Maryland and Virginia, and it
will be very interesting to see what GSA decides to do in that
adjudication. And there is a lot of political pressure and, of
course, we are hopeful that we will resist political pressure
and make a rational decision based on the merits. That is the
Virginia position and we are sticking to it.
But it puts GSA certainly under a lot of pressure because
you have two State delegations very much aware of the issue and
weighing in on it unabashedly. So sometimes we ourselves have
to show some discipline if we are going to help OMB and the
various agencies try to get their arms around this problem.
Again, Mr. Chairman, I thank you so much for your
leadership. I think this is an issue that can definitely bring
us together in a bipartisan basis, and I look forward to
working with you on a continuous basis.
Mr. Mica. And save the taxpayers a lot of money.
Mr. Connolly. I am going to run downstairs to the Ex-Im
Bank hearing.
Mr. Mica. Thank you, Mr. Connolly.
Mr. Connolly. Thank you all for being here.
Mr. Mica. Mr. Meadows, you are recognized.
Mr. Meadows. Thank you, Mr. Chair.
And thank each one of you for your testimony.
Mr. Mader, I look forward to your leadership. You are going
to get a free pass from me today, because anybody who is new
deserves some time. I feel like I am a good judge of character.
I believe that you are a man who means what you say, so the
next hearing that we have, and I assume that there will be
excess inventory next year, but the next time I am hopeful that
we don't see guidance and memos and great plans. I hope we see
execution. So we are going to hold you to that standard, if
that is okay with you.
Mr. Mader. Yes, sir.
Mr. Meadows. Mr. Gelber, do you agree with the $6.5 billion
figure of excess property that has been bantered around here
today? Is that high, low?
Mr. Gelber. That represents the entire Federal inventory,
so I would not have a way to verify that at this point. I have
no reason to doubt that is incorrect, though.
Mr. Meadows. All right. So your inventory that you manage,
Mr. Gelber, is how many billions?
Mr. Gelber. We have around 9,000 buildings, I don't have a
strict figure. I am thinking about $100 million, these are
about the 1,000 buildings that GSA owns.
Mr. Meadows. So 1,000 buildings that you own for $100
million.
Mr. Gelber. And, again, the valuation of these buildings is
always difficult. Replacement value is one number; fair market
value is----
Mr. Meadows. So you are only in control of $100 million
worth.
Mr. Gelber. Again, that number may not be entirely
accurate, but I think it is fair to say that we control 1,000
properties across the Country.
Mr. Meadows. But if we have $6.5 billion, you are chump
change when it comes to managing inventory.
Mr. Gelber. We represent about 13 percent of the Federal
Government's real property holdings.
Mr. Meadows. Well, I don't see how those numbers work,
because $100 million is not even 13 percent of $6.5 billion.
Mr. Gelber. Again, the $100 million is just a rough
estimate. I would be happy to provide you a more accurate
number. The numbers I am aware of is we control approximately
1,000 buildings.
Mr. Meadows. Well, I am a numbers guy, so I guess what
happens is we start to look at if you have $100 million worth
of inventory and you sold $30 million of it this year,
according to your testimony, in 2014, is that correct?
Mr. Gelber. Those properties were not----
Mr. Meadows. That is significant. That is one-third. I
don't think that you sold one-third of your inventory.
Mr. Gelber. The properties that GSA sells, some of them are
owned by GSA, some of them are controlled by other agencies and
we sell on their behalf.
Mr. Meadows. All right, so what you are saying is the $30
million that was in your report is part of the $6.5 billion.
Mr. Gelber. That is correct, sir.
Mr. Meadows. Okay. That brings me to my next point. Do you
classify that as successful?
Mr. Gelber. I think we could always do better at our jobs.
I think we have clearly heard today that there are ways the
Government can improve----
Mr. Meadows. So yes or no, successful or not?
Mr. Gelber. I think I will say yes.
Mr. Meadows. Okay. That is troubling, because at that rate,
I did the math, that means that we will dispose of our excess
property in 216 years; 216 years. So I won't be around. You
won't be around. So that is successful in your mind?
Mr. Gelber. Well, as I said, sir, we wish to improve in
this area. I think across the Executive Branch, executive
agencies are looking at their property----
Mr. Meadows. I know you want to improve, but what is
success? I mean, what percentage of that 6.5 billion of excess?
We are not even talking about the other. What is successful?
Mr. Gelber. I would have no way to obtain that metric at
this point. We respond to the agencies----
Mr. Meadows. I think therein is the problem. You know, I
used to be in real estate. I got paid based on what I sold or
what I didn't sell. So when we have a matrix that we don't know
what success is, it is very troubling, even with Mr. Mader that
says, well, we are going to put that out there and it is part
of their performance. I have looked at that. They don't get
compensated based on how successful they are, not even bonuses.
I mean, it is part of their performance review, but there is no
linear line in terms of bonuses. We give big bonuses to people
that are successful and some that are not based on what is on
the website.
So how do we make sure that the compensation matches with
performance? When you come in, if I were coming in, you were
coming before me for a performance review, how do I say, Mr.
Gelber, you did an outstanding job or you did a terrible job?
How do we know?
Mr. Gelber. I think the performance in this area should be
a joint conversation in the Executive Branch at the beginning
of a fiscal year to ascertain how many of the properties that
we currently have declared as excess we should dispose of or
resolve in the course of a fiscal year.
Mr. Meadows. I agree. So out of $6.5 billion, what is
success?
Mr. Gelber. Again, that would be a conversation amongst the
Federal Real Property Council, since the vast majority of those
properties are not controlled by GSA.
Mr. Meadows. All right.
Mr. Gelber. I wouldn't want to impose a success factor on
my colleague and other agencies.
Mr. Meadows. Well, and, see, there I think is the problem
that we have in Congress, is who is in charge? I mean, we have
four people. If I were to say who is in charge of excess
properties and getting rid of them, which one of you would it
be?
Mr. Sullivan. [Remarks made off mic.]
Mr. Meadows. Okay, all right. So, Mr. Sullivan, we can come
to you and you said earlier that it was historical value for
some of those buildings.
Mr. Sullivan. It is replacement value.
Mr. Meadows. Okay. But that really creates a real problem
for you in terms of replacement value, wouldn't you say, in
terms of getting rid of a piece of property?
Mr. Sullivan. It does. It is a challenge. But we have a
plan that shows us trying to get rid, we have 4.2 million
square feet of vacant square footage out there. Our four-year
plan that we published in our budget is to get that down to 1.5
million by 2018. And I would measure if we hit 80 percent, 75
or 80 percent of that total, given all of numerous tools we
could use that, some of that is deconstruction, demolition,
sale, or out-leasing, long-term out-leasing to other entities
to take it off our financial liability.
Mr. Meadows. So how do we help you? And I mean this
sincerely. How do we help you with regards to the replacement
value model that is in place right now? Because if you have a
huge, we would call it in my business a white elephant, so if
you have this huge white elephant of a 2 million square foot
building that functionally is obsolete, you are not going to
get rid of it at replacement value or anywhere close to it, so
it can sit there and sit there and sit there. So how do we help
you, where you are not penalized for getting rid of a
nonperforming asset and OMB doesn't hit you with their negative
score, or whatever it may be? How do we do that?
Mr. Sullivan. I think in our case, if we have our enhanced
use legislation that is now restricted to just repurposing for
housing, we have a proposal in Congress to expand that to be
able to take those assets and receive other either cash
consideration or other consideration. Enactment of that would
help reduce our properties. Because at VA we have very few
assets that have a high market value. Most of these, with the
savings to the Government, will be not having the recurring
dollars to have to maintain those.
Mr. Meadows. Sure.
Mr. Sullivan. So if we could just get rid of those
properties either through long-term leases or sale, working
with the local community, because we found that is the only way
we get these to work, when we can get synergy of a win-win
between the local veterans organizations, the local political
structure at the local level, and here. When we can align those
three things, those out-leases go like that, and the financing
for them to do it.
Mr. Meadows. So what you are saying is if you leased it for
a dollar a year and they----
Mr. Sullivan. For 75 years.
Mr. Meadows.--and they covered the maintenance, and you
didn't get penalized for that, you would be happy with it.
Mr. Sullivan. Yes. And if we could roll in the remediation
cost into that deal----
Mr. Meadows. If we roll that in. He is negotiating.
Mr. Sullivan. We roll that into the deal, we have done that
in a few places, that is where you can get substantial savings
to the Government. It won't be a huge cash inflow, but it
reduces the cash outflow.
Mr. Meadows. All right.
Mr. Mader, I am going to close with this. I think you see
the problem that we have here, and you are one of the few that
can help each one of these agencies accomplish what they need
to accomplish, and the task is Herculean. But if you can work
with these agencies to help them where we don't have $6.5
billion 216 years from now, that is what we need. Let's get a
plan. Let's work the plan. And even if it doesn't score well,
we will leave scoring for another day. Even if it doesn't score
well from an OMB standpoint, let's let Mr. Sullivan manage his
assets and benefit from managing it, same with Mr. Gelber and
Mr. Wise, and let's move this stuff and get it performing.
I am very reluctant. We are about to vote on $5 billion
more for Mr. Sullivan to either lease or purchase buildings,
and yet we have nonperforming assets around that he is having
to spend millions of dollars every year. So let's see if we can
work together.
I yield back, Mr. Chairman. I apologize, I have to run to
another meeting.
Mr. Mica. Thank you. We will be concluding shortly, but
thank you, Mr. Meadows.
Just a couple of final questions. First of all, for GSA,
let me just ask this question. Mr. Gelber, have you met with
these folks yet?
Mr. Gelber. Members of the GSA staff have. I have not
personally.
Mr. Mica. But you haven't.
Mr. Gelber. I have not personally.
Mr. Mica. Okay. I need your pledge in the next 30 days to
meet with these people. Sit down and just talk to them. You
compiled a great set of experience who are capable of disposing
properties, but you should sit down with them. This is from May
2013, and hear them out. And if you haven't met with them, I
will call you back either voluntarily or subpoena you, and we
will come back to this room and meet with them, okay? I am
trying to work with the agencies, give you the tools. You have
the tools. The tools have not been used.
And I heard some of the impediments, and some they referred
to OMB. The gentleman from OMB is a breath of fresh air, at
least in his testimony. Mr. Meadows says we will hold his feet
to the fire, which we will too. But you have to have the
ability to operate, and we want to hear if there is a problem.
And you should also be meeting with OMB on these issues. So
that is the first thing.
The second thing, the Dire Courthouse. I have done two
hearings down there. I did have a representative of the
college. You know the story of that?
Mr. Gelber. I am familiar with it, sir.
Mr. Mica. The Dire Courthouse, empty for five, six years,
gathering mold. After I did the first hearing in Miami at the
empty courthouse, I got a letter from Dr. Padrone, president of
the college who is across the street, as close as the next
office building, not as far as the Capitol, but right across
the street, saying we have been trying to get the property for
four or five years and couldn't get a response from GSA. I
understand those negotiations are ongoing. We want that
property, any of the issues resolved as soon as possible. The
college can use it. It costs us over a million to maintain it,
and there is millions in dollars now in mold remediation that
is required by keeping it empty.
All of these buildings require security, they require
maintenance, they require a whole host of things that cost the
taxpayers. I think the empty power thing was over a million a
year. So, again, empty facilities may be empty, but they have a
huge cost to taxpayers, not mentioning what we can do putting
them in the positive column.
Okay, then I also want an update. My staff hands me these
notes. We did a hearing in an empty warehouse property not just
blocks from here. I would like an update on the status of that.
The whole community turned out, it was a huge turnout for a
proposal to use that property. Still sitting vacant, to my
knowledge. And then the cotton exchange, if you could also give
me an update on that, one of the largest properties in the
District of Columbia. You have say over it and I understand
there is a plan, but that needs to go forward. So that project
alone will be in excess of a billion dollars. But we have an
empty cotton exchange building on a huge piece of property that
goes from, I think, Independence all the way to the Expressway
and then beyond.
You want to answer for the record that you are going to
respond on these?
Mr. Gelber. Yes, I would be happy to do so, sir.
Mr. Mica. Okay.
One of the things we are going to have to do is, again, we
have sort of garbage in, garbage out, is get the lists up to
date from agencies. But more than having a list up to date, I
go back to Mr. Mader, a plan. It is impossible, and Mr.
Connolly had spoken that maybe we could pick 100 properties,
but I think we have to do it agency by agency. They have to
have a plan first of an inventory, then a plan of action on
disposal, and then by your helping to speed up the process or
finding solutions.
And we are part of the impediment. We have the McKinney
Act. I found on the Maryland property agricultural research
center that there had been a caveat put in the law on the use
of the land. But we have to find ways to either go back, change
the law, change the process. And any recommendations that you
have, you are just getting into this, but we need them as soon
as possible.
The legislative remedies do take time. Mr. Denham and I
have introduced measures, others have introduced measures. It
is very hard to get those through Congress. But we also can be
very creative in working. And while I am critical of GSA, also
compliment the latest efforts. I met with the new Public
Buildings administrator. It looks like they are trying to find
creative ways to dispose of property or utilize them.
Thank you, Mr. Wise, for, again, your assessment and
evaluation. You see the difficulty that we have. And any other
recommendations that you have from GAO to us we would
appreciate. But thank you for your work.
Mr. Wise. Well, thank you, sir. One thing I might like to
add is one of the things we have seen that I think could be
helpful to agencies especially out in the field is we have seen
that with the FRPP, even though it is, as we have all
recognized, rather a flawed database, some parts of it are
better than others. The location of a property and who it
belongs to is generally pretty good.
And one of the things we found in some of our field work
was that you might show up in a medium size city somewhere and
there may be some empty space in a field office of one of the
Federal agencies, and the guy down the street from another
agency doesn't know it because he doesn't have access only to
his own data.
So one of the things we have talked about, and I think I
dealt with Dave's predecessor and we have talked some about
this, is that FRPP becomes more of an open source document
within the confines of the Federal agencies so that one can
know what the other has and then make some decisions as to,
well, hey, maybe we could get rid of one lease and combine two
leases into one least and move the small field office of SHWA
into vacant space in the postal building in that town.
So those are the kind of things that are not particularly
complicated fixes to come up with but could actually, as the
military would say, kind of a force multiplier. If you look at
them on a countrywide basis, could actually provide some
substantial efficiencies and potential cost savings. So I think
a more open FRPP might be a useful help to the Federal
agencies, as well as to us. We have also had trouble getting
access to the FRPP.
Mr. Mica. Well, again, I appreciate your recommendations.
Heaven forbid we should have agencies utilizing space. Now, I
have, in my own backyard in Florida, I have 144,000 acres. It
is six times the size of Manhattan. It is owned by NASA. Their
mission has changed in five years. Six hundred buildings, half
of them vacant; launch pads, other buildings that can be used.
We took the committee down there, we have done a hearing there
on a path.
Our port, which is adjacent to that, testified, give us 200
acres out of 144,000 and then a rail line that goes across not
only their property, but the Air Force next to the 144,000 has
a landing strip 16,000 acres, a beautiful rail line going
through, little connection from the two properties to the port.
Five thousand jobs could be created by making that a port
container full operation.
So we have assets that can be valuable, not to mention
possible return for the Federal Government, the Air Force,
NASA, jobs. We are getting some of those properties now turned
around, relocating businesses. And even our nature conservancy,
we had some of those folks in. Preserving some of it, it all
doesn't have to be developed to the hilt. But unlimited
possibilities with a little bit of creativity.
I know you have limited GSA authority over that. This
committee does not. And when I chaired Transportation, we
focused mainly with you. But the rest is, like you said, what,
13 percent or 11 percent of all the properties?
Mr. Gelber. Thirteen percent for GSA.
Mr. Mica. So, again, the realm is huge. I have sat with DOD
and Post Office, and my mind just spins from the amount of
property that they have that we could better utilize and
dispose. But great ideas and looking at cross-pollenization of
agencies utilizing space would be remarkable.
Thank you, finally, to Mr. Sullivan for appearing. We look
forward to working with you. Any impediments you see to the 280
buildings that are identified on the list I brought here. Some
properties are rough, some economies are rough and it is hard
to dispose of them. But it also costs the taxpayers to keep
them on the roll, so we have to balance that and try to see
what we can do to best utilize them. So we look forward to
working with you.
And also thank them for the action on--that will make a big
difference in central Florida. We are a growth area. We have
more veterans coming, and after the cold winter we will have
even more, and the improvement of the economy coming to central
Florida. That is one of the issues we face with our veterans;
we have lots of assets in the north and those people are now in
the south. They are Phoenix, where we had the huge problem of
backup. They are in Texas, they are in Florida, some of the
warmer States, and the populations are changing. So that is
important that we move those assets around. And if we have
encumbrances or restrictions by law or anything you see, we
want you to let us know.
Mr. Sullivan. Absolutely we will, sir. And just to let you
know, the same tools of the contractors that are on the GSA
tool you raised earlier in the hearing is some of the same ones
we use for our long-term leasing. So we are tapping into that
expertise through a different vehicle to help us with our long-
term out-leasing of property.
Mr. Mica. Well, there are multiple hearings being conducted
at this point we have heard from several members of the
subcommittee this morning.
Without objection, we are going to leave the record open
for 10 days. We may have additional questions that we will
submit to you, and those responses will be incorporated into
the proceedings of this hearing.
There being no further business before the Subcommittee on
Government Operations, I thank our witnesses. This hearing is
adjourned.
[Whereupon, at 11:53 a.m., the Subcommittee was adjourned.]
APPENDIX
----------
Material Submitted for the Hearing Record
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
[all]