Senate panelists debate independence of proposed board to sell property

By Charles S. Clark

June 10, 2011

"You have dead-stopped every federal property movement in the past 13 years," Sen. Tom Coburn, R-Okla., told advocate for the homeless Maria Foscarinis during a Senate hearing Thursday. "We have a bureaucracy that says we can't get rid of real property."

The charge, that Title 5 of the 1987 McKinney-Vento Homeless Assistance Act is a roadblock to the growing bipartisan effort to unload surplus federal property, was rejected by Foscarinis, executive director of the National Law Center on Homelessness and Poverty. "Title 5 requires that the homeless be protected and it is not the cause of inefficiencies or delays" in disposing of underused property, she told the Senate Homeland Security and Governmental Affairs Subcommittee on Federal Financial Management, Government Information, Federal Services and International Security. With the rate of homelessness having risen 9 percent in 2010, "protecting the rights of the homeless is not only morally the right thing, it is the most cost-effective," she argued.

An easing of Title 5 requirements -- which give organizations that help the homeless first refusal rights when federal property is being disposed of -- is part of the plan advanced by the Obama administration this spring to save an estimated $3 billion by accelerating the sale of 14,000 properties. It would do so primarily through creation of a politically powerful board resembling the Defense Department's Base Realignment and Closure Commission. The Office of Management and Budget plan cites "competing stakeholders" as one reason for the difficulty in selling federal properties.

A Republican version of the plan, sponsored by Rep. Jeff Denham, R-Calif., cleared a House subcommittee last month. The GOP proposal would essentially bypass Title 5 and introduce a new set of procedures for factoring in the interests of the homeless, drawing opposition from Foscarinis. As the Senate begins consideration of the issue, conflicts also remain over whether the proposed civilian board should be overseen by OMB, or whether it should be a more independent commission.

The Obama proposal "holds promise, but needs examining." said Sen. Tom Carper, D-Del., chairman of the subcommittee.

"Many citizens believe our decision-making culture is broken," Carper said in his opening statement, and "we must establish a culture of thrift." He noted that the federal buildings management program has been on the Government Accountability Office's high-risk list since 2003. He added that 45,000 properties, or 340 million square feet, are underutilized or wastefully leased. "But agencies should not be waiting for a civilian-style BRAC to begin better managing properties," he said.

Danny Werfel, OMB controller, said the process the agency hopes to manage would focus on two types of properties. Many of the 14,000 excess properties listed publicly in May could be disposed of by agencies, though not necessarily at a profit. Those proceeds would be "trumped," he said, by disposal of a select set of "high value" properties for which the federal presence is perhaps obsolete. "Thousands of agency field offices, one in every county in the country, may not be needed in this post-Internet Age" of electronically administered federal benefits, he said. In these cases, he said "inertia" has set in preventing stakeholders from leveraging valuable opportunities for commercial exploitation.

Former Sen. Alan Dixon, D-Ill., a past BRAC chairman, told the panel the civilian version "can be done fairly if the board is prepared to enforce transparency, and citizens are consulted."

Another BRAC specialist, David Baxa, chief executive officer of VISTA Technology Services, warned, "Don't view the current situation as a fire sale for short-term gain," and recommended instead that the civilian board be seen as an opportunity to make long-term changes in federal asset management.

Tim Ford, CEO of the Association of Defense Communities, said the Obama approach "risks making some mistakes BRAC made in the 1980s in not being transparent for communities." Use of an administration board rather than an independent commission "could impede the process and politicize it," he said. A commission could be a "positive way to maximize efficiency of the federal footprint" in communities and could look at properties beyond those currently on the list.

Sen. Mark Begich, D-Alaska, said a BRAC approach was too grandiose, given the difference in scale between military installations and real estate properties. "Keep it simple," he said. "I'm in real estate, and every property has value and can sell." He recommended an independent board to distance the process from the government.

Baxa countered that a BRAC-type board "puts the emphasis on getting the job done, which is often politically difficult." A commission "has wider acceptance, is more bipartisan and more credible," he said. He also recommended the board set up a body similar to the Resolution Trust Corporation used during the savings and loan crisis of the late 1980s. "It allows you to bring in professional real estate developers for bundling of properties, even in different cities, to make them attractive to a business," he said.

James Sullivan, director of the Office of Asset Enterprise Management at the Veterans Affairs Department, described successes in repurposing agency properties to house homeless veterans in VA's enhanced use lease process. VA just announced 34 new sites, with 100 buildings for homeless veterans, that will bring total buildings in the program to 5,000, he said.

Robert Peck, commissioner of the Public Buildings Service for the General Services Administration, defended his agency's ongoing efforts to efficiently dispose of federal properties, noting that the vacancy rate is only 3 percent. "Since 2002, we have disposed of more than 200 GSA properties valued at $467 million and covering more than 9.5 million square feet," he said in prepared testimony. "These dispositions represent 5.3 percent of GSA's owned portfolio and eliminate almost $484 million in future anticipated repair needs."

David Wise, director of physical infrastructure issues for the Government Accountability Office, said he we welcomed OMB's proposal as "somewhat responsive," but said it doesn't sufficiently address the government's overreliance on leasing.

Another outstanding issue is whether the proceeds from building sales are to go more to deficit reduction or to other agency-determined priorities. "Deficit reduction will shine through as a legitimate objective," Werfel said. "But other stakeholders such as the homeless and commercial interests will participate and the goal is that all voices are heard and considered." When the final decisions are made, "not everyone will be fully happy, but we will move forward for good or for bad," he said.


By Charles S. Clark

June 10, 2011

http://www.govexec.com/oversight/2011/06/senate-panelists-debate-independence-of-proposed-board-to-sell-property/34137/