June 19, 2012The pace of the Obama administration’s campaign to sell off unneeded government properties came under renewed attack Tuesday as House Republicans on the infrastructure panel staged a field hearing in an abandoned federal heating plant on the pricey Georgetown waterfront.
Rep. Jeff Denham, R-Calif., chairman of the House Transportation and Infrastructure Subcommittee on Economic Development, Public Buildings and Emergency Management, ripped into a General Services Administration official, the sole witness, telling him “you’re not doing a good job” and adding, “if this president is not willing to hold agencies accountable, then this committee will.”
Speaking before cameras and surrounded by the plant’s rusty ducts, exposed pipes and trash-strewn floors, Denham and full committee Chairman John Mica, R-Fla., demanded details on why GSA did not begin preparing to sell the decommissioned 1948-vintage plant until November 2011, given that the facility’s role in providing steam heat to federal buildings in the district’s western side ended more than a decade ago.
“If you think we came here to embarrass the GSA in this building, you’re right,” said Mica, noting the property is in one of the country’s most expensive neighborhoods. “I can’t tell you how hard it is to get anything done when we actually have an administrator, not to mention an acting one.”
He and Denham had invited GSA’s acting chief, Dan Tangherlini, to testify, but the agency instead was represented by Flavio Peres, deputy assistant commissioner for real property utilization and disposal at GSA’s Public Buildings Service.
The two-acre Georgetown heating plant site “is an example of GSA’s successful management of our assets and our ongoing efforts, in line with administration goals, to better utilize federal real property,” Peres testified. “We have moved aggressively to right size our portfolio.” Only after a careful screening process that involved putting out a notice of opportunity and working with the Energy Department, Peres explained, did GSA “feel comfortable that it had a way forward.”
Peres, who’s been with GSA since 2002 but assumed his current post in February, assured the lawmakers the plant will go up for auction in September. “It has gorgeous views and interest in the private sector is already incredibly high,” he said.
According to Peres, GSA is using brokers in an effort to display the property to national and international audiences. Under questioning, he admitted a 4-by-6 foot white banner reading “GSA. Coming Soon. For Sale” had been mounted at the plant’s entrance on 29th Street only the day before.
Tuesday’s event was the fourth in a series of hearings by committee Republicans to promote their campaign to get the government to “Stop Sitting on Our Assets.” Other field hearings were held in Washington’s Old Post Office (since leased to Donald Trump) and at the Agriculture Department’s former Cotton Annex near the National Mall in Southwest Washington.
The hearings are part of an effort to push for passage of Denham’s Civilian Property Realignment Act (H.R. 1734), which cleared the House in April but stalled in the Senate. It would streamline the process of selling unneeded federal properties through an appointed independent board.
In confronting Peres, committee Republicans blasted the “opportunity costs” of allowing the Georgetown plant to sit empty for more than a decade, at an estimated cost of $3.5 million, while it was used to store extra fuel and spare parts as well as to serve as a backup in case the District of Columbia’s central heating plant broke down. They also faulted GSA for its slowness in addressing empty public buildings in Los Angeles; Miami; Bethesda, Md.; and elsewhere in Washington. “For every vacant building sold, GSA continues to create vacant space,” Denham said. “It’s unacceptable and costly to the taxpayer.”
Mica mocked GSA for its April scandal stemming from overspending on a training conference and expressed skepticism toward the administration’s program to sell 14,000 unneeded properties by holding up a sign that read “Three down, 13,997 to go.”
Rep. Richard Hanna, R-N.Y., asked Peres whether he thought the sales of unneeded properties could be better handled by the private sector.
Peres said no. “We have the expertise and a strategy, though we do use brokers,” he said. In the last 10 years, GSA has disposed of more than 2,600 governmentwide assets, generating proceeds of $4.2 billion, he said.
Of the government’s 893,381 buildings and structures, GSA controls only 9,476, or about 12.3 percent. Only 124 of the 14,000 marked as unneeded are GSA-controlled, he added, noting that 24 major agencies have their own landholding authority, departments such as the Defense, Veterans Affair and Interior, each with varying incentives to sell, such as the ability to retain any proceeds. “We’re not the only disposal agency,” Peres said. “I can’t speak to their expertise, but we have expertise.”
Asked whether GSA advertises on e-Bay and Craigslist, he said it posts sales on Realestatesales.gov. Unfortunately, Peres added, sales “sometimes require an upfront investment to relocate an agency, which is difficult in these budgetary times.”
Ranking panel member Del. Eleanor Holmes Norton, D-D.C., pressed for more details on GSA’s plans for selling the Cotton Annex (the process is under way) and noted the agency’s need to deal with requirements under the 1970 National Environmental Policy Act and the 1966 Historic Preservation Act. She said she expected GSA to work closely with the deputy mayor of the District of Columbia on local zoning issues while the sale of the Georgetown heating plant goes through.
Mica said his inquiries that morning among security guards at the plant convinced him that GSA’s notion that the heating plant served as a backup was “bogus,” because the equipment hadn’t been turned on in a decade and had been cannibalized. “If you’re the most efficient” at selling properties, he told Peres, “then God help us!”
Peres said he found the panel’s hearings “helpful in marketing the property, because it gets the word out.”
Denham shot back that he was “glad you find the hearings helpful, because you will see more across the nation.” He and Mica plan to hold field hearings in places like Miami and Texas, on into the next Congress, he said, whether on a bipartisan basis or not.
CORRECTION: The story has been changed to reflect that the Old Post Office was leased to Donald Trump.
June 19, 2012