posted 8/19/03
See list of USPS Vacant and Underused Properties (pdf 88k)
note: pages taken from the full GAO Report by PostalReporter.com
News articles:
| October 01, 2003 | |
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| CHAIRMAN COLLINS CALLS
FOR FEDERAL REAL PROPERTY REFORM Deteriorating Buildings, Wasted Opportunities Costing Taxpayers Millions |
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| For Immediate
Release October 1, 2003 Contact: Andrea Hofelich (202) 224-4751 WASHINGTON, D.C.—Senate Governmental Affairs Committee Chairman Susan Collins (R-ME) today called for a closer examination of the problem of vacant and underutilized federal properties. “The federal government spends millions of dollars each year to maintain empty buildings. This is government waste, plain and simple,” said Collins during a Governmental Affairs Committee hearing. The government’s real property assets are worth an estimated $328 billion and include more than 3 billion square feet of building space. Some of the federal government’s assets, such as St. Elizabeths Hospital in Washington, D.C., are historically significant and valuable, yet deteriorating and rundown. The federal government also has considerable property that it no longer needs. In August 2003, the General Accounting Office released a report identifying 600 vacant properties and 327 underutilized properties owned by three agencies: the General Services Administration, the Department of Veterans Affairs, and the U.S. Postal Service. These 927 properties represent more than 2,000 acres and 32.1 million square feet of vacant or underutilized space. According to that GAO report, retaining unneeded real properties presents federal agencies with significant potential risks for “lost dollars because such properties are costly to maintain, and lost opportunities because the properties could be put to more cost-beneficial uses, exchanged for other needed property, or sold to generate revenue for the government.” During today’s hearing, “Deteriorating Buildings and Wasted Opportunities: The Need for Federal Real Property Reform,” Collins also took a closer look at the West Campus of St. Elizabeths Hospital, a Washington, D.C., facility owned by the U.S. Department of Health and Human Services and occupied by the District of Columbia’s Department of Mental Health. The 182-acre property has fallen into disrepair and is costing taxpayers millions of dollars to maintain. Needed repairs are estimated at more than $400 million. Some of the buildings on the West Campus of the property, which Collins toured earlier this month, suffer from extensive water damage; mold, asbestos, and flaking lead paint are also prevalent problems. Floors and ceilings have rotted and caved in, caused in part by the heavy furniture that remains in the building and exacerbated by the still-operational steam pipes. In addition, personal medical files and billing records were strewn throughout the main building, with wide-open windows offering outsiders easy access, Collins noted. “The deterioration of the West Campus of St. Elizabeths Hospital is a particularly tragic example of how the federal government’s mismanagement of its real property can result in massive waste of taxpayer dollars,” said Collins. “If a 182-acre historic landmark, just two miles away from the Capitol can be so mismanaged, what confidence can we have that thousands of other federal buildings scattered across the country are being managed properly to preserve their value and to ensure their best use?” |
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Testimony of GAO Comptroller David Walker Before the Committee on Governmental Affairs, United States Senate on October 1, 2003 (see full PDF report)
Former Chicago Main Post Office-The former Chicago main post office building is a 2.5 million square foot facility that was vacated when it was replaced with a new facility in 1997. The U.S. Postal Service (USPS) is incurring about $2 million in annual holding costs for the property. According to USPS, the property was listed for sale and publicly offered. About five offers were received and the property was placed under contract of sale for $17 million. According to USPS, completion of the sale has been delayed due to the weakness of the Chicago real estate market and the lack of an agreement between the developer and the city of Chicago that would abate real estate taxes on a portion of the redevelopment cost for a number of years. According to USPS, this has created a "chicken and egg" situation for the developer. Potential tenants are unwilling to commit to the project unless they are sure it will go ahead. The city appears unwilling to grant the tax abatement until the users of the building are known. USPS is hopeful that the city will begin to address the issue.
In addition to the holding costs USPS is incurring, a deteriorating façade will add additional repairs costs to USPS’s annual budget. Furthermore, deterioration of the system that funnels train exhaust up through eight shafts to the roof of the building is a problem that will have to be addressed. The estimated cost of repair is about $10 million and is a condition of the sale. According to USPS, another factor, which bears on the cost of redevelopment, is that the State Historic Preservation Office wants to impose requirements on the redevelopment of the building.
Currently, according to USPS, these requirements will add millions of dollars to the redevelopment costs, and the buyer and USPS are reviewing them. USPS said that this project is challenging because of the large amount of space that needs to be developed. According to USPS, a breakthrough in current market conditions will have to be achieved, together with an agreement with the city, before this project can move forward. Figure 3 shows downtown Chicago with the vacant post office building highlighted.
Why GAO Did This Study
The federal government has many vacant and underutilized properties that are no longer needed. Retaining unneeded real properties presents federal agencies with significant potential risks for (1) lost dollars because such properties are costly to maintain; and (2) lost opportunities because the properties could be put to more cost-beneficial uses, exchanged for other needed property, or sold to generate revenue for the government.
The General Services Administration (GSA), the Department of Veterans Affairs (VA), and the U.S. Postal Service (USPS) hold a significant number of real property assets. GAO was asked to provide information on how these agencies identify vacant and underutilized real properties and the numbers, types, and locations of these properties.
Vacant and Underutilized Properties at GSA, VA, and USPS
What GAO Found
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GSA, VA, and USPS primarily rely on field office officials to identify vacant and underutilized properties. These officials make on-site property visits, communicate with tenant agencies about lease renewals, and examine agency program requirements that will affect agencies’ real property needs. These three agencies also have ongoing nationwide initiatives to realign their real property portfolios. GSA officials are reviewing all of its properties to identify and remove all assets from its real property inventory that are not financially self-sustaining or for which there is not a substantial, long-term federal purpose. VA officials are in the process of identifying unneeded real property assets to reduce VA’s large inventory of vacant and underutilized buildings. USPS officials are reviewing and modifying its postal real property infrastructure so that USPS can enhance customer service and control costs through the closing and consolidation of unneeded facilities, such as some post offices.• As of October 1, 2002, these agencies reported a total of 927 vacant and underutilized real properties—including facilities and land—located throughout the United States and Puerto Rico in 294 cities. VA reported the most properties—577; GSA reported 236 properties, and USPS reported 114 properties. Most of these properties—807 of 927—were facilities that represented about 32.1 million square feet and ranged from office buildings to hospitals to post offices. Although VA reported the highest number of facilities, GSA facilities made up more than half of this square footage. The remaining 120 properties were vacant lands reported only by VA and USPS, most of which were 10 acres or less.
• GSA said that 236 properties is an overstatement because 43 properties are committed to future use, and 37 small properties support occupiable space. GAO did not change GSA’s total number of properties because they were vacant or underutilized as of October 1, 2002. However, GAO reflected GSA’s concern in the text and in the list of GSA’s properties. VA and USPS generally agreed with the information in this report.
