Congressman Denham: Old Post Office Redevelopment a Victory In Battle Against Government Waste

Denham CPRA bill would achieve victories like these across the country

“We chose the Old Post Office because it is a symbol of a larger national problem. Similar properties sit vacant or underutilized all across the country. Redeveloping these properties will create thousands of jobs and promote economic growth.” said Chairman Denham.

When Denham first took over as Subcommittee Chairman one year ago, he immediately urged GSA to aggressively pursue redevelopment of this property to promote economic growth and job creation. At today’s hearing, he questioned GSA Commissioner, Bob Peck, about how GSA will ensure this project and other asset management improvements move ahead expeditiously, so that taxpayers can stop pouring money into vacant and poorly utilized buildings.

“In this case Congress held multiple hearings and passed two laws requiring action, yet years and years passed before we could get to the point of announcing the Trump organization as the private sector developer,” said Chairman Denham. “The bottom line is the system is broken and we need a new process to sell or redevelop these properties. My bill, CPRA, will streamline this process to ensure economic and job growth across the country.”

The redevelopment of the Old Post Office is an example of the type of asset management improvement that could be implemented across the country under the Chairman Denham’s Civilian Property Realignment Act (CPRA), H.R. 1734. This bill passed off the House Floor on Tuesday and is headed to the Senate. The bill implements common-sense policies to literally shrink the size of government and help ensure savings by selling or redeveloping high value properties, consolidating federal space, maximizing the utilization rates of space, and streamlining the disposal of unneeded assets.

“The long delayed decision to move forward with redeveloping the Old Post Office is a victory in our efforts to get the federal government to stop sitting on its assets,” Chairman Mica said. “Bringing in private sector developers like the Trump organization will ensure more effective utilization of this historic property can create hundreds of jobs and end wasteful spending.”

“The government’s poor management of just this one property alone has cost taxpayers $6.5 million every year. Unfortunately there are other unused, underutilized and poorly managed federally owned properties here in Washington and around the country. We must address waste across the full inventory of the government’s assets to save taxpayers billions of dollars.”

Over the years the committee highlighted several large underutilized properties, and as far as we can tell GSA has done little to sell, redevelop, or fill them with federal employees. For example:

In Miami, the Dyer Federal Courthouse continues to sit completely empty in Miami.

In the New York City area a huge federal building has been 50% underutilized for almost a decade.

In Washington, DC the small Cotton Annex sits empty on property CBO valued at $150 million dollars.

And then there are those examples where GSA is spending millions of dollars and the taxpayer will end up with even more vacant and underutilized property:

For example, in Los Angeles GSA intends to spend $360 million dollars and completely abandon a 700,000 square foot courthouse and a significant portion of a federal building.

In Norfolk, Virginia we recently learned GSA was sued for condemning private land to build a courthouse that we don’t need and don’t have the money to construct.

Background on the Old Post Office Building: The Old Post Office has sat partially empty and underused for years in the heart of the nation’s capital. Committee Members have long pressured the federal government to select a private sector company to redevelop the site. Yesterday, General Services Administration (GSA) finally announced its plans to do so in selecting the Trump Hotel Collection.

According to GSA, it leases approximately 200,000 square feet of office space in the Old Post Office (OPO) to a variety of federal agencies. The building is more than 375,000 square feet. GSA collects about $5.5 million in rent each year. In order to make better use of the building, in 1982, GSA attempted to redevelop the lower levels of the building for retail use. In 1989, a new retail facility in the OPO courtyard (Annex) of 53,000 square feet and was built.

The OPO Annex opened but was never fully occupied. The Annex remains vacant and deteriorating. GSA spends about $12 million to operate and maintain the facility, which results in an annual operating loss of $6.5 million.