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Denham Civilian BRAC Proposal Receives Broad Support

May 12, 2011

Washington, DC – Members of Congress and witnesses representing the Administration and the private sector today supported a proposal by U.S. Rep. Jeff Denham (R-CA) to employ a BRAC-like process to civilian properties in order to reduce the federal footprint and save taxpayers billions of dollars.

The Economic Development, Public Buildings and Emergency Management Subcommittee, chaired by Denham, held a hearing to examine the bill he introduced, the Civilian Property Realignment Act (H.R. 1734), as well as a similar proposal by the Administration.

Chairman Denham proposed exploring the use of a civilian BRAC process to address chronic problems and waste in federal real property management at a February 10th Subcommittee hearing. The President’s FY 2012 budget also proposed a civilian BRAC process. The Subcommittee held a hearing focusing on the topic on April 6th, and both the administration and Chairman Denham released their proposals on May 4, 2011.

The Base Realignment and Closure (BRAC) process was first established by Congress in of 1988 to create a process for the realignment and disposal of Department of Defense properties. Anthony J. Principi, Chairman of the 2005 Base Realignment and Closure Commission, testified today in favor of the Civilian Property Realignment Act and offered several recommendations.

The proposal would establish a framework through which a board or commission would independently review federal properties and make recommendations for consolidations, co-locations, redevelopment, selling or other actions to minimize costs and produce savings for the taxpayer.

“I believe the potential to save billions of dollars is real, and our challenge is to create system where it will happen,” Chairman Denham said. “Just having a fire sale of surplus property in a bad real estate market is not going to generate significant savings for the taxpayer. Instead redeveloping, consolidating or selling certain high-value assets can unleash huge cost savings for taxpayers.”

The Office of Management and Budget (OMB) estimates that the proposal could save taxpayers more than $15 billion. Daniel Werfel, OMB Controller, testified today and stated that the differences between the Denham and Administration proposals are bridgeable and that he looked forward to continuing to work together to establish a civilian BRAC process.

At the April 6th hearing, Werfel had agreed to principles outlined by Denham for a civilian BRAC process. Restating some of those key principles today, Denham said, “To achieve these savings, any solution must incorporate key principles: consolidate the footprint of federal real estate, house more federal employees in less overall space, reduce our reliance on leased space for long-term requirements, sell or redevelop high value assets that are underutilized or too valuable for housing federal employees, and dispose of surplus property more quickly.”

Witnesses today also focused on the potential for significant savings through the sale of high value properties, redevelopments and more efficient use of property, agreeing that the savings that can be achieved through selling unneeded surplus properties will be a very small fraction of the overall savings.

The witnesses also stressed the importance of private sector participation and expertise to the success of the initiative.

“Given the federal budget conditions, there should be increasing focus on public-private partnership to provide workplace solutions, agency consolidations and federal real property redevelopment,” said David Winstead, a real estate attorney and former General Services Administration Commissioner of Public Buildings.

Michael Glosserman, Managing Member of JBG Companies, which invests, develops and manages commercial real estate in the Washington, DC area, said, “We strongly support the Civilian Property Realignment Act. We are encouraged to see that Congress and the Administration are working to improve the efficiency of the Government real estate portfolio, while at the same time providing the opportunity for the private sector to compete for otherwise unavailable prominent sites throughout the United States.”

Glosserman urged the Subcommittee to empower a civilian BRAC commission to identify opportunities outside the scope of individual agencies. “Many undervalued properties or sites with excess density or alternative value-add opportunities are likely to be overlooked by Government agencies, which do not possess real estate expertise,” he said.

Glosserman testified that if the private sector sees progress with a civilian BRAC process and the opportunity to work with the federal government, “you will see folks coming out of the woodwork” with proposals to better utilize federal properties and save taxpayers money.

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