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Federal Government Finally Stops Sitting on Its Assets

Old Post Office Redevelopment a Victory in Battle Against Government Waste

February 9, 2012

Washington, DC – In a vacant and cold 53,000 square foot government building a few blocks from the White House, Transportation and Infrastructure Committee Chairman John L. Mica (R-FL) and Economic Development, Public Buildings and Emergency Management Chairman Jeff Denham (R-CA) announced new plans to renovate the Old Post Office would bring jobs and new life to the costly facility, dormant for a decade.

“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,” Mica said. “Bringing in private sector developers like the Trump organization will ensure more effective utilization of this historic property, and can create hundreds of jobs and end wasteful spending.”

Mica and Denham, at a Committee hearing in the Old Post Office today, declared a victory in their efforts to get the federal government to stop sitting on its assets and finally move forward with the redevelopment of the building. The project is an example of the need to improve the management of valuable but underutilized federal properties to save taxpayers money.

“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 Denham.

Mica and Denham held today’s hearing in the empty annex of the Old Post Office, one year after holding a hearing at the same location to begin highlighting the government’s wasteful mismanagement of its assets. Prior to taking control of the House of Representatives at the beginning of this Congress, Republicans issued a report entitled “Sitting on Our Assets: The Federal Government’s Misuse of Taxpayer-Owned Assets” as a blueprint for reducing waste of taxpayers’ money.

“The government’s poor management of just this one property alone has cost taxpayers $6.5 million every year,” Mica said. “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.”

“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,” Denham added. “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 Civilian Property Realignment Act (CPRA), H.R. 1734. This bill was introduced in the House by Chairman Denham. The bill implements common-sense policies to help eliminate government waste and save billions of taxpayer dollars. CPRA will 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 bill takes politics out of the process and will bring an independent process, outside of bureaucratic red tape, to improve the management of federal real property to eliminate government waste. H.R. 1734 creates a 9 member commission that would review federal properties and recommend specific actions to reduce the federal building inventory and more efficiently house federal employees.

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.

For more information about today’s hearing, click here.



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