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Mica & Denham Statements from Hearing on "Sitting on Our Assets: Cutting Spending and Private Redevelopment of Underperforming Buildings"

February 10, 2011

Washington, DC – At a Congressional hearing today in an unheated and vacant federal property just blocks from the White House and the Capitol, Committee leaders called on the federal government to dramatically improve the management of underused, wasteful federal buildings in order to save taxpayers’ money.

Today’s hearing of the Economic Development, Public Buildings and Emergency Management Subcommittee was entitled, “Sitting on Our Assets: Cutting Spending and Private Redevelopment of Underperforming Buildings,” and was held at the Old Post Office Building Annex in Washington, DC.

This underperforming federal asset costs taxpayers millions of dollars every year, while working with the private sector to redevelop and improve the management of the property could provide the federal government with a return on its investment. The Old Post Office Building is just one example of the wasteful, underperforming, poorly managed federal properties that continue to bleed the taxpayers. The Annex, which was built with $1.8 million in government funding, in addition to millions in private funds, has been unoccupied for 10 years.

In October 2010, Committee Republicans released a report entitled, “Sitting on Our Assets: The Federal Government’s Misuse of Taxpayer-Owned Assets.” In part the report focuses on the mismanagement federal real property. The report can be viewed here.

The following are the statements of Transportation and Infrastructure Committee Chairman John L. Mica (R-FL), and Economic Development, Public Buildings and Emergency Management Subcommittee Chairman Jeff Denham (R-CA) from today’s hearing:

Mica Statement
“It’s a cold day today for the witnesses, the audience, and the Members of the Committee, but it’s been an even colder decade for the taxpayers. This facility has been sitting vacant and unused for a decade, costing taxpayers $6.5 million each year.

“This building is just the tip of the iceberg – there are underused and poorly managed public buildings across the country. A review of three agencies in 2009 by the General Accountability Office revealed about 10% of their properties were excess or underutilized, meaning there could be as much as 330 million square feet of extra space, costing taxpayers billions of dollars each year to maintain.

“The federal government must stop sitting on its assets and wasting money.

“If the federal government’s real estate management agency, the General Services Administration, doesn’t have the tools or the incentive to better manage our valuable assets, then Congress needs to provide them. I am open to looking at any solutions, but the answer is certainly not sitting here in this cold, vacant building.”

Denham Statement
During the hearing, Chairman Denham issued a warning to all federal agencies putting them on notice that he wants a list of excess and surplus properties and is willing to request a subpoena if necessary. During his first committee hearing as Chairman, Rep. Denham stated that at such a time of economic hardship we owe it to the taxpayers to provide them lists of unused properties in order to reduce the debt. Chairman Denham’s statement:

“We are here in the Annex of the Old Post Office Building to turn the spotlight on vacant federal space in Washington, and all across the country, so that we may find ways to stop sitting on our assets and save taxpayer money.

“The Old Post Office Building sits on prime real estate in the nation’s capital – walking distance from both the White House and the Capitol building on what is considered America’s Main Street – Pennsylvania Avenue.

“Common sense would tell us this building should have tremendous value for the taxpayer. However, the reality is much different – GSA loses over $6 million annually on this building and the Annex has been vacant for more than a decade.

“The sad fact is there are buildings like this one all over the country. As a former State Senator from California, I have seen first-hand the costs that poor management of public buildings has on a budget. The waste is significant.

“According to the Federal Real Property Council, in fiscal year 2009, the federal government spent $1.7 billion in annual operating costs for underutilized buildings and $134 million, annually, for excess buildings.

“In this case GSA has the legal authority to redevelop the building and generate a positive return. Yet the annex sits vacant and bleeds taxpayer money. Business as usual must stop.

“One of the first things we must do is identify underperforming assets. I understand the GSA maintains a database of federal real property, yet has declined to give this committee access to it. This practice must end so our committee can conduct effective oversight of federal real estate.

“I look forward to working with Chairman Mica, Ranking Member Norton and other members of our committee on reforms that will help stop wasteful spending.”

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