The White House on Wednesday sent to Congress a legislative proposal that would establish an independent commission to sift through more than 12,000 excess federal properties and streamline the process of either selling or demolishing them.
Jeffrey Zients, the deputy director for management in the Office of Management and Budget, said the process would be modeled after the Defense Department’s Base Realignment and Closure (BRAC) commission. Congress first implemented BRAC in the 1980s to eliminate unnecessary military installations that couldn’t be shut down because members of Congress were unwilling to close bases in their own districts. Like BRAC, the new commission would prepare a list of recommendations and send it to Congress for an up or down vote.
“For too long, the political interests and the red tape have gotten in the way and not enough has gotten done,” Zients said. “There’s been a culture of inertia. What the legislation does is it changes this process. It takes a proven approach and applies it to the civilian terrain, and will unlock $15 billion of taxpayer value across three years.”
The administration claims its proposal would get rid of the three main obstacles for getting rid of the properties that agencies don’t need. Of the red tape, Zients said there are 20 different requirements agencies have to follow when they want to dispose of real estate.
“It doesn’t make sense to use the same procedure when selling a small unused warehouse as you do when you sell a large downtown office building,” he said.
The administration says the political process has also been an impediment to the disposal of unneeded real estate. Members of Congress, they argue, are not frequently eager to champion the selling off or demolition of federal property in their own districts.
Third, White House officials say, is the question of agency funding.
“Ironically, agencies often can’t afford to get rid of unneeded property,” Zients said. “They can’t cover the short-term costs, things like moving expenses and transaction expenses. This often prevents agencies from capturing the obvious ongoing savings of getting rid of property they don’t need.”
Zients said the administration’s legislation would solve that problem by splitting up the proceeds of any property the government sells. He said 60 percent would go back to the Treasury for deficit reduction purposes, and 40 percent would be returned to agencies for reinvestment in their existing real estate portfolios, including defraying those short-term property disposal and moving costs.
Also Thursday, the administration made public the list of the federal properties agencies already designated as excess and posted roughly half of them in an online map. The list is based on 2009 data, so some of the properties have already been sold or otherwise gotten rid of, but it includes 14,000 federal real estate holdings, ranging from vacant warehouses to half-empty office buildings to lands and roads.
All the properties total more than 24 million square feet. In the Washington DC area, for instance, Maryland has 243 excess properties, Virginia has 273 and Washington has five.
California has the most excess properties with more than 1,100 and Illinois is second with 529.
“This is a very important step,” Zients said. “Now the public will hold us accountable to sell or get rid of these properties, and the public will also identify other properties that are not on the excess list, but should be.”
He said most of the properties on the current list actually have no commercial value or are housed within a larger federal compound, and would be better candidates for demolition than for sale. Nonetheless, the government would realize savings by no longer having to pay for upkeep on those properties.
In a memo last year, President Obama told agencies to come up with $3 billion in savings through smarter management of their real estate portfolios, including shutting down data centers, ending expensive leases and getting rid of excess property. Danny Werfel, OMB’s controller, said they agencies are on track to achieving that goal.
“A specific example of a lease termination occurred here in Washington D.C.,” he said. “The Department of Homeland Security was the occupant of a building, and because they used an aggressive telework policy, they cut their lease space in half. They saved $900,000 a year in one building alone.”
Werfel said agencies also were being encouraged to do all they could to avoid unnecessarily expanding the government’s real estate footprint. He said the Social Security Administration had recently avoided $7 million in new spending by cancelling the construction of eight new offices and finding ways to work within their existing facilities.
The civilian BRAC proposal showed early signs of support on Capitol Hill. Rep. Jeff Denham (R-Calif.), who is the chairman of the Transportation and Infrastructure’s subcommittee on public buildings said in a statement Wednesday that the proposal appears to be a good first step.
And Sen. Tom Carper (D-Del.), who sits on the transportation and infrastructure committee, also praised the measure. Both Carper and Dehnam plan to introduce their own legislation proposing a civilian BRAC process.