GSA caught in another spending spree

byJennifer Peebles

05/18/12

Federal officials with the same agency that blew $800,000 at a Las Vegas employee conference two years ago are also paying millions every month to rent property that almost nobody in the government uses.

The General Services Administration (GSA), the federal government’s housekeeping agency, pays $13 million in annual rent for 189 rental properties that were less than 1 percent “occupied” for nearly half of last year, according to an analysis of GSA leasing inventory data by The Washington Examiner.

And GSA pays $600 million in annual rent for at least 2,000 rental properties that were less than 10 percent occupied during that time, the analysis found.

All of the properties are managed by GSA’s Public Buildings Service (PBS), which negotiates the leases and assigns the space to federal departments and agencies.

The housekeeping agency, which manages more than 354 million square feet of space used by units throughout the federal government, recently came under fire for lavish spending on a staff conference held in Las Vegas in 2010.

Among the spending abuses found were the hiring of a “mentalist,” paying $6,000 for commemorative coins in velvet boxes for attendees, and several GSA officials making multiple “planning” trips to Las Vegas prior to the conference.
As a result, Martha Johnson resigned as GSA Administrator, two of her top deputies were fired and four senior program managers were put on administrative leave.

The scandal was uncovered by the GSA Inspector General and first reported in April by The Washington Post.

One of those placed on leave was David Foley, deputy PBS commissioner, who told a congressional subcommittee last year that "GSA effectively manages its leased space."

It was also Foley who joked on video about congressional oversight at the Las Vegas blowout.

The most expensive single rental property in the GSA stable is the sprawling U.S. Patent and Trademark Office complex in Alexandria, Va.

The government pays $71.5 million a year to rent that building from the same firm that is building, and which will own, the new Nuclear Regulatory Commission headquarters in North Bethesda, Md.

The agency pays $43.5 million to rent the building in southeast Washington, D.C., where the U.S. Department of Transportation is headquartered.

Both of those buildings are 100 percent occupied, data show.
But GSA data show 189 leased properties were less than 1 percent occupied in September 2011 and were still less than 1 percent occupied in March 2012, the Examiner found.

And more than 2,000 properties in the government data were less than 10 percent occupied in September and again in March.

Among the most expensive examples of unoccupied leased property is a 24,000-square-foot space in Fort Lauderdale for which the government pays $1 million annually. The facility was listed in the data files as just 0.1 percent occupied in both September and March.

The government pays another $355,000 a year to rent 24,000 square feet in Tulsa, Okla., with the same 0.1 percent occupancy rate.

And $267,000 a year goes to rent a 7,000-square-foot space at the Raleigh, N.C., airport that the GSA estimated as 0.02 percent occupied during the same time.

A GSA spokesman did not return a reporter’s telephone call seeking comment.

GSA officials have acknowledged in the past that the federal government has "underutilized" rental properties on its books and say they routinely get rid of space the government doesn't need.
The agency has sold off $244 million in federal property since 2005 and is on track to beat the goal President Obama gave it two years ago to cull $3 billion in unneeded property from the rolls by the end of this fiscal year, then-Public Buildings Service Commissioner Robert Peck told Congress in March. Peck was fired in the aftermath of the scandal.

This week, GSA is trying to sell an unfinished building in tiny Falfurrias, Texas; a former home and bunk house for park rangers in Walden, Colo., lighthouses in Maine, New Jersey and New York; and an entire island off the New York coast that has been home to the federal research center on animal diseases.

The agency also can lease unneeded property it owns. For instance, GSA recently announced it would allow a Donald Trump firm to lease and redevelop the historic Old Post Office pavilion on Pennsylvania Avenue in Washington, with its landmark 315-foot-high clock tower, as an upscale hotel.

Less than three percent of all of the property the agency leases and owns was vacant in fiscal year 2010, the agency told Congress last year -- considerably better than the private sector’s rate of 17 percent.
The GSA now rents more space than it owns, even though building and owning property "is often the least expensive option," the Government Accountability Office wrote in a 2008 report:

"Federal budget scorekeeping rules require the full cost of (construction) to be recorded up-front in the budget, whereas only the annual lease payment plus cancellation costs need to be recorded for operating leases, making them 'look cheaper' in any year even though they generally are more costly over time."

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