United States. Congress. House. Committee on Publi.

General Services Administration prospectuses ; To direct the administrator of the General Services Administration to investigate the need and feasibility of acquiring or constructing a federal building in Wilkes-Barre, PA : hearing before the Subcommittee on Public Buildings and Grounds of the Commi online

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Online LibraryUnited States. Congress. House. Committee on PubliGeneral Services Administration prospectuses ; To direct the administrator of the General Services Administration to investigate the need and feasibility of acquiring or constructing a federal building in Wilkes-Barre, PA : hearing before the Subcommittee on Public Buildings and Grounds of the Commi → online text (page 1 of 7)
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GENERAL SERVICES ADMINISTRATION PROSPECTUSES



TO DIRECT THE ADMINISTRATOR OF THE GENERAL
SERVICES ADMINISTRATION TO INVESTIGATE THE
NEED AND FEASIBILITY OF ACQUIRING OR CON-
STRUCTING A FEDERAL BUILDING IN WILKES-
BARRE, PA

(103-30)

Y 4. P %/ 11:103-30

KING

General Services ftdninistration Pro. . . j^ the

SUBCOMMITTEE ON
PUBLIC BUILDINGS AND GROUNDS

OF THE

COMMITTEE ON

PUBLIC WORKS AND TRANSPORTATION

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRD CONGRESS

FIRST SESSION



AUGUST 4, 1993



Printed for the use of the
Committee on Public Works and Transportation




^■"'^^^%.



^fC2 5



1933

U.S. GOVERNMENT PRINTING OFFICE ''^'^^Cf^i^^^y



73-014 ^ WASHINGTON : 1993



For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-04173A-1



•7"a_m yt r\ n-



GENERAL SERVICES ADMINISTRATION PROSPECTUSES



TO DIRECT THE ADMINISTRATOR OF THE GENERAL
SERVICES ADMINISTRATION TO INVESTIGATE THE
NEED AND FEASIBILITY OF ACQUIRING OR CON-
STRUCTING A FEDERAL BUILDING IN WILKES-
BARRE, PA

(103-30)

Y4.P %/l 1:103-30

RING

General Services ftdninistration Pro. . . j^ the

SUBCOMMITTEE ON
PUBLIC BUILDINGS AND GROUNDS

OF THE

COMMITTEE ON

PUBLIC WORKS AND TRANSPORTATION

HOUSE OF REPRESENTATIVES

ONE HUNDRED THIRD CONGRESS

FIRST SESSION



AUGUST 4, 1993



Printed for the use of the
Committee on Public Works and Transportation




1993



DBC23



U.S. GOVERNMENT PRINTING OFFICE "^'^^Cf^i^^^y

7»-014 i=f WASHINGTON : 1993 *'*^^

For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
ISBN 0-16-041734-1



COMMITTEE ON PUBLIC WORKS AND TRANSPORTATION



NORMAN Y. MINETA, California, Chair



JAMES L. OBERSTAR, Minnesota
NICK JOE RAHALL II, West Virginia
DOUGLAS APPLEGATE, Ohio
RON DE LUGO, Virgin Islands
ROBERT A. BORSKI, Pennsylvania
TIM VALENTINE, North Carolina
WILLIAM O. LIPINSKI, lUinois
ROBERT E. WISE, Jr., West Virginia
JAMES A. TRAFICANT, Jr., Ohio
PETER A. DeFAZIO, Oregon
JIMMY HAYES, Louisiana
BOB CLEMENT, Tennessee
JERRY F. COSTELLO, Illinois
MIKE PARKER, Mississippi

GREG LAUGHLIN, Texas

PETE GEREN, Texas

GEORGE E. SANGMEISTER, Illinoia

GLENN POSHARD, Illinois

DICK SWETT, New Hampshire

BUD CRAMER, Alabama

BARBARA-ROSE COLLINS, Michigan

ELEANOR HOLMES NORTON, District of
Columbia

LUCIEN E. BLACKWELL, Pennsylvania

JERROLD NADLER, New York

SAM COPPERSMITH, Arizona

LESLIE L. BYRNE, Virginia

MARIA CANTWELL, Washington

PAT (Patsy Ann) DAJWER, Missouri

KAREN SHEPHERD, Utah

ROBERT MENENDEZ, New Jersey

JAMES E. CLYBURN, South Carolina

CORRINE BROWN, Florida

NATHAN DEAL, Georgia

JAMES A. BARCIA, Michigan

DAN HAMBURG, California

BOB FILNER, California

WALTER R. TUCKER, California

EDDIE BERNICE JOHNSON, Texas

PETER W. BARCA, Wisconsin



BUD SHUSTER, Pennsylvania
WILLIAM F. CLINGER, Jr., Pennsylvania
THOMAS E. PETRI, Wisconsin
SHERWOOD BOEHLERT, New York
JAMES M. INHOFE, Oklahoma
BILL EMERSON, Missouri
JOHN J. DUNCAN, Jr., Tennessee
SUSAN MOLINARI, New York
WILLIAM H. ZELIFF, Jr., New Hampshire
THOMAS W. EWING, Illinois
WAYNE T. GILCHREST, Maryland
JENNIFER B. DUNN, Washington
TIM HUTCHINSON, Arkansas
WILLL^M P. BAKER, California
MICHAEL A. "Mac" COLLINS, Georgia
JAY KIM, California
DAVID A LEVY, New York
STEPHEN HORN, California
BOB FRANKS, New Jersey
PETER I. BLUTE, Massachusetts
HOWARD P. "Buck" McKEON, California
JOHN L. MICA, Florida
PETER HOEKSTRA, Michigan
JACK QUINN, New York



Subcommittee on Public Buildings and Grounds

JAMES A TRAFICANT, Jr.. Ohio, Chair
ELEANOR HOLMES NORTON, District of JOHN J. DUNCAN, Jr., Tennessee



Columbia, Vice Chair
EDDIE BERNICE JOHNSON, Texas
DOUGLAS APPLEGATE, Ohio
JAMES E. CLYBURN, South Carolina
WALTER R. TUCKER, California
NORMAN Y. MINETA, California

>(ExOffi<iK))\i^-''



THOMAS E. PETRI, Wisconsin
BILL EMERSON, Missouri
BUD SHUSTER, Pennsylvania
(Ex Officio)



(n)



CONTENTS



GENERAL SERVICES ADMINISTRATION PROSPECTUSES

Testimony: Page

Bibb, David, Assistant Commissioner, Office of Facility Planning, Public

Buildings Service, General Services Administration 3

General Services Administration prospectuses:
Leases:

Kansas Ci^, KS, Metropolitan Area — Federal Administration 10

Landover, MD, Landover Building 15

Capital OfBce Park, Suburban Maryland 19

New York, NY, U.S. Secret Service 23

Northern Virginia:

Northrop Page Building 27

Park Center One 31

Washington, DC, Metropolitan Area, Main Interior Building, Swing

Space Lease 35

District of Columbia:

Department of Justice, Todd Building 38

Feaeral Election Commission 43

Reporters Building 48

ArUngton, VA, 2800 Crystal Drive 52

Alteration:

Various locations — Social Security Administration (amended FY

1992) 57

Fiscal year 1993 leases:

Research Triangle Park, NC, Environmental Protection Agency 61

Rockville, MD, 1390 Piccard Drive 65

Woodlawn, MD, Social Security Building 69



REQUEST TO HAVE A COMMITTEE 11(b) RESOLUTION TO DIRECT THE
ADMINISTRATOR OF GENERAL SERVICES TO INVESTIGATE THE NEED
AND FEASIBILITY OF ACQUIRING OR CONSTRUCTING A FEDERAL
BUILDING IN WILKES-BARRE, PA

Testimony:

Kanjorski, Hon. Paul E., a Representative in Congress from Pennsylva-
nia 73

Prepared statement 73

Letter, from Hon. Paul E. Kaiyorski of Pennsylvania to Hon. James
A. Traficant, Jr., of Ohio, requesting authorization for the General
Services Administration to perform an 11(b) building survey in
Wilkes-Barre, PA 74

(III)



General Services Administration Prospectuses



To Direct the Administrator of the General Serv-
ices Administration to Investigate the Need
and Feasibility of Acquiring or Constructing a
Federal Building in Wilkes-Barre, PA



WEDNESDAY, AUGUST 4, 1993

House of Representatives,
Subcommittee on Public BuiLonvfOS and Grounds,
Committee on Public Works and Transportation,

Washington, DC.

The subcommittee met, pursuant to call, at 9:25 a.m., in room
2253, Raybum House Office Building, Hon. James A. Traficant, Jr.
(chairman of tiie subcommittee) presiding.

Mr. Traficant. The subcommittee will come to order. The sub-
committee is meeting today to hear and mark up several important
items. I would like to make a clarifying comment on S. 779, Smith-
sonian legislation that we will take up, it is identical to H.R. 848,
sponsored by our distinguished Chairman, Mr. Mineta.

A bill which was passed in the Senate has been referred to this
committee. The simple purpose is to continue the authorizations
appropriation for the East Court construction project at the Na-
tional Museum of Natural History imtil the appropriations are ex-
pended.

S. 779 which serves the laudable purpose of correcting a draftmg
mistake in the existing East Court law enacted in 1990. The sub-
committee will also hear testimony from Congressman Paul Kan-
jorski of Pennsylvania on his request for an 11(b) resolution.

And when he comes, we will accommodate him in the schedule.
He has been with the President on the Hill today.

Next tiie witness from General Services Administration will
present testimony on a number of GSA prospectuses. The sub-
committee will then begin its extensive markup.

We will mark up five name bills, 5 GSA 11(b) requests, and nu-
merous GSA prospectuses. Would the gentleman from Wisconsin
like to make a statement?

Mr. Petri. I think I will defer to my Ranking Member.

Mr. Traficant. Would you like to make a statement until the
distinguished Ranking Member comes in?

Mr. Petri. No, I don't have any statement.

(1)



Mr. Traficant. I recognize the gentleman from Tennessee who
was really on time. I was late. He made it look like I was early,
he was late.

Mr. Duncan.

Mr. Duncan. Well, I apologize for getting here now. We under-
stood the meeting was going to start a few minutes late, so I start-
ed in on other things. I want to welcome the witnesses here this
morning to testify on the pending matters and I understand that
we have a number of 11(b) proposals that we are going to act on
today.

The government needs office and related space and for funding
reasons, we have got to — we are into a number of leases. I am par-
ticularly interested this morning in regard to 14 leases that are
pending before the subcommittee, and the value of these leases to-
tals $875 million.

There is a lot of money that comes through this subcommittee
and I think we have got to start looking a little bit closer at some
of these leases because we have some people that really have got-
ten rich off of some of these leases, and I think that if we look at
these a little closer, there are some substantial savings that can be
made in regard to these leases.

I have asked staff to review some of these proposed lease actions
and to report back to me on any cost savings that the committee
can initiate. I want to move forward, but I also want to try to save
money wherever possible.

In addition, we are going to get in I think to some of the 11(b)
proposals.

Are we going to do that later?

Mr. Traficant. Yes, we are.

Mr. Duncan. Okay. All right. Then I will just reserve any other
statement for the appropriate time at a later point.

Mr. Traficant. Thank you.

Hearing that, I would like to say that I will work with you on
that, Mr. Duncan. I agree with you 100 percent. Hopefully, we can
resolve a few of those things and go on.

We have members here today from the Secret Service, they are
hoping that some of the loss that they suffered up in New York due
to the bombing of the World Trade Center can be corrected and the
committee will address itself to them, and I would like to say that
we will do that.

Also officials came here from the Social Security Administration
where there are also a number of issues. We will address ourselves
to those concerns as well. Mr. Kanjorski is not here. We will try
and accommodate him.

We have now received testimony from the General Services Ad-
ministration, represented by Mr. David L. Bibb, the Office of Facil-
ity Planning, Public Building Services.

At this point, I would like to comment on the Social Security Ad-
ministration amended prospectus for repair of three service centers
located in Philadelphia, Chicago and Richmond, California. This
1991 prospectus is so complex and confusing that we are today not
considering — not the first, but the second amendment of the
project.



Constant repair projects have increased tremendously. For exam-
ple, the original cost for the Richmond, California project has gone
from $4 million, Mr. Duncan, to $11.4 miUion, almost a 200 percent
cost increase. An effort to rescue this project, conversations were
held with staff and the Social Security Administration to determine
what the Social Security Administration's agreement to fund the
$6.89 million of additional construction cost requested in this
project for use of funds previously authorized by this committee for
the Chicago service center which currently is being redesigned.

As a result, carrying out the repair projects in Philadelphia and
Richmond will not involve any further cost to taxpayers. Also the
Social Security Administration will be requested to submit a new
prospectus to the committee for the Chicago service center.

And I want to state that in advance, make sure you are com-
pletely apprised of all that. I don't know if you had all that up-to-
date details. And with that, I would like to welcome Mr. Bibb and
mention the fine job you have done in the past and want to hear
what is happening on these issues. Now, Mr. Bibb, the floor is
yours.

TESTIMONY OF DAVID BIBB, ASSISTANT COMMISSIONER, OF-
FICE OF FACILITY PLANNING, PUBLIC BUILDINGS SERVICE,
GENERAL SERVICES ADMINISTRATION AND GARY ARNOLD,
DEPUTY ASSOCIATE COMMISSIONER FOR FAdLITIES MAN-
AGEMENT, SOCIAL SECURITY ADMINISTRATION
Mr. Bibb. Thank you, Mr. Chairman, good morning, and good
morning, Mr. Duncan.

I am pleased to appear before you today to continue our discus-
sion of prospectuses in support of the fiscal year 1994 Capital Im-
provement and Leasing Program. The majority of the projects that
will be considered today are lease projects, and rather than deliver-
ing a lengthy opening statement, I would simply say I would be
pleased to describe any individual project on the agenda that you
would ask me to, and to answer any questions that you may have.
Mr. Traficant. Well, I am going to defer to Mr. Duncan. If you
have any questions you would like to proceed first, Mr. Duncan,
you are welcome.

Mr. Duncan. Mr. Bibb, whai^what is the present arrange-
ment — what are some of the — what is a typical fee for the brokers
who bring lease offers to the GSA? Is there a standard rate or a
percentage, or how is that handled?

Mr. Bibb. There is no standard. Our practice is to go to the mar-
ket and negotiate with the owner or whomever the owner may des-
ignate as his or her representative.

We don't require that the owner use a broker. It can be the
owner personally, it could be a legal counsel representing the
owner, or it could be a broker. Also, there is no set fee. We rely
on the market. Some people will offer property through a broker,
others will offer it themselves. Therefore market forces are working
to drive that price down.

Mr. Duncan. Well, let's see, can we get to some specifics? What
percentage, rough guess, of the leases that GSA handles are done
through brokers?



Mr. Bibb. I would really have to provide that information for the
record. We do not keep statistics that way. It would have to be kind
of a rough guess, which I could put together for you. But I really
don't have a good guess this morning.

[The information follows:]

Since lease fees are not specifically identified in the Lessor's Annual Cost State-
ment submitted with the offer or the appraisal completed prior to award, we are
unable to provide an accurate percentage of leases which are brokered by real estate
brokers. /^ a practical matter, we believe building owners use real estate brokers
to negotiate leases with GSA a majority of the time, especially on the larger more
complex leases.

Mr. Duncan. All right. What is the— what is the biggest broker-
age fee that you know of?

Mr. Bibb. I just don't know. As far as I know, we don't keep sta-
tistics that way. I would have to do some research on that.

Mr. Duncan. Well, all right. I would like to look into some of
those brokerage fees and I would like to know what are the — I
would like to have some — I would appreciate if you would send me
some specific information on some of the brokerage fees that have
been paid by the GSA on some of these leases and the amounts and
to whom they were paid and that type of thing. And also informa-
tion about what percentage of the leases are handled through bro-
kers.

Mr. Bibb. All right. I will be glad to do that.

[The information follows:]

GSA does not pay a broker a fee to lease space fi-om private-sector building own-
ers. Fees for negotiating a lease with GSA are paid by the building owner. We do
not have information relative to the financial arrangements between owners and
brokers or the percentage of GSA leases handled by brokers.

Mr. Duncan. Some of the — some of the leases that we are deal-
ing with today, I haven't really seen before and so I don't — I am
going to — I may have some specific questions later on, but we will
get those to you.

We will work through the staff and get those to you later.

Mr. Bibb. That will be fine.

Mr. Duncan. I do want to say one other thing, though, that I
should have mentioned. I don't mean to imply by the tone of my
questions that I think anything is wrong here, put Mr. Bibb on the
spot because you and your staff have been very responsive in help-
ing us in many different ways and responding to other inquiries
that we have made.

Mr. Bibb. Thank you.

Mr. Duncan. So I do want you to know that I appreciate that.
We are just looking into these things and it may be that once we
look into them, that we will be very satisfied with everything. But
at least some of these things we are going to check into a little bit.

Mr. Bibb. I understand that. And if you would like to get to-
gether and sit down and talk about it, we are always glad to do
that.

Mr. Duncan. All right, thank you very much.

Mr. Traficant. I want to echo the same comments of Mr. Dun-
can, Mr. Bibb. I appreciate your frank and open response to any
concern that we had. For example, I am new in the chairmanship
here, and I appreciate your frank and honest answers.



But Mr. Duncan has been a tiger on some of these issues and I
want to support him. I think it is exactly right that some of our
costs are a httle high. As you know, I have introduced a scoring
bill. I can't believe the government is still doing business in a way
which is costing a ton of money to the American taxpayers.

So I have a couple of questions here as well. Would lease costs
as exhibited in the Department of Interior prospectus be avoided
if the government owned a sufficient amount of swing space?

Mr. Bibb. Yes, if we owned space, that could be used for swing
space purposes, and we could avoid the rental payment. In think-
ing about where we want to devote our money for Federal construc-
tion or Federal ownership, we have generally targeted areas where
we can avoid the most rental payments.

The swing space for this particular one is a metro-wide procure-
ment, so perhaps we can get a httle bit lower rental rate than for
some of the other situations we are talking about. But in a major
metro area like Washington, Washington particularly, ownership I
beheve is a good investment.
Mr. Traficant. How much space do they need?
Mr. Bibb. For the Department of Interior, we are requesting
210,000 square feet of swing space. That of course is so we can pro-
ceed with the renovation of the main Interior headquarters, which
you authorized just a couple months ago.

And that will allow us to do that building in phases. We will in
essence move out of about a quarter of the building so that the ren-
ovation project can proceed in phases.

Mr. Traficant. If not for the current scoring rules, how many of
these leases would have been authorized construction projects?

Mr. Bibb. Just running down the hst, I believe there are about
15 leases on the agenda today. I know you have looked at the eco-
nomics, your staff has looked at the economic analyses on the
leases, and most of them show that ownership would be preferable.
I wouldn't say we would want to construct buildings instead of
leasing for all of these projects, but it appears to me just from
skimming through this hst that at least nine of them we would like
to have some kind of ownership position in an unfettered world.

Now, like I say, that doesn t necessarily mean we would build.
We might want to buy or lease with some kind of ownership posi-
tion in the lease. But that comes back to the lengthy discussions
we have all had about scoring on the availabiUty of money to make
that sort of thing happen.

Mr. Traficant. Well, Mr. Duncan and I are committed to devel-
oping a building purchase fund and to this abihty open in addition
to changing the scoring rules. I appreciate your help on that. This
government works in strange ways, so you've got to give us a hand
once in a while.

Mr. Bibb. I will. The level of interest and knowledge on the scor-
ing issue is much higher than I have ever seen it before. The de-
bate is healthy. There are lots of pros and cons on both sides and
we all know the issue is bigger than just public buildings.

But I certainly appreciate both your and Mr. Diincan's efforts on
getting the issue on the table.

Mr. Traficant. The GSA lease for this Kansas City space ex-
pired on October 31, 1992, which means you are in a hold-over sta-



6

tus from what we understand. In your negotiations, for how long
will you attempt to extend this lease?

Mr. Bibb. Well, the lease that expired in October 1992, was a
very small one, only about 2,900 square feet. We were unable to
reach agreement for an extension, so we relocated within the Kan-
sas City area at a rate of under $10 a square foot. Therefore, we
were able to house that client in the interim through a
nonprospectus action.

Mr. Traficant. As I am askir^g these questions, if you want to
jump in any time, it is open for you.

Mr. Duncan. All right, thank you, thank you, Mr. Chairman.

I do have some questions based on some material that I have
been handed. You know, Mr. Bibb, in recent months there have
been articles in Forbes magazine, the New York Times, pubhca-
tions all over the country, about the fact that there is a glut of pre-
mium type office space in the Nation's largest cities, vacancy rates
of a third or even higher.

And so the impression I have, and tell me if I am wrong, but the
impression that I have from these articles is that there are devel-
opers or building owners out there that are really hurting for good
tenants and they would just do almost anything to get the Federal
Government into some type of long-term lease.

So it looks like that, you know, a few years from now maybe it
wouldn't be the case, but now we ought to be able to work out some
just almost bargain basement type leases or very good deals, very
favorable arrangements.

And yet I look down through this Ust at these proposed leases,
and as I said earlier, they total $875 miUion I think roughly, so we
are talking about some pretty significant money here.

But the Secret Service lease in New York City is at a range of
$45 to $55 a square foot. Now, you mentioned the Kansas City
lease of less than $10 a square foot. It would seem to me that even
in a place like New York City where the New York Times wrote
that there was a glut of space and that, you know, the economy has
not been good, why in the world would we have to pay $55 a
square foot for space?

Mr. Bibb. Well, let me

Mr. Duncan. What are we getting for that?

Mr. Bibb. Well, we are getting location, for one thing. The Secret
Service in Manhattan has two major responsibilities. One is to pro-
vide support to the United Nations and the constant stream of per-
sons at the U.N. that they have to protect.

The other is to provide credit card fraud investigations, counter-
feiting, that sort of thing. A lot of their investigations are centered
in the financial community on lower Manhattan. They also have —
we have under long-term lease — about 200 parking spaces in the
World Trade Center, which were damaged by the explosion, but are
in the process of being replaced under lease through the year 2013
at a below market, low end of the market rate.

So we are trying to locate near that parking space and in an area
to serve Secret Service. Manhattan rates, although there is avail-
able space, continue to be higher than most areas of the country,
thus the $55 rate.



I would like to comment on an issue that sometimes I think dis-
torts, albeit not intentionally, the rate that you see before you. We
express cost per square foot in something called occupiable space,
dollars per occupiable square foot, and that excludes elevator
shafts, restrooms, public corridors.

All of that is excluded when we figure out how many square feet
we are leasing. So consequently there are fewer occupiable square
feet than the way the New York market measures space. Our rate
of $55 equates to, if you see printed numbers in the New York
newspapers, that would equate to something like $38 a square foot
unserviced on a New York system of measurement of space, which
is basically exterior wall to exterior wall.

I know that is probably an overly complicated answer. I am not
saying that the rate is cheap, but I am saying our rates do appear
to be a little higher than what you would read in the newspaper.

Mr. Duncan. You mean that this— that you would knock off
roughly a third for that

Mr. Bibb. Because of the different systems of measurement. We
are still leasing the same space, it is simply the way the New York
landlords classify space versus how we classify the space. I am not
trying to say this is inexpensive space, it is just

Mr. Duncan. You would agree that this is very expensive space?

Mr. Bibb. I would say it is expensive space as far as our inven-
tory goes.

Mr. Duncan. What is the highest per square foot rent that you
know of in the entire GSA inventory?

Mr. Bibb. I would have to research that to be sure of the answer,
but there are some spaces up around $60. Not much, but some.


1 3 4 5 6 7

Online LibraryUnited States. Congress. House. Committee on PubliGeneral Services Administration prospectuses ; To direct the administrator of the General Services Administration to investigate the need and feasibility of acquiring or constructing a federal building in Wilkes-Barre, PA : hearing before the Subcommittee on Public Buildings and Grounds of the Commi → online text (page 1 of 7)