Lawmakers plan bipartisan push on bill to help agencies offload unnecessary property

Friday - 12/6/2013, 3:26pm EST

Each year thousands of empty federal buildings stand empty, draining millions from federal coffers in upkeep and maintenance costs.

But numerous attempts over the past 2 1/2 years to streamline the way agencies offload properties, including a "civilian BRAC" effort proposed by the Obama administration, have all fallen short.

Enter Capitol Hill's version of HGTV's "Property Brothers."

Sen. Tom Carper (D-Del.) and Rep. Jason Chaffetz (R-Utah), aren't renovating an old fixer-upper, though. Instead, they're breaking ground on a new effort to get both sides of the Capitol dome on board with a bill to make it easier for agencies to hang the "For Sale" sign on unnecessary properties.

Carper, the chairman of the Senate Homeland Security and Governmental Affairs Committee, and Chaffetz, a member of the House Oversight and Government Reform Committee, hosted a Capitol Hill roundtable with private-sector real-estate experts and former government officials Wednesday to discuss a new legislative path forward.

"I think we heard some very constructive ideas from the private sector and that enable us, hopefully, in the second half of this Congress to move the ball into the other team's territory and drive toward the end zone," Carper said in a brief interview with Federal News Radio after the roundtable. "A conversation like today gives us some renewed momentum, which we need."

CBO scoring has stymied efforts

Nearly everyone — leaders in both the House, Senate and the White House — agrees that disposing of unnecessary real property will net significant savings for the federal government over the long haul.

Agencies own some 14,000 excess properties by one count, costing the government $190 million each year to operate and maintain, according to administration estimates. Another 71,000 properties are underused.

The problem is crunching the numbers: Analyses of recent real-property legislation authored by both Carper and Chaffetz indicate the bills would actually increase agency spending at least in the short- term.

Both pieces of legislation would require GSA to launch a pilot program to expedite the disposal of excess properties by cutting red tape. Under Carper's bill, which envisions as many 200 properties annually undergoing an expedited sell-off, up to 20 percent of sale proceeds would be returned to the agency that owned the property. The Chaffetz bill calls on agencies to target the 15 highest-value properties for sales and would allow agencies to claim the full net proceeds.

Under current law, GSA can spend up to 12 percent of sale proceeds to offset the direct costs associated with preparing the property for sale, while the remainder must be deposited back to the Treasury.

However, both bills have run into trouble with the Congressional Budget Office, which provides cost estimates for proposed legislation. CBO has consistently reported that the bills' provision to allow agencies to keep the proceeds from sales would increase agencies' direct spending by millions of dollars. Meanwhile, requiring agencies to keep better track of their properties and compile the data in a comprehensive repository would actually mean about $2 million to $3 million in increased administrative and reporting costs, according to CBO's analysis.

Doing something smart

Kim Burke, a managing director at Jones Lang LaSalle's Public Institutions Group, said CBO's analysis only takes into account the revenue potential of expedited sales of excess federal property — and that's only part of the story.

"I think we have to take a look at how we're looking at this," she said during the roundtable. "If we're saying that one of the goals is to reduce the deficit, a big bang from a proceed from a large sale is one way to reduce the deficit. But you're also looking at avoiding costs."

By ridding themselves of properties, even if it's not through a particularly lucrative sale, agencies are avoiding future costs, such as upkeep and maintenance of empty or unnecessary buildings, she added.

"We often lose track of that concept when you're looking at these bills, in part because you don't get the scored savings for them," Burke said. "It doesn't help you in any way from a scoring perspective. But it shouldn't keep you from doing something that's smart."

And the idea of allowing agencies to keep the proceeds from selling off their unused assets has worked in the past.

In 2005, Congress temporarily granted GSA the authority to retain proceeds from the sale of surplus property, said Dave Winstead, former commissioner of GSA's Public Buildings Service during the George W. Bush administration.