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Tuesday, April 09, 2013

From islands to log cabins, agencies struggle to offload excess property

Efforts to offload unused property from the federal books got a boost last month when a team of developers working with the Four Seasons hotel chain submitted the winning $19.5 million bidto purchase the massive Georgetown West Heating Plant from the government.

The Art Deco brick behemoth, near the swanky Georgetown waterfront in Northwest Washington, D.C., had long been a poster child for the difficulties the federal government faces in disposing of excess properties. Despite being mostly vacant for the past decade, the building stood there continuing to rack up $3.5 million in annual upkeep.

The process of disposing of properties that have outlasted their usefulness to the government continues to vex agencies.

Three years ago, President Barack Obama called on civilian agencies to reduce total real-estate costsby $3 billion, a goal they handily surpassed.

But the majority of agency savings resulted not from property disposal but from more small-bore improvements, such as space-management and sustainability initiatives. Of the $3.5 billion agencies reported in real-property savings at the end of 2012, just $984 million came from actually disposing of some of the 14,000 excess properties the government owns.

As part of the special report, Rise of the Money People, Federal News Radio examines why the government has struggled with real-property management and the reform efforts on the table that could help make a difference.

The government owns some 889,000 buildings and structures, according to fiscal 2010 data — the last year for which complete information is available.

More than 15 percent (or 14,000) of those buildings is considered excess, costing the government $190 million each year to operate and maintain, according to administration estimates. Another 71,000 properties are deemed underused, such as half-empty office buildings or warehouses.

The government's inventory of excess buildings and structures spans everything from everyday office buildings in Washington, D.C., and historic log cabins in the Pacific Northwest to manmade caves and even islands.

High-quality data is key to effective financial management. But when it comes to real-property data — such as knowing the location, condition and occupancy rates for buildings owned by the government — it's hard to come by.

-Jack Moore, FederalNewsRadio.com

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