Norton Chairs 1st On-Site Congressional Hearing in NOMA Area - 2/27/2007
Norton Chairs 1st On-Site Congressional Hearing in NOMA Area to
Save Federal Dollars and Increase D.C. Revenues
February 27, 2007
Washington, DC--The Office of Congresswoman Eleanor Holmes Norton (D-DC) today announced that Norton, Chair of the Subcommittee on Economic Development, Public Buildings and Emergency Management, will hold a field hearing today to examine the General Services Administration's (GSA) role as the realtor for the federal government, as she presses federal agencies to locate in the attractive but underdeveloped NOMA area (North of Massachusetts Avenue). The hearing will take place at the Federal Energy Regulatory Commission, 888 1st Street, NE, Hearing Room 1, one of the few federal agencies located in NOMA, which is bound by Union Station, North Capitol Street, Florida Avenue, New York Avenue, and Second Street.
Norton got the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF) to re-locate its headquarters on New York and Florida Avenues, NE, and got federal funds for the New York Avenue Metro station. Both have spurred planned development of amenities, rental housing and office space. Nonetheless, federal leasing remains behind, even as this area still has lower market prices than K Street and other downtown corridors that traditionally have been attractive to government agencies. Norton has been critical of the GSA for dragging its feet on prime space in NOMA, priced well-below other downtown areas and with savings for U.S. taxpayers.
During the hearing, Norton will examine GSA's role as a real estate agent, specifically how it advises agencies and finds office space, and whether the agency is meeting its statutory responsibilities in its multiple role as a realtor, developer, and landlord. During 16 years on the Subcommittee, Norton has learned that agencies often prefer high priced space near downtown shops, theaters and restaurants, and has complained that the GSA defers to agencies, despite its statutory responsibilities for locating them, and despite high costs. After 10 years of GSA failure to locate federal agencies on the 57-acre Southeast Federal Center, Norton wrote the legislation that is now allowing private entities to build on a federal site for the first time anywhere.
The GSA is responsible for approximately $3.8 billion of leased office space nationwide and for finding space for almost all federal entities nationwide. Hearing witnesses will include David Winstead, GSA Public Building Service Commissioner; Bruce Baschuk, Chairman of the NOMA Business Improvement District; and Mignon Anthony, ATF Building Project Director.
"NOMA, with its central location near the New York Avenue gateway and the Union Station mall and transportation hub, should be very attractive to the federal government, and in turn can keep federal agencies and jobs in D.C.," Norton said. "In times of staggering federal deficits, it is imperative that GSA aid federal agencies in their decision making process by highlighting financial advantages of being in an emerging urban area like NOMA."
The text of Norton's hearing statement follows.
I am pleased to welcome today’s witnesses to this hearing on General Services Administration (GSA) site location policy entitled “A Case Study in National GSA Location Policies for Federal Agencies.” I especially thank Federal Energy Regulatory Commission officials and staff who readily made excellent accommodations available for today’s hearing. For sixteen years on this subcommittee I have had an opportunity to closely observe GSA as it has located federal agencies here, creating a virtual microcosm of GSA’s location policies nationwide. The agency is charged by statute to perform various developer, landlord, and real estate agent functions. Established in 1949, the GSA has unique and unsurpassed expertise in every location in the country, including extensive knowledge of local and regional real estate markets, costs, availability, and trends. GSA is responsible for approximately $3.8 billion of leased office space nationwide and for finding space for almost all federal agencies, with the exception of the Department of Defense and Veterans Administration entities.Today’s hearing seeks to learn more about the GSA’s role as real estate agent, specifically as how it carries out its statutory responsibilities in guiding and advising agencies seeking office space, and whether the GSA is meeting the statute’s requirements in carrying out this mission. According to Title 40, subtitle I, paragraph 584, the Administrator of General Services is responsible for assigning and reassigning space. She exercises this authority after “consultation” with the head of an agency and on the determination that the “assignment or reassignment is advantageous to the Government in terms of economy, efficiency, or national security.” GSA is assigned this responsibility because, unlike other federal agencies, it has unique professional and technical knowledge. Importantly, this function is assigned to GSA and not to federal agencies themselves in order to assure adherence to uniform polices, to control important variables, such as cost per square foot, and to assure that taxpayers receive the best value for available federal funds.Because the District of Columbia is the nation’s capital with many federal agencies, this jurisdiction is ideal for studying how GSA carries out its location policy mandate nationwide. The subcommittee for several years has received complaints that GSA’s decisions have created the impression that some locations are unacceptable, despite their proximity to public transportation and amenities, even where there is existing federal investment. Today we are holding this hearing at a location that can act fairly as a case study for looking closely at GSA location policy. We are holding this field hearing in a federal agency in the heart of an area known as NOMA (North of Mass Ave). This area, generally bounded by Union Station, North Capitol Street, Florida and New York Avenues, and Second Street, NE, was once dotted with warehouses, parking lots, and vacant lots. However, its prime location led to a makeover that began almost two decades ago. NOMA is located in the Central Employment Area (CEA), defined as “parts of the central core area of Washington where employment facilities are concentrated, and adjacent areas where additional development, economic diversification, and job generation are encouraged.” NOMA qualifies to be included in the CEA because it “contains a mix of land uses that efficiently support the existing federal activities.” As part of the GSA project authorization process, including requests for proposals, a CEA description is always attached. The private sector has long given NOMA its vote of confidence, even before a new New York Avenue Metro station was added with funds jointly from the private sector, the federal government, and the District of Columbia government. For years NOMA has been the headquarters for brand name private, public, and non-profit entities, among them XM Radio, Carefirst Blue Cross/Blue Shield, the Securities and Exchange Commission, and Kaiser Permanente. NOMA is in the midst of a building boom and will have about 60% office space and 40% rental housing. The confidence in the private market is so high that a super market will be built before most of the housing will be done. In addition, a number of other factors would appear to make NOMA desirable to federal agencies. Most federal agencies located in the District desire to remain here, and NOMA is located close to the Capital and has rates that are significantly below those in other downtown locations. NOMA is not only close to the new New York Avenue Metro, but also to Union Station, the city’s transportation hub where rail, light rail, Metro, bus and taxi service converge. However, it must be noted that federal investment in urban areas is not limited to CEA areas only. Guided by executive orders, the GSA is charged to bring federal facilities to urban areas throughout the country to “strengthen the Nation’s cities and make them attractive places to live and work,” as one executive order states. However, Washington D.C. is unique among large cities in that most need little inducement to remain or locate in the nation’s capitol. The major location challenge GSA finds here is that there is not enough space for many of the agencies who desire to consolidate and expand in the District. It cannot be doubted that the federal government regards the centrally located NOMA as vital to federal interests. The NOMA transformation has been significantly influenced by federal policy. The new Bureau of Alcohol, Tobacco, and Firearms (ATF) headquarters signaled that NOMA was regarded as an ideal site for federal facilities. To make the point unmistakable, the federal government also invested in an extra Metro station that had not been planned as part of the Metro system and specifically positioned the station to serve the NOMA area, fulfilling the GSA requirement that federal facilities be located in close proximity to public transportation. As a result, NOMA has a new Metro station on the north end in addition to the Union Station Metro that has long served much of NOMA. We are holding this hearing at FERC, which has been located here for more than 30 years and chose to stay here in 1995 when it moved into this new building. How then can we explain 50 city blocks of existing and planned below market office space, without any significant commitment from any federal agency since the ATF anchor was awarded and the new New York Avenue metro was built in 2004? In years of oversight of GSA in Democratic and Republican administrations alike, this subcommittee has found evidence that agency preferences, not statutory mandates, often dominate GSA location selections. The 57-acre, government-owned Southeast Federal Center located five minutes from the Capitol is a particular case in point. GSA was unable to convince agencies to locate there. After 10 years of seeing agencies avoid the area, I introduced the Southeast Federal Center legislation that, for the first time, is allowing the private sector to develop a federally owned site. Shortly thereafter, the new Department of Transportation headquarters, scheduled to open soon, was built on part of the government-owned Southeast Federal Center site, where GSA has previously been unable to attract federal agencies. Meanwhile, federal agencies have continued to lease higher priced space in more traditional areas near K Street, Connecticut Avenue and similar downtown locations. Not surprisingly, federal employees often prefer downtown office locations near shops, theaters, and restaurants. Agency preferences are, of course, relevant and must be taken into account. However, significant questions are raised concerning GSA’s adherence to statutory requirements when sites complete with amenities are continually bypassed in NOMA, which is close to the Capitol, other federal agencies, private and non-profit entities, the Union Station Mall and metro stations at both ends of the area.Who is calling the shots? The subcommittee has documented luxurious courthouses virtually designed by judges because GSA essentially deferred its statutory role to them. The result has been luxurious courthouses with scandalously lavish comforts, including individual showers, kitchens, and special exercise facilities only for the judges, unknown in public buildings. Is there similar deference to federal agencies seeking space at the expense of U.S. taxpayers?Today’s staggering federal deficit requires that GSA demonstrate that the agency does much more to demonstrate that the agency takes seriously its responsibility to ensure that the federal government gets the best price while agencies are comfortably and conveniently accommodated. This nationwide obligation increases exponentially when the federal government has moved in advance to target an area with pioneering office space, such as the ATF headquarters on the north end of NOMA, as well as new transportation facilities. GSA is a peer agency and may need assistance from our subcommittee to meet pressures from federal agencies that assume they can have their pick of space, regardless of how the federal real estate tax dollar is spent. The subcommittee does not seek to penalize the GSA or other federal agencies. However, we are resolute in our determination that the federal office space not only reflect the best accommodations for the agencies, but also the best deal for the tax payer. This hearing begins the process of assuring this policy and outcome.