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H.R. 2573, Postal Building in Terre Haute, Indiana



SEPTEMBER 29, 1999


Mr. Chairman and Members of the Committee:

I am Gordon S. Creed, Deputy Assistant Commissioner of the Office of Property Disposal, Public Buildings Service, General Services Administration (GSA). I am pleased to have the opportunity to appear before you today to discuss H.R. 2513, a bill that directs the Administrator of General Services to acquire a building located in Terre Haute, Indiana, and for other purposes.

I will briefly discuss GSA's role in the disposal of Govemment-owned property, and how GSA would view the redeployment of this U.S. Postal Service asset under existing statutory authority. Commencing with the Surplus Property Act of 1944, which was administered by the War Assets Administration, and continuing with the enactment of the Federal Property and Administrative Services Act of 1949, GSA's mission has included the promotion of real property disposal consistent with sound asset management practices. GSA promotes asset management in the property disposal program by: Encouraging agencies to release unneeded properties; Recycling unneeded Federal property to agencies that are in need of real property; and Disposing of property no longer needed by any Federal agency.

GSA has more than 50 years of experience in the transfer and disposal of Government real property assets, spanning from simple easements to complex military bases. Taxpayers benefit from the efficient transfer of property to non-Federal public and private interests. Surplus properties that are returned to local tax rolls contribute to economic growth and job creation.

GSA objects to the enactment of H.R. 2513 because no administrative effort was ever made to promote and successfully market the redeployment of the Terre Haute property.

In July 1985, GSA and the Postal Service entered into an Agreement that covers the transfer, exchange, and disposal of real property. The Agreement established procedures for the Postal Service to notify GSA of Postal real property that was no longer needed for its purposes, i.e., excess to its needs. The Agreement covered real property that is excess to the Postal Service for purposes of ownership yet remains encumbered by existing tenant agreements.

In recent discussions with Postal Service officials I have learned there is no need for the Postal Service to retain ownership of the Terra Haute property. I further understand that there are outleases issued by the Postal Service that need to be honored in any potential reuse of the property. GSA leases account for 13,250 square feet of the building.

I note that GSA successfully solved this very same situation in 1998 when it disposed of the I I story Federal Building to the City of Philadelphia. Although this facility was excess to the needs of the GSA, there was a continuing need to provide space for the military recruitment and induction center located on two floors of the building. After acquiring the property, the City of Philadelphia entered into an exchange transaction with the Pennsylvania Academy of Fine Arts so that the Academy could gain additional space in which to accommodate its growing need for academic and gallery space. It is important to note, this disposal was favorably reviewed by this subcommittee.

Another example of this type of successful redeployment of unneeded Government owned property is the former Federal Office Building in Asheville North Carolina known as Grove Arcade. In 1997, this property was conveyed to the City of Asheville without cost for use as a historic monument. Section 203(K)(3) of the Federal Property Act authorizes this type of conveyance and, in addition, allows for the transferee to generate income in operating the property. Thus, a revenue stream for repair, rehabilitation, restoration, and maintenance of the property remains an option should the City of Asheville seek to outlease any available vacant space in this building.

Is the Terre Haute property a potential historic monument? While the Advisory Board on National Parks, Historic Sites, Buildings and Monuments established by section 463 of Title 16 makes the recommendation over the suitability of property as a historic monument, clearly the property's age, design and history seem to lean in that direction. Successful reuse of the Postal Service property appears to be the goal of the legislation and to that end, GSA stands available to assist the Postal Service in marketing this property.

Because of the proximity of the Terre Haute Building to the Indiana State University, it is also possible that an application could be submitted to the Department of Education for public educational use for the property. Section 203(k)(1) of the Federal Property Act allows for the conveyance of surplus real property for public educational use. Finally, I note that GSA's experience and brand name connote a quality in the real estate market often sought by developers who seek trophy properties for their portfolio. This could, in fact, be one of those desired properties.

Mr. Chairman, this concludes my statement, I will be pleased to respond to any questions you or the other members of the subcommittee may wish to ask.