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FEDERAL TRADE COMMISSION AND GENERAL 

SERVICES ADMINISTRATION THWART COST 

SAVING CONSOLIDATION 

HEARING 

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT OPERATIONS 

OF THE

COMMITTEE ON OVERSIGHT 

AND GOVERNMENT REFORM 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

DECEMBER 3, 2013 

Serial No. 113–74 

Printed for the use of the Committee on Oversight and Government Reform 

( 

Available via the World Wide Web: http://www.fdsys.gov 

http://www.house.gov/reform 

(II) 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM 

DARRELL E. ISSA, California, Chairman 

JOHN L. MICA, Florida 

MICHAEL R. TURNER, Ohio 

JOHN J. DUNCAN, JR., Tennessee 

PATRICK T. MCHENRY, North Carolina 

JIM JORDAN, Ohio 

JASON CHAFFETZ, Utah 

TIM WALBERG, Michigan 

JAMES LANKFORD, Oklahoma 

JUSTIN AMASH, Michigan 

PAUL A. GOSAR, Arizona 

PATRICK MEEHAN, Pennsylvania 

SCOTT DESJARLAIS, Tennessee 

TREY GOWDY, South Carolina 

BLAKE FARENTHOLD, Texas 

DOC HASTINGS, Washington 

CYNTHIA M. LUMMIS, Wyoming 

ROB WOODALL, Georgia 

THOMAS MASSIE, Kentucky 

DOUG COLLINS, Georgia 

MARK MEADOWS, North Carolina 

KERRY L. BENTIVOLIO, Michigan 

RON DESANTIS, Florida 

ELIJAH E. CUMMINGS, Maryland, Ranking 

Minority Member 

CAROLYN B. MALONEY, New York 

ELEANOR HOLMES NORTON, District of 

Columbia 

JOHN F. TIERNEY, Massachusetts 

WM. LACY CLAY, Missouri 

STEPHEN F. LYNCH, Massachusetts 

JIM COOPER, Tennessee 

GERALD E. CONNOLLY, Virginia 

JACKIE SPEIER, California 

MATTHEW A. CARTWRIGHT, Pennsylvania 

TAMMY DUCKWORTH, Illinois 

ROBIN L. KELLY, Illinois 

DANNY K. DAVIS, Illinois 

PETER WELCH, Vermont 

TONY CARDENAS, California 

STEVEN A. HORSFORD, Nevada 

MICHELLE LUJAN GRISHAM, New Mexico 

Vacancy 

LAWRENCE J. BRADY, Staff Director 

JOHN D. CUADERES, Deputy Staff Director 

STEPHEN CASTOR, General Counsel 

LINDA A. GOOD, Chief Clerk 

DAVID RAPALLO, Minority Staff Director 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS

JOHN L. MICA, Florida, Chairman 

TIM WALBERG, Michigan 

MICHAEL R. TURNER, Ohio 

JUSTIN AMASH, Michigan 

THOMAS MASSIE, Kentucky 

MARK MEADOWS, North Carolina 

GERALD E. CONNOLLY, Virginia Ranking 

Minority Member 

JIM COOPER, Tennessee 

MARK POCAN, Wisconsin 

(III) 

C O N T E N T S 

Page 

Hearing held on December 3, 2013 ........................................................................ 1 

WITNESSES 

Mr. David Robbins, Executive Director, Federal Trade Commission 

Oral Statement ................................................................................................. 5 

Written Statement ............................................................................................ 7 

Mr. Chris Wisner, Assistant Commissioner, Office of Leasing, Public Buildings Service, General Services Administration 

Oral Statement ................................................................................................. 11 

Written Statement ............................................................................................ 13 

APPENDIX 

Statement of Rep. Mica ........................................................................................... 44 

Statement of Rep. Connolly .................................................................................... 46 

Building Profiles Submitted by Mr. Mica .............................................................. 47 

(1) 

FEDERAL TRADE COMMISSION AND GENERAL 

SERVICES ADMINISTRATION THWART COST 

SAVING CONSOLIDATION 

Tuesday, December 3, 2013 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON GOVERNMENT OPERATIONS, 

COMMITTEE ON OVERSIGHT AND GOVERNMENT REFORM, 

Washington, D.C. 

The Subcommittee met, pursuant to notice, at 10:08 a.m., at Constitution Center, 400 7th Street, S.W., Washington, D.C. 20001, 

Hon. John Mica [chairman of the subcommittee] presiding. 

Present: Representatives Mica, Meadows; and Connolly. 

Staff Present: Will L. Boyington, Press Assistant; Ashley H. 

Callen, Deputy Chief Counsel for Investigations; and Sharon 

Casey, Senior Assistant Clerk. 

Mr. MICA. Good morning. I would like to call this hearing of the 

Subcommittee on Government Operations of the Committee on 

Oversight and Government Reform to order. Pleased that I could 

have our distinguished ranking member, Mr. Connolly, from Virginia, Mr. Meadows, our colleague from the State of North Carolina, join us on the dais today. And we have several witnesses 

that—for a subcommittee hearing, which is entitled Federal Trade 

Commission and General Services Administration thwarting some 

cost-saving consolidation. We will review that matter in today’s 

hearing. 

The purpose of our oversight hearings is to—just generally, Mr. 

Issa always opens with his statement—accountable of taxpayer dollars. And, certainly, I think this hearing will show that we are attempting to do the best job possible with those limited dollars, tight 

budgetary constraints, and that the people have a right to know 

how their money is spent, and expect a proper reform, us being 

good stewards of their hard-earned taxpayer dollars. 

I am going—the order of business is we will have opening statements from Members. Then we will hear from the witnesses. And 

then we will have questions. If anyone has any lengthy statements 

to put in the record—I have to welcome—I will ask the witnesses 

to limit their testimony to five minutes, try to move the hearing 

along as quickly as possible. 

Let me first start by giving a little bit of history. We are gathered today—and I will call this the Constitution Building—in the 

Constitution Building. And this is going to be the site of about twothirds of the operations of the Federal Trade Commission. Some 

years ago, the Federal Trade Commission came to the Committee 

2 

on Transportation, which has jurisdiction over GSA, and asked— 

requested additional square footage. They were looking at expanding the two locations that they had outside of the current FTC 

building. 

The old FTC building, which was built in the 1930s, is not too 

far from here on Constitution. It is also referred to as the Apex 

Building. It contains about 300,000 square feet, approximately. 

About half of it is used, because it is a 1930 building. The outside 

is quite beautiful and classic; the inside is 70 years-plus old, and 

very poor utilization, as even evaluated by GSA. 

When they came and asked for additional space, again, they had 

the Apex Building, their headquarters building. They rented two 

other locations. And in those locations, one behind Union Station— 

sometimes referred to, I guess, as NOMA—they had a 217,000 

square-foot rental building, and the lease is expired on that. In addition, they had another location, where they had additional space. 

So they had three locations, but were asking for additional space. 

When it came before the committee, the Transportation Committee, we examined it. We said that we ought to look at consolidating it all into one operation. There was also interest by the National Gallery of Art, which is directly across the street from the 

FTC building, to take that building and utilize it as, actually, the 

National Gallery North. 

Have we got a copy of that report? Do we have copies of that report? And on the front page, people can look at this. You see the 

FTC building, which is triangular. The West Wing of the National 

Gallery, and the East Wing. And this is a plan that the National 

Gallery of Art came up with, to actually make this the North Wing 

of the National Gallery. It would be connected by a tunnel over to 

the West Wing, as we now have with the East Wing. The National 

Gallery of Art rents about 60,000 square feet, has need for about 

150,000 square feet in the future. 

So, there aren’t too many places that they can go to acquire that 

space. The space in the old FTC headquarters building is inadequate, outdated. They actually offered to raise private funds to 

renovate the building, and we estimate those funds would be worth 

approximately $140 million to renovate that space, more or less. 

And they came up with this plan, which is incredible, as far as utilization. 

Unfortunately, the General Services Administration went forward and is in the process of leasing 203,000 square feet of space 

in the building that we are in right now. This building has an interesting history. And there was about a million square feet leased, 

and that lease fell through—actually, the courts upheld the lease, 

and the Federal Government was obligated to pay for space here 

for, I believe, a 10-year period. So, they started leasing some of 

that, GSA did. 

Of the space that we have in this particular building—let me see 

here—we have—FTC is currently looking at leasing 203,000 square 

feet. According to the report that we have here from GSA, there is 

a total of—let’s see here—I think a total need of about 380,000 

square feet that are needed. We will get the exact figures as we 

go forward with this. 

3 

But, in any event, what they are doing is proposing to bring in 

two smaller agencies. One they—and the National Endowment for 

Humanities, National Endowment for the Arts, and occupy the balance, most of the balance, of that space that is available, rather 

than bringing in the FTC headquarters, which would allow substantial consolidation of space, and a dramatic savings for the taxpayers. And we will go over some of those figures as we get a little 

bit more into detail. 

There will be substantial savings in consolidation. And the Data 

Center, they run a shuttle—is there a little picture of the shuttle? 

Does somebody have that? Between the three buildings that they 

currently have. This is the FTC shuttle. So, things like this will be 

eliminated if all this operation was consolidated into one area. 

Now, everyone who has walked in this building has seen it as 

a—probably one of the nicest facilities in Washington, D.C. I 

brought a few slides. Not all the Members or staff have been 

through the old FTC building, the Apex Building. Can we show 

some of those slides? This is actually the current buildings. Again, 

the old FTC building and current headquarters leased, and also 

leased space—this is—these two are what they are consolidating on 

the right into this facility. And we have the FTC building—again, 

the old one—with about—it is actually about 150,000 square feet 

that they occupy at this time. 

Let’s go to some of the interior. This is—you see the building you 

are in. We would like to consolidate them all. This is what it looks 

like in some areas of the old 1930s FTC building. Here is old phone 

booths. Look at the hallways. Look at the radiator complex. The 

building—this is part of the electrical system in the old building. 

It is almost embarrassing that the Federal Government would 

house employees, federal employees, in a building of this age and 

in this condition. Are there any other slides? 

[No response.] 

Mr. MICA. So, again, this is a—the building we are in—203,000 

square feet they are consolidating two of those operations into. 

What I want to discuss today is the possibility of finishing the consolidation, bringing all the FTC into a modern complex that would 

adequately house their staff, their operations, and be a very proud 

facility for an important function of government. 

Mr. MICA. So, those are some opening comments. We will go over 

this a little bit more. I want to open an opportunity to the ranking 

member for some introductory opening comments. Mr. Connolly? 

Mr. CONNOLLY. Thank you, Mr. Chairman, and thank you so 

much for holding today’s hearing. The Federal Trade Commission’s 

historic Apex Building and the National Gallery of Art’s West and 

East Buildings, together, form an iconic streetscape at the end of 

the Federal Triangle. Today we consider proposals to transfer the 

FTC headquarters building to the NGA. 

I am new to this issue, compared to yourself. And key agency 

stakeholders have been working on this matter for six years. I am 

interested in hearing from all sides this morning on the potential 

savings, potential cost, and operational impacts associated with the 

proposed transfer of the Apex Building from the FTC to the NGA. 

You, Mr. Chairman, have been an avowed supporter of the arts, 

which I very much appreciate. And you have sought to expand the 

4 

National Gallery into the Apex Building to enable the museum to 

grow and expand its offering to the American public, while consolidating leases and cutting costs. 

I also understand that the FTC and the U.S. General Services 

Administration believe that the transfer would not be advisable 

with respect to operational and financial considerations, in addition 

to historical considerations related to the fact that the late President Franklin Delano Roosevelt actually built the celebrated Apex 

Building in 1938 specifically to serve as the home of then-newlyestablished FTC. 

I want to thank our witnesses for participating at the hearing 

this morning, and look forward to examining the issues. I also want 

to thank the Constitution Center for hosting this hearing. This is 

a beautiful facility, as you indicate, Mr. Chairman. And I look forward to getting educated on both the pros and cons of the proposed 

move. 

Mr. MICA. Thank you, Mr. Connolly. I recognize Mr. Meadows 

from North Carolina. 

Mr. MEADOWS. Thank you, Mr. Chairman. I appreciate both of 

you being here to testify. And, as the chairman has already pointed 

out, obviously, this Subcommittee looks at how we can be efficient 

and how we can make sure the taxpayer dollars are well invested. 

Today, as we look at this consolidation, what I am looking for 

from each one of you is a compelling reason on why we should 

spend the extra money. Just to be frank, is there a compelling reason why we should be spending $150 million more of taxpayer dollars, from either a strategic standpoint or a functional standpoint? 

We all know that these are difficult times, from a financial 

standpoint. There is pressure on salaries. And yet, if we have a 

way to save money, which it appears that this is, I am looking for 

why we should be consolidating. I also served on—with the chairman on the Transportation and Infrastructure, subcommittees 

there. This is near and dear to my heart when it comes to—I know 

real estate. I have had a career in real estate. 

And so, I understand there are subtle differences from time to 

time on why you would make a decision or not make a decision in 

terms of long-term strategic planning. But, quite frankly, I am 

looking to—as our ranking member, Mr. Connolly, said, hearing 

from both sides of the story. And then let’s try to make the best 

decision on behalf of the American taxpayers. 

And I yield back to the chairman. 

Mr. MICA. Thank the gentleman, and we will—— 

Mr. CONNOLLY. Mr. Chair? 

Mr. MICA. Yes? 

Mr. CONNOLLY. I just want to say to my friend from North Carolina I have long been considered an honorary member of T&I. 

Mr. MICA. Well, we appreciate your service, Mr. Ranking Member, and we will make you an ex officio member. As the former 

chair, welcome to the T&I. 

[Laughter.] 

Mr. MICA. Our next order of business will be to hear from our 

two witnesses. We have Mr. David Robbins, Executive Director at 

the Federal Trade Commission. Then we have Mr. Chris Wisner. 

He is the General Services Administration Public Building Service 

5 

Assistant Commissioner for Leasing. I appreciate both of you appearing before us. This is an investigative oversight committee. We 

do swear in our witnesses. So, if you would stand, raise your right 

hand. 

[Witnesses sworn.] 

Mr. MICA. Okay, and the record will reflect that both of the witnesses answered in the affirmative. 

So, with that, we will start with Mr. David Robbins, Executive 

Director of the Federal Trade Commission. Recognize him. 

STATEMENT OF DAVID ROBBINS, EXECUTIVE DIRECTOR, 

FEDERAL TRADE COMMISSION 

Mr. ROBBINS. Chairman Mica, Ranking Member Connolly, Representative Meadows, thank you for having us today. My name, as 

you said, is David Robbins, and I am the Executive Director of the 

Federal Trade Commission. 

This Committee today is looking at the consolidation of Constitution Center of the FTC buildings that we currently are renting at 

New Jersey Avenue and M Street. The FTC has been working very 

closely with the General Services Administration to secure and 

build out space at Constitution Center, this wonderful facility, as 

you have said. The Commission believes that the new space is 

properly configured to sustain its mission in a cost-effective manner, consistent with space utilization regulations and the Administration’s initiative to make more efficient use of the government’s 

real estate, known as Freeze the Footprint. 

FTC is primarily a law enforcement agency with broad jurisdiction over major sectors of the economy. Among its missions, the 

FTC reviews proposed mergers, investigates and pursues those engaging in unfair methods of competition and unfair or deceptive 

acts or practices, and returns money to injured consumers when 

possible. 

The FTC also educates consumers and businesses on how best to 

protect themselves, advances policy through research and advocacy 

and public workshops, and works with foreign counterparts to harmonize competition and consumer protection law across the globe. 

I think it is also fair to say we take very seriously our responsibility to be good stewards of the taxpayer dollars, as well. 

The space at the Constitution Center will house staff of the Bureau of Competition, the Bureau of Consumer Protection, the HartScott-Rodino pre-merger notification filing office, the records and 

filings office, the inspector general’s office, and other support functions. We are an agency consisting primarily of lawyers and economists who, in the course of our work, often meet with outside parties, frequently work in teams and with experts, and handle large 

amounts of documents and data consisting of highly confidential 

business and personal information. We work collaboratively, and 

often under deadline. The Constitution Center space will meet 

these particularized needs of the agency, while at the same time 

reducing its space utilization rates. 

The FTC’s space at Constitution Center has been designed to accommodate 905 FTC occupants. FTC staff moving to Constitution 

Center will have significantly smaller offices and less overall space 

than they have now. The agency is using an aggressive space utiliVerDate Aug 31 2005 10:08 Feb 12, 2014 Jkt 000000 PO 00000 Frm 00009 Fmt 6633 Sfmt 6633 C:\DOCS\86552.TXT APRIL
6 

zation rate of 119 square feet per employee. And, by way of comparison, in the two currently-leased spaces, the utilization rate is 

approximately 167 square feet. There will also be a net savings in 

rent, once we consolidate those two facilities into Constitution Center, not an increase in costs. 

The Commission is aware of the interest of having all FTC’s employees housed in Constitution Center, so that the FTC headquarters building can be given to the National Gallery. As both 

GSA and the FTC have explained, however, that is neither physically nor financially feasible. The only current occupied space—unoccupied space in Constitution Center is the southwest quadrant. 

As it stands, FTC will occupy a substantial portion of this quadrant 

to accommodate the employees from its two currently-leased satellite facilities. 

As I understand it, NEA and NEH are also due to occupy a portion of this quadrant in late winter. Even if these agencies, though, 

were forced to give up their offices to the FTC, there simply is not 

enough space in the southwest quadrant to house all of FTC’s operations in Constitution Center. 

GSA is determined that the FTC requires a minimum of 446,054 

square feet for its entire space needs in D.C. The entire southwest 

quadrant totals only 358,537 square feet. Even if, though, all FTC’s 

D.C. operations could be fit into the southwest quadrant of Constitution Center, their cost to the American taxpayer would be prohibitive. GSA has calculated that over 30 years it would cost nearly 

$172 million more to house all of the FTC in the leased space. 

Additionally, significant costs would be incurred to move FTC 

staff from the headquarters building to such a space. GSA has estimated over $50 million, and we believe it would be in excess of 

that. 

Moreover, while not having a direct impact on the FTC, there are 

additional costs to taxpayers of giving away the FTC’s headquarters building, including the loss of its estimated fair market 

value, which is roughly $92 million, and the loss of $6 million that 

the FTC pays into the Federal Building Fund each year. 

The FTC’s headquarters building is in good condition, notwithstanding those pictures, and needs no significant renovations, repair, or maintenance, and is expected to meet our needs for some 

years to come. 

Finally, at this time construction of the space here in the Constitution Center is more than 40 percent complete, and changing 

our plans would have quite substantial impact. 

In closing, I just want to reiterate the FTC’s commitment to the 

Freeze the Footprint initiative, while meeting our mission-driven 

needs. We will continue to work with Congress, GSA, and the Office of Management and Budget to complete construction of the 

Constitution Center space in a manner that maintains FTC’s effectiveness and efficiency. I would be happy to answer any questions 

you might have. 

[Prepared statement of David Robbins follows:] 

7 


Insert offset folio 1 here 86552.001

PREPARED STATEMENT OF 

THE FEDERAL TRADE COMMISSION 

On 

THE CONSOLIDATION AND SPACE UTILIZATION RATES AT THE 

CONSTITUTION CENTER 

Before the Committee on Oversight and Government Reform 

Subcommittee on Government Operations 

Constitution Center 

Washington, D.C. 

December 3, 2013 
8 


Insert offset folio 2 here 86552.002

Chairman Mica, Ranking Member Connolly, and distinguished members of the 

Subcommittee, I am David Robbins, the Executive Director of the Federal Trade Commission 

("Commission" or "FTC"). 1 Thank you for the opportunity to discuss the consolidation at the 

Constitution Center orthe FTC staff currently housed in its two leased Washington D.C. satellite 

facilities, located at 60 I New Jersey Avenue and 1800 M Street, and the space utilization rates 

thaI will be achieved at the Constitution Center. 

The FTC has been working very closely with the General Services Administration 

("GSA") to secure and build-out space at Constitution Center. The Commission believes that the 

new space is properly configured to sustain its mission in a cost effective manner, consistent with 

space utilization regulations and the Administration's initiative to make more efficient use of the 

government's real estate assets (known as "Freeze the Footprint"). 

The FTC is primarily a Jaw enforcement agency with broad Jurisdiction over major 

sectors ofthe economy. Among its missions, the FTC reviews proposed mergers; investigates 

and pursues those engaging in unfair methods of competition and unfair or deceptive acts or 

practices; and returns money to injured consumers when possible. The FTC also educates 

consumers and businesses on how best to protect themselves; advances policy through research, 

advocacy, and public workshops; and works with foreign counterparts to harmonize competition 

and consumer protection law across the globe. 

The space at the Constitution Center will house the staff of the Bureau of Competition 

and the Bureau of Consumer Protection, the Hart- Scott- Rodino Pre-merger Notification Filing 

Office, the Records and Filings Office, the Inspector General's Office, and other support 

functions. We are an agency consisting primarily oflawyers and economists who, in the course 

of our work, often meet with outside parties, frequently work in teams and with experts, and 

handle large amounts of documents and data consisting of highly confidential business and 

personal information. We work collaboratively, and often under deadline. The Constitution 

Center space will meet thcse particularized needs of the agency, while at the same time reducing 

its space utilization rate. 

Today, there are no formal government standards for space utilization. Nor do federal 

regulations mandate space requirements based on pay grade or maximum area per person. 

Rather, recognizing that one size does not fit all, federal regulations provide: 

Executive agencies must provide a quality workplace environment 

that supports program operations, preserves the value of real 

property assets, meets the needs of the occupant agencies, and 

provides child care and physical fitness facilities in the workplace 

when adequately justified. An executive agency must promote 

I While the views expressed in this statement represent the views of the Commission, my oral 

presentation and responses to questions are my own and do not necessarily reflect the views of 

the Commission or any individual Commissioner. 

2 
9 


Insert offset folio 3 here 86552.003

maximum utilization offederal workspace, consistent with mission 

requirements, to maximize its value to the government.2 

The housing plan approved by GSA for the FTC at the Constitution Center is fully consistent 

with these regulations. 

The FTC's space at Constitution Center has been designed to accommodate 905 FTC 

occupants. FTC staff moving to Constitution Center will have significantly smaller offices and 

less overall space than they have now. The agency is using an aggressive space utilization rate of 

119 square feet (sf) per employee. There are four types of "office space" at the FTC's new 

Constitution Center location. A very limited number (17) are 150 sf offices for Senior Executive 

Service ("SES") managers who lead large divisions of lawyers. All GS II-IS employees, 

including mid-level managers, will be housed in offices ofl10 sf. GS I-lOs, International 

SAFEWEB fellows and interns, student volunteers and interns, experts, contractors, and staff 

visiting from other FTC offices will occupy either 64 or 48 sf workstations or hoteling stations. 

By way of comparison, in the two currently leased satellite facilities, the average size of an office 

is 270 sf for SES and other senior managers; 196 sffor mid-level managers; 150 sf for GS 12-

I 5s; and 80 sf for workstations for all others. The Constitution Center space will also include 

deposition rooms, litigation "war rooms," teaming rooms, conference rooms of various sizes, and 

other special purpose spaces in which our federal and non-federal personnel can carry out the 

work of the agency. 

The Commission is aware of the interest in having all of FTC's employees housed at the 

Constitution Center so that the FTC Headquarters Building can be given to the National Gallery. 

As both GSA and the FTC have explained, however, this is neither physically nor financially 

feasible. The only currently unoccupied space in the Constitution Center is the southwest (SW) 

quadrant. As it stands, the FTC will occupy a substantial portion of the SW quadrant to 

accommodate its employees from its two currently leased satellite facilities. The National 

Endowment for the Arts (NEA) and the National Endowment for the Humanities (NEH) also are 

due to occupy portions of this quadrant in late winter. Even if these agencies were forced to give 

up their offices to the FTC, there simply is not enough space in the SW quadrant to house all of 

the FTC's operations in Constitution Center. GSA has determined that the FTC requires a 

minimum of 446,054 sffor its entire space needs in D.C.; the entire SW quadrant totals only 

358,537 sf. 

Even if all of the FTC's D.C. operations could be fit in the SW quadrant of Constitution 

Center, the costs to the American taxpayer would be prohibitive. GSA has calculated that over 

30 years it would cost nearly $172 million more to house all of the FTC in leased space such as 

Constitution Center than it will cost if, as planned, the FTC's headquarters staff remains in its 

federally owned bUilding. These additional costs would have to be absorbed by the FTC budget, 

and, given the current funding environment, these costs would most likely be at the expense of 

pursuing the agency's mission to protect competitive markets and consumers. 

'41 CFR 102-79.10. 

3 
10 


Insert offset folio 4 here 86552.004

Additionally, significant cost would be incurred to move FTC staff out of its headquarters 

building and into leased space. GSA has estimated that cost to be at least $50 million. At 

Constitution Center, specifically, the Commission would have to alter the construction of the 

space to accommodate all of the FTC's personnel, as well as mission-critical functions not 

considered in consolidation of satellite space. For example, the Commission's main data center 

and the FTC Administrative Law Judge Courtroom - currently housed at the FTC's headquarters 

building - were not replicated in the build-out of the Constitution Center. 

Moreover, while not having a direct impact on the FTC, there are additional costs to 

taxpayers of giving away the FTC's headquarters building. If the GSA-owned headquarters 

building is given to the National Gallery of Art ("NGN'), rather than sold, the government will 

lose the fair market value of this building, estimated at $92,800,000. Furthermore, going 

forward, the federal government would lose the $6 million that the FTC pays annually into the 

Federal Building Fund (FBF) in rent and would still be responsible for the costs of the operation, 

administration, and maintenance of the headquarters building, per the NGNs charter. 

The FTC's historic headquarters building was designed and built for the FTC in 1938. 

The building is in good condition and needs no significant renovation, repair, or maintenance. In 

particular, the 76-ycar old building has up-to-date electrical, plumbing, and HV AC systems, 

which are in excellent working order. The GSA has listed no major projects on its five-year 

maintenance and renovation schedule for the FTC building. It is expected to meet the needs of 

the FTC for years to come. 

Finally, at this time, construction of the space in the SW quadrant is well under way - at 

least 40% completed. Substantial investments have bcen made in planning and executing the 

build out. These plans and investments include, among other things, special orders and purchases 

of walls and furniture, specialized construction, and increased electrical and HVAC 

infrastructure, telecommunications and data cabling and infrastructure, as well as dark fiber 

connectivity, and construction to meet fire exit requirements. 

The original lease at 601 New Jersey A venue expired in August 2012, and, since that 

time, the FTC has paid millions of dollars in increased rent for the space. To minimize further 

delay and expense, the Commission has worked diligently to ensure that the build out of the 

Constitution Center space is completed in time to allow Commission staff to move in and fully 

vacate the 601 New Jersey Avenue building before August 8, 2014, the expiration date of the 

extended lease. 

In closing, I want to reiterate FTC's commitment to the "Freeze the Footprint" initiative, 

while meeting our mission-driven space needs. We will continue to work with Congress, GSA, 

and the Office of Management and Budget to complete construction of the Constitution Center 

space in a manner that maintains FTC's effectiveness and efficiency. I would be happy to 

answer any questions you may have. 

4 
11 

Mr. MICA. Thank you. 

We will recognize Mr. Wisner with GSA now. 

STATEMENT OF CHRIS WISNER, ASSISTANT COMMISSIONER, 

OFFICE OF LEASING, PUBLIC BUILDINGS SERVICE, GENERAL SERVICES ADMINISTRATION 

Mr. WISNER. Good morning, Chairman Mica, Ranking Member 

Connolly, and members of the subcommittee. My name is Chris 

Wisner, and I am the Assistant Commissioner for Leasing at the 

GSA’s Public Building Service. I appreciate being invited here 

today to discuss GSA’s efforts to provide cost-effective and highlyefficient space for our partner federal agencies, and GSA’s plan to 

ensure that the existing lease obligation we assumed on behalf of 

the SEC at Constitution Center is properly utilized. 

As the PBS Assistant Commissioner for Leasing, I helped manage GSA’s efforts to assume the balance of SEC’s existing lease obligation at Constitution Center, and minimize the cost to the taxpayers in this location. Constitution Center is an example of our 

efforts to assist an agency that entered into an agreement using its 

independent leasing authority. 

In 2010, the SEC, under its own authority, signed an agreement 

leasing—to lease approximately 900,000 square feet in this building. Shortly thereafter, the SEC indicated that this space was not 

needed. The Federal Housing Finance Agency and the Office of the 

Comptroller of Currency agreed to take on approximately twothirds of the space. 

In 2011, GSA reached an agreement with the SEC to assume 

control of and backfill the remaining 358,000 square feet in Constitution Center. Since that time, GSA has worked to identify potential backfill tenants and minimize the financial exposure to the 

government that would result from this space sitting vacant. GSA 

is taking advantage of the lease hold interest in Constitution Center to consolidate space for the Federal Trade Commission, the National Endowment for the Arts, and the National Endowment for 

the Humanities. 

FTC will be moving from their two expiring lease locations at 

601 New Jersey Avenue, N.W. and 1800 M Street, N.W., in Washington, D.C. GSA and FTC have used this opportunity to reduce 

FTC’s footprint, improving FTC’s utilization of office space from 

167 square feet per person in the old leases to only 119 square feet 

in Constitution Center. The balance of this space will be used to 

provide needed housing for NEA and NEH, without—whose relocation is essential to GSA’s agreement to redevelop the Old Post Office. 

As you know, GSA recently reached an agreement to out-lease 

the Historic Old Post Office, securing an investment of $200 million 

in private-sector funds in the restoration of the 114-year-old federal 

building. This investment will allow GSA to convert the Old Post 

Office into a mixed-use development that will serve the local community, preserve the historic facility, and save taxpayer dollars. 

The agreement is contingent on GSA’s ability to vacate the existing federal tenants from the Old Post Office. Relocating NEA and 

NEH in a timely fashion is imperative to GSA’s ability to implement the proposed redevelopment agreement for the Old Post OfVerDate Aug 31 2005 10:08 Feb 12, 2014 Jkt 000000 PO 00000 Frm 00015 Fmt 6633 Sfmt 6633 C:\DOCS\86552.TXT APRIL
12 

fice, and failure to deliver the unencumbered site will result in significant financial penalties for the government. Upon delivery of 

the Old Post Office to our private sector partner, we will receive 

a base rent of $250,000 a month, escalating the consumer price 

index over the next 60-year lease. 

The funds that GSA receives from the Old Post Office out-lease 

can be used to repair and upkeep of historic federal buildings 

across GSA’s inventory, saving additional taxpayer dollars. 

GSA’s portion of the Constitution Center will have zero vacancy, 

once we complete construction of tenant improvements. Construction is underway for all tenants, and FTC space is approximately 

40 percent complete. The NEA and NEH, as well as the FTC employees currently housed at 601 New Jersey Avenue and 1800 M 

Street are scheduled to move into this building in March of 2014. 

At the direction of Chairman Mica and the House Committee on 

Transportation and Infrastructure, GSA examined alternatives for 

Constitution Center aimed at consolidating FTC’s entire Washington area presence, including FTC headquarters functions currently housed in the historic Apex Building at 600 Pennsylvania 

Avenue, N.W. 

Accommodating FTC’s projected needs in Fiscal Year 2015, even 

under GSA’s improved space utilization standards, would require 

446,054 rentable square feet. Even at current, on-board staff levels, 

FTC would require more space than is available to GSA and Constitution Center. In addition to the space limitations, relocating the 

FTC employees currently housed in the Apex Building would increase moving costs by nearly $50 million. At the same time, the 

30-year net present value cost of moving FTC headquarters operations from federally-owned space into a lease would exceed $70 

million. 

Given the size limitations and cost associated with a move, consolidating the FTC’s entire Washington area presence into Constitution Center is not feasible. 

Thank you for inviting me to appear before you today. Given 

GSA’s expertise in leasing, we look forward to working to continue 

our dialogue on how to maximize utilization at Constitution Center 

and throughout GSA’s inventory. I am pleased to take your questions. 

[Prepared statement of Mr. Wisner follows:] 

13 


Insert offset folio 5 here 86552.005

U.S. General Services 

Administration 

Chris Wisner 

Assistant Commissioner 

Office of Leasing 

Public Buildings Service 

Committee on Oversight & Government Reform 

Subcommittee on Government Operations 

GSA's Plan to Fully Utilize Constitution Center 

December 3, 2013 
14 


Insert offset folio 6 here 86552.006

Introduction 

Good morning Chairman Mica, Ranking Member Connolly, and members of the Subcommittee. 

I am Chris Wisner, the Assistant Commissioner for Leasing at the General Services 

Administration's (GSA) Public Buildings Service. 

I appreciate being invited here today to discuss GSA's efforts to provide cost-effective and 

highly efficient space for our partner Federal agencies, and GSA's plan to ensure that the 

existing lease obligation we assumed on behalf of the Securities & Exchange Commission (SEC) 

at Constitution Center is properly utilized. 

Finding Cost-Effective Space for Agencies 

GSA currently has an inventory of more than 375 million square feet of space, approximately 

half of which is distributed over nearly 9,000 leases across the country. We seek to provide 

space for our partner Federal agencies that assists them in achieving their missions while best 

serving the public interest. 

GSA, as a part of this Administration's management agenda, prioritizes finding ways to 

maximize utilization of the eXisting federally owned inventory. By dramatically improving 

utilization of our current inventory, we have saved millions of dollars for ou r partner Federal 

agencies and for the American taxpayers. 

When existing space is not available, GSA determines the best method to acquire new space, 

whether through new construction or leasing space from the private sector. GSA leases space 

for most agencies, including, but not limited to offices, laboratories, warehouses, and clinics. 

GSA uses a comprehensive, deliberative process that ensures full competition and fair rental 

rates for the taxpayers, while taking into account such public interests as proximity to central 

business districts or public transportation and the mission requirements of GSA's partners. 

Since real property was identified as a high-risk area by GAO in 2003, GSA has worked closely 

with our partner Federal agencies to maximize the utilization of leased space. In our 

prospectus-level lease program in Fiscal Year 2013 alone, GSA and our partner agencies have 

proposed a nearly 10 percent reduction is square footage requirements, from a current 

requirement of 3.4 million square feet to proposing just 3.1 million square feet. Approximately 

80 percent of GSA's leases are for smaller, short-term needs that require fewer than 20,000 

square feet. Nationally, GSA's leased space vacancy is only 1.6 percent; this compares to a 

national average of 15.6 percent in the private sector. 

2 of 5 
15 


Insert offset folio 7 here 86552.007

How the Constitution Center entered GSA's inventory 

Of course, GSA is not the only agency that leases space on behalf of the Federal Government. 

More than 2S agencies and commissions have their own statutory authority to hold land and 

acquire leasehold interests. 

Constitution Center is an example of our efforts to assist an agency that entered into an 

agreement using its independent leasing authority. In 2010, the SEC, under its own authority, 

signed an agreement to lease approximately 900,000 square feet in this bUilding. Shortly 

thereafter, the SEC indicated that this space was not needed, and the Federal Housing Finance 

Agency (FHFA) and the Office of the Comptroller of the Currency (OCC) agreed to take on 

approximately two-thirds of the space. 

In 2011, GSA reached an agreement with SEC to assume control of and backfill the remaining 

358,000 square feet under SEC's lease. Since that time, GSA has worked to identify potential 

backfill tenants and minimize the financial exposure to the Government that would result from 

this space sitting vacant. 

GSA's plan far the Constitution Center 

GSA is taking advantage of the leasehold interest in the Constitution Center to consolidate 

space for the Federal Trade Commission (FTC), the National Endowment for the Arts (NEA), and 

the National Endowment for the Humanities (NEH). FTC will be moving from two expiring lease 

locations at 601 New Jersey Avenue Northwest and 1800 M Street Northwest in Washington, 

D.C. GSA and FTC have used this opportunity to reduce FTC's footprint, improving FTC's 

utilization of office space from 167 square feet per person in the old leases to only 119 square 

feet in Constitution Center. 

The balance of the space will be used to provide needed housing for the NEA and NEH. The 

move of NEA and NEH is part of GSA's agreement to redevelop the Old Post Office. 

As you know, GSA recently reached an agreement to outlease the historic Old Post Office, 

securing the investment of $200 million in private sector funds in the restoration of the 114-

year old federal building. This significant investment will allow GSA to convert the Old Post 

Office into a mixed-use development that will serve the local community, preserve the historic 

facility, and save taxpayer dollars. 

30f5 
16 


Insert offset folio 8 here 86552.008

This agreement is contingent on GSA's ability to vacate the existing Federal tenants from the 

Old Post Office. Relocating NEA and NEH from the Old Post Office in a timely fashion is 

imperative to GSA's ability to implement the proposed redevelopment agreement for the Old 

Post Office, and failure to deliver the unencumbered site will result in significant financial 

penalties for the Government. 

Upon delivery of the Old Post Office to our private sector partner, we will receive a base rent of 

$250,000 per month, escalating at the Consumer Price Index over the term of the 60-year lease. 

The funds that GSA receives from the Old Post Office outlease can be used for repair and 

upkeep of historic Federal buildings across GSA's inventory, saving additional taxpayer dollars. 

GSA's portion of the Constitution Center will have zero vacancy once we complete construction 

of tenant improvements and FTC, NEA, and NEH move into their new space. Construction is 

underway for all tenants, and FTC's space is approximately 40 percent complete. The NEA and 

NEH, as well as the FTC employees currently housed at 601 New Jersey Avenue and 1800 M 

Street, are all scheduled to move into this building by March 2014. 

Previous Considerations for Constitution Center 

At the direction of Chairman Mica and the House Committee on Transportation and 

Infrastructure, GSA examined alternatives for Constitution Center aimed at consolidating FTC's 

entire Washington-area presence, including FTC Headquarters functions currently housed in the 

historic Apex Building at 600 Pennsylvania Avenue Northwest. 

Accommodating FTC's projected needs in Fiscal Year 2015, even under the improved space 

utilization, would require 446,054 rentable square feet of space. Even at current, on-board 

staff levels, FTC would require more space than is available to GSA in Constitution Center. In 

addition to the space limitations, relocating the FTC employees currently housed in the Apex 

Building would increase moving costs by nearly $50 million. At the same time, the 30-year net 

present value cost of moving FTC Headquarters operations from federally owned space into a 

lease would exceed $170 million. Given the size limitations and costs associated with such a 

move, consolidating the FTC's entire Washington presence into Constitution Center is not 

feasible. 

40fS 
17 


Insert offset folio 9 here 86552.009

Conclusion 

Thank you for inviting me to appear before you today. Given GSA's expertise in leasing, we look 

forward to continuing our dialogue on how to maximize utilization at Constitution Center and 

throughout GSA's inventory. I am pleased to take your questions. 

50f5 
18 

Mr. MICA. Appreciate both of the witnesses, and we will turn 

right to questions. 

All right, you are leasing 203,000 square feet here, right? 

Mr. WISNER. As of July 2012 we leased 358,000 square feet, 

which we assumed from the SEC. 

Mr. MICA. And in this space, in this—in Constitution you have 

358,000 square feet, but you are going to occupy 203,000 square 

feet for the FTC? 

Mr. WISNER. It is approximately 250,000 square feet for the FTC. 

That is the space that the FTC will be—— 

Mr. MICA. Okay. What we are told is 203,000 square feet. 

Mr. WISNER. I can get—— 

Mr. MICA. Which would leave 150,000 square feet. We are pretty 

close. 

In the slide that we had a few minutes ago, we had the Apex 

Building, where the headquarters is, 160,000 square feet. And if 

you rent 203,000 or more, that still leaves you with about 150,000, 

140,000 square feet in this building. And that is what you intend 

to give to the—how much do you intent to give to the Humanities 

and to the Arts? 

Mr. WISNER. Chairman Mica, the space for the NEA and NEH 

is about 100,000 square feet. 

Mr. MICA. So, again, in talking to Mr. Moran and others, the appropriators, that he is not a very happy camper. First of all, it 

looks like it is being purposely done to put NEH and the Arts in 

here to occupy part of that space, and ignore consolidation of FTC. 

I mean there is no reason why you cannot fit the balance of what 

is in the old building. In fact, in the old building you have things 

that would be—in this new building—and, again, two of the FTC 

operations—you have in this building a cafeteria, do you not? 

Mr. WISNER. Yes, there is. 

Mr. MICA. Do you have day care in this building? 

Mr. WISNER. Yes, there will be an FTC day care center. 

Mr. MICA. You would have—— 

Mr. WISNER. I apologize, sir. I was wrong. There is not an FTC 

day care center in this building. I was incorrect. 

Mr. MICA. Oh, it would be at the other one? 

Mr. WISNER. Yes. 

Mr. MICA. Okay. But that could be consolidated. You have a 

whole list of activities here that could be consolidated. You cannot 

find, again, a consolidation of space that would be saved by putting 

all of FTC together. 

The Data Center, obviously, could be consolidated. Could it not? 

Mr. WISNER. I will have to defer to Mr. Robbins on the Data Center consolidation, but I don’t believe they can—— 

Mr. MICA. Well, I can tell you. Mr. Connolly and I looked at the 

consolidation of the Data Centers. And they have two of them, and 

at great expense. 

The biggest expense in moving is the moving of the Data Center. You have $34 million in moving the Data Center from New Jersey 

and the other building. I guess most of it is in New Jersey. Is that 

the cost of moving it? How much is moving the Data Center? Staff, 

do you have that information? How much is moving the Data Center? 

19 

Mr. ROBBINS. So the overall IT cost, not only for the Data Center, 

but for also building out all of the networking in the building, as 

well as the AV and other kind of wireless facilities is going to 

roughly be $20 million. 

Mr. MICA. Okay. And that is from New Jersey and the other 

building? 

Mr. ROBBINS. New Jersey and M Street. 

Mr. MICA. Okay. And, again, if you had one consolidated data 

center, it would be cheaper to operate, probably less space required, 

and, again, the savings from consolidation. 

You wouldn’t see any savings from consolidations in that, Mr. 

Wisner? 

Mr. WISNER. The cost to move out of the Apex Building would 

be—— 

Mr. MICA. Not the cost to move, the cost to operate. Is it going 

to be cost to move? 

Mr. WISNER. The cost to replace the Apex Building with leased space would be about $170 million over 30 years. So—— 

Mr. MICA. The cost of what? 

Mr. WISNER. To replace the Apex Building. To—— 

Mr. MICA. I am not talking about replacing the Apex Building. 

I am talking about—right now, I am talking about consolidations, 

to put everything right in the building that we are in here that you 

are thwarting. 

Again, we passed resolutions. This resolution was passed by the 

House committee of jurisdiction, which was the Transportation 

Committee. It was passed the 16th of February, 2011. And it cited, 

again, consolidation of these facilities. Is it GSA’s policy just to ignore? Tell the Congress and the committee just to go jump in the 

Potomac River? 

Mr. WISNER. No, sir. 

Mr. MICA. Okay. Well, again, you have—— 

Mr. ROBBINS. If I may, Mr. Chairman, just one on the Data Center. 

Mr. MICA. Well—you what? 

Mr. ROBBINS. So one note on the Data Center. So the Data Center operations, or the technology operations we are consolidating 

here, are not our main data center functions. We are consolidating 

AT labs, our litigation support facilities, et cetera. It is not the 

same thing. And, as I understand it, there isn’t sufficient space in 

this building, if we even wanted to move—— 

Mr. MICA. Okay. 

Mr. ROBBINS.—our current Data Center here. 

Mr. MICA. Okay. This—— 

Mr. ROBBINS. Respectfully, I am just trying to make sure you 

have the information. 

Mr. MICA. You are leasing 203,389 square feet of usable space 

here. You have 655 employees you are putting into this building 

from both New Jersey and M Street. So that is an average of 310 

square feet per person. That is an average. Okay. And you describe 

most of what you are doing is paperwork. 

Mr. ROBBINS. So—— 

Mr. MICA. Attorneys. I don’t see having industrial manufacturing, I don’t see—— 

20 

Mr. ROBBINS. You are right, we—— 

Mr. MICA.—space that are required—— 

Mr. ROBBINS. You are right. We are not doing heavy manufacturing—— 

Mr. MICA. And you did cite that there is a diminution in the 

square footage, so there is a lot of extra space in this area. So is 

some of that conference rooms and other things that you would be 

using? What is the balance of the space? How much did you say 

per-person square feet utilization, 100-something? 

Mr. WISNER. The new utilization in this building will be about 

119,000 square feet per person. 

Mr. MICA. A hundred and nineteen—— 

Mr. WISNER. I am sorry, sorry, 119. 

Mr. MICA. But, again, the total that you are acquiring—just do 

the math. Even a second-grader can do the math. It is 310, if you 

take the 655 and divide it. So there is a lot of space here that can 

be used for consolidation—— 

Mr. ROBBINS. Mr. Chairman Mica, I would just note a couple 

things. One is one of the things that enables this agency to fit into 

smaller space with our staff who are going to be coming here is 

that it presupposes that there is going to be meeting space, conference space, and other special use spaces—— 

Mr. MICA. What is the total number of employees that you have, 

total number of employees you have? I have here, as of March 

2013, the latest, 1,159 FTC employees. And then you have some 

contract people that you also house. 

Mr. ROBBINS. So the FTC—— 

Mr. MICA. Is that right, 1,159? 

Mr. ROBBINS. So the FTC’s FTE ceiling is 1,176. And, like any 

other agency, we have people who leave, and then we have to backfill—— 

Mr. MICA. No, my concern was how many employees do you 

have. Do you have 1,159 FTC employees? Yes or no? And then you 

have some additional contractors—— 

Mr. ROBBINS. As I—— 

Mr. MICA.—is that correct? 

Mr. ROBBINS. I believe the current number in the D.C. area—— 

Mr. MICA.—1,340’s. 

Mr. ROBBINS. I believe that the current number of employees— 

so FTE employees—is 1,035, actually, currently. 

Mr. MICA. Okay, 1,035 in D.C. 

Mr. ROBBINS. In D.C. So—— 

Mr. MICA. Okay. And—in D.C. Well, that’s even less than what 

I have here, because you are talking about this is total in D.C. 

Mr. ROBBINS. Chairman Mica—— 

Mr. MICA. So 1,035—— 

Mr. ROBBINS. Chairman—— 

Mr. MICA. And we will give you 250. 

Mr. ROBBINS. So—— 

Mr. MICA. That would give you 1,300. If I gave you 200—— 

Mr. ROBBINS. Chairman? 

Mr. MICA. Hey, just let me finish. If I gave you 200 square feet— 

he is talking about giving them 119 square feet—if I gave you 200 

square feet, do the math of that. It is, what—— 

21 

Mr. ROBBINS. Here is the problem. 

Mr. MICA. How many? 

Mr. ROBBINS. So—— 

Mr. MICA. It is 240,000 square feet we will give you to house employees. 

Mr. ROBBINS. Chairman Mica—— 

Mr. MICA. At 200 square feet a piece, 240,000 square feet. There 

is 358,000 square feet, and you are telling me you cannot get the 

balance of the operation in here? That is bull. 

Mr. ROBBINS. So, the FTC currently has an inventory of—— 

Mr. MICA. This is an abuse of taxpayer money unlike anything 

I have seen. And to renovate a building that is 1930s and have 

someone else pay for it—and don’t sit there and tell me that the 

building is worth $90 million, that, in fact, we are giving it away. 

Where does the property stay? Where would that property stay, the 

FTC building? 

Mr. WISNER. The appraised value is about $92 million in 2011. 

Mr. MICA. Okay, $92 million. But where does it stay? It doesn’t 

change hands. It is still in trust for the people of the United States. 

It is part of the inventory, is it not? 

Mr. WISNER. It would leave the GSA federal properties inventory. 

Mr. MICA. But it is part of the—it is fee simple to the United 

States of America. It is not to anyone. 

Mr. WISNER. It would not be of use to the federal employee base. 

Mr. MICA. Not of use? And, again, you can’t consolidate and get 

the balance in here, in the little scam you are playing, to bring in 

two agencies that use part of the space—and again, it is what we 

asked you to do in 2011 that made sense. Again, you are saving— 

they currently lease 60,000 square feet, don’t they, the National 

Gallery of Art? 

Mr. WISNER. Sir, they are occupying about—— 

Mr. MICA. They lease 60,000 square feet, and they need additional space. They are across the street. There is no place that is 

really for them to go to expand their galleries. They have this plan 

and, again, you are thwarting the plan. 

Well, I won’t go a second round. I think I get a little bit excited 

about this—— 

Mr. ROBBINS. Chairman Mica, if I may, you had mentioned the 

number of people, so I just wanted to clarify one thing. So it is 

true, in terms of FTE. But, like any modern organization, we have 

a mix of staff, full-time employees, temporary employees, contractors in our buildings. Currently, we have an inventory of 1,517 

seats across our three operations—— 

Mr. MICA. One thousand how many? 

Mr. ROBBINS.—1,517, and we have planned for 1,630. 

Mr. MICA. In Washington, D.C. In Washington, D.C.—— 

Mr. ROBBINS. Correct. 

Mr. MICA. You just told me that you had 1,100, approximately. 

I give you—— 

Mr. ROBBINS. It is a difference between employees and people 

who work in our facility, Mr. Chairman. 

Mr. MICA. Again, if we used his figures, 119 square feet, and we 

have you multiply that, I was giving you 200 and I could get to 

250,000, and it still leaves 250 minus 300-some square—358,000 

22 

square feet. It still leaves you an incredible amount of space for expansion, for activities, for conference rooms, for hearing rooms, not 

to mention any savings from consolidation of having some of the 

operations that are listed here being covered. 

Mr. Connolly, thank you. 

Mr. CONNOLLY. Thank you, Mr. Chairman. As a newcomer to 

this issue, I am now confused. So let me try to educate myself. 

Mr. Wisner, the building we are in right now, Constitution Center? 

Mr. WISNER. Yes, sir. 

Mr. CONNOLLY. Who owns it? 

Mr. WISNER. It is owned—— 

Mr. CONNOLLY. You need to speak into the mic. 

Mr. WISNER. Excuse me. It is owned by a private-sector organization. It was originally owned by the Nassif Corporation, and now 

it has been sold to another organization. 

Mr. CONNOLLY. So we don’t own it. Do we own the FTC building 

currently? 

Mr. WISNER. Yes, we do own the FTC building. 

Mr. CONNOLLY. The decision was made to move from there primarily to here and some other locations for what reason? 

Mr. WISNER. The decision to consolidate out of the two lease locations was made to make the SEC lease whole, which is the SEC 

leases—this Constitution lease, which we inherited from the action 

that the SEC took. 

Mr. CONNOLLY. So there was recognition that the current site 

was inadequate. 

Mr. WISNER. Of the two leased spaces? No. 

Mr. ROBBINS. Can I break in? And I apologize, respectfully. 

Mr. CONNOLLY. I ask you both—— 

Mr. ROBBINS. The—— 

Mr. CONNOLLY. You have got to speak into the microphone. I 

cannot hear you. 

Mr. ROBBINS. The FTC has three buildings, as we have discussed, in—at D.C. The Apex, or headquarters building, which was 

never planned to be moved, because it is very cost-effective for us. 

The kind of square-foot lease cost to that is much lower than getting into a commercial lease, which I think everybody has recognized, across government. 

The two properties we were consolidating here are current commercial leases, as well, which are expiring. And one has expired 

and we are in holdover, and it is costing us millions more to stay 

there. 

Mr. CONNOLLY. Okay. Point well taken. But I am actually at a 

more fundamental level. What is the square footage at the Apex 

Building right now? 

Mr. WISNER. The Apex Building is about 305,000 square feet. 

Mr. CONNOLLY. Three hundred and five. And you have moved a 

lot of operations here for what reason? 

Mr. WISNER. We have not moved operations in the building yet; 

it is currently under construction. 

Mr. CONNOLLY. Well, but, I mean, the plan is to do that. 

Mr. WISNER. Yes. We will be moving the NEA and NEH from the 

Old Post Office—— 

23 

Mr. CONNOLLY. No, no, no, no. I am talking about the FTC right 

now. 

Mr. WISNER. The FTC locations that we are consolidating are the 

two leased facilities at New Jersey Avenue and 1800 M Street. We 

need to get out of those two facilities and consolidate into this 

lease. 

Mr. CONNOLLY. Is it your position, from GSA’s point of view, that 

the Apex Building is a functional building? 

Mr. WISNER. The Apex Building is a functional building. It is a 

performing building. And it does not require additional investment 

at this time. 

Mr. CONNOLLY. The Chairman showed some slides trying to 

highlight, you know, it looks like a building that needs remodeling 

and updating to meet normal 21st century office—commercial office 

standards. Do you dispute that? 

Mr. WISNER. I am not familiar with those particular pictures 

that were out there. The condition of the building that we have 

from our analytic shows that it is a high-performing building. I 

don’t believe that it needs significant investment at this time, sir. 

Mr. MICA. Mr. Connolly? 

Mr. CONNOLLY. Yes, sir. 

Mr. MICA. Could I answer in the record, here? This is by—an assessment by GSA. The Federal Trade Building has been classified 

as a 2B—a tier 2B asset for Fiscal Year 2013 by GSA’s national 

office. Tier 2B assets are under-performing financially, and fail to 

return a six percent equity. This is part of what I just request 

unanimous consent at this point that we insert this in the record. 

[No response.] 

Mr. MICA. Thank you. Without objection, so ordered. 

Mr. MICA. Yield back. 

Mr. CONNOLLY. Why was the decision made to put NEA and the 

National Endowment for the Humanities in this building? 

Mr. WISNER. The NEA and NEH are part of the Old Post Office 

facility. As you know, we are in the process of striking—we have 

struck a deal with a private-sector organization that will be reinvesting that property. We needed to exit out of the Old Post Office 

building. We have a significant penalty in that building if we stay 

over in that building. 

There was space available here, in the Constitution Center, to 

consolidate their location and to downsize them. There was no 

other significant block of space that we had available within the 

portfolio at the time that that decision was taken. So it made complete sense to move the NEA and the NEH and consolidate them 

out of this location. 

Mr. CONNOLLY. And so, we are dedicating, in this building, 

100,000 square feet to those two? 

Mr. WISNER. Approximately 100,000 square feet, yes, sir. 

Mr. CONNOLLY. Was there any consideration ever by either GSA 

or FTC that that was an opportunity cost, that by not doing that 

we could consolidate a lot more of FTC here? 

Mr. WISNER. The FTC, in total, would not fit in this location. I 

don’t know if there was the opportunity cost that you are talking 

about studying that—— 

24 

Mr. CONNOLLY. Well, just a second, Mr. Wisner. You have currently 305,000 square feet at the Apex Building? 

Mr. WISNER. The Apex Building is about 305,000 square feet, 

gross space, yes. 

Mr. MICA. Only half of it is usable. 

Mr. CONNOLLY. And not all of that is used by FTC. 

Mr. WISNER. No, all of it is used by the FTC. They occupy 

253,000 square feet of rentable space. 

Mr. CONNOLLY. Two fifty-three? 

Mr. WISNER. Yes, sir. 

Mr. CONNOLLY. So, if you—and you have got—and you said to 

the chairman that you think here 250,000, roughly, square feet will 

be dedicated to the FTC mission. 

Mr. WISNER. Yes, sir. 

Mr. CONNOLLY. If you didn’t lease to NEA and NEH, hypothetically, you could add another 100,000 to that. 

Mr. WISNER. That is the total amount. Yes, sir. 

Mr. CONNOLLY. So then you could get to 350,000 square feet, in 

theory. 

Mr. WISNER. Approximately. 

Mr. CONNOLLY. For—without any modifications to the building, 

which might free up some more square footage, depending on what 

you did, for the FTC mission. 

Mr. WISNER. Yes, sir. 

Mr. CONNOLLY. And you said that we—what you need—maybe, 

Mr. Robbins, you said this—you need 446,000 square feet. 

Mr. WISNER. Yes, sir. 

Mr. CONNOLLY. And is that to accommodate growth? I mean that 

is an increase over what you currently have in toto now. 

Mr. WISNER. That is the number that we calculated in July of 

2012, when this decision was made. 

Mr. CONNOLLY. But what is the delta that that represents between what you currently occupy and what you project you need? 

Often, when we make these kinds of moves, both in the private and 

public sector, we want to add capability, we want to be able to do 

things we can’t do now. And so we kind of go for the max, rather 

than the minimum. 

So, that 446,000—what I am trying to get at is—what delta does 

that represent over current de facto numbers? 

Mr. WISNER. I believe you are asking the difference between the 

total lease at Constitution Center and the total requirement for the 

FTC. 

Mr. CONNOLLY. No, I am asking the difference between 446, 

which I think, Mr. Robbins, you stated, is what you—is the square 

footage you need. And I am trying to get at does that need include 

some change from the number you have currently? I am trying to 

get my arms around—is that 50,000 over and above what you currently have in order to better meet your needs, or—I mean, certainly, you are not telling us that it represents zero change. 

Mr. WISNER. No. It would have been—incorporated the change or 

growth that we anticipated with the FTC in July of 2012. 

Mr. CONNOLLY. And what is that change? 

Mr. WISNER. It would have been—I think we were counting 

about 1,006 total employees that would have to be seated. 

25 

Mr. CONNOLLY. In square footage. 

Mr. WISNER. In square footage? I will have to get back to you 

that on [sic], sir. I don’t—I can’t—— 

Mr. CONNOLLY. Do you know, Mr. Robbins? 

Mr. ROBBINS. I don’t, off the top of my head. I apologize. 

Mr. CONNOLLY. Well, okay. So we have a question about the 

delta. 

Mr. ROBBINS. If I may, one other thing. 

Mr. CONNOLLY. Yes. I have to ask you again to speak into the 

mic. 

Mr. ROBBINS. I apologize. I am with you. So, one of the 

things—— 

Mr. CONNOLLY. Could be my hearing. 

Mr. ROBBINS. I will get better at this microphone thing, I promise. 

When looking at whether to consolidate headquarters building 

with—and this is something that was looked at with GSA many 

years ago, when we were starting down this process, we came up 

with this requirement. But not only did we come up with this requirement, we looked at what would be the delta, if you would, between government-owned space cost and the cost to get into leased 

space. And the financials just don’t make any sense. And you don’t 

have to take my word for it. I know, over the past couple of years, 

a couple of bills were introduced in Congress, and CBO scored 

those bills, and there was a net cost to taxpayers, not a net savings. 

Mr. CONNOLLY. Yes. 

Mr. ROBBINS. And so, we did a cost benefit analysis, if you would, 

like any business would. And it would cost more to the taxpayer 

for us to get out of headquarters building, if—what our analysis 

showed. 

Mr. CONNOLLY. Mr. Robbins and Mr. Wisner, I spent 20 years in 

the private sector, and I spent 14 years in local government, and 

I have been involved in many, many relocations of government 

agencies and of my own private-sector company. So I have gone 

through this kind of analysis. 

And I am not unsympathetic to the fact that there is an opportunity when you relocate or you consolidate, not only for savings, 

but to also allow you some capabilities maybe you are constrained 

with—meeting rooms, audio visual, amphitheaters, auditoriums, 

and so forth—and those aren’t good or bad. They are capabilities 

we seek to be able to function in a more professional way. And, you 

know, I don’t think government should be a bunch of hermits in 

a cave. Maybe some of my colleagues do, but I don’t. 

But, on the other hand, we are trying to get our arms around 

what really—you know, how much is extra in the sense of over and 

above current operations that we are seeking in that 446. Because 

we are trying to—you know, we are trying to better understand can 

this building largely accommodate the FTC, in theory, if we wanted 

to, if we didn’t want to put NEH and NEA here, in theory. And, 

if you want to get back to us, great, but we have got to sort of get 

the numbers right for us to do analysis with you about what can 

and cannot be done. 

26 

Now, Mr. Robbins, in your testimony I missed part of what you 

said. You said something was 40 percent complete. Was it the 

move? 

Mr. ROBBINS. The construction of the space here in Constitution 

Center. 

Mr. CONNOLLY. Here. 

Mr. ROBBINS. Exactly. For those two leases of the property. 

Mr. CONNOLLY. So we are already invested is your point. 

Mr. ROBBINS. Well invested. 

Mr. CONNOLLY. Well invested. Okay. And the move—I am sorry—the consolidation here, roughly, is going to cost around $15 

million for build-out? 

Mr. WISNER. No. 

Mr. ROBBINS. So for the two leased properties we are talking about, it is $75 million to move them here. 

Mr. CONNOLLY. $75 million. 

Mr. ROBBINS. Yes. 

Mr. CONNOLLY. Now, you talked about if we were to give up the 

Apex Building to accommodate the National Gallery, it would cost 

us $170 million over 30 years. Is that correct? 

Mr. ROBBINS. So when GSA ran the numbers, the net present 

value, over 30 years, as I understand it, was that figure, yes. 

Mr. CONNOLLY. That does not include the $75 million we are investing in the consolidation here. 

Mr. WISNER. No, sir, it does not. 

Mr. CONNOLLY. And tell us a little how you arrived at that $170 

million. Because, I mean, just, you know, a naked look at that 

number, it sounds scary. 

Mr. WISNER. It is the total lease cost over 30 years to replace the 

space that would be required if we left the Apex Building in the 

lease market in Washington, D.C. 

Mr. CONNOLLY. Ceteris paribus, all other things being equal—— 

Mr. WISNER. I am sorry, sir? 

Mr. CONNOLLY. Ceteris paribus, all other things being equal? 

Mr. WISNER. Yes, sir. 

Mr. CONNOLLY. I speak Latin, a little. Okay. I guess I would 

want to know—just trying to get my arms around this a little, and 

then I have got to yield back, Mr. Chairman, but I think we need 

to know more about that $170 million cost figure, rather than just 

accept it at face value. 

Mr. WISNER. Yes, sir. 

Mr. CONNOLLY. Not that—not trusting you, but we want to understand how you arrived at such a figure. 

Mr. WISNER. Yes, sir. 

Mr. CONNOLLY. And, secondly, I think we need to understand 

that delta. How much of the 446 you say your need is—I am not 

disputing it—represents a delta. And there could be an excellent 

reason for that delta, or much of that delta, but we have just got 

to know what it is, so that we have a better handle on the numbers 

we are dealing with. 

Mr. WISNER. Yes, sir. We can get back to you for the record. 

Mr. CONNOLLY. And would I be allowed one final question, Mr. 

Chairman? 

Mr. MICA. Go right ahead. 

27 

Mr. CONNOLLY. Being from Virginia, where rents are cheaper 

and life is perfect, did we look at the relocation of NEH and NEA 

to suburban Virginia or, for that matter, suburban Maryland, instead of making the decision to put them here? 

Mr. WISNER. Sir, I think we looked at the entire portfolio within 

the National Capital Region, but I can get back to you with the 

specifics of the—— 

Mr. CONNOLLY. Yes, because I would like to also know what was 

the thinking with—because if you put NEH and NEA here, perhaps 

there is a good reason to do that. I would like to hear it. You, of 

course, preclude 100,000 square feet that could be Accommodating 

the FTC. And the chairman has suggested that that wasn’t done 

accidentally, that perhaps that was done in order to preclude any 

further pressure by Congress or anyone else in further consolidation of FTC here. So I would like to know the rationale for why we 

are commingling FTC operations with NEH and NEA here. 

And, with that, Mr. Chairman, I yield back, and I hope—— 

Mr. MICA. And at this point in the testimony, I am asking unanimous consent—and I will get the information from Mr. Moran, the 

gentleman from Virginia, appropriation, who, I think, cited opportunities in Virginia to lease at a lower cost to relocate those agencies, if we were looking just at the item of cost that were available. 

So that opportunity, according to Mr. Moran—and I talked to him 

yesterday—he will put something in the record about what he did 

to tell them what was available and, again, ignored—and—— 

Mr. CONNOLLY. And, as you know, Mr. Chairman, having helped 

us with transit with Northern Virginia, all served by transit. 

Mr. MICA. Yes. I love Virginia. 

The gentleman from North Carolina. 

Mr. MEADOWS. Thank you. I need to ask a few questions. I am 

confused. And I can be your best ally or your worst nightmare. And 

so cap rates from a internal perspective, you are looking at a six 

percent cap rate? Did I hear that? 

Mr. WISNER. The cap rate on the net present value for the 30- 

year lease, or the cap rate for the return on investment? 

Mr. MEADOWS. The 30 years. 

Mr. WISNER. Yes, sir. I believe it was six percent. 

Mr. MEADOWS. All right. So did you not find that—— 

Mr. WISNER. So we—— 

Mr. MEADOWS. Did you not find that out of line? 

Mr. WISNER. No, I do not. 

Mr. MEADOWS. So you think that is—— 

Mr. WISNER. There are multiple market rates, but I can certainly 

get back to you, sir, I apologize. 

Mr. MEADOWS. Is that—is it your testimony that the six percent 

cap rate in Washington, D.C. is market—— 

Mr. WISNER. Sir, I would like to check the number and get back 

to you specifically on the net present value calculations that we 

did. 

Mr. MEADOWS. You do this for a living? 

Mr. WISNER. I do this for a living, yes, sir. 

Mr. MEADOWS. So is that market rate or not? 

Mr. WISNER. I can get back to you on the numbers, sir. 

28 

Mr. MEADOWS. Okay, all right. So you got 100,000 square feet 

that you classify as unusable, characterize that unusable 100,000 

square feet—— 

Mr. WISNER. I am not familiar with the 100,000 square feet. 

There is—— 

Mr. MEADOWS. Well, it was your testimony, one of yours—— 

Mr. WISNER. Yes—— 

Mr. MEADOWS.—that you had unusable at the Apex—— 

Mr. WISNER. Sir, the rentable square feet of the Apex Building 

is about 253,000 square feet. 

Mr. MEADOWS. I see—— 

Mr. WISNER. So there is about 50,000 square feet that is between 

the gross and the—— 

Mr. MEADOWS. So 100,000—so you are saying there is 50,000 of 

unusable space. 

Mr. WISNER. 50,000 between the gross and the usable. Yes, sir. 

Mr. MEADOWS. So characterize that for me, if you would. 

Mr. WISNER. I think there are some—there are hallways and 

there is some historic locations within that facility that we need to 

maintain, sir. 

Mr. MEADOWS. So those would be—because, normally, if you are 

just talking about open area, that would not necessarily be square 

footage. I mean that may be volume, but it is not square footage. 

So you are saying these are actually hallways, square footage? 

Mr. WISNER. Yes, sir. 

Mr. MEADOWS. Okay. So we are here dealing with this problem 

because somebody screwed up and entered into a lease and then 

tried to default. Is that—— 

Mr. WISNER. They did not default. The SEC did not need this 

space after they—— 

Mr. MEADOWS. So you approved that lease. 

Mr. WISNER. The SEC, under their own authority, sir—— 

Mr. MEADOWS. Did the GSA do that? 

Mr. WISNER. No, GSA did not have anything to do with that. 

GSA—— 

Mr. MEADOWS. So it was under their own individual—— 

Mr. WISNER. Independent authority. Yes, sir. 

Mr. MEADOWS. And so, are we charging them back for their mistake? 

Mr. WISNER. No, sir. The property was excessed under the agreement to GSA, and GSA’s responsibility was to dispose or to find another tenant for the space, sir. 

Mr. MEADOWS. So, is there any scenario, Mr. Robbins—and I 

know the projections—is there any scenario which you can see to 

consolidate your operation under one roof? 

Mr. ROBBINS. In the Constitution Center building, which I think 

we have looked at closely with GSA, the answer is no. 

Mr. MEADOWS. And why is that? 

Mr. ROBBINS. There isn’t enough space in this building. 

Mr. MEADOWS. Based on what? 

Mr. ROBBINS. The square footage that is here, and the requirement—— 

Mr. MEADOWS. Based on square footage of—— 

29 

Mr. ROBBINS. No, so based upon—so part of the process we went 

through with GSA—— 

Mr. MEADOWS. Right. 

Mr. ROBBINS.—was to develop what was our need, as an agency—— 

Mr. MEADOWS. Because I heard earlier you were talking about 

internal rates, the rate versus—— 

Mr. ROBBINS. Oh, so that is just the minimal square feet—— 

Mr. MEADOWS. Saving—— 

Mr. ROBBINS. So I think—and I would ask Chris to correct me 

if I am wrong here—the rough square footage cost to us of the Apex 

Building is, I think, $23 per square foot. And in a general commercial lease, it is $49 per square foot. So just a cost doesn’t add up. 

It doesn’t make sense. So, even if we were to fit into smaller space, 

you have to go a long way in order to have it make sense from a 

financial perspective. 

But then, on top of it, when you look at the kind of square footage in this building, which I think we said is something along— 

the one quad, which is roughly 358,000 square feet, and our need, 

which is 446,000 square feet, there is just a large deficit. 

Mr. MEADOWS. At 400-plus—— 

Mr. ROBBINS. Yes. 

Mr. MEADOWS. And my friend from Virginia, who was right in 

saying, you know, what is the delta, I mean—and for both of you 

to give a figure like that with rate accuracy is troubling, when we 

don’t know where it came from. Do you know—— 

Mr. ROBBINS. So it came—— 

Mr. MEADOWS.—Mr. Wisner said he didn’t know where it 

came—— 

Mr. ROBBINS. So—you [sic] will have to apologize. I have been 

back at the FTC for about four months. My understanding, I came 

from the FCC. And I am also living in Virginia. I love Virginia. It 

is—lots of great things we are talking about today. 

Mr. CONNOLLY. Wait, wait, wait. Which district? 

[Laughter.] 

Mr. ROBBINS. I live in Arlington. 

Mr. CONNOLLY. Arlington? 

[Laughter.] 

Mr. ROBBINS. But I would say a couple things. One is the process 

of any long-term capital planning includes sitting down and figuring out how many people do you have, what are your needs, and 

then you figure out a plan around that. And it takes a while to do. 

And we are, as I said, 40 percent complete in that building. The 

delta between kind of what is in this building of one quad, which 

is 358,000 square feet, and the plan we came up with, right, is significant. 

If I could put it in people terms—— 

Mr. MEADOWS. Significant in terms of—— 

Mr. ROBBINS. Exactly right. But let’s put it in people terms, all 

right? So—— 

Mr. MEADOWS. I want it in square footage terms. What is the difference—— 

Mr. ROBBINS. So 446 minus 358 is 87,000 square feet. 

Mr. MEADOWS. So you increased your space requirement—— 

30 

Mr. ROBBINS. No. So that is just the space that is available here, 

in the building, versus what our requirement was. We haven’t increased our requirement. It is just the delta between what is available here and what our requirement is. So that is kind of how I 

would describe that. 

But if I put it in people terms—— 

Mr. MEADOWS. Okay, let’s put it in people terms. 

Mr. ROBBINS. Sure. 

Mr. MEADOWS. And I know you gave the answer on the—— 

Mr. ROBBINS. That is okay. 

Mr. MEADOWS.—so let’s go to people terms. How many square 

feet are you giving to each employee per office? 

Mr. ROBBINS. So, here in the Constitution Center, as we have 

discussed, our utilization rate is 119. Our largest offices, and there 

is only about 20 of them—— 

Mr. MEADOWS. What is ‘‘utilization’’? I mean—because that is a 

technical term. So are you saying that each office, they would have, 

on average, 119 square feet per office? 

Mr. WISNER. Yes, sir. 

Mr. ROBBINS. That is my understanding, yes. So, that is in this 

building. Clearly, in New Jersey and Constitution—and M Street, 

as we have described, the current utilization is much higher. It is 

167, I think. So we are kind of being able to realize a much smaller 

footprint for our staff here. 

But if I could just put it in people terms for a second, all right, 

so our estimate is—our plan has been to build to 1,630 kind of 

seats here in the D.C. area. We currently have 1,517. There are 

going to be 905 seats—— 

Mr. MEADOWS. So you are going to increase your number of employees by 10 percent. 

Mr. ROBBINS. So when we developed our plan, the agency was 

growing—— 

Mr. MEADOWS. That was a yes or no question. 

Mr. ROBBINS. I understand. So we are growing, yes. We projected 

a growth rate when we came up with our plan, because we were 

growing at roughly 30 people a year when we developed our 

plan—— 

Mr. MEADOWS.—authorization that would give you the ability to 

increase that number of employees, and that doesn’t track with 

your trends on where you did that. So why would you do that? 

Mr. ROBBINS. So actually, if you look at our FTE rates, our FTE 

rates over the past kind of five years have been growing, albeit last 

year was different. And sequestration has had its effect. But we are 

talking about long-term capital planning here, not, you know, what 

we are doing one night versus the next. 

Mr. MEADOWS. That is not your job; that is GSA’s job. 

Mr. ROBBINS. I understand. But we are already well into the investment and the build-out of this space for the two leased properties I have discussed, which is going to result in a net savings, 

as I have mentioned, of $5 million, roughly, in annual rent. 

But again, if I put it in people terms, so 905 kind of seats in this 

kind of quad that we will be in, seven floors. 

Mr. MEADOWS. Right, okay. 

31 

Mr. ROBBINS. And we have roughly 600 or 700 people in our 

Apex Building. We are not going to fit 600 or 700 people in three 

floors. It just doesn’t work. 

And then, when you look at the special uses we have in the headquarters building, we can talk about the Data Center, we can talk 

about Commission meeting rooms, we can talk about kind of the 

types—— 

Mr. MEADOWS. Nice meeting rooms, certainly. 

Mr. ROBBINS. Well, we have a Commission meeting room, because we are a commission, a bipartisan commission that meets 

regularly to make decisions for the agency. 

Mr. MEADOWS. So what you are saying is you wouldn’t move over 

here because you have a commission. 

Mr. ROBBINS. No, I am not saying that. I am saying that that is 

just one of the other special spaces that, if you are going to fit 700 

people into three floors, that is not going to work, from a people 

perspective. Then, when you add on these special spaces, it just 

doesn’t make sense. 

And then, when you look at the dollars and cents, it just doesn’t 

make any dollars and cents—— 

Mr. MEADOWS. All right, I am going to hold you to that, because 

I want to look at the dollars and cents, all right? 

Mr. ROBBINS. Fair enough. 

Mr. MEADOWS. Because that is really what this is about. 

Mr. ROBBINS. Yes. 

Mr. MEADOWS. It comes down to a disastrous decision—— 

Mr. ROBBINS. Yes. 

Mr. MEADOWS.—to lease this building, and then figure out 

what—— 

Mr. ROBBINS. Even if you only looked at the move costs, which I think are north of $50 million, what is the justification to get into 

a more expensive lease? It just doesn’t make any sense. 

Mr. MEADOWS. I hear you. Here is what I would like, is a de- tailed analysis of the $50 million. And I am not talking about—I 

am talking about a detailed analysis on that $50 million. 

Mr. ROBBINS. And just—— 

Mr. MEADOWS. Because we all make assumptions. 

Mr. ROBBINS. It is a minimum of $50 million. I am not suggesting that—you may see something more than that. 

Mr. MEADOWS. I heard testimony of $50 million. You said $50 

million—— 

Mr. WISNER. It is at least $50 million, sir. 

Mr. MEADOWS. All right. So I want a detailed analysis. 

Mr. ROBBINS. Understood. 

Mr. MEADOWS. The second part of that is the reason why you 

heard passion from the chairman is two reasons. One is, quite 

frankly, the GSA had a very real job of managing its assets, buildings all around the city, and so that is part of the passion. The 

other is there was a resolution that said to consolidate the operation. And this flies in the face of the will of the people. 

And you know, when you really look at it—so if your jobs are 

there, and your job, Mr. Robbins, was on the line, and we said that 

we are going to pay you a big-dollar bonus if you would figure a 

way to consolidate this into one operation, could you do it? 

32 

Mr. ROBBINS. So I would hope that you would want to hold me 

to the stewardship standard that we talked about earlier, which is, 

is it in the best interest of taxpayers. And that is what we have 

been looking at. 

Now, maybe there is something about the numbers that you 

know that I don’t know. But we can’t seem to find a way to save 

taxpayer money—— 

Mr. MEADOWS. Well, there seems to be—and I want to throw it 

out here, I will close with this, and I appreciate my colleagues’ indulgence—there is a political component to this that—and this 

seems to be an area that doesn’t get talked about. 

And so, have either of you had any talk around the water cooler 

you have heard of when it comes to whether you consolidate, move 

the operation, not move the operation, move from the Apex Building or not? Is there any of that that says, ‘‘Well, we just want to 

hold on to what we have got?’’ All right? ‘‘Because the potential future needs that we might have, this is too nice to give up.’’ Has any 

of that conversation happened? 

Mr. ROBBINS. So not with me, Congressman. I happen also to be 

a lover of the arts, and I think the National Gallery is a wonderful 

institution. It just doesn’t make sense to give them our building. 

Mr. WISNER. No, sir, I have not. 

Mr. MEADOWS. All right. So there is—so what you are saying is, 

dollars and cents, this is the best move for the American taxpayer. 

Mr. WISNER. Yes, sir. In this particular case, for this particular 

lease, and consolidating, yes, sir. 

Mr. MEADOWS. All right. If you could get me the details of that. 

The other is that I do not want us to look at a delta that would 

increase our square foot footprint. And so, we need to look at how 

we handle that. 

Under sequestration, and under—I think it is not right to start 

looking at increases of employees of close to 10 percent. You know, 

when you start to look at that, based on the trends, and you have 

anywhere from a full-time equivalent of 1,159—which is actually 

more than what you gave in your testimony—— 

Mr. ROBBINS. If I may, so if Apex is a given, between New Jersey 

and M Street consolidating here, we will have a net decrease in 

23,000 square feet between the consolidation. So there is a decrease in space utilization, a decrease in the space we will be renting when we move here, and a decrease in the rent. 

Mr. MEADOWS. All right. And so then I would ask you, Mr. Robbins, is—you have got a staff of people you project is—— 

Mr. ROBBINS. GSA is much bigger than us, but—— 

Mr. MEADOWS. But this is your operation, so I would look at 

what are the increased costs of having it housed in three different 

places. I mean is there an increased incremental cost? Because—— 

Mr. ROBBINS. Of course. Mr. Mica—I mean Chairman Mica mentioned one. For instance, the shuttle. It does cost us money each 

year. I think roughly $100,000 each year to operate a shuttle. It 

is money that we are spending. It is real money. But when you look 

at the cost benefit of how much will it cost us to move out of headquarters versus consolidating here into Constitution Center, aside 

from the fact that there is not enough space, the dollars don’t add 

33 

up. The net savings you may get from eliminating a shuttle, for instance, don’t net out to getting below move costs and other costs. 

Mr. CONNOLLY. Mr. Chairman? 

Mr. MICA. Mr. Connolly. 

Mr. CONNOLLY. If I could just be allowed to—a thought, I certainly applaud the fact that we are looking to get the best deal we 

can for the U.S. taxpayer. But we should not—well, two aspects of 

that. One is it is always arguable what the best deal for the taxpayer is. Right? I mean we could say, ‘‘Let’s move all of our government operations to the Dominican Republic, because it is cheaper 

there.’’ We could get much better rent deals in—somewhere in 

the—— 

Mr. MICA. Transportation costs would be—— 

Mr. CONNOLLY. Transportation might hurt, but we will have 

fewer meetings. And technology allows us to Skype and all other 

stuff. So there are lots of considerations that go beyond just dollars 

and cents in the analysis. There is functionality, there is proximity, 

there is the ability to interact by having consolidation, and so forth. 

There are values that may be intangible, but no less real. 

There is also consideration, certainly for Congress, beyond the 

taxpayer consideration—not that that is trivial. And that is looking 

at the—this picture, and asking one’s self, ‘‘What is the ideal use 

for that particular location for the American people?’’ And what is 

our responsibility, as Congress, to answer that question? 

Now, if we were starting from scratch, would we put the FTC in 

that location? If everything else was in place, would that be what 

we would do? Probably not. I am not quite sure what FDR’s thinking was about the FTC at the time. Obviously, it was an important 

agency, from his point of view, and it got a lot of prominence. And 

if I were at the FTC, if I were, for example, a commissioner at the 

FTC, I might really like my location, and not want to change it, 

for lots of reasons. You know, it is a very prominent location that 

has status and all that good stuff. 

So, I just say that because sometimes we can get into the weeds 

about dollars and cents and miss the bigger picture. And I commend to both of my Republican colleagues, you know, the current 

Capitol we have today, the expansion of the United States Capitol, 

the replacement of both chambers and that dome, was championed 

by a man named Jefferson Davis. The only good thing he ever did 

in his life. And he did it right up until the day he resigned from 

the United States Senate to join his fellow traitors in the Confederacy. 

But —and he also was up against lots of people saying, ‘‘What 

are you spending all this money for on flub-dubs, and we can live 

with the chamber where no one can hear anyone because of the 

acoustics,’’ and he had a vision that—and so did Lincoln—that, you 

know, that the Capitol was a very important unifying element, and 

was—it was necessary to invest the tax dollars, even though it cost 

us. Even though you could probably today—GSA might argue, if we 

had GSA doing the analysis back in, you know, the 1850s, GSA 

might have said, ‘‘Just not worth it,’’ you know? Unnecessary expenditure, and so forth. Aren’t we glad they made that decision? I 

am not trying to blame GSA, you weren’t around then, but—so, I 

just commend to my colleagues there are other considerations. 

34 

It is essential we have a cost benefit analysis, of course. But once 

we do, we also have to look at some other questions here. And I 

think the chairman certainly has put that broader vision question 

in front of us, as well, and it has to be answered. I don’t know that 

FTC or GSA can answer that question, but certainly Congress can. 

I thank my colleagues for allowing me to intervene. 

Mr. MICA. Thank you. Let’s go back. I want to recap here. Okay. 

We are moving 655 employees from two rental spaces, New Jersey 

and M Street, right? 

Mr. WISNER. Yes, sir. 

Mr. MICA. And you are telling me they are going to utilize 

119,000 square feet a person in the plan that you are advocating, 

right? 

Mr. WISNER. The utilization rate, yes. 

Mr. MICA. That is what you testified. 

Mr. WISNER. Yes, sir. 

Mr. MICA. The utilization. And we have a balance of 671 employees in the headquarters building occupying a usable space of— 

there is 160,000 of 305,000, because it is an old building. And I 

can—I would love to—I need to walk you all through it, to see it. 

Again, the under-utilization. And, again, we will put in the record 

here—— 

Mr. ROBBINS. We would love to have you come visit. 

Mr. MICA. I have been there many times. I can give the damn 

tour. 

So, again, it is a dump. It is a dump. 

Mr. ROBBINS. I beg to differ. 

Mr. MICA. It is a dump. I mean, compared to what you are looking at here. You are putting federal employees in substandard office space, in my opinion. Okay? That is my opinion. They have the 

opportunity for probably some of the best office space here. We are 

leasing space at those two locations now, consolidating leasing 

space. We should save money. 

The National Gallery of Art is leasing 60,000 square feet, needs 

140,000, 150,000 square feet in the future, which is right across the 

street. We can’t put something together like that. There are savings from not leasing, paying for that least, of at least 60,000 

square feet in the future—say 100,000 square feet—that they do 

not calculate. 

They do not calculate, but we do, of the building—the building, 

in my opinion—I have been in this since 1974, in real estate—yes, 

it is usable, but it has a life cycle, and it will cost $140 million to 

bring that up, at least. If GSA does it, my God, it will cost two or 

three times that. I think the National Gallery can do it—— 

Mr. ROBBINS. We have no plans—as far as I know, neither does 

GSA—for those expenditures on the Apex Building. 

Mr. CONNOLLY. Mr. Robbins—— 

Mr. MICA. Wait, let me just—— 

Mr. CONNOLLY. I didn’t hear what you said. 

Mr. ROBBINS. So I believe Chairman Mica just said that there 

was a plan to spend $140 million on the Apex Building, and—— 

Mr. MICA. No, no one said—no. 

Mr. CONNOLLY. No, no, he said—— 

35 

Mr. MICA. I said in the future you are going to have to spend 

quite a bit of money to—I mean to renovate it. It is going to need— 

it is 70 years old. Yes, some—I looked at—I have been down in the 

bowels of it, I have seen what can be salvaged. 

Mr. ROBBINS. I am just saying—— 

Mr. MICA. But it needs renovation to accommodate modern-day 

conveniences. Yes, the commissioners have nice views of the Capitol, and I know that is important and prestigious. But again, you 

are going to 120 square feet per person. And if we take the 655 and 

the 617, you get to 1,326. Mr. Robbins said, ‘‘Well, we are going to 

need 1,500.’’ Well, if we use his—— 

Mr. ROBBINS. 1,630, I am sorry. 

Mr. MICA. What? 

Mr. ROBBINS. I said 1,630. 

Mr. MICA. Well, 1,630. And we do the math, that is 160,000 and 

34,000—would be 196,000 square feet you would need for employees, if the employees are being provided space on the basis of 

which—of what Mr. Wisner is putting people in here for. You said 

119, and I give you 120. So, that is 190,000 square feet, and there 

are—— 

Mr. ROBBINS. I am just—— 

Mr. MICA. There are 358,000 square feet here? 

Mr. WISNER. Yes, sir. 

Mr. MICA. 358,000 square feet. And you cannot get—we will give 

you 200,000 square feet, and even up the square footage. For 

158,000 square feet, you can’t do that? And then you already have 

the other cafeteria here. Don’t they have a cafeteria? 

Mr. WISNER. Yes, sir. 

Mr. MICA. They don’t need a cafeteria if they come here. The consolidation of these other activities that we had listed. Again, please 

don’t try to tell me that you cannot give plenty of space—much 

more, even, than you are providing—to your employees in a modern building. And there are savings, again, in the long-term, the 

renovation of that building, which will need to be done. 

The second thing is that cost of leasing for the National Gallery 

would be eliminated. There are savings—— 

Mr. ROBBINS. But you replace a lease for the National Gallery 

with a lease for the FTC. 

Mr. MICA. We have calculated and recalculated this. And then, 

to top it off, to shove in here the two agencies to take enough space 

to thwart what we asked you to do in 2011. Mr. Moran had even 

given you options. 

I want also to list—you have thwarted our staff in not giving 

us—you said there is no property available in D.C. that could accommodate those two agencies. 

Mr. WISNER. The vacancy rate—— 

Mr. MICA. They are about 50,000 square feet a piece, right? 

Mr. WISNER. Approximately, yes, sir. 

Mr. MICA. Yes. But you are telling this Subcommittee of Congress, under oath, that there is no other property that you could 

put them in. 

Mr. WISNER. At the time—— 

Mr. MICA. You could put them in property that we own and save 

money. And we own property that you could put them in here. I 

36 

want you to provide me, the subcommittee, with a list of every 

property. You can’t come before us and tell us that there is no 

property. We have—there is property all over this town, some that 

we own, some that we leased. 

Have they given us that list, staff? Answer me. The staff said no. 

I want the list. I will come down and sit in the office until I get 

the damn list. 

Mr. WISNER. Yes, sir, you will have it. 

Mr. MICA. I am absolutely outraged at what is going on here 

with this. This is a perfect example of why American people should 

be fed up with government, to see this nonsense. There is no reason at all all the FTC operations cannot be consolidated. 

I want to invite every member of the FTC staff here, and I will 

host a reception here, and I will do it beginning in January. I want 

them to come and see what you are denying the rest of the people 

in—again, the current FTC Apex, what you are having them go to 

work in every day, as opposed to what they can do. I am going to 

be here, and I am going to invite every one of them, and I will give 

you the time and date, okay? We will do it after work or before 

work, because I want them to come and see. Your union should be 

outraged that you are putting this sham on, again, people who 

work hard, deserve decent space. And again—— 

Mr. ROBBINS. I share your interest in taking care of FTC employees, Chairman Mica. 

Mr. MICA. I want them to come and see this facility that we are 

going to put 655 of their brothers and sisters in, and then leave 

them in what I consider a dump—— 

Mr. ROBBINS. I share your interest in making sure FTC staff are 

taken care of. We work every day to make sure that that happens. 

Mr. MICA. Well, work every day to get them all consolidated 

here. You have 150,000 square feet. You can give them more space 

than you are giving now on average here, just by sheer calculations. An idiot, a first-grader, can do the math on that—190,000 

square feet. He is giving them 119. Is that somewhat inadequate? 

Is 119 inadequate? 

Mr. ROBBINS. With respect, we don’t believe we can fit the rest 

of our operation in—— 

Mr. MICA. Okay, we will go to 200,000 square feet. That leaves 

you 158,000 square feet for all the other things, not deducting the 

things that will be already here, the cafeteria and the other items 

that we cited. 

Again, you can fool some of the people some of the time. You can 

BS people some of the time. And you are not going to BS—I will 

find a way to—and the other thing, too, is that I want put on hold 

the NEH and also the Arts move into this building. I want that put 

on hold. 

I want to talk to Moran. If we have to put it in appropriations, 

whatever we are going to do. You get me the list of other locations. 

And I want to see some locations in Virginia with actually lower 

rent than you are paying here. I know they are available, are they 

not? 

Mr. WISNER. I am not familiar with that, sir. 

37 

Mr. MICA. Okay. Well, you don’t know the D.C. rental market. 

I can tell you they are available. Probably some great places in Mr. 

Connolly’s district or Mr. Moran’s district. 

Mr. WISNER. Sir, I must state that the NEA and NEH space is 

about 35 percent complete in this facility. 

Mr. MICA. What? What did you say? 

Mr. WISNER. The NEA and NEH construction in this building is 

about 35 percent complete. 

Mr. MICA. You have no housing plan, according to staff, for NEH 

and NEA. You haven’t provided it to us. 

Mr. WISNER. I can look into that and get you that, sir. 

Mr. MICA. Is this correct, what you gave me? We have no housing plan? 

Mr. WISNER. It is committed, sir. 

Mr. MICA. We have no housing plan. We do not have—can you 

get us that? 

Mr. WISNER. I can get that, sir. 

Mr. MICA. Again, I have see the jerry-rigging of the cost of moving spaces without any calculations or savings. Mr.—you want to 

go again, or do you want to let Mr. Meadows—— 

Mr. CONNOLLY. I have no further questions. 

Mr. MICA. Mr. Meadows? 

Mr. MEADOWS. Thank you, Mr. Chairman. Let me just ask a few 

things. 

Mr. WISNER. Yes, sir. 

Mr. MEADOWS. We have all this discussion, and you have already 

committed the space to NEH. Is it a moot point, is it not? 

Mr. WISNER. The space is under construction currently, sir, yes. 

Mr. MEADOWS. And so, you made that decision in spite of the fact 

that you knew the wishes of the American people was otherwise? 

Why did you make that decision? 

Mr. WISNER. Sir, I cannot answer that. 

Mr. MEADOWS. Were you aware that that was not the wish of the 

American people? 

Mr. WISNER. No, sir. 

Mr. MEADOWS. Are you aware of the 2011 resolution? 

Mr. WISNER. Yes, sir. 

Mr. MEADOWS. So you were aware. And you consciously made a 

decision to lease it to somebody else? Why would you do that? 

Mr. WISNER. There was a requirement that we get out of the Old 

Post Office to avoid the cost in that location—— 

Mr. MEADOWS. That—— 

Mr. ROBBINS. If I may break in for one moment? 

Mr. MEADOWS. Sure, Mr. Robbins. 

Mr. ROBBINS. Because I think the will of the American people is 

incredibly important. I know it has been mentioned a couple of 

times. I know on the Senate side there was language in the Appropriations Committee reports that actually would have prohibited 

our transferring the Apex Building to somebody else. 

Mr. MEADOWS. Right. 

Mr. ROBBINS. I realize it was only a committee report, but—so 

there were—obviously, we take seriously the will of the people, as 

expressed in Congress. 

Mr. MEADOWS. I will remind the gentleman that one—— 

38 

Mr. ROBBINS. Absolutely. 

Mr. MEADOWS.—does not constitute the will of the American people. 

Mr. ROBBINS. I completely agree, that Congress did have two 

bills over the past few years to consider. And after CBO’s scoring 

of these things, I guess—although I obviously don’t know—the net 

cost didn’t outweigh the benefit to the American people, and so 

Congress decided, in its wisdom, not to pass those bills into law, 

which would have directed us all to take a different course. 

Mr. MEADOWS. So, basically, you made the decision, or your 

agency made the decision to house NEH and—here. 

Mr. WISNER. Yes, sir. 

Mr. MEADOWS. And under what rationale? I mean is it cheaper 

for them to be here? Because it is obviously not cheaper for the 

FTC to be here. 

Mr. ROBBINS. It is actually cheaper for us for those two leased 

facilities, but not for our own—— 

Mr. MEADOWS. Right, but they are in their own facility, as well. 

Is it cheaper? 

Mr. WISNER. They are in federal space that must be vacated to 

allow for this renovation to occur. 

Mr. MEADOWS. So we are making money? 

Mr. WISNER. We—I will have to get back to you on the—— 

Mr. MEADOWS. Based on the numbers—you said $250,000 was 

the lease in—— 

Mr. WISNER. The monthly income will be $250,000, once we hand 

it over to the private-sector entity, yes. 

Mr. MEADOWS. All right, $250,000 a month. 

Mr. WISNER. The agreement states—we will have to get back to 

you. 

Mr. MEADOWS. Because here is what I find, and what I am troubled by. And while this sounds like this is water under the bridge 

and we need to just figure out a best way to accommodate Mr. Robbins and—but I don’t want to further exacerbate that, and it 

sounds like that is what we are doing, we are making decisions for 

an Old Post Office that I love—I love that building—but we are not 

in the business, you know, of managed properties for profit. And 

you should be, but you are not. I mean I have looked at your numbers, and you are not. 

And so, what I am troubled by is we are making decisions to 

house people here, getting rid of a federal building, so we can lease 

it to a multi-purpose use, I guess, is what you would say that 

that—the Old Post Office is. So we are moving them out, putting 

them in a leased facility. And yet we were in a hearing yesterday 

where they were talking about leasing—wanting to increase— 

buildings in this quadrant because we need more square footage for 

this and that. Do you not believe, Mr. Wisner, that there is a better, more cost-effective way to manage our public buildings than 

what is currently being utilized? Do you think the GSA could do 

a better job? Or do you think the private sector could do a better 

job of managing the federal assets? 

Mr. WISNER. I think we do a good job of managing the private—— 

39 

Mr. MEADOWS. I didn’t say did they do a good job. Could they do 

maybe a better job? 

Mr. WISNER. I think there is always room for improvement, sir. 

Mr. MEADOWS. All right. So would—your recommendation is to 

do away with the GSA and let the private sector—— 

Mr. WISNER. No, sir. That is not what I said. I said there is always room for improvement. 

Mr. MEADOWS. I didn’t think you did, but—so, how do we make 

sure that we are most cost effective? Because a lot of this today is 

pent up frustrations is what we are hearing. It is saying we have 

made stupid decisions in the past, let’s not make them again. 

Mr. WISNER. Yes, sir. 

Mr. MEADOWS. I am all for great space. I have got 12 people, at 

times, in an 800-square-foot office. And Mr. Connolly is more senior 

than I am, and so he has a bigger office than I have, and—— 

Mr. CONNOLLY. I probably have less space, I am in Cannon. 

Mr. MEADOWS. Well, I have the smallest office on Capitol Hill. 

So—but that being said, I am all for giving—from a functionality 

standpoint, Mr. Robbins, I want you to have what you need. I have 

had nice offices that I paid for myself. But when it comes to managing—Mr. Wisner, if there is one thing I want you to take from 

that, it is that making decisions on behalf of the American people 

need to be made as if you were spending your own personal dollars. 

Mr. WISNER. Yes, sir. 

Mr. MEADOWS. And that is not happening. I am telling you decisions are being made every day in this city that we wouldn’t 

make—moms, single moms back in my district, wouldn’t make the 

same decisions. And they are not even trained to do this, but they 

know, dollars and cents, that it doesn’t make sense. 

And so, my admonishment to you and my encouragement to you 

is that it is time that you start working a cost-effective way for the 

American people to make sure that the cap rates we get are market—I am telling you. I go all over this city. The cap rate that you 

tell me is not an effective cap rate. It may be effective in terms of 

the Federal Government. But the private sector pays a whole lot 

more than that. 

And so, I would challenge you to look at that, and let’s go after 

this, make sure the FTC gets what they want, what they need— 

more what they need than what they want, because I think that 

what happens is that we all have—and Mr. Robbins, I challenge 

you. I want you to look for the future needs of 1,650—you would 

have plenty here. What I need you to look at is certainly the 5- 

year, 10-year plan. But in that is realize the other dollar that is 

spent is—somebody back home in my district is paying for. 

Mr. ROBBINS. That is exactly what we have tried to do here. 

Mr. MEADOWS. I yield back. 

Mr. MICA. How many parking spaces are there at the Apex 

Building? Forty? Fifty? 

Mr. ROBBINS. Give me one moment. 

Mr. MICA. Forty, fifty. I have been down there. The staff—there 

is—— 

Mr. ROBBINS. I believe there is 44. 

40 

Mr. MICA. Forty-four. What kind of parking is available here? 

The 655 that are coming in here, I think almost all of them will 

have access to parking. 

Mr. ROBBINS. I know that we will have—— 

Mr. MICA. Is that right, staff? What are we told? 

Mr. ROBBINS.—from the parking that is available in the building. 

I think it is shared with—— 

Mr. MICA. How many spaces here will be available—— 

Mr. ROBBINS. Remember, we are consolidated from New Jersey 

building and M Street, and those folks already have parking, which 

they are accessing. 

Mr. MICA. God forbid we should have someone other than the 

commissioners and 100 paid staff having a parking space. You are 

keeping them in the old—— 

Mr. ROBBINS. I share your concern of FTC employees, and we 

want to take good care of them in all that we do. 

Mr. MICA. I am sure—just told Mr. Connolly it must be full of 

asbestos, too. I will have to check that. All right. Well—— 

Mr. ROBBINS. I am not aware of any asbestos issues within the 

headquarters building, Mr. Chairman. 

Mr. MICA. Well, we will check that out. I haven’t followed 

through all of the ceilings and stuff. I am sure I can find some or 

bring some in. You can tell I have a distinct interest in this. And 

there are some things that—you know, 600 people go in that building a day, 40 park there. The National Gallery will have four or 

five million people that don’t need a car that will see the nation’s 

treasures, which, again, we haven’t for several generations done 

any upgrading of our National Gallery to house our national treasures. 

Yes, it was an important building when Roosevelt dedicated it. 

And he did it to consolidate the scattered FTC operations in Washington. So, again, this is 2013, looking to the future, and consolidating at least three operations. And they came to our committee 

requesting a fourth, and that is when we came up with some of 

this proposal some years ago. 

So, I think, in the long term, it would greatly benefit the FTC. 

I told Mr. Connolly more people will know about the FTC building 

and its headquarters and its operations once you move out from 

that location than ever, because four or five million people go in 

there, it will be a space dedicated to the history of the FTC and 

its use of that building and its function, far more—most people, 

they just put a few signs up in the last few years—— 

Mr. ROBBINS. The FTC seeks to serve every American citizen. 

There are hundreds of millions across this nation, for example, that 

have registered on the national Do Not Call registry. We serve 

every American citizen, whether they are visiting D.C. or not. 

Mr. MICA. And you house the kind of—and you do a good job and 

you have a great purpose. No one is disputing that. What I am disputing is the utilization of the space and consolidation of the agency in a cost-effective manner, to the benefit of our citizens and taxpayers and all the rest. 

So, without further ado, thank you for—I want to thank Mr. 

Connolly, particularly, for his endurance, and Mr. Meadows for his 

compliance. And thank our witnesses. This is not the end of this 

41 

story, but we will leave the record open for a period of 10 days. 

Without objection, so ordered. 

Mr. CONNOLLY. Mr. Chairman? 

Mr. MICA. Yes? 

Mr. CONNOLLY. Just for the record, our two witnesses have promised to get back to us with several—— 

Mr. MICA. Oh, yes. Oh, yes. We will have a deluge of questions, 

and hopefully getting responsive answers. 

This hearing of the House Government Reform and Oversight, 

Subcommittee on Government Operations is adjourned. 

[Whereupon, at 11:45 a.m., the subcommittee was adjourned.] 

(43) 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

44 


Insert offset folio 10 here 86552.010

Opening Statement 

Chairman John Mica 

Government Operations Subcommittee Hearing 

"FTC and GSA Thwart Cost Savings Consolidation" 

December 3, 2013 

• Good morning. I would like to welcome Ranking Member Connolly, Members of the 

subcommittee, our witnesses, and members of the audience. Thank you for making the 

short trip over to this beautiful building. 

• We are here to examine the merits of relocating the Federal Trade Commission to more 

efficient, modem office space -- namely, this building, the Constitution Center. 

• Doing so will ensure that taxpayers do not have to foot the bill for renovating the FTC's 

aging headquarters, and eliminate the need for the National Gallery of Art to lease 

additional space. This proposal will save taxpayers nearly 283 million dollars. 

• Throughout my time serving as a Member of Congress, I have worked to reduce waste 

and inefficiencies at many levels of the federal government, including in our public 

buildings. The use of the Apex Building-FTC's current headquarters--is no exception. 

My proposal to transfer the building to the National Gallery and relocate FTC personnel 

to the Constitution Center has enjoyed support from other Members of Congress. Last 

Congress, the Transportation and Infrastructure Committee passed a resolution approving 

of this proposal. 

• The Apex Building once met the needs of the FTC. But today, the FTC is scattered 

around the city in three different locations. The Apex Building is aging, and in need of 

several renovations. In fact, it is so inefficient that the agency only uses a little over half 

of its 306,000 square feet. It simply does not facilitate modem-day office operations. 

• The National Gallery of Art, which is a federal entity, badly needs space. It cannot meet 

all of its space requirements at its primary facility. The federal government is in a 

position of having to spend more money leasing additional space to address the Gallery's 

needs. 

• There is a simple solution to both of these problems. The Constitution Center has more 

than enough square footage to accommodate the Apex Building and New Jersey Avenue 

personnel, and will result in a much more efficient utilization of federal office space. The 

Apex Building employees would be giving up less than 2 useable square feet per person, 

and still have more space than those at many other federal agencies. 

• This building has been fully renovated, and offers an updated configuration and state of 

the art amenities. It even houses enough parking for FTC's employees, compared with 

just around 40 parking spaces for 671 employees at the Apex building. 
45 


Insert offset folio 11 here 86552.011

• Relocating the Apex building personnel will allow for retained federal ownership of the 

building while significantly improving the National Gallery's ability to store and display 

the many works of art given to our nation. 

• Most importantly, the National Gallery would fund the necessary renovations of the Apex 

building with private donations rather than taxpayer dollars, eliminating the need for the 

government to continue paying to lease additional space to meet its needs. 

• Despite the numerous benefits of this proposal, GSA and the FTC continue to stonewall 

efforts to implement these cost savings. 

• I would like to welcome the witnesses on our panel--

o Mr. David Robbins, Executive Director of the Federal Trade Commission, 

and 

o Mr. Chris Wisner, General Services Administration Public Buildings 

Service Assistant Commissioner for Leasing. 

• We appreciate you appearing before the subcommittee today. I look forward to hearing 

your testimony and getting to the bottom of the FTC and GSA's opposition to this 

common sense plan. 

2 
46 


Insert offset folio 12 here 86552.012

Statement of Congressman Gerald E. Connolly (VA-It) 

Ranking Member 

Subcommittee on Government Operations 

Committee on Oversight and Government Reform 

Federal Trade Commission and General Services Administration 

Thwart Cost Saving Consolidation 

December 3, 2013 

Chairman Mica, thank you for holding this morning's hearing to examine proposals that would 

consolidate the U.S. Federal Trade Commission (FTC) offices in the Constitution Center and 

transfer the historic FTC Apex Building headquarters to the National Gallery of Art (NGA). I 

also want to express my appreciation to the Constitution Center facility for hosting today's 

Government Operations Subcommittee hearing. 

The historic Apex Building and the NGA's East and West Buildings fornl an iconic streetscape 

at the end of the "Federal Triangle," and I can certainly understand why proposals to modify the 

current set up might generate a diverse range of views and opinions among interested 

stakeholders and citizens, including my constituents who reside in the Commonwealth of 

Virginia's 11 th Congressional District and work for the FTC and NGA. 

Recognizing that I arrive at this issue with a relative clean slatc compared to the Chairman and 

agency stakeholders who have developed significant experience and expertisc while working on 

this matter for six years rum1ing; I am interested in hearing from all sides today on the potential 

savings, potential costs, and operational impacts associated with the proposed FTC consolidation 

and associated transfer of the Apex Building from the FTC to the NGA. 

My understanding is that the Chairman, an avowed supporter of the arts, has long sought to give 

the Apex Building to NGA. By expanding the museum to occupy three buildings, NGA would 

be able to grow and expand its program offerings to better serve the American public, while 

consolidating leases and cutting costs. 

However, I have also come to learn that the FTC and the U.S. General Services Administration 

(GSA) believe this transfer would not be advisable with respect to operational or financial 

considerations. For example, analyses conducted by the FTC and GSA found that the moving 

costs alone of consolidating the FTC into a leased space would add up to approximately $95.9 

million, while GSA's available space in the Constitution Center of358,537 rentable square feet 

would not meet the FTC's minimum space requirement of 446,054 square fcet. In addition, the 

FTC has also expressed concerns with respect to historical considerations, since former President 

Franklin Delano Roosevelt built the celebrated Apex Building in 1938 specifically to serve as the 

home for the newly-established FTC. 

I want to thank our witnesses for participating in our hearing this morning, and I look forward to 

examining these complex real property management issues. I hope we can have a constructive 

discussion focused on how we can best serve the respective missions of the FTC and the NGA; 

the interests of the national capital region; and most importantly, the American taxpayer. 
47 


Insert offset folio 13 here 86552.013

ASP-Print Plans 

DC0019ZZ 

600 Pennsylvanhl Av~nuc NW 

WASHI),,'GTON. DC 20j80~OOOl 

11,D~~~I-~~5: 

;:Uistoric Contact: 

Description 

is housed in a structure \\hose cornerstone was 

the cornerstone of the U.S. Capitol in Ji93. As he lay 

President Franklin D, Ro{)~e\ elt remarked, "'rvlay this permanent 

FEDERAL TRA DE 

Triangle Service' Center 

._- ---~·-~-----~--~-----lr '" 

Outdoor Parking: ----:! : Nn. of Floors: 

; Land Acreage: 

:Year Built: 1938 

NA TIONA!. REGlSTF.k LISTED !I --"-_.-------. -----------.. -~1; 

-----------ll nUSF·ll".. n 

-:~~~--- ----=--=--=~:~~=-]i 

! ___ --=-__________________ ._ .:" :.:..!"o_~!~::l~ il COlI: Ulluc:rin0!l pcrlwmrng '--.~~-:, .. _---- -~~--

gmc""me"tto insist on a greater application of the golden rule tu conJud the corporation and bu<:incss cnterrrise~ 11\ their 

politic. 

The subject building was constructl!d in 1937 and 1938 on a 1.67 acre propl!rt)-' located in the ~orthwe$t quadrant of Washington, DC, at the ! 

int(;rscctioD of 7 th Street and Consilulton Avenue, Oil a triangul<ll' shaped parcel of land. Jhe site is bounded b} 7th Street Oll the \Vest, 

Pcnnsyhania Avcnul! un the north, 6th Street on the east and Constitution A"enue on the South and east, The site is improved with 

helm\-' grade {with a small sub-ba.<;ernent area used to house mechanical equipment) limestone 

square the GSA). and 16{U97 

flOt:ll' area, Built as an apex to the Federal (he building \\as originally named the l\pex Building- so named 

it sits at the apex of Washington, D,C.'s Federal Triangle-at 600 Pennsylvania Avenue. NW. ft is considered a Class B oD1ce 

building. 

1938, this asset has served as Headquarters for the r-ederaJ Trade Commission and the building is a monumental lisset in NCR's 

GSA recognizes and respects the building's historical and cultural value as the las! FederaJ Triangle building constructed in the 

Depre:;;sion-era. As stewards for this asset GSA has kept the building much the li:.unc ali it \vas in thc 1930's, 

~J he building essentially has a triangular footprint \\Jth a semicircular portico at the east end. An 

interior olikes, The subjcd property is part of the National Historic "Pennsylvania Avenue 

10/2912013 Page 1 of6 
48 


Insert offset folio 14 here 86552.014

in 1966. Two nearly identical allegorical sculptural groups called "Man Controlling Trade" are located at the east ends of the two 

avenues. Michael Lantz designed the sculptures in the Art Deco style. In each, a muscular man holds a rearing stallion, symbolizing the 

cnoonity of trade and the government in its role as enforcer. The sculptures have become the agency's infonnallogo. 

The exterior walls are clad in large, smooth blocks of Indiana limestone laid in a regular pattern. There are midsection bays that are 

divided by pilasters (attached columns) or colonnades that fonn a loggia. The seventh story of the building has a slight recess from the 

balance of the building, There is a low hipped roof on the building that is covered with red terra-cotta tiles, The interior of the building has 

relatively few finishes but is in a good state of repair. There are three lobbies on the main level of the building with large, dark green 

terraz.zo panels with black borders. Walls are clad in Neshobc gray marble. Plaster covers the ceiling and cornice. The subject building was 

one of the first Federal buildings to have central air conditioning designed when it was developed. 

The Federal Trade Building has been classified as a Tier 2b asset for FYI3 by GSA '$ National Office. Each year every owned asset is 

subjected to a series of financial performance tests used to segment the portfolio into tiers. Tier 1 a~sets are strong financial performers and 

have low reinvestment needs. Tier 2a assets arc good financial perfonners but require large capital investment. Tier 2b assets are 

underpcrforming financially and fail to return a 6 percent on equity. Tier 3 assets are non-perfonning assets that fail to recover operating costs 

and basic reinvestment needs. This asset is classified as a tier 2b as the asset's retum on equity is 5.7%, 

!his property is a long-term hold for GSA. The asset provides approximately $SM to the FBF and is not a drain on GSA's limited resources. 

In FY12, the FFO totaled $4.7M. In FY13, the FFO is approximately $SM due to a decrease in repair and alterations and National G&A and, 

Regional G&A. The annual FPO is projected to be $SM in FY 14. The Federal Trade Building has been a Significant financial performer in 

'GSA's portfolio. This is a Delegated Facility and the expenses should be stable, 

FTC has not expressed dissatisfaction with this building and the site is part of GSA's long-term hold strategy. GSA has a significant 

stewardship responsibility to preserve historic buildings and legal obligations under the National Historic Preservation Act and Executive 

'Order 13006. Both the law and Executive Order call on the Federal Government to choose historic buildings first and to make every effort to 

put historic buildings to Government use and to keep them viable. TIle Federal Tmde Building is a long-term hold for GSA. 

,The value estimated for the subject property is as follows: 

Market value .• as of October 26, 2011, was $95,000,000 

[Note: The last market value appraisal of this asset examined the value using existing OAs ($95 million) and the value as if this 

property was exposed to the open market ($92.8 million). The ASP uses the value which is based on existing OAs.l 

The Federal Trade Building should continue to be a Tier 2B performing asset into the near future. The Occupancy Agreement (OA) went 

into ef6,,,'Ct on 9-15-2009, and will remain in effect until 9-15-2014. 

Tenants Last Updated: 061J9120!3 By: Aspruin 

The Federal Trade Commission (FTC) has occupied the building since 1938 and occupies 100% of the space as the sole tenant. with the 

balance of space being joint use (dayeare/cafeteria). 

The mission of the FTC is to prevent business practices that are anticompetitive, deceptive, or unfair to consumers, as well as to enhance 

informed consumer choice and public understanding of the competitive process. Today, the FTC is the only federal agency with both 

consumer protection <Jnd competition jurisdiction in broad sectors of the economy. It pursues law enforcement efforts; advances 

consumers' interests by sharing its expertise with federal and state legislatures and other U.S. and international government agencies; 

develops policy and research tools through hearings, workshops, and conferences; and creates educational programs for consumers and 

businesses. One of its best-known programs is the National Do Not Call Registry, which helps consumers limit the number of 

telemarketing calls they receive. The FTC deals with issues that touch the economic life of every American by pursuing vigorous and 

effective law enforcement and creating practical and plain-language educational programs for consumers and businesses in a global 

marketplace with constantly changing technologies. 

Operations Last Updated: 06/19/2013 By: ASpruil! 

'Rcsponsibihty for daily operation of the building has been delegated to the agency. The GSA/NCR Delegation's Liaison for FTC is Donna i 

Wells [(202)- 205·01 26j. The property is within the inventory of the Triangle Service Center. 

10/29/2013 Page 2 of 6 
49 


Insert offset folio 15 here 86552.015

Market Discussion Last Updated' 0611912013 By' ASpnntl 

Washington DC Area Office Market 

The Washington metropolitan area oft1ce market has been enduring a slow and sluggish recovery period following the recession in 2007 and 

2008. Net absorption, though it has remained positive on an annual basis, has decreased each year from 5,4 million SF in 2010, to less than 1.7 

million SF in 2011 and less than 275.000 SPin 2012. By way of comparison, the long~term annual average net absorption in the Wa.<;hjngton 

metro area is 5.7 million SF. Average asking rents have increased during that time in Class A and Class B office but have fallen in the Class C 

seament The rent increases shown do not include concessions. Delta and Associates has estimated that effective rents were down as much as 

2.9% during 2012. Class A vacancy rates have been largely stable since 2010, as have Class C; Class B vacancy rates, on the other hand, have 

increased by over 27% from 11% to 14% during that time. The overall vacancy rate at the end of2012 was estimated at 13.5%, higher than 

the previous two years but still the seventh lowest vacancy rate among the largest metro areas in the US. Currently. there is more than 7.5 

million square feet of new office space under construction. On average, this space is 52% pre-leased. 

Present demand factors which are combining to keep potential office space users on the sideline include: the uncertainty associated 

with sequestration and the federal budget issues; the federal government mandate to shrink its overall rCl:11 estate footprint; on-going 

BRAe related move-outs; general tenant downsizing upon lease renewal: and the trend (in both the private and public sectors) to 

reduce office square footage per employee through desk sharing and teleworking. 

East End 

The East End is a principal downtown submarket in D.C., extending from 15th Street to 3'd Street and from Constitution Avenue to P 

Street (all in NW). There are a total of 404 office buildings with nearly 47.2 million SF of rentable area in the East End. At the end of 

t!rst quarter 2013, this submarket had a vacancy rate of 9.9% which has held steady since year end 2010. There arc currently 817,470 SF 

of office space under construction, with just under 43,000 SF having been delivered to market in the first quarter of 2013. This submarket 

had one of the highest average asking rental rates in the region at $51.33/SF. The table below summarizes the key market factors and 

trends over the last three years and up through the most recent, completed quarter. 

FOR INTERNAL GSA USE ONLY 

10/2912013 Page 3 of6 
50 


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Strategy & Action Plans 

Holding Perh)d: > 15 long tem1 Inventory St'grncnla!ion: Core under/non perf01l11ing 

ouilding\ historic dc~ignation. 

the boiler room piping; roof covcring<; and terminal and package unit~, 

Action 

tern 

istoric Prc"crvation/Arc 

REPLACE TIlE 

P/\RKING GARAGE 

EXHAU$TAND 

CONDENSATE PUMPS 

EPLACETHE 

'LECTRICAL 

S\~TnTr(;F,\R 

Completion Date 

Estimated Actual 

FOR INTERNAL GSA USE ONLY 

IOI29120 13 

Project 

Manager 

Project 

Manager 

Laot Updated: 09/1112013 By: ASprulll 

EPLACE THE PARKING GARAGE EXHAUST AND PUMPS 

EPLACE THE ELECTRICAL SWITCHGEAR 

Page 4 01'6 
51 


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Asset Financial ~llImn'''rv 

IllSTRICT OF COLCMIlIA 

Senator: 

National Landmark (YIN): 

Bldg Predominant Use: 

Geneml 

Security Level: 

J 

Environment Risk Index (ERI): 

41.12 

Environment Liability Cost Estimate: 

Gro~~: $12,000 per GSF: $(U)4 

Eleanor Holm~;, i\'orton 

Congo District: 

I)N 

PBS RSF: 

Customer Satisfaction Rating: 

82,I')q( 

Delegated Building (YIN): 

y 

Facility Condition Index (PCSIFRV): 

0.0] 

NOlle 

Mayor: 

Vincent C. Ora;; 

FRY (PBS Calculated): 

9,"i,9X73-.i7 

Undeveloped Land: 

'iO 

Last Major Renovation: 

2007 Leaks 

4/2411()13 By: ASPRUlLLf 

GSA's likelibood of being liable for Environ. I...iab.:, 

f'rolXlbk 

Government Owned Property Performance Analysis 

Direct Revenue 

Type Actuals 

lOll 

5,716,39 

Actuals 

'011 

5.738,92 

YTDActuals 

5,253,311 

111n B;:,g;t 6,077,156 

B;:,~.t 

5,742715 ~ 6,077,156 

Operations and Maintenance 84,76 93,00 78,533 39,738 40,930 42,158 

Repair and Altenltions 219,573 l' 24 14 25 

Rental of Space I ° 0 

Protection 0 ° ° ° 0 

National G&A 231,96 218,091 78,981 105.156 108,311 111,560 

Regional G&A 255,89{ 259,49 85,51 118118 121,672 125,322 

Fed Protect Service G&A I 

Field Office G&A 11,09 4,43. 1,20 22,891 ° ° 23,571 24,285 ° Purchase Contracts ° 0 

= 0 

Real Estate 157,40 39,765 157,409 162'~ 166,995 

Other Expenses [92,63 31,681 52.99? 82.579 85,0 87,608 

Funds from Operations 4,940,04 4755234 4916.301 5,551,232 5,201,013 5519,203 

NOI: 1 5,427,9011 5.232,8241 5,080,795 5,774.516 5,430,996 5,756,085 

BA54 and SA 55 Obligations 

Rnd •• U,Uvitv "V FV7.fiOR ~ vv 

BA54 235,315 53,884 0 ! 16.189 195,98~ 410,603 

BASS 0 ° ° 00 

Total 235,315 53,884 1111,5'9'8"_ 410,603 

1938, the Federal Trade Commission (FTC) has been headquartered in the Apex Building so 

named because it sits at the apex of Washington, D.C:s Federal Triangle-at 600 Pennsylvania 

Avenue, NW, The Federal Trade Commission headquarters is housed in a structure 

1012912013 Page 5 of6 
52 

Æ 


Insert offset folio 18 here 86552.018

'whose cornerstone was laid with the same silver trowel that President George Washington used to 

lay the cornerstone of the U.S. Capitol in 1793. Since 1938. the Federal Trade Commission (FTC) 

as heen headquartered in the Apex Building. 

The interior spaces arc relatively restrained; only public spaces and hearing rooms arc afforded a 

easure of distinction. Three lobbies on the first floor share similar features. Floors are covered ith 

large, dark green terrazzo panels with black borders. Walls are clad in Neshobe gray marble ith 

black marble on fluted pilasters, and plaster covers the ceiling and cornice. The FfC uilding was 

one of the first federal buildings in Washington to have an integral air-conditioning 

system and a basement parking garage. 

'Built as the apex to the Federal Triangle, this building serves as an elegant focal point and 

monumental asset in NCR's portfolio. 

All projects must t; ~ubnliit;d to the RegiOnal I"iis"toric Preservation Offic~Torco;;;1tiU;tion -withihe State Historic Preservation ---

Officer as project is heing developed. 

EI Market Value 

Arrrai,,,1 

o GSA Direct Cap 

Fdir Market V<llue Apprai~a! Assumptions· 

FOR INTERNAL GSA USE ONLY 

10/29/2013 

() Con:-;truction Co"t 

Last tll>dated: :Y15!20lJ By: ('RE~D 

o ROT Value 

Date of Valuation: 10126/2011 

95 000.0004 -376. j 

Page 6 01'6