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SITTING ON OUR ASSETS: 

THE COTTON ANNEX 

(112–77) 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND 

EMERGENCY MANAGEMENT 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MARCH 22, 2012 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

JOHN L. MICA, Florida, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

TIMOTHY V. JOHNSON, Illinois 

SAM GRAVES, Missouri 

BILL SHUSTER, Pennsylvania 

SHELLEY MOORE CAPITO, West Virginia 

JEAN SCHMIDT, Ohio 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ANDY HARRIS, Maryland 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

JAIME HERRERA BEUTLER, Washington 

FRANK C. GUINTA, New Hampshire 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

CHIP CRAVAACK, Minnesota 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BILLY LONG, Missouri 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

JEFFREY M. LANDRY, Louisiana 

STEVE SOUTHERLAND II, Florida 

JEFF DENHAM, California 

JAMES LANKFORD, Oklahoma 

REID J. RIBBLE, Wisconsin 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

NICK J. RAHALL II, West Virginia 

PETER A. DEFAZIO, Oregon 

JERRY F. COSTELLO, Illinois 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

BOB FILNER, California 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

LEONARD L. BOSWELL, Iowa 

TIM HOLDEN, Pennsylvania 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

MAZIE K. HIRONO, Hawaii 

JASON ALTMIRE, Pennsylvania 

TIMOTHY J. WALZ, Minnesota 

HEATH SHULER, North Carolina 

STEVE COHEN, Tennessee 

LAURA RICHARDSON, California 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC BUILDINGS, AND EMERGENCY

MANAGEMENT

JEFF DENHAM, California, Chairman 

TIMOTHY V. JOHNSON, Illinois 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas, 

Vice Chair 

RANDY HULTGREN, Illinois 

LOU BARLETTA, Pennsylvania 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

JOHN L. MICA, Florida (Ex Officio) 

ELEANOR HOLMES NORTON, District of 

Columbia 

HEATH SHULER, North Carolina 

MICHAEL H. MICHAUD, Maine 

RUSS CARNAHAN, Missouri 

TIMOTHY J. WALZ, Minnesota 

DONNA F. EDWARDS, Maryland 

BOB FILNER, California 

NICK J. RAHALL II, West Virginia 

(Ex Officio) 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

PANEL ONE

Hon. Scott P. Brown, a United States Senator from the State of Massachusetts ....................................................................................................................... 2 

PANEL TWO

Robert A. Peck, Commissioner, Public Buildings Service, U.S. General Services Administration .............................................................................................. 7 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Hon. Scott P. Brown ................................................................................................ 22 

Robert A. Peck ......................................................................................................... 24 

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(1) 

SITTING ON OUR ASSETS: 

THE COTTON ANNEX 

THURSDAY, MARCH 22, 2012 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ECONOMIC DEVELOPMENT, PUBLIC

BUILDINGS, AND EMERGENCY MANAGEMENT, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, Washington, DC. 

The subcommittee met, pursuant to notice, at 10:07 a.m. in the 

Cotton Annex, 300 12th Street, SW., Washington, DC, Hon. Jeff 

Denham (Chairman of the subcommittee) presiding. 

Mr. DENHAM. Ladies and gentlemen, if you can take your seats, 

the subcommittee will come to order. 

Before we get started this morning, I understand that the mother 

of Elliot Doomes, a very fine Democrat staffer here, is here in the 

audience. Just wanted to welcome her and tell her what a fine job 

we think her son is doing. So thanks for joining us. 

Let me first welcome and thank Senator Brown for joining us 

here today. He has been a leader on this issue in the Senate, and 

certainly in his region, as well. I also want to thank Chairman 

Mica—he is on his way, as well as Congresswoman Norton—the 

ranking member, for their leadership on this issue, as well. 

Last month we stood in the vacant annex of the Old Post Office, 

not far from where we are today. It has been 1 year since our first 

hearing in that annex. And it took quite a bit of time for GSA to 

finally select a developer to redevelop that site. That site has been 

vacant for more than a decade, and it took 5 years after Congress 

directed GSA to redevelop it before a developer was actually chosen. 

Today we are in yet another vacant building, the Cotton Annex. 

This building has been vacant for 5 years, sitting on prime real estate in our Nation’s capital. The Cotton Annex and surrounding vacant property are worth at least $150 million if sold, according to 

the Congressional Budget Office, yet here it sits vacant, deteriorating, and costing the taxpayers to maintain. In the so-called Stimulus Bill, the GSA received $5.5 billion. Why 

weren’t any of those funds used to prepare this building for reuse, 

if GSA intends to keep it in its inventory? And if not going to reuse 

the building, why hasn’t GSA made steps to sell or redevelop it? 

Whether GSA uses this site to move Federal agencies out of leased 

space, redevelops the site, or just sells it, GSA can’t keep sitting 

on prime real estate like this. 

We know that there have been a number of proposals for the redevelopment of this site, yet GSA has acted on none of them. This 

2 

is exactly why I have introduced the Civilian Property Realignment 

Act, to get agencies like GSA to get rid of unneeded and undeveloped properties. Even without enactment of specific legislation, 

GSA has—already has broad authority to reuse, redevelop, and sell 

sites like this, but has chosen not to. 

And what makes matters even worse is, instead of getting rid of 

unneeded properties, GSA seems to actively compound the problem 

of unused and underused space. GSA is slow to vacate properties, 

but chooses to build an unneeded $340 million courthouse in Los 

Angeles, which we have had great differences and discussions on. 

That will actually add empty space in our inventory. We see GSA 

condemning private property in Norfolk, Virginia, for a courthouse 

that will never be built. We still see the old Dyer Courthouse in 

Miami sitting vacant and abandoned, with no plan to reuse or sell 

it. Despite our budget deficit and despite even the direction of 

President Obama’s own real property directive in 2010, GSA continues to operate business as usual. 

It is unacceptable, it is costly, it is costly for the taxpayer. And 

we hope today to hear that GSA has plans to do redevelopment or 

reuse with this building and others like it. 

Again, I want to thank our witnesses here today for joining us, 

and thank the Honorable Scott Brown for joining us, as well. 

Thank you. 

STATEMENT OF THE HONORABLE SCOTT P. BROWN, A UNITED 

STATES SENATOR FROM THE STATE OF MASSACHUSETTS 

Senator BROWN. Thank you, Mr. Chairman. I want to thank you 

also and the ranking member, and Members of the House that are 

taking this very important issue up. It has been a pleasure working 

with you and addressing CPRA, and I want to congratulate your 

passage of it out of the House last month. 

As the committee knows, the Federal Government owns over 

45,000 excess and underutilized properties. And, according to GAO, 

these properties cost American taxpayers over $1.7 billion per year. 

And that, as we know, is unacceptable, especially in this tough economic climate. It is one of the main reason that GAO has put the 

Federal property management on its High Risk List. Despite the 

high-risk status, as you referenced, little has been done to successfully address this problem, and the current disposal process led by 

the Federal Real Property Council is mired in bureaucratic red 

tape, politics, competing stakeholder interests, and other inefficiencies. 

And, as you know, Mr. Chairman, the current process is broken. 

The President has acknowledged that the process is broken. So 

simply accepting the status quo and codifying the FRPC with some 

modest changes, as alternative proposals suggest, will do little to 

guarantee that the properties are properly disposed of. 

I mean you just look at the building we are in here today, 90,000 

square-foot building sitting on prime real estate, as you referenced 

also, worth upwards of $150 million. It would go a long way to 

helping not only pay down our debt or deficit, or—obviously helping 

with programs that may be needed by those who need it most. Yet 

it has been sitting empty for over 5 years, which is completely unacceptable, while taxpayers foot the bill, once again, for its mainteVerDate Aug 31 2005 13:56 Jun 18, 2012 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\3-22-1~1\73471.TXT JEAN
3 

nance. And this building, which is down the street from Congress, 

serves as a symbol of the culture of complacency our Government 

has towards wasting taxpayer dollars. With us being over $15 trillion in debt, taxpayers cannot afford for Washington to continue 

business as usual. 

And in today’s political environment, it seems that everything is 

turned into a partisan fight, with little accomplished. Even commonsense legislation like the Stock Act has struggled to make it 

through Congress. We are finally taking it up today, I am happy 

to say. But fighting waste, fraud, and abuse in the Federal Government is not a partisan issue. It is something Senator Carper and 

I have been working on, almost from the get-go. And saving tax 

dollars is not a partisan objective. 

So, I am pleased to announce that today, in a bipartisan effort, 

Senator Mark Warner and I are introducing the Civilian Property 

Realignment Act of 2012. Senator Warner and I have been working 

to improve the CPRA legislation I introduced last August. And our 

bipartisan legislation takes the necessary steps to ensure the best 

of the—best use of Federal property for taxpayers, because it is 

time that the Government put the best interests of taxpayers first. 

And our improvements also strengthen the legislation’s deficit reduction goal by requiring a minimum of 80 percent of the proceeds 

and savings to go into the treasury for deficit reduction, rather 

than being used to pad the Federal agencies’ budgets, and that is 

a good thing. 

I strongly believe that the independent commission, like the one 

established through CPRA, is the only viable way to overcome the 

hurdles in the disposal process created by competing stakeholder 

interests. And I also believe that the streamline process created by 

CPRA is the best way to break through the red tape and ensure 

that the properties are actually disposed of properly. 

President Obama proposed CPRA last year. And under your leadership, Mr. Chairman, it was successfully passed out of the House. 

So at two-thirds of the way of having this critical legislation signed 

into law, Senator Warner and I are looking forward to working 

with Chairman Boxer on the Environment and Public Works Committee, and our other colleagues in the Senate, to ensure its passage in the Senate. 

I appreciate the opportunity to come and speak. I know you have 

other witnesses that have a lot to say, so thank you for your courtesy, and I look forward to working with you on this. 

Mr. DENHAM. Thank you. Thank you, Mr. Brown. At this time 

opening comments from Chairman Mica. 

Mr. MICA. Well, thank you. And before you leave, Senator Brown, 

we want to thank you for coming out, for participating, and being 

such an aggressive advocate for trying to get these vacant and underutilized buildings not only in Washington, but across the country, moving. 

At our last hearing—well, our last couple of hearings—we started 

this last February. It was 32 degrees outside, and we took everyone 

to the annex. It was 38 degrees inside. So this is—then we were 

back there a few weeks ago. But this is one of our most comfortable 

settings in a vacant building. 

4 

But the other thing is, as you know, we have 14,000 of these. 

And we are on a jihad, a national jihad, to take them, if we have 

to, one at a time. So we are at 13,998, and we appreciate your help. 

And we have got a few more to go. Thank you. 

Senator BROWN. Thank you. 

Mr. MICA. Well, thank you for recognizing me, and welcome this 

morning. And I am sorry I am a couple of minutes late. Somebody 

should do something about traffic and transportation. 

[Laughter.] 

Mr. MICA. But that being said, good to be here, appreciate your 

leadership, Chairman Denham, Ranking Member Norton. I am 

pleased that—they told me, too, that Elliot Doomes has his mom 

here. Welcome, too, from all sides of the aisle. We are pleased to 

have you and your family’s leadership on this panel. Now if you 

can help me get those 13,998 others occupied to the maximum use 

of the taxpayer, we will really be proud of him. And I appreciate 

your being here. 

I think that sort of says it all, but this building is another example, unfortunately, and we need to have a plan. We have to take 

these buildings one at a time. We are going to demonstrate that we 

should not have these vacancies. This has been vacant, I guess, for 

5 years. Not only this building itself, which is a valuable asset that 

we are sitting on, but also the adjoining land and property. And we 

would like to move forward with plans and work with GSA, work 

with both sides of the aisle. 

So, that is our goal, is trying to be constructive and productive. 

The average citizen across the country I think who is, in fact, the 

largest property owner—it is not the Federal Government, it is not 

GSA, it is not the Congress, but the people own these assets, and 

we have been sitting on them for too long, as our report pointed 

out nearly 2 years ago. 

So, I want to hear GSA’s plan today. It is great that we have bipartisan and bicameral support for these measures. The Old Post 

Office and the annex are great examples. We are very proud of 

what we were able to accomplish together there. And a salute to 

GSA for moving forward. 

I am looking forward to actually a better response on our resolution, Mr. Peck, on the FTC request that we passed last week. What 

was passed along to us is totally inadequate, but I want to see a 

good and better utilization proposal so we can get FTC consolidated 

and save, I predict, a half-a-billion dollars on that one transaction, 

better coordination for an agency, an important agency’s activity, 

rather than having it scattered, and saving money, providing space 

for other important activities that are sponsored by the United 

States Government. 

So, with those remarks, Mr. Chairman, great to be with you. It 

is not as chilly as—we need to find some chillier vacant buildings 

to liven things up. But I salute you and Ms. Norton, and we are 

going to get it done. Yield back. 

Mr. DENHAM. Thank you. Now recognize Ranking Member Norton for any opening comments she may have. 

Ms. NORTON. Well, thank you, Mr. Chairman and Mr. Chairman. 

Thank you for being here. I do note for the record that Senator 

Brown testified that he was introducing a bill, but did not note that 

5 

the House has passed two BRAC bills that I suppose are in the 

Senate right now. I know they had two that were already introduced, so maybe we can get all those bills consolidated, and something can happen. 

Today we are meeting at a virtual palace, compared to the Old 

Post Office building: the Cotton Annex building, a greatly 

underused General Services Administration building located on 

prime land near the National Mall, here in the Nation’s capital. 

Built in the 1930s, the Cotton Annex is approximately 79,000 

square feet of incredibly valuable rental property. The building has 

been mostly vacant since 2007, when the U.S. Department of Agriculture left, and has remained unutilized with no clear plan for full 

utilization. 

Over the past 5 years there have been a number of opportunities for development of this building, including the $5.5 billion in American Recovery and Reinvestment Act renovation funds to GSA for 

renovation of Federal buildings, and several legislative proposals 

for the redevelopment of this site, including a national women’s 

history museum, a national health museum, and several proposals 

from private developers. The strong interest and possibilities demonstrate the Cotton Annex’s significant potential for delivering a financial return to the U.S. taxpayer, or for housing Federal agencies and federally owned space with savings to the Government, 

which leases space throughout the national capital region. 

Despite the various proposals for reuse of this valuable property, 

GSA has failed to develop a plan for the property, or to use its existing authorities to renovate or redevelop the site with a private 

partner. The Cotton Annex is adjacent to the National Mall, and 

therefore, will probably have uses in keeping with its monumental 

location. But, if anything, its location makes the Cotton Annex particularly attractive to developers. If GSA chose not to renovate the 

building, why did it not use its previous experience working with 

the private sector to turn underutilized buildings to profitable use, 

including the highly regarded renovation of the historic Tariff 

Building in Washington, DC? 

More recently, in February, GSA, of course, announced its selection of the Trump Organization to redevelop the historic Old Post 

Office building as a hotel. Of course, this announcement was the 

culmination of nearly a decade of dogged bipartisan work of this 

committee for redevelopment of that site for the benefit of U.S. taxpayers. We do not intend to allow the same delay to get full use 

of the Cotton Annex. 

Among other precedents for—in GSA’s portfolio is the public-private partnership for the redevelopment of the Southeast Federal 

Center into The Yards, one of the largest public-private mixed-use 

projects in the United States. This project resulted from my Southeast Federal Center Public-Private Development Act of 2000, which 

allowed the private sector development of a large tract of fallow, 

but very valuable, federally owned waterfront property in the District of Columbia. I wrote this legislation in the hope that it would 

not only develop the parcel here, but might launch a new direction 

in Federal land use by leveraging private sector development expertise and capital to extract the maximum value from valuable 

Federal land. 

6 

This has not happened, despite the bill’s dramatic effects in the 

Nation’s capital, converting a 57-acre eyesore of dilapidated Navy 

Yard structures into a mixed-use community that will generate 

millions of dollars for the Federal Government and contribute to 

the tax base of this city. Having worked with GSA on successful 

Federal public-private partnerships, this committee must continue 

to ask why GSA is not reaching out for similar partnerships, especially today, when development costs are at record lows. 

It cannot be for lack of authority. In 2003, Congress granted GSA 

what is known as 412 authority. Section 412 authority gave GSA 

permanent authority to engage in public-private partnerships like 

the Old Post Office building and the Southeast Federal Center. 

This valuable authority allows GSA to offset costs associated with 

renovating or creating Federal space without the need for Federal 

appropriations. 

There are, as yet, no signs of the GSA’s at least investigating 

whether to use its authority to continue the agency’s largest current development project, the consolidation of the Department of 

Homeland Security at the St. Elizabeths Campus, which has been 

significantly slowed, due to diminished appropriations. While the 

least expensive and, therefore, most fiscally responsible way to 

complete the redevelopment of the St. Elizabeths DHS site, and 

augment the billions of dollars that have already been spent on the 

infrastructure, would be to appropriate Federal dollars, GSA knows 

that it will not get funding at the rate necessary to complete this 

facility for the security of our country, except over several years beyond the plan date. 

Yet GSA’s existing authority provides a way, in plain view, to 

complete this project now. For every day that passes, construction 

costs for the DHS headquarters increases, and Federal agencies remain in expensive leased space instead of the Government-owned 

DHS space planned. I have requested that GSA provide an analysis 

of how 412 authority can be used to complete this project, and expect to hear from GSA without delay. 

The time is overdue for GSA to use its considerable footprint in 

the marketplace, and all of its authority to develop the Government’s assets and provide the maximum return to U.S. taxpayers. 

I look forward to hearing from GSA today about its asset management strategy for the Cotton Annex, and how GSA plans to address 

other underutilized properties. 

And I thank you, Mr. Chairman, for calling today’s hearing. 

Mr. DENHAM. On our second panel we have Mr. Robert Peck, 

commissioner, public building services, the General Services Administration. I would like to welcome Mr. Peck and thank him for 

being here today and making this space available for the hearing. 

I ask unanimous consent that our witness’s full statement be included in the record. 

[No response.] 

Mr. DENHAM. Without objection, so ordered. Since your testimony 

has been part of the record, the subcommittee will request that you 

would limit your oral testimony to 5 minutes. And you may proceed. 

And just as we are told—are going to be calling votes in about— 

just over a half an hour, so probably 11:10 or so. 

7 

STATEMENT OF ROBERT A. PECK, COMMISSIONER, PUBLIC 

BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION 

Mr. PECK. All right. Thank you, Mr.—Chairman Denham, Chairman Mica, Ranking Member Norton. Thank you for the opportunity 

to be here. I thank you for picking a lovely spring day. I wish we 

had windows, so we could see the cherry blossoms outside. But perhaps we can find a building in the heat of a Washington summer, 

and really put ourselves at some pain—— 

Mr. MICA. Oh, that is a great idea. 

[Laughter.] 

Mr. PECK. So thank you. I am sorry I said that, already. 

[Laughter.] 

Mr. PECK. We are at the annex, the Cotton Annex, a property 

that we are actively assessing for productive reuse, and I will talk 

about that a little bit later. GSA is a leader in Government asset 

management, and we take pride in effectively utilizing our owned 

and leased building portfolio. We are building on our successes 

with aggressive efforts to further improve utilization in the Government. 

We continue to make progress on the targets put in place by 

President Obama in his June 2010 memorandum on disposal of 

unneeded Federal real estate. Federal agencies are on target to exceed the $3 billion goal of cost savings by the end of fiscal year 

2012. To date, GSA has saved more than $300 million toward our 

goal—within that $3 billion—of $450 million. As part of this effort, 

we are assisting other agencies in meeting their targets, and will 

continue to aggressively identify underutilized assets for disposal. 

And we are almost finding new ones every month, I have to say. 

It is interesting. 

Over the last decade, GSA has successfully implemented a major 

restructuring aimed at right-sizing our real estate portfolio. Since 

GSA gained the authority to retain sales proceeds in 2005, GSA’s 

disposal actions have returned almost $244 million to the Federal 

Buildings Fund. At the end of fiscal year 2011, GSA’s national vacancy rate for all owned and leased assets was 3.4 percent, and 

was even lower in the District, at 1.96 percent, much lower than 

the private sector’s rate. 

In fiscal years 2010 and 2011, we disposed of 88 vacant or underutilized properties from the inventory, totaling more than 4 million 

square feet. For example, we disposed of a surplus Federal building 

in Brooklyn, New York. We got about $10 million for that. And we 

are in the process of disposing the West Heating Plant in Georgetown, in Washington, DC. We also recently began disposing of a 

GSA-owned warehouse in Gaithersburg that currently houses testing facilities for the Consumer Products Safety Commission. 

These disposals will allow GSA to avoid $73 million in anticipated repair needs, and operations and maintenance costs. 

Since our restructuring initiative began, we have delivered a 

number of critical consolidation projects, and completed more than 

140 major modernization projects. We are modernizing our own 

headquarters at 1800 F Street, NW., and will move in our Federal 

Acquisition Service currently housed in leased space in northern 

Virginia, saving millions of dollars in annual leased costs. We are 

8 

also redeveloping the Department of Homeland Security headquarters campus at St. Elizabeths, which will consolidate more 

than 20 DHS locations in the DC area. This move will allow GSA 

to transition Federal employees from 1 million square feet of leased 

space to federally owned space. 

We have successfully used our out-leasing authorities to improve 

the use of our properties. Most recently we selected, as you noted, 

the Trump Organization to begin redeveloping the Old Post Office. 

We are now negotiating an agreement for the building’s redevelopment, with occupancy potentially in 2016. This is a significant step 

in putting this notable asset to its highest and best use, while preserving its historic integrity. 

I will also note that, of course, however, we will not be using it 

for Federal office space. The higher and better use is as a hotel, 

apparently. 

Additionally, GSA is leading the way to use space more effectively by breaking out of traditional office space configurations, and 

providing tools and solutions that support a truly mobile and flexible work space for ourselves and other Federal agencies. 

Mr. Chairman, I also want to note that I am glad that the committee moved some of our pending lease prospectuses early this 

month. However, 10 leases from GSA’s fiscal year 2011 leasing program still require action. Most of these leases represent replacements for already-existing space, but nearly all will result in reductions in the amount of space that Federal tenants occupy. If the 

prospectuses are left on hold and fall into hold-over, it will cost taxpayers far more money than approving them and letting us go forward with those, as I say, reduced-space leases. I am hopeful we 

can work with the committee to remove the remaining 

prospectuses. 

Today the committee is hosting this hearing here at the Cotton 

Annex, which formerly housed components of the Department of 

Agriculture until 2007. It represents one of GSA’s few remaining 

developable parcels in DC. We have held on to this property so far, 

because studies that we conducted that concluded in 2008 showed 

that Federal construction represented the highest and best use of 

the property. While the Cotton Annex is not yet currently meeting 

its full potential, by a long shot, it is generating small, positive revenue, because we do lease some of the space to the Federal Protective Service. We are considering a number of options for it. 

I would also note that Congress has considered legislation that 

would direct us to dispose of the property to specific users—and 

that is one factor—while we have not yet made a decision on what 

to do with the annex. Currently, we are considering some publicprivate proposals to modernize the central heating and refrigeration plant right across the street. There is a potential need for this 

property in that modernization. We believe in a very few months 

we will know whether that is necessary, and then we will make a 

decision about the disposition of this asset. 

In conclusion, GSA is a leader in asset management, aggressively 

moving out unneeded properties from our inventory, effectively utilizing space, and pursuing new strategies that meet our obligation 

to taxpayers to house Government functions as efficiently and economically as possible. 

9 

We are also taking advantage of our position in the Federal Government to help drive better decisionmaking across partner agencies that will result in a sustainable and efficient Government. 

We appreciate your interest in this initiative, in the Civilian 

Property Realignment Act. And again, I want to congratulate you 

for getting that through the House. You know we have some reservations about it, but it has been a very good bipartisan effort. 

And I am, obviously, happy to answer any questions. 

Mr. DENHAM. Thank you. And we look forward to moving the bill 

out of the Senate and getting it to a position where the President 

looks forward to signing it. So we—certainly if there are other 

amendments—you and I have continued to talk, and if there are 

other amendments, we certainly want to work with you on that. 

But we certainly need to make sure we continue to take politics out 

of it, and focus on the policy of the issue. 

On the leases, you know, we were glad to pass a number of those 

out. We look forward to continuing to work with you. We want to 

make sure that each of the leases, as we did in the last 10, continue to reduce the footprint and the leased space, and make sure 

we are using the best usage rates as possible. 

You have a very daunting task, with consolidating the Federal 

footprint, redeveloping many of these different buildings, certainly 

selling off the things that we don’t need. Just looking at your current portfolio, I can see the challenges. Some we feel, obviously, 

have sat way too long, and we need to expedite moving forward on 

those. 

But you said something that I found interesting. You said that 

you are finding other properties every day. And when the bill, the 

new bill that just passed the House dealing with properties—a lot 

of reporters ask me, you know, what is the difference between the 

two bills. And I just wanted to emphasize, with the Civilian Property Realignment Act, one of the big challenges that I see that you 

have is not only redeveloping and selling off the things that we 

have today that have outlived their usefulness, but all of these 

properties that you don’t know what the lists are, or what the proper usage is. 

And I think one of the big differences in the current proposal is— 

with Civilian Property Realignment Act—will actually give you the 

ability to take a look at all of the different agencies, and see where 

our best use is, what can be sold off, what can be combined, and 

really start making some large-scale differences in how GSA runs 

the overall asset portfolio. 

Mr. PECK. Yes, sir. And, as you know, we agree with that, that 

the opportunity to have a commission that could look across the 

board in the Federal Government at as many agencies as possible, 

take a look at all the properties and see where there are underutilized assets that we could consolidate, get rid of, is important. 

I will just note there is—and this is getting in the weeds, and 

I can bore everybody to death, but we run—as you know, the Government does have an inventory of real property. And one of the 

things we have discovered in looking at this—and our colleagues, 

led by Danny Werfel at the Office of Management and Budget have 

looked at this, too—the way in which we categorize properties—unVerDate Aug 31 2005 13:56 Jun 18, 2012 Jkt 000000 PO 00000 Frm 00017 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\3-22-1~1\73471.TXT JEAN
10 

derutilized, excess—in that inventory is not totally helpful for determining where we actually have underutilized space. 

Give you an example. There are some properties that we are discovering in which the property looks like it is fully utilized. And 

yet, if you really go visit it, you will see that you could consolidate 

people into one part of the property and dispose of the other. That 

is something that some of these inventories don’t show us yet. 

Mr. DENHAM. Like the current LA courthouse. 

Mr. PECK. The current LA courthouse has other problems, as you 

know, security issues are the—being among the biggest of them. 

But there are other properties in which we have seen some 

things that are utilized in a way that probably the private sector 

would be more interested in developing in a different way, and we 

could still use the property for Federal uses. 

Mr. DENHAM. And we also have buildings like the courthouse in 

Miami that is not on the current excess or unneeded list, even 

though it is clearly, clearly sitting vacant. 

Mr. PECK. It is completely vacant. It is the—you know, there is— 

what is that old line? There are, you know, 8 million stories in the 

Naked City—I guess we should call it the Big Apple now. Everyone 

has a story. 

I went to visit the Dyer Building in Miami, because I am concerned, too, that it is sitting there, vacant. And the hurdle we have 

to get over is that there is a three-building court complex there. 

The vacant building happens to have all of the heating and air conditioning for the three buildings. Wish it hadn’t been developed 

that way. And so, to move that building out of the inventory, we 

need to figure out whether anyone would pay us enough money to 

move—to severe the building. It also has a tunnel that we would 

have to seal. 

So, there are issues, and—but we are actively looking at it, including the possibility of some form of public-private partnership 

that could actually help us move that one out. We have a team in 

our Atlanta regional office that is working really aggressively on 

that. 

Mr. DENHAM. Thank you. On this building in particular, you said 

2007 this became vacant? 

Mr. PECK. Yes, sir. 

Mr. DENHAM. And they moved out prior to 2007? 

Mr. PECK. I think in 2007 is—at least 2007 is when the Agriculture Department gave it back to us. 

Mr. DENHAM. In 2008 GSA determined it would not declare this 

property excess, and that Federal construction was better—the best 

course of action to meet GSA’s long-term mission. 

So, my question is, after receiving $5.5 billion, stimulus dollars, 

why is this building still vacant? Why at that time wasn’t the decision made—you had money available, stimulus dollars, to redevelop 

and put people in here. 

Mr. PECK. It is a good question. As the—as you know, the filter 

through which we made decisions on where to spend the $5.5 billion of stimulus money in GSA had a couple criteria. We looked 

first for projects that were ready to go, that we could get out, contract as fast as possible and create jobs as fast as possible. 

11 

On this one we did not have plans for the site, and it would have 

taken a while to develop them. Because, be honest, if you look at 

this building, it is unlikely that it would make great sense just to 

rehabilitate the Cotton Annex by itself and not combine—use the 

other vacant property here, this just plain land, and do something 

with it. It would have taken a long time to figure out those plans. 

You would have to go through all kinds of review procedures. And 

it just didn’t look like that was going to get done fast enough to 

responsibly spend that money. 

I have to say you could ask the question another way, which was 

that we made a decision in 2008 that however we came up with 

the money, somehow GSA, in the course of the work that we do in 

the public buildings service, would have money at some point in 

the relatively near future to build a building. And the way the Federal Buildings Fund works, that looked—that, I think, was a reasonable judgment at the time. However, in the last 3 years we have 

not been able to spend the money that accumulates in the Federal 

Buildings Fund to do those kind of renovations or new construction. 

And so, it is looking less and less like there is a time when we 

are going to get Federal—get dollars generated by the Federal 

Buildings Fund to renovate this building, which I think means that 

we go back and take another look at it. 

One other thing I alluded to in my testimony, I want to—I am 

not sure all of you are aware this is going on. Across the street 

there is a very large structure that houses the central heating and 

refrigeration plant. It provides steam and chilled water for Federal 

buildings, the entire Federal Triangle, some other buildings on or 

near the Mall. It needs to be redeveloped. 

Last Friday we accepted offers or initial indications of interest 

from private sector utility firms to see if they would be interested 

in investing their dollars to rehab that plant. One of the things 

that we had been told was that they might decide, rather than 

rehabbing a plant—or in addition to—they might need part of this 

site to do a modernization of that plant. 

There is an opportunity to save a lot of money for the Federal 

Government here. We believe that—we are just now evaluating 

what they came in with, and we believe we will know in a few 

months whether anybody thinks that this site is critical to that 

proposal. When we make that determination, if there is a determination that they need part of this site, we will deal with it then. 

If they don’t, we are going to move forward and make an aggressive decision about what to do with this particular parcel. 

One other thing I will—just to put in context, we are taking a 

look—there are some other vacant slivers of land down Maryland 

Avenue toward the Capitol that the Federal Government owns. 

And we have—in 2008 we took a look at how we might reposition 

those. We are looking at that again, and we have had some indications of interest from some private developers. And we might be 

able to do a bundled package deal for a number of surplus properties here that would get them—either have them used for Federal uses or for private uses, but would make terrific use of them, 

and be a form of public-private partnership. 

Mr. DENHAM. How big are ‘‘slivers’’? 

12 

Mr. PECK. They—well, there are different pieces of leftover triangles. But some of them are three-quarters of an acre, half-anacre. However, half-an-acre is 22,000 or so square feet, and you can 

build something on those. Some very interesting ideas coming up. 

Mr. DENHAM. And just finally, just to sum things up, so you don’t 

agree with the 2009 assessment on redeveloping this building. You 

are going to take this back and look at making a new decision. And 

if you are going to do that, what is your timeline? 

Mr. PECK. I have told my folks that we are going to make some 

kind of a call on this site within the next 6 months. And I am hoping sooner than that. I just don’t know how long it is going to take 

us to evaluate the proposals for the heating plant. 

Mr. DENHAM. And is there still interest in the sale of this property? Do you still have interested buyers? 

Mr. PECK. Yes, sir. 

Mr. DENHAM. Thank you. Ms. Norton? 

Ms. NORTON. Thank you very much, Mr. Chairman. Now, Mr. 

Peck, you and I have had discussions over the years about the 

chronic shortage of space in the Nation’s capital for agencies that 

want to remain here. Agencies really don’t want to move out of the 

Nation’s capital, but we have to lease space throughout the region, 

because there would never be enough space in the Nation’s capital. 

You know, it—let me ask you. Who owns most of the land around 

this particular building? 

Mr. PECK. The Federal Government. 

Ms. NORTON. Isn’t that amazing, that so close to the Mall you 

will not find more valuable property in the District of Columbia 

than this property and, as you say, the properties surrounding it, 

owned by the Federal Government. It is inconceivable that any private owner would have left this land vacant for decades. I just 

think it is emblematic of how GSA doesn’t have plans for even 

what is right in its face, as it goes around leasing here and there, 

complaining that there is not enough space. 

You indicate some of the limitations of this building, and that 

wouldn’t it be great to use all of this land around it. Where is the 

plan, Mr. Peck? Where is the plan for development, not just of the 

Cotton Annex, but for development of this extraordinary parcel of 

land that surrounds it, including the Cotton Annex, which means 

that the Federal Government is sitting on just millions, billions— 

I don’t know what it is. 

Mr. PECK. Well, Ms. Norton, can I just say that one reason—I 

mean I can only account for the last 2 years at GSA—— 

Ms. NORTON. No, no, don’t give me that. 

Mr. PECK. Well, I—— 

Ms. NORTON. Since you have been here, you know, you—first of 

all, you have been here before, and you have come back again. 

Mr. PECK. Correct. And when I was—— 

Ms. NORTON. And what I want to know is, with land that is perhaps—and I would wager to say the most valuable plot of land that 

is vacant in the District of Columbia, with this agency having triggered the notion that, ‘‘Hey, wait a minute, we own this land, why 

don’t we do something about it’’ in 2007, how could it possibly be 

that there is no plan on paper to do something about this entire 

13 

parcel of land, valuable land owned by the United States taxpayers? 

Mr. PECK. Ms. Norton, I—our portfolio management group, our 

planning group in this region, happens to be a terrific group. And 

I think that they did not make this a high-priority for planning because there were some congressional proposals, one for a national 

health museum, one for the national women’s history museum for 

the proposal. So I believe that people were waiting to see if those 

were going to go through—— 

Ms. NORTON. No, I am talking about—— 

Mr. PECK [continuing]. Because, actually—— 

Ms. NORTON. I am talking about the land that the Federal Government continues to own, not the land that the women’s health— 

the health museum has been gone forever. The only possible land 

that is outstanding is the women’s history museum does want some 

land in the back of this. 

Mr. PECK. Right, right, right. 

Ms. NORTON. I am talking about—— 

Mr. PECK. And—— 

Ms. NORTON [continuing]. The majority of the land owned by the 

United States of America. 

Mr. PECK. Well, as I said, there are some slivers of land along 

Maryland Avenue that the Federal Government has not developed. 

Each of them, they have issues. They back up to a railroad rightof-way, rather than—— 

Ms. NORTON. So? 

Mr. PECK [continuing]. To a street. It makes them difficult to develop in some cases. And there has been a question of just how 

much money does GSA have, and where does it get allocated. And 

so it has—— 

Ms. NORTON. Mr. Peck—— 

Mr. PECK. Quite honestly, I believe—— 

Ms. NORTON. Listen, I am going to stop you there—— 

Mr. PECK [continuing]. Quite honestly—may I finish? 

Ms. NORTON [continuing]. Because I have been talking about— 

in my own opening statement I talked about public-private partnerships. I am not asking you to pull money out of a hat. But I am 

saying that it is inconceivable that any but the Federal Government would have said, ‘‘Well, we can’t do anything on this because 

we don’t have any money,’’ or because somebody else may want a 

piece of it. 

And my impatience with seeing this grows, as you see where the 

private sector could develop down here. Mandarin Hotel, they have 

seen how valuable the land is. The notion that anybody would be 

sitting on as valuable a property as this and can’t figure out what 

to do with it, even though the private sector—and even though in 

your own portfolio are private sector precedents, you know, is not 

an answer, sir. 

Mr. PECK. Ms. Norton, you and I have violently agreed for years 

on the benefits that there would be if GSA had routine access to 

public-private partnerships. And we are grateful that—both for 

your legislation on the Southeast Federal Center, and for the section 412 authority. We also have section 585, it is called property 

exchange authority. 

14 

And as you know, we have tried in the past previous administrations—our own in the Clinton—at least the GSA, our previous administrators, I and other folks have tried—have made proposals for 

that in various places, meeting with mixed success when it goes 

through all of the Government reviews. We are trying again. We 

have a team inside GSA looking at various ways we might use the 

section 412 authority on this and other properties around the country. And we are going to see, again, if we can get up a head of 

steam and make this work within the Federal—— 

Ms. NORTON. All right, Mr. Peck. Mr. Peck, you know, the notion 

that you can’t convince OMB that it is wasting money by letting 

this land lie fallow, it really is—and I can understand how difficult 

OMB is. But passing the hat continually to OMB is not going to— 

particularly when legislation could—I mean if you need help—and, 

by the way, the notion of the Southeast Federal Center didn’t come 

from the GSA, it came from us. And so we passed a piece of legislation. And, you know, the GSA can’t do anything about that. 

Mr. Chairman, I just have one more question before—I know I 

am over my time. 

But I want to ask you, Mr. Peck. You—at the DHS construction, 

you have now spent over $1 billion, and that has gone with the assumption that there would be a set of buildings. And we know that 

that can’t happen very quickly. We also know that the infrastructure is in place, because that had to be built first. And we know 

the waste of just letting that kind of lie there with nothing over 

top of it, you know that the Coast Guard is going to be there, beginning in 2013. 

Now, if I am talking about this as a matter of urgency because 

it is in your face, that is a piece of property that will go to waste 

if we don’t do something about it. It does seem to me that if you 

could not convince OMB of what to do about this property, you 

might have better luck with DHS if you went and asked for 412 

authority to continue to build the buildings that are buildings necessary for the security of the United States of America. Have you 

done so? How do you intend to complete the Department of Homeland Security? 

Mr. DENHAM. Brief response. 

Mr. PECK. OK. That has occurred to us as well, and we are having conversations about that inside with OMB, about how—so that 

we could accelerate what is now looking like a stretched out project 

at St. Elizabeths. We have raised that possibility with them on a 

number of the specific projects within the St. Elizabeths consolidation. 

Mr. DENHAM. Chairman Mica? 

Mr. MICA. Well, don’t work too hard, because I want to put all 

of that on hold, except for the Coast Guard building, until I get 

some resolution, you know, on the FTC project. Not only that 

project, but a lot of the resolutions. We did let some go, we are trying to work with you, and we certainly don’t want any cost to the 

taxpayers. But when you have a project that can save a half-a-billion dollars, in my evaluation—and I think it is fairly conservative—I want to move forward with it. So that and other initiatives, until I get a response, I am not going to be—and I will conVerDate Aug 31 2005 13:56 Jun 18, 2012 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\3-22-1~1\73471.TXT JEAN
15 

tinue with this, I can assure you. And I can also assure you that 

help is on the way. So we will get it done. 

The FTC, let’s move to that, and the resolution that we passed. 

I have—and we asked for housing and floor plans that incorporate 

and reflect two separate alternatives. This is what I have gotten 

so far. Am I getting the balance? 

Mr. PECK. Well, this was not in response to the resolution that 

the committee passed. 

Mr. MICA. OK. It is not. 

Mr. PECK. This is in response to your previous request. 

Mr. MICA. OK. But we are getting what we are—— 

Mr. PECK. Mr. Chairman, I want to express a significant concern 

about the resolution, and just to put it on the record. The resolution would direct GSA to investigate a sole-source lease on a building in Washington, DC. And, as a matter of policy, as a matter of 

getting the best deal for the taxpayers, that is a bad way for us 

to operate. 

We are not allowed to go out on the market with a requirement 

and just go to one property owner. 

Mr. MICA. Well, unfortunately, the taxpayer was already shafted, 

and we already have the space. And I am looking at the best utilization of the space, and you didn’t have anything to do with 

the—— 

Mr. PECK. That’s right. No, I—— 

Mr. MICA [continuing]. Shafting of the taxpayers in that. I guess 

it was the Securities and Exchange Commission. 

Now, what I want is a plan that does incorporate—and the information we have gotten from before, the utilization of that space, 

there is 379,000 rentable square feet that has been leased by the 

Securities and Exchange Commission, plus another 40,000 square 

feet that has special use. 

So, what we are looking at, and the plan—well, the—this is a 

housing plan for FTC that you—by title. It shows they need 

240,000 square feet of office space, and 125,000. Now I went to the 

University of Florida, I am not the best at math. But—and it 

wasn’t my degree specialty—but I add those up and I get 365. Now, 

somehow, 365 will fit in to 397 without a plan to realize some efficiencies of scale. 

In addition to that, we have another 40,000 square feet, according to the information we got from the Securities and Exchange 

Commission on that same property that is available for special use 

common to the building occupants, all of which is listed here, some 

of those common-use offices. There could be—my God, we could 

have some consolidation and do some things together that would 

save the taxpayers money. 

So, all I am looking for is, again—and we have New Jersey Avenue, that lease coming up. We have—I have—what is the current 

total square footage in the FTC Apex Building, 302? Staff? Somebody? 

Mr. PECK. Usable is—— 

Mr. MICA. 325 gross, and we are using 160, approximately, just 

for argument’s sake here. 

But again, I want to see this project completed. And I know, you 

know, you said you had some disagreements with Ms. Norton. I 

16 

have some disagreements with Ms. Norton on that particular issue, 

too, and I have some disagreements with you. But we are going to 

do this, one way or the other. We have support in the Senate, and 

we are going to move legislation forward there, if we have to, directive legislation. And it will appear in legislation, and we will get 

it done. 

So, I want the plan. And we are putting them on notice. We are 

trying to work with them, because again, it is an important agency. 

They have an important responsibility. But when I have 400,000 

square feet, approximately, of leased space that the Federal Government has committed to pay, and I have leases expiring with 

FTC, I have a building that is 80 years old, of which we are using 

160 out of 320—about half the square footage, even a simple analysis says that it could be combined. 

So, I appreciate your cooperation to date. I would like to see, 

again, a utilization. The longer we stall—I know the game is trying 

to shove a couple of folks in there and then say it can’t be used. 

Mr. Moran came to me, expressed his concern about what he’d 

heard might happen. And I don’t want that to happen. Mr. 

Moran—and last time I checked he was on the other side of the 

aisle. Isn’t he an appropriator, too, over some of these matters? 

Yes? So he came to me. I didn’t initiate it. So he is concerned about 

this, too. 

So, again, I appreciate your being here. Look forward to working 

with you. We want an amicable resolution, and move forward. 

Thank you. 

Mr. PECK. Mr. Chair, can I just—— 

Mr. MICA. Just a comment, you don’t have to respond. 

Mr. PECK. Let me just—I know. Let me just put one issue on the 

record, just because it is important in an ongoing negotiation. 

The amount of space that the SEC actually can convey to us as 

excess is—it is hard to know, because they did this proposed lease 

action in a unique way. It is about 279,000 square feet. I know 

there is other space available in the Constitution Center. I just 

want to put that on the record. It is important for us in our ongoing conversations with the owner of the building. 

Mr. MICA. And again, what you provided me was to have 279 

available. You produced 240 is what they need, an office space and 

then other space. 

So, what—and no one is trying to give anybody a sole-source 

lease. I think everyone knows that. And I would not support that. 

But a consolidation where there is that space available, we just 

want to see a proposal. Haven’t said give it to them. I want to see 

a proposal. 

We had this conversation, as I recall, before Christmas. And now 

this is—we are getting to Easter. Now I don’t mind Christmas, I 

don’t mind Easter. But, you know, I am not celebrating the Fourth 

of July still discussing this. Thank you. 

Mr. DENHAM. Ms. Norton? 

Ms. NORTON. I just have a couple of questions more. Mr. Peck, 

this committee needs to know. Are there any other buildings like 

the Cotton Annex in the District of Columbia sitting vacant or underutilized? 

17 

Mr. PECK. You know, Ms. Norton, I have learned enough now in 

this business that I would like to say I am unaware of any. We 

have looked around. In the GSA inventory I can tell you the answer is none that we are not already working on. Whether there 

are other agencies that might turn up and say, ‘‘I have got something I don’t need or that you didn’t know about,’’ that may be 

something else. But that is—— 

Ms. NORTON. I just want to make sure that we won’t have—— 

Mr. PECK. We are—— 

Ms. NORTON [continuing]. That we won’t find another GSA building looking like this building looks, or I say, greatly underutilized. 

Mr. PECK. Right. 

Mr. DENHAM. If the CPRA were in place today, though, you could 

definitely tell which buildings were underutilized and which ones 

were vacant. 

Mr. PECK. After a few months of them working, right, through 

the inventory, we believe that is the case. 

Ms. NORTON. Are there such buildings in the national capital region that are underutilized or vacant the way this one is? 

Mr. PECK. There probably are. 

Ms. NORTON. The reason I ask—— 

Mr. PECK. I mean I am not thinking of anything specifically, but 

I—— 

Ms. NORTON. The reason I ask is because of the—this is the region that has the largest amount of leased space. Would you provide the chairman within 2 weeks a list of all properties that are 

either vacant or underutilized owned by GSA—— 

Mr. PECK. Of course. 

Ms. NORTON [continuing]. In the national capital region? 

Mr. PECK. Yes. 

Ms. NORTON. One last question. I have not been able to figure 

out how the Veterans’ Administration has been able to use authorities that GSA claims it does not—cannot use, even though, of 

course, we have given you the authority. 

For example, the Veterans’ Administration avoids the whole notion of appropriations, that you are locked in, by its enhanced use 

lease authority, where the property is developed and then they 

lease back the property. Have you ever considered doing that? And 

why is the Veterans’ Administration able to do that, and GSA is 

not able to do that? 

Mr. PECK. A really good question. We have talked to the Veterans’ Administration. They have some legislative authority that 

gave them the right on their reservations to lease property for a 

very long time, to use some of it, to allow the private sector to 

share in the use so they could have a—— 

Ms. NORTON. On their reservations? I don’t know what you 

mean—— 

Mr. PECK. I mean—I am sorry. VA refers to their hospital campuses with a lot of land around it as a VA Reservation. And so they 

have been able to build things there. 

I am sorry to tell you that I have learned recently, however, that 

their authority to use the enhanced use lease has been cut back. 

I am not quite sure what the origin of that is, but they have told 

us that they don’t have the access to—— 

18 

Ms. NORTON. Do they have the authority or not? 

Mr. PECK. I think they have the authority on the—I believe on 

the books they still have it. Can anyone—I don’t think it has been 

repealed legislatively, but I believe they are running into some policy issues with using the authority. 

Ms. NORTON. Well, again, it—I think the way they got it—— 

Mr. PECK. But we have been talking to them about health—— 

Ms. NORTON. You know, I think the way they got it is that they 

had leadership that was able to convince the Congress they should 

have it. You—we did this on our own, the 412 authority. We certainly didn’t use it because GSA came and explained how much 

they needed this. We did it because we felt pushed to do it because 

GSA kept saying it just couldn’t do anything. 

So, Mr. Chairman, I appreciate your keeping with this agency. 

And I think if Mr. Peck finds some more authorities—some more 

buildings like this, we should go out into the region to have hearings just like the hearings you are having here that point up the 

need for GSA or the Congress, if we are going to get our BRAC bill 

through, to quickly move on this horrific waste. This is the worst, 

perhaps second only to the Old Post Office. It is the worst, because 

it is so visible and because it is so valuable, and because there is 

so much land. Thank you very much, Mr. Chairman. 

Mr. DENHAM. Thank you. Mr. Peck, how much space does the 

Federal Government lease in DC? 

Mr. PECK. The General Services Administration leases about 24 

million square feet in the District itself, and about 44 million 

square feet—hope I have that number right—in the region, as a 

whole. Is it 44 or 55—50 million square feet in the region, as a 

whole. 

Mr. DENHAM. So 74, combined? 

Mr. PECK. No, I am sorry, 50 million square feet of leased space 

in the region, as a whole, and about another 50 million square feet 

of Government-owned space in this region. So about 100 million 

square feet, overall, for GSA alone. That excludes properties that 

are controlled by other agencies like the Pentagon, which is not one 

of our properties. The military installations are separate. 

Mr. DENHAM. But the 24 million in DC is combined in the 50 

million—— 

Mr. PECK. Yes, sir. 

Mr. DENHAM [continuing]. DC area. 

Mr. PECK. Yes, sir. 

Mr. DENHAM. So if we have got 50 million square feet in the DC 

area of leased space, why wouldn’t you have filled office buildings 

like this over the last 5 years? 

Mr. PECK. Well, this building, because it is not exactly—it is 

pretty close to usable right now, but I think because we have asked 

ourselves whether we were going to dispose of it, we wouldn’t want 

to move somebody in here who would have a long-term use, thinking that we are just going to move them in and then move them 

out to redevelop the site. So, I suspect that is the reason why, 

when it first came back in the inventory, we didn’t put anybody in 

it. 

Mr. DENHAM. And—— 

19 

Mr. PECK. But I will—can I just say—one of the successes we are 

having is that we are where we can get the money—and I have to 

say, you know, in the interest of all candor, I have to tell you we 

are trying very hard to use less space in the Government. And, unfortunately, that requires some upfront investment to move people 

around. And at the moment we are having—we have not been allowed within our budget to use the profit that we generate in the 

Federal Buildings Fund to do that. 

So, that is another—one of the impediments. We think we could 

relinquish some leased space. We are going to relinquish a couple 

hundred thousand square feet of leased space for part of GSA when 

we move back into our renovated office building. 

Mr. DENHAM. What about the Prettyman Courthouse? 

Mr. PECK. Pardon? 

Mr. DENHAM. The Prettyman Courthouse, 600,000 square feet. 

Remember, Ms. Norton asked which office spaces are vacant right 

now? There is only 400 people in there is my understanding. 

Mr. PECK. Mr. Chairman, the Prettyman Courthouse, you know, 

the court sent you and us a letter saying that—and I have been 

in there, and the parts of it that are occupied by—that are supposed to be occupied by the courts are fully utilized. We have—if 

I remember correctly, the only part of the building that is not utilized is some part of it in which we are doing some work. 

And that is—you know, whether—what do you consider full utilization? How many people need to be in a given corridor in a given 

time is certainly open to question. 

Mr. DENHAM. We can further debate that one in the future. But 

let me just ask you a couple questions about this complex here. I 

know this is hard to see, but we are—— 

Mr. PECK. Yes. 

Mr. DENHAM [continuing]. The building here is the Cotton Annex 

that we are talking about. You have got a vacant piece of open 

ground, just north of this. 

Mr. PECK. Right. 

Mr. DENHAM. My question is, you have got the Department of 

Energy building that was built over a road. Are we ever going to 

build any more buildings over a road again? 

Mr. PECK. No, sir. 

Mr. DENHAM. So, to fully utilize the two vacant spots on each 

side of the road, and to redevelop the Cotton Annex, you would 

have to build either over a road or, to fully utilize that space—— 

Mr. PECK. You mean on this—are you talking about this parcel, 

the vacant lots around the Cotton Annex itself? 

Mr. DENHAM. Yes. I am talking about the vacant piece right next 

to the Department of Energy, as well as the vacant piece right next 

to this building, and the overall—— 

Mr. PECK. Oh, well—— 

Mr. DENHAM [continuing]. The Cotton Annex. 

Mr. PECK. You are right. There is one parcel that is on the other 

side of the ramp that is called the 12th Street Ramp down—it is 

part of the freeway system. It is possible, although it is expensive, 

to build up and over that road. You have to maintain a certain 

clearance for the cars and trucks that go down there. It is possible 

to do it. And the plans that the two museums who have looked at 

20 

this have had—I believe in both cases—would have bridged over 

that road. 

We would, for Federal agencies, because of our security requirements, we probably wouldn’t do that. And in fact, when we did our 

studies on the site, we showed that you could get a higher number 

of square feet for a private development than we could get for the 

public—for the Federal Government, because we would have ostensibly have setbacks and wouldn’t build over the road. Still, there 

is a significant development potential here. 

Mr. DENHAM. So my question is, as a developer, when you are 

looking at a area or a region like this, where you have got a Department of Energy building, you have got this Cotton Annex, a 

couple of vacant parcels, and just a couple—a block or so away I 

am told that there is a private developer that has—willing to build 

600,000 square feet, that you could move this property over and 

then sell—still be able to sell this off for about $200 million, on top 

of the relocation costs. So you would have new prime office space— 

it would be leased space, I would assume—but then it would give 

you the opportunity to redevelop three or four, five different parcels 

right here. 

Mr. PECK. We are—you about got it right. I mean there are a lot 

of—as in any plan on a piece of urban ground, there are a lot of 

moving parts. One of the parts I will just put to the side for the 

moment—but it is a huge one—is the option of developing it for 

federally owned office space, which is the best fiscal deal for the 

taxpayers. It is a difficult one, because you have to get your hands 

on the—it is an indelicate way to say it—you have to get your 

hands on the money to build it. 

But are right. There are opportunities to use private dollars to 

do it, or to have private sector people to build the building, and we 

could lease it. We could lease it from them. As I always say, I 

would much rather lease it back on a section 412 kind of project, 

where at the end of the term we would be able to own the building. 

That would be a good deal for the taxpayers. 

So, we are looking at all of those options. And there is clearly interest in the site. And I said there have been a number of different 

proposals. And in a way I think what happens is some of the proposals—you know, it is kind of like—they bump each other apart, 

and we need to sit down and make a decision about which one we 

are going to try to pursue. And then, when we do, I would love to 

enlist your help in making it happen. 

Mr. DENHAM. Absolutely. Why don’t you and I plan on getting together in the next month? 

Mr. PECK. OK. 

Mr. DENHAM. And if you could walk me through your thought 

philosophy on all of the parcels combined, that would be helpful. 

Mr. PECK. Be happy to. 

Mr. DENHAM. We are about out of time, as they are calling votes. 

I just have one final question, more of a comment. It took nearly 

4 months for this committee to get what should have been just 

basic information from you regarding how much GSA has spent on 

administrative costs over the last 5 years. And just this week we 

received your responses, but we are still missing quite a bit of information. 

21 

So, if you could, follow up and give us why your other administrative costs increased by more than $100 million. What are your 

total administrative costs, including those associated with specific 

projects? Why are there still unobligated funds remaining with 

projects that have been finished for years, like the Prettyman 

Courthouse, that we are continuing to talk about? 

Mr. PECK. OK. 

Mr. DENHAM. We have a lot of followup questions. 

Mr. PECK. OK. 

Mr. DENHAM. And I don’t want it to take 4 months to get a response on the followup questions. So—— 

Mr. PECK. Can I give you one answer right now, just so you 

know? The short answer on—I also asked this question, too—on 

unobligated funds on projects that look like they ended a long time 

ago, the answer is often that there is some kind of a claim, a construction claim, and we are holding off the money to see if we have 

to use it to satisfy it. But I will get you answers on all that. 

Mr. DENHAM. Thank you. Can you agree to have your staff meet 

with my committee staff to come up with the answers on those this 

week? 

Mr. PECK. Yes, sir. Yes, sir. 

Mr. DENHAM. Thank you. All right. Well, with that, thank you 

for your testimony, Mr. Peck, and there are no further questions. 

I would like to ask unanimous consent that the record of today’s 

hearing remain open until such time as our witnesses have provided answers to any questions that have been submitted to them 

in writing, and unanimous consent that during such time as the 

record remains open additional comments offered by individuals or 

groups may be included in the record of today’s hearing. 

[No response.] 

Mr. DENHAM. Without objection, so ordered. I would like to thank 

Mr. Peck again for joining us once again on another hearing, as 

well as thank Senator Brown for being here to testify on his bill, 

as well. We are getting not only bipartisan support on this issue, 

but often times our battle is not with the other party but with the 

other House, and it is good to see that the other House has taken 

equally an aggressive approach to this, too. So we are looking forward to continuing to work between the two Houses to make sure 

we can marry the two proposals together and actually get something to the President that will expedite all of these different problems, not only in this region, but throughout the entire United 

States. 

If no other Members have anything to add, the subcommittee 

stands adjourned. 

[Whereupon, at 11:15 a.m., the subcommittee was adjourned.] 

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