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[Senate Report 106-458]
[From the U.S. Government Publishing Office]

                                                       Calendar No. 905
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-458
_______________________________________________________________________

                   SOUTHEAST FEDERAL CENTER PUBLIC-

                    PRIVATE DEVELOPMENT ACT OF 2000

                               __________

                              R E P O R T

                                 of the

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                          UNITED STATES SENATE

                              to accompany

                               H.R. 3069

TO AUTHORIZE THE ADMINISTRATOR OF GENERAL SERVICES TO PROVIDE FOR 
  REDEVELOPMENT OF THE SOUTHEAST FEDERAL CENTER IN THE DISTRICT OF 
  COLUMBIA

October 2 (legislative day, September 22), 2000.--Ordered to be printed

                               __________

                    U.S. GOVERNMENT PRINTING OFFICE
79-010                     WASHINGTON : 2000

                   COMMITTEE ON GOVERNMENTAL AFFAIRS

                   FRED THOMPSON, Tennessee, Chairman
WILLIAM V. ROTH, Jr., Delaware       JOSEPH I. LIEBERMAN, Connecticut
TED STEVENS, Alaska                  CARL LEVIN, Michigan
SUSAN M. COLLINS, Maine              DANIEL K. AKAKA, Hawaii
GEORGE VOINOVICH, Ohio               RICHARD J. DURBIN, Illinois
PETE V. DOMENICI, New Mexico         ROBERT G. TORRICELLI, New Jersey
THAD COCHRAN, Mississippi            MAX CLELAND, Georgia
ARLEN SPECTER, Pennsylvania          JOHN EDWARDS, North Carolina
JUDD GREGG, New Hampshire
             Hannah S. Sistare, Staff Director and Counsel
                       Johanna L. Hardy, Counsel
      Joyce A. Rechtschaffen, Minority Staff Director and Counsel
          Peter A. Ludgin, Minority Professional Staff Member
                     Darla D. Cassell, Chief Clerk
                                                       Calendar No. 905
106th Congress                                                   Report
                                 SENATE
 2d Session                                                     106-458

======================================================================

 
    SOUTHEAST FEDERAL CENTER PUBLIC-PRIVATE DEVELOPMENT ACT OF 2000

                                _______
                                

October 2 (legislative day, September 22), 2000.--Ordered to be printed

                                _______
                                

Mr. Thompson, from the Committee on Governmental Affairs, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 3069]

    The Committee on Governmental Affairs, to which was 
referred the bill (H.R. 3069) to authorize the Administrator of 
General Services to provide for redevelopment of the Southeast 
Federal Center in the District of Columbia, having considered 
the same, reports favorably thereon with an amendment and 
recommends that the bill as amended do pass.

                                Contents

                                                                   Page
  I. Purpose & Summary................................................1
 II. Background.......................................................1
III. Legislative History..............................................4
 IV. Section-by-Section Analysis......................................5
  V. Estimated Cost of Legislation....................................5
 VI. Evaluation of Regulatory Impact..................................7
VII. Changes in Existing Law..........................................7

                          i. purpose & summary

    The purpose of H.R. 3069, the Southeast Federal Center 
Public-Private Development Act of 2000, is to authorize the 
Administrator of General Services to provide for the 
redevelopment of the Southeast Federal Center in the District 
of Columbia.

                             ii. background

Planning the capital city

    Washington, D.C.'s design is the product of careful 
planning. Two plans for the city were created and followed. 
These plans were completed by Pierre Charles L'Enfant in the 
18th Century and Senator James McMillan of Michigan in the 20th 
century. Planners today refer to and interpret how L'Enfant and 
McMillan would have extended their plans to accommodate the 
current needs of D.C.
    In 1791, Pierre Charles L'Enfant was selected by President 
George Washington to plan the Federal City known as the 
District of Columbia. L'Enfant, through his planning of 
Washington, attempted to symbolize the balance of the executive 
and legislative branches of the government by placing the 
Capitol and White House on prominent sites in the city and 
linking them with Pennsylvania Avenue. L'Enfant also 
highlighted the importance of States by creating prominent 
squares and circles named after State heros and linking them 
with roads named for the States.
    L'Enfant also envisioned the possibility of new development 
and planned the city such that neighborhoods were linked with 
one another and the Federal government. He also emphasized the 
importance of preserving open space, parks, and vistas. In 
particular he envisioned the grand stretch of open space west 
of the Capitol extending to the planned Washington Monument now 
called The Mall.
    In 1901, Senator James McMillan, as Chairman of the Park 
Improvement Commission of the District of Columbia (McMillan 
Commission), began extending L'Enfant's Plan to revitalize the 
District of Columbia. McMillan re-emphasized the importance of 
open spaces and parks. He also expanded the planning of open 
space and parks away from The Mall, extending it throughout the 
city.
    Since 1924, a National Capital planning agency has existed 
in various forms to be responsible for the comprehensive 
planning of the National Capital Region. The current commission 
is the National Capital Planning Commission (NCPC). In 1997, 
the NCPC released ``Extending the Legacy: Planning America's 
Capital for the 21st Century,'' intended to build upon the 
previous planning efforts by creating a vision plan for the 
city. Although not a comprehensive plan, the Legacy Plan 
creates a ``framework'' for planning which provides vision for 
the development of the Capital in the 21st century which 
includes the Southeast Federal Center. The Legacy Plan also 
takes into account the local planning efforts begun after Home 
Rule in 1973, which established the current local D.C. 
government.

History and need for legislation

    The Southeast Federal Center (Center) is a 55.3 acre site 
located in Washington, DC. It is bounded by the Anacostia River 
on the south, M Street on the north, the Navy Yard on the east, 
and 1st Street on the west. Other than the Navy Yard, there is 
only moderate industrial use in the area.
    During the time of Pierre Charles L'Enfant much of the 
Center was under water. In 1803, President Thomas Jefferson 
established shipbuilding in this area of the city. 
Subsequently, there was a rapid development of wharves, 
warehouses and refineries. By the end of the 19th Century, 
electricity and the railroad were introduced to the site.
    During World War I, the nature of development on the site 
shifted from shipbuilding and refineries to weapons production 
and most of the private development was eliminated from the 
site. Further changes occurred during World War II when the 
site was the center for ordnance production and repair of 
damaged navy vessels. Following the war, however, development 
of missiles and electronic equipment made this production and 
repair obsolete.
    By 1962, all production ended and the Navy Yard was split 
into two--a portion of the property remained with the Navy Yard 
and a portion was transferred to GSA. Today, the main presence 
in that area is the Navy Yard, which has increased its number 
of personnel over the years. GSA has attempted over the years 
to encourage other Federal agencies to relocate to this area to 
help revitalize it; however, they have not been successful.
    In 1996, Congress appropriated funds to start environmental 
restoration of the Navy Yard area and demolition or restoration 
of unused buildings to help make the area more attractive. Even 
with these efforts, GSA has identified approximately 5 million 
square feet of potential office space which is going unused.
    H.R. 3069 provides GSA with the authority to enter into 
various types of agreements with private entities including 
leases, contracts, cooperative agreements, limited 
partnerships, joint ventures, trusts, and limited liability 
corporations. Further, GSA would be authorized to sell or 
exchange property in that area.
    The Committee concluded that special authorization for GSA 
was needed for several key reasons. First, previous GSA 
attempts to re-develop this area under the current law have 
failed. Second, any property transactions authorized by H.R. 
3069 must be for ``fair consideration,'' thus ensuring the 
Federal government will receive appropriate compensation for 
any business arrangements, leases, sales, or exchanges. Third, 
the redevelopment fits into a larger revitalization plan for 
redevelopment, following the legacy of the L'Enfant and 
McMillan plans.
    Fourth, Congress has a special responsibility to the 
District of Columbia as the Capital City as mandated in the 
United States Constitution, Article I, Section 8, Clause 17. 
Finally, to ensure the Federal interests are adequately 
protected, the bill requires GSA to report to Congress on any 
agreements and explicitly retains the authority of the NCPC 
over this site to ensure future development is consistent with 
the overall planning for the National Capital Region.

Local district efforts

    The District of Columbia in recent years has been 
attempting to revitalize the city. There already has been 
tremendous redevelopment in the downtown area, planned 
redevelopment westward from the Navy Yard down M Street to 
South Capitol Street, and discussions about revitalizing key 
entry points into D.C. such as Georgia Avenue and New York 
Avenue. The local government has attempted to facilitate this 
revitalization in reasonable ways.
    D.C. Mayor Anthony Williams outlined key economic 
development priorities in the District of Columbia Strategic 
Plan for Fiscal Year 2001. Among the goals of the economic 
development plan are increasing targeted industries, marketing 
the District, increasing access to the Capitol, establishing 
retail hubs/commercial centers in neighborhoods, and relocating 
District agencies to neighborhoods to spur economic growth. The 
redevelopment of that area is a part of the broader 
revitalization that will help D.C. achieve some of the local 
goals. In particular, the redevelopment of the Southeast 
Federal Center and the Navy Yard has a projected potential of 
creating 15,000 new jobs in D.C.
    The redevelopment of the Center will also allow for better 
use and public access to the waterfront. Unlike many other 
major cities, D.C. has underutilized its waterfronts including 
the waterfront at the Center and Navy Yard. Currently, even 
pedestrian access to the waterfront in the Southeast is 
limited. Redevelopment is intended to open access and 
development of this waterfront.
    Although the employment level at the Navy Yard is expected 
to increase by 2,000 in the near future, the lack of 
redevelopment of the Southeast Federal Center may slow down or 
adversely effect the redevelopment of the area. This is one of 
the reasons GSA and the District of Columbia are partnering 
together to coordinate the revitalization of the Southeast 
Federal Center. It is an important piece of the redevelopment 
in that area and citywide. Also, because of plans to encourage 
growth, create more open access to the waterfronts, and connect 
this area down M Street to South Capitol Street, it is a 
natural extension of the L'Enfant and McMillan plans as 
outlined in the NCPC's ``Extending the Legacy: Planning 
America's Capital for the 21st Century.''
    The authority provided to GSA in H.R. 3069 is a 
continuation of this effort and is appropriate given the role 
the Federal government has with respect to D.C.

Amendment

    The amendment offered by Senator Thompson provides 
technical changes to the bill. First, it corrects the spelling 
of the National Capital Planning Commission (NCPC) in section 
3(f). Second, it clarifies the role of NCPC by requiring that 
the Administrator of GSA consult with NCPC on the 
interpretation of the NCPC vision plan entitled ``Extending the 
Legacy: Planning America's Capital in the 21st Century.'' 
Third, it corrects the Senate committee to which GSA is to 
report from ``Environment and Public Works'' to ``Governmental 
Affairs.''

                        iii. legislative history

    H.R. 3069 was introduced in the House of Representatives by 
Representative Bob Franks (R-NJ) on October 13, 1999 for 
himself and Representatives James A. Traficant, Jr. (D-OH), 
Robert E. Wise, Jr. (D-WV), and Delegate Eleanor Holmes Norton 
(D-DC). It was referred to the House Committee on 
Transportation and Infrastructure and then to the House 
Subcommittee on Economic Development, Public Buildings, 
Hazardous Materials and Pipeline Transportation. On March 23, 
2000, the House Committee on Transportation and Infrastructure 
ordered reported H.R. 3069 by voice vote. The bill was passed 
by voice vote under suspension of the rules in the House on May 
8, 2000.
    On May 9, 2000, the bill was referred to the Senate 
Committee on Governmental Affairs. The Senate Committee on 
Governmental Affairs considered H.R. 3069 with an amendment 
offered by Senator Thompson on September 27, 2000. The 
Committee voted to order the bill reported as amended by voice 
vote.

              iv. section-by-section analysis (as amended)

    Section 1 entitles the Act as the ``Southeast Federal 
Center Public-Private Development Act of 2000.''
    Section 2 defines the ``Southeast Federal Center'' as the 
site in the southeast quadrant of the District of Columbia that 
is under GSA control and jurisdiction and extends from Issac 
Hull Avenue on the east to 1st Street on the west, and from M 
Street on the north to the Anacostia River on the south.
    Section 3 authorizes the Administrator of General Services 
to enter into agreements (including leases, contracts, 
cooperative agreement, limited partnerships, joint ventures, 
trusts, and limited liability company agreements) with a 
private entity.
    Subsection 3(b) sets out terms and conditions for such 
agreements.
    Subsection 3(c) requires that an agreement entered into by 
GSA will be for fair consideration.
    Subsection 3(d) authorizes GSA to convey any interests in 
real property by lease, sale, or exchange, to a private entity.
    Subsection 3(e) requires any obligations payable by GSA due 
to use of space, goods, or services by GSA on property subject 
to an agreement under this section be paid by funds available, 
in advance, in an annual appropriations Act, to GSA from the 
Federal Buildings Fund.
    Subsection 3(f) retains the authority of the National 
Capital Planning Commission with respect the Southeast Federal 
Center and requires GSA, to the extent practicable, to ensure 
any agreement will be in accordance with the NCPC vision plan 
entitled ``Extending the Legacy: Planning America's Capital in 
the 21st Century.''
    Subsection 3(g) excludes GSA's authority under this section 
from various federal property laws.
    Section 4 requires GSA to report to Congress prior to 
entering into an agreement under section 3.
    Section 5 requires that net proceeds from an agreement 
entered into under section 3 be deposited into, administered, 
and expended, subject to appropriations Acts, as part of the 
fund established by section 210 (f) of the Federal Property and 
Administrative Services Act of 1949.

                    V. ESTIMATED COST OF LEGISLATION

                                     U.S. Congress,
                               Congressional Budget Office,
                                Washington, DC, September 29, 2000.
Hon. Fred Thompson,
Chairman, Committee on Governmental Affairs,
U.S. Senate, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 3069, the 
Southeast Federal Center Public-Private Development Act of 
2000.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is John R. 
Righter.
            Sincerely,
                                          Barry B. Anderson
                                    (For Dan L. Crippen, Director).
    Enclosure.

               CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

H.R. 3069--Southeast Federal Center Public-Private Development Act of 
        2000

    H.R. 3069 would authorize the General Services 
Administration (GSA) to enter into an agreement with a private 
entity for the purposes of redeveloping the Southeast Federal 
Center (SEFC) in Washington, D.C. Because much uncertainty 
exists as to whether GSA could find a private-sector partner to 
redevelop the SEFC and the exact form that such an agreement 
might take, CBO cannot estimate the budgetary impact of H.R. 
3069. Because the legislation could affect direct spending 
(including offsetting receipts), pay-as-you-go procedures would 
apply.
    An agreement to develop the SEFC under H.R. 3069 could take 
one of many forms, including a lease, joint venture, or limited 
partnership between the federal government and a private 
entity. Through such an agreement, GSA could sell a portion or 
all of SEFC; lease or exchange SEFC property for space, goods, 
or services, including new construction or physical 
improvements to existing federal property; or, through a 
public-private partnership, construct, manage, and lease space 
in new facilities to federal and nonfederal entities. The 
legislation would prohibit GSA from providing a federal 
guarantee for any debt issued as part of an agreement. Any 
obligation for GSA to make payments under H.R. 3069 would be 
subject to funding being provided in advance in appropriation 
acts. Under the legislation, GSA could retain and spend any 
proceeds resulting from an agreement, the legislation would 
require GSA to report to the Congress on the proposed 
agreement.
    Because much uncertainty exists as to whether GSA could 
find a private-sector partner to redevelop the SEFC and the 
form such an agreement might take, CBO cannot estimate the 
budgetary impact of H.R. 2069. However, depending on the type 
of agreement, implementing H.R. 3069 could have significant 
budgetary consequences. For example, a public-private 
partnership formed to construct an office building at SEFC for 
use by federal agencies would be a lease-purchase agreement. 
Under the Budget Enforcement Act, a lease-purchase agreement 
would require an up-front appropriation equal to the building's 
full construction cost, and outlays would be recorded during 
the construction period.
    Alternatively, GSA could use the authority in H.R. 3069 to 
provide a long-term lease of the SEFC to a private entity in 
exchange for specific services, such as rent-free office space 
for federal agencies. Because it would not involve the payment 
of cash, that transaction would have no budgetary impact. 
Finally, GSA could sell some or all of the SEFC property, thus 
increasing offsetting receipts (a credit against direct 
spending) from the sale of surplus federal property.
    H.R. 3069 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act and 
would impose no costs on state, local, or tribal governments. 
The District of Columbia could benefit under this legislation 
because public land currently exempt from property tax would 
become taxable if the property is transferred to private 
ownership. The outcome would depend on whether the District of 
Columbia would choose to grant a tax exemption based on the 
proposed use of the property.
    On April 6, 2000, CBO transmitted a cost estimate for H.R. 
3069 as ordered reported by the House Committee on 
Transportation and Infrastructure on March 23, 2000. The two 
versions of this legislation are very similar and our cost 
estimates are the same.
    The CBO staff contacts for this estimate are John R. 
Righter (for federal costs) and Susan Sieg Tompkins (for the 
state and local impact). The estimate was approved by Robert A. 
Sunshine, Assistant Director for Budget Analysis.

                  VI. EVALUATION OF REGULATORY IMPACT

    Pursuant to the requirements of paragraph 11(b) of rule 
XXVI of the Standing Rules of the Senate, the Committee has 
considered the regulatory impact of this bill. CBO states that 
there are no intergovernmental or private-sector mandates as 
defined in the Unfunded Mandates Reform Act and no costs on 
state, local, or tribal governments. The legislation contains 
no other regulatory impact.

                      VII. CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, there are no changes in existing 
law made by the bill as reported.

                                  
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