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75–438 PDF 2012

SITTING ON OUR ASSETS: THE VACANT 

FEDERAL COURTHOUSE IN MIAMI 

(112–98) 

FIELD 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 

AUGUST 6, 2012 (Miami, Florida) 

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 

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 

VACANCY 

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 

Hon. Frank M. Hull, Circuit Judge, United States Court of Appeals for 

the Eleventh Circuit, and Member, Committee on Space and Facilities 

of the Judicial Conference of the United States ................................................ 8 

David Wise, Director, Physical Infrastructure, U.S. Government Accountability Office ......................................................................................................... 8 

John Smith, Regional Commissioner, Public Buildings Service, U.S. General 

Services Administration ...................................................................................... 8 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Hon. Frank M. Hull ................................................................................................. 34 

David Wise ............................................................................................................... 42 

John Smith ............................................................................................................... 50 

SUBMISSIONS FOR THE RECORD 

Letters to Hon. John L. Mica, a Representative in Congress from the State 

of Florida, and Chairman of the Committee on Transportation and Infrastructure, in support of his efforts to sell more than 14,000 Government 

surplus properties, sent by: 

Rosendo Caveiro, CPA, Senior Director, Multifamily Advisory Group, 

Cushman & Wakefield, August 16, 2012 ............................................. 56 

Douglas G. Dennison, National Sales Coordinator, Rowell Auctions, 

Inc., August 17, 2012 ............................................................................. 57 

Michael T. Fay, Chairman-Founding Partner, Colliers International 

South Florida, August 16, 2012 ............................................................ 58 

Craig Haskell, CEO, Value Hound Academy .......................................... 59 

Gonzalo Herrera, District Sales Manager, Keyes Real Estate Company, August 16, 2012 ........................................................................... 60 

Walter Liff, President, Auctioneer, Action Auctions, August 15, 2012 . 61 

Michael Pappas, President, Keyes International Center, August 17, 

2012 ......................................................................................................... 62 

Robert J. Pliska, CRE, CPA, MBA, Managing Director, Sperry Van 

Ness/Property Investment Advisors, August 15, 2012 ....................... 63 

Howard W. Steinholz, President/Principal, The Urban Group, Inc., 

August 15, 2012 ..................................................................................... 64 

Stanley G. Tate, Chairman, Tate Enterprises, August 17, 2012 ........... 65 

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(1) 

SITTING ON OUR ASSETS: THE VACANT 

FEDERAL COURTHOUSE IN MIAMI 

MONDAY, AUGUST 6, 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 call, at 10:06 a.m., in the 

David W. Dyer Federal Building and U.S. Courthouse, 300 N.E. 1st 

Avenue, Miami, Florida, Hon. John L. Mica (Chairman of the committee) presiding. 

Present: Representatives Mica and Denham. 

Also Present: Representative Diaz-Balart. 

Mr. MICA. Good morning. I would like to welcome everyone and 

call to order the Subcommittee on Economic Development, Public 

Buildings, and Emergency Management. 

I am Congressman John Mica. I am pleased to be able to chair 

the full Transportation and Infrastructure Committee of the House 

of Representatives. This is one of our subcommittees. I am pleased 

to be joined this morning by the chairman of the subcommittee, the 

gentleman from California, Mr. Denham. Within the portfolio of the 

committee and Mr. Denham’s subcommittee, we do have the important responsibility of one of our three major areas of overseeing 

public buildings. These are not Department of Defense and they 

are not Post Office facilities, unless they are controlled by the General Services Administration, but all the balance of the properties. 

The General Services Administration is the largest property 

owner in the world. It is trustee for all of the public properties and 

assets of the United States and our chief procurement agency. 

We are pleased to be in Miami today as a continuance of some 

of the emphasis of the committee, some of our work, and I will explain that in just a second. 

Let me again say welcome, Mr. Denham, and I also thank Mr. 

Diaz-Balart, a former distinguished member of the committee and 

subcommittee, a chair. We are very proud of his service on this 

committee. He went on to be a member of the Appropriations Committee of the House of Representatives, and I think it is very fitting that he join us today because while we authorize projects, he 

funds projects in that important role and responsibility. 

So I would like to ask unanimous consent that Representative 

Diaz-Balart be permitted to sit with the committee at today’s hearing, offer testimony and participate in questions. Without objection, 

so ordered. 

2 

So, pleased to have you this morning. 

Mr. DIAZ-BALART. Thank you. 

Mr. MICA. I know you welcomed Mr. Denham to Miami, Chairman Denham. We are pleased to have him come all the way from 

California and be with us today and assist not only with this hearing, but next week he will be chairing a hearing on the same subject in Los Angeles. Our committee is taking the issue of vacant or 

underutilized Federal properties from Washington, and we have 

done hearings there today, to Florida with this first one outside of 

the Nation’s capital, and onto the west coast. So we are going to 

go from sea to shining sea. 

We have, under the purview of the GSA, more than 9,000 buildings or properties. The Federal Government also has in the neighborhood of 14,000 properties, buildings that are vacant or properties that are underutilized. We have done three hearings in our 

Nation’s capital while Congress is in session to focus on vacant 

buildings in the capital. This is not just some Johnny-Come-Lately 

type of an investigation or oversight but actually our committee, 

when Mr. Diaz-Balart was on the committee, before we became the 

majority about a year-and-a-half ago, we produced a report entitled, ‘‘Sitting on Our Assets: The Federal Government’s Misuse of 

Taxpayer-Owned Assets,’’ and within that, the very first category 

of abuses that were identified and targeted and actually have become the blueprint for this committee’s work was the problems 

with GSA sitting on incredibly valuable assets, not only in Washington, DC, but across the United States, just like we will find out 

here in south Florida, and then on the other side of the continent, 

in Los Angeles next week. 

Mr. Denham and I did three hearings, the first one in a vacant 

annex to the Old Post Office in Washington, vacant for 15 years, 

costing $8 million a year, two blocks from the White House. We 

managed within a year to turn that around from a money-losing 

asset to now with the potential of a site employing 1,000 employees, and probably $8 to $10 million a year in revenue, and taking 

an unproductive Federal property and turning it around. I am very 

pleased with that effort. 

Our committee then moved to a vacant building between the 

interstate and the Mall, a wide swath of property with, I believe, 

an 89,000-square-foot building, vacant for 5 years, the Cotton 

Annex that sat vacant. And then in our last hearing in the Nation’s 

capital, we held a hearing in a vacant power building, a power station building behind the Ritz Carlton in Georgetown, Washington, 

some of the most expensive real estate on the entire east coast, 

2.08 acres sitting vacant for 11 years. 

Now, the good news is when Mr. Denham and I did our hearing, 

the day before—and maybe you can pull this up—the day before, 

we forced GSA to begin a marketing campaign. So they actually 

put up a ‘‘Coming Soon, For Sale’’ sign the day before our hearing, 

which is remarkable that GSA would not take an initiative to take 

a valuable piece of property and transform it into a performing 

asset. 

So we have done three hearings in the Nation’s capital. Today is 

our fourth. Mr. Denham and I use this little chart. We had 14,000 

3 

properties. Now we only have 13,996 to go. Next week we will get 

that down to 95. 

The good news about this property, as unfortunately it has been 

vacant since 2007, and we have also inspired GSA to move in trying to come up with a better utilization plan. On Friday, they announced their plans to try to seek—it says, ‘‘GSA seeks ideas to develop Miami Courthouse.’’ So again, 180,000, maybe 178,000 square 

feet of prime office and court space facilities in the heart of Miami, 

probably one of the most robust cities not only in the State of Florida but in the United States, sitting idle. 

So here we find ourselves in this courthouse this morning. This 

is the David Dyer Federal Courthouse, vacant since 2007. It has 

annual operating expenses that are lost to the taxpayers of $1.2 

million operating costs. If you multiply that by the years vacant, 

the dollars start to add up. 

Incidentally, I brought for my colleagues—this was presented to 

me. We have done hearings on GSA. Of course, you have all seen 

the guy in the hot tub who thumbed his nose, and the expensive 

conferences they did, first in Las Vegas, and the guy thumbed his 

nose at the committee, the Congress and the taxpayers. Our most 

recent scandal is in our investigation to uncover waste to their conferences was a one-day, quarter-of-a-million-dollar fiasco. These are 

actually two of the $20,000 drumsticks. I don’t know if you have 

ever seen $20,000 drumsticks, but they paid $20,000 for drumsticks 

for a Virginia conference, 1 day, $104,000 to a consultant to put the 

1-day conference together, and $35,000 for picture frames. I don’t 

have one of the $35,000 picture frames, but someone did present 

me—these are authentic, and actually they are engraved to commemorate the occasion of the conference that was held in Virginia. 

That is the situation that we face with GSA. Unfortunately— 

well, fortunately for the taxpayers, the first level of abusers has 

been removed. The Administrator, the Public Buildings Commissioner, Mr. Neely, one of the regional administrators and one of the 

chief offenders, and a host of others have been removed. Last week 

we held a hearing in Washington, Mr. Denham and I, and we are 

on our second level of GSA officials involved in, again, these wasteful conferences, and we found, unfortunately, no one wanted to appear. They brought forward an employee who had only been in the 

position for about 3 months. The Administrator was on vacation 

and couldn’t be disturbed. A deputy did not choose to come because 

the deputy and some others are now involved in the second conference. So we have had difficulty in eliciting information, testimony, documentation, or even witnesses to our hearings. 

So that is the situation that we find ourselves in this morning, 

and again a courthouse that has grown to be a huge burden on taxpayers, an agency that is mired in neutral on trying to dispose or 

better utilize these facilities. 

I must add a caveat to my commentary and give GSA a little bit 

of a break in that Congress also holds responsibility because sometimes they do not cooperate with the agency in moving forward. 

However, there was an authorization for moving forward with this 

particular project some time ago. The administration—let me just 

check so I have the accurate figures. The stimulus provided GSA 

with $5.9 billion 3 years ago, stimulus money to renovate buildings 

4 

like this. But again, GSA turned its back on the taxpayers, turned 

its back on this building to turn a money loser into a revenue 

gainer for the taxpayers. Now we are up to an estimated cost of $60 million. This has sat 

idle, and I think it has some mold and other issues. The new courthouse that was built next door, the Wilkie D. Ferguson, opened in 

2007 when this closed, was overbuilt by 238,000 square feet, and 

had a cost overrun of $49 million. It still has substantial vacant 

space. We will hear more about its potential for utilization as the 

hearing proceeds. 

So with that, the order of business will be that I yield now to 

Chairman Denham. I thank him again for his undaunting leadership in pursuing these matters. I told him this morning on the way 

over, of all the freshmen, Mr. Diaz, all the new Members of Congress, I think he is by far the most outstanding performer. He has 

done a remarkable job, provided leadership. He had some experience as an elected official in the California legislature. But I 

couldn’t be more pleased to have a leader on our committee, a new 

Member of Congress, just an absolutely incredible job again in pursuing this matter and other matters. He has a portfolio that has 

very broad jurisdiction. 

So with that, Mr. Chairman, Chairman Denham, I would like to 

yield to you. 

Mr. DENHAM. Well, thank you, Mr. Chairman, and good morning. 

Let me first start by saying I was able to pick up the ball and run 

with it because of your leadership. The document that you had put 

together on GSA sitting on its assets is something that has been 

a playbook that we have been able to run with ever since the beginning of the 112th Congress. This is something that has gone on 

for far too long. 

You know, I have actually taken the position that the question 

that should really be asked is couldn’t we do without GSA altogether? Can we actually abolish the agency and have private industry pick up that ball and run with it? 

So I am proud to have Mr. Diaz-Balart here, who is on the Appropriations Committee that will oversee the funding of GSA. 

I think one of the questions that we will be asking in the 113th 

Congress is what level of appropriation does GSA need? If GSA is 

not going to follow the President’s memorandum, if they are not 

going to follow his Executive order on pay freezes, bonuses and 

overtime, if they are not going to follow the President’s Executive 

order on excess properties, and if they are not going to follow the 

Vice President coming together with all of the department heads on 

the conferences and the wasteful spending, the question really is 

should we cut off their money altogether? 

So I am proud to have Mr. Diaz-Balart here, who actually sat in 

this position under this subcommittee prior to going to the Appropriations. This will be a joint effort between Appropriations and the 

funding for GSA in the future, as well as this committee that oversees all of the public buildings altogether. 

We are here in Miami for two reasons, to continue our investigation into the billions of dollars wasted on vacant buildings just like 

this one, and for the public to see the likely outcome if GSA builds 

a new $340 million courthouse in Los Angeles, where we still have 

5 

two existing courthouses, one that is partially full, one that is just 

about vacant, and yet even with less judges, they want to continue 

to move forward to build a new courthouse. 

This is a perfect example of how things should not be done. Here 

we have a beautiful, historic building that is sitting dilapidated, 

mold. You can see its historic and beauty here, and yet we are allowing it to fall apart because GSA is not focused on the best use 

for its assets. 

I am also told that we have over 3 million square feet of leased 

space in the Miami area. So the question is why is a building like 

this sitting vacant? If it is not needed, let’s sell it off. If we do need 

it, then let’s relocate the individuals that are in other buildings 

around the area into this facility. 

But we have a job to do for the taxpayers and making sure that 

their dollars are spent correctly. So seeing something that is not 

only sitting vacant but falling apart in the process and costing us 

millions of dollars is inappropriate. 

I want to just highlight a few different properties. Fourteen thousand is a small number compared to the overall portfolio the GSA 

has. Those are the excess properties. Yet, properties like this, properties like the Old Post Office that sat vacant for over a decade, 

the Cotton Annex, many, many others that aren’t even on that list. 

Again, we have a job to do, to sell off these properties, to relocate 

agencies that are in leased space, and we are going to hold GSA’s 

feet to the fire because, as the chairman already said, these properties are not getting liquidated, they are not getting sold, they are 

not getting redeveloped or, in the case of Georgetown, even offered 

up to sale until we hold a hearing. So we will hold as many hearings as it takes to get the best outcome for the taxpayer. 

We have a whole separate issue with these courthouses. I have 

toured many of them across the Nation. Up in New York, we have 

seen courtroom sharing as they are renovating the courtroom next 

door. I am told now that even though they have a new courthouse 

and an old courthouse that is being renovated, rather than utilizing 

that excess square footage for the huge amount of leased space that 

we have in the New York area, they are looking at taking a very 

successful courtroom-sharing model and expanding into space that 

they don’t need. 

Here we have seen the same thing with four courtrooms, four 

buildings, and yet not only overbuilding for excess square footage 

but this one sitting vacant. In L.A., we will go take a look again 

next week to see what GSA’s plan is for that one. But again, wanting to build a new courtroom, a new huge office building when you 

have one that is sitting vacant, one that is sitting underutilized, is 

just a bad use of taxpayer dollars. 

And with that, in conclusion, let me just say obviously I am very 

disappointed that you have an agency that continues to ignore the 

Commander in Chief. The President of this great Nation has issued 

an Executive order, two Executive orders and a memorandum on 

GSA on conferences, on buildings, on saving money for the taxpayer dollars, and yet we have an agency that continues to ignore 

that. 

I am also disappointed today that the new acting director, who 

we continue to give every opportunity to show how things are being 

6 

changed, is not here today. I understand that he couldn’t be here 

last week as well because of a personal family obligation. But let’s 

be very clear, you have had several weeks—we have had several 

months now to notice not only this hearing but the one in Los Angeles, and this committee fully expects the new acting director, 

Dan Tangherlini, to be there. 

With that, I yield back. 

Mr. MICA. I thank the gentleman. 

I am pleased now to recognize Mr. Diaz-Balart. 

Mr. DIAZ-BALART. Mr. Chairman, let me first thank you for this 

hearing, but more importantly for what you have done for Florida, 

for Miami-Dade County, and for the Nation. I think very few people have been as effective in rooting out waste as you have, Mr. 

Chairman. It was one of the distinct honors of my years in public 

service to be able to serve under your leadership in your committee. When I went to the Appropriations Committee, then you 

upgraded by having a much better chairman than I clearly was or 

could have been. 

And you, Mr. Chairman Denham, also for your steadfast leadership. You have been a real champion for the taxpayer. If the American people just were to spend a little time here today and they 

were to see, look at those windows and look at that painting and 

look at the ceiling, this could be the Biltmore Hotel in Coral Gables, but it is not. It is a vacant piece of property that is a national 

treasure. 

It is vacant, so not only is it not being utilized, not only is it 

going into disrepair, but the taxpayers are paying to maintain this 

empty building. Then, of course, it was replaced by a building next 

door that, as the chairman said, was 20 percent overbuilt. 

Now, I wish, we all wish that this was the exception to the rule, 

that this is a weird aberration and this just happens to be this 

weird building somehow that fell through the cracks. It isn’t. This 

is everywhere throughout the country, including, as Chairman 

Mica and Chairman Denham just mentioned, including in the capital of the United States, where you have prime properties that sit 

vacant for years, one next to Georgetown, in Georgetown. But 

again, it is not an aberration. 

I need to thank you gentlemen for the leadership that you are 

providing in trying to stop this throwing away—it is not even 

waste. It is beyond wasteful. It is really beyond wasteful, just 

throwing taxpayer money away while buildings like this sit vacant. 

Again, there is just no explanation. 

Also, your staff, I want to thank your staff. I have had the privilege of working with your staff, and they are among the best on 

Capitol Hill. 

So I am looking forward to listening to our expert witnesses 

today to see why is this not the exception, why is this almost the 

rule, and what steps, specific concrete steps are being taken to not 

only avoid this happening in the future but also to make sure that 

properties like this don’t sit vacant, aren’t costing the taxpayer 

money. 

I am looking forward to their testimony. But I will tell you that 

this is among the most frustrating and infuriating things that one 

witnesses in the Federal Government, when you see buildings like 

7 

this vacant, when you see buildings that are overbuilt, when you 

see buildings where taxpayer money is just being thrown into and 

there is, frankly, no excuse for it, and then to have to hear—and 

I don’t mean to be overcritical, but some of our colleagues even who 

are constantly saying that the Federal Government doesn’t have 

enough money, that we need to raise taxes. Really? 

Come here. Come look at this building. Come look at this empty, 

beautiful building in the heart of downtown Miami. Or go to the 

heart of Washington, DC, and see buildings like this that are sitting empty. As bad as the $20,000 drumsticks are, and they are, 

and it is frankly unacceptable, immoral, even more money is being 

wasted every single day while buildings like this sit empty. And 

then we need to raise money, more money for the Federal Government? We have to raise taxes? For God’s sake, get real. 

I am so grateful to you, Chairman Mica and Chairman Denham, 

for the leadership that you are providing, for making sure that the 

American taxpayer’s money stops being wasted and that buildings 

like this don’t just sit empty year after year. 

I saw, Chairman Mica, that GSA now has advertised that they 

are looking at ways, what to do with this building. How many 

years after this building has been sitting vacant? It is great to see 

that every time your committee and your subcommittee do a hearing, all of a sudden that building that you are highlighting becomes 

interesting, and all of a sudden people realize that it is even here. 

But again, this is not the exception. This is not the exception. It 

is immoral. It is unacceptable. I cannot thank you enough for your 

leadership, and I look forward to the testimony of our distinguished 

panel. Thank you. 

Mr. MICA. Well, thank you again, Mr. Diaz-Balart, for your service on our committee, your leadership as the former chair of this 

subcommittee, and also Mr. Denham, for taking time. Right now a 

lot of folks are away, but you are both actively involved in this 

project to highlight, as we are trying to do, some of the waste, inefficiency, and just lack of attention by a Federal agency. 

In an effort to try to remedy this situation, it is nice to talk about 

things, but we also want a positive accomplishment. We have got 

to find out first how we got ourselves into this situation and then 

find out how we can better utilize taxpayer assets, and to do that 

we have assembled a panel before us today, and I am grateful for 

the three witnesses who have taken time and are appearing today. 

I will recognize them first. Let me introduce them. 

We have first the Honorable Frank M. Hull, circuit judge of the 

United States Court of Appeals of the Eleventh Circuit. We have 

Mr. David Wise, director of the Physical Infrastructure team of the 

U.S. Government Accountability Office. Then we have Mr. John 

Smith, the Region 4 commissioner of the Public Buildings Service, 

General Services Administration. Those are our witnesses. I welcome you. 

The custom before our committee is to present sort of a summary. You probably have some prepared remarks here. You are 

welcome to deviate from them and submit as much information to 

the committee as you wish. So what I will do is I will recognize 

you, then we will hear from all three, and then we will go through 

8 

a little series of questions from Members. That will be the order 

of business. 

So again, welcome, and while I expected a gentleman, we have 

a very distinguished gentle lady and judge from the bench, the 

Federal bench. We are just delighted to have you come, I think, 

from Atlanta today and be with us. 

I guess when you are in a Federal courthouse, you say, oh, I am 

not an attorney, but they always say, ‘‘May it please the court.’’ 

Unfortunately, this situation doesn’t please the court or the taxpayers, or the Congress. So we have got a little bit of a situation 

to deal with, but we are just very grateful that you would take 

time, Your Honor, to be with us and represent the court in this 

matter. 

So I would like to recognize you and welcome you at this time. 

TESTIMONY OF THE HONORABLE FRANK M. HULL, CIRCUIT 

JUDGE, UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT, AND MEMBER, COMMITTEE ON SPACE AND 

FACILITIES OF THE JUDICIAL CONFERENCE OF THE UNITED 

STATES; DAVID WISE, DIRECTOR, PHYSICAL INFRASTRUCTURE, U.S. GOVERNMENT ACCOUNTABILITY OFFICE; AND 

JOHN SMITH, REGIONAL COMMISSIONER, PUBLIC BUILDINGS SERVICE, U.S. GENERAL SERVICES ADMINISTRATION 

Judge HULL. Thank you. Good morning, Chairman Mica, Chairman Denham, and Congressman Diaz-Balart. My name is Frank 

Hull. My mother is Frank, my grandmother is Frank, and my 

great-grandmother was Frank. I come by it honestly. My daughter 

is Molly. 

[Laughter.] 

Judge HULL. Named for my mother-in-law. I am a wise judge. 

As you mentioned, I serve as a judge on the United States Court 

of Appeals for the Eleventh Circuit, which hears appeals from 

Georgia, Alabama and, of course, Florida. Florida is our largest jurisdiction and provides most of our caseload, although we do have 

a significant number of cases from the other two states on appeal. 

However, today I actually am appearing in my capacity as one 

of the members of the Judicial Conference’s Space and Facilities 

Committee. The Judicial Conference is the judiciary’s national policymaking body. 

At the outset, I appreciate the opportunity to appear, but I think 

it is important for me also to stress the Federal courts could not 

do their job without infrastructure, and we cannot do our jobs without the help of this committee. This committee has been very helpful in assuring that we do have adequate courthouses, adequate facilities to handle what has really been a tripling of the caseload in 

the Miami community. 

So I think, particularly to Congressman Diaz-Balart, I want to 

express our appreciation for helping the judiciary be able to handle 

and plan for this growing Miami community caseload. It has tripled 

both in criminal cases and in civil cases, and without the infrastructure, we could not do our jobs. So I sincerely thank this committee at the outset. 

Now, let’s discuss what the issues are today, and I will start with 

the Dyer Building. The Dyer Building, as you know, was built in 

9 

1933. It served the Federal courts extremely well for many, many 

years. But as the caseload grew and we did get a lot of new judges 

in Miami, the Federal district court outgrew this building appreciably. But that wasn’t just the main problem. The main problem 

was security. 

The biggest problem for the district court in this building was 

that there is only one main corridor. Prisoners, the general public, 

and court staff all shared the same corridors. The U.S. Marshals 

Office rated it highly unsafe. There were serious problems. So the 

court outgrew the building, there were significant security problems, and so Ferguson was planned and built. And we moved—that 

is, the Federal courts moved into Ferguson, I believe approximately 

in 2008, Chairman Mica, although I don’t think 1 year matters 

here or there. But the Federal court did move from Dyer into Ferguson in 2008. 

The Federal court’s position is that the decision with regard to 

the Dyer Building is GSA’s decision. So I will spend my time primarily talking about the Ferguson Building. 

The Ferguson Courthouse was planned back in the late 1990s 

and the early 2000 time period. The planning, design, and the construction process took approximately 8 years, and as I said, we 

moved into it in 2008. 

Today, every courtroom and every chamber in the Ferguson 

building is being utilized except for one vacant courtroom and one 

vacant chamber. There is a judge vacancy on that court. This is an 

existing vacancy. It will be filled, and then that new replacement 

judge will be assigned that courtroom. 

In addition, it is very important to point out that we have seven 

active district court judges in the Ferguson Courthouse who are eligible for senior status. They are like me. They are in their early 

60s. They are eligible for senior status at age 65. So we are going 

to have seven new active judges within 3 to 5 years. I am not talking about new judgeships. I am talking about existing judgeships. 

So we are going to have to house, and we will house, the new seven 

active district court judges in Ferguson when those take senior status. 

So what we are doing is we are taking this hearing at a point 

in time, 2012, 4 years after Ferguson has come online. Is it totally 

full? No, it is not totally full today. That is very correct. But what 

do we do? Don’t we need to build for some excess capacity? We 

have built for excess capacity. The building came online in 2008, 

and I suggest to you well before 2018 they will not only be full in 

Ferguson but there will be significant courtroom sharing. We will 

look back, particularly in this day and time of critical lack of resources, and see that this has been good planning—to have Ferguson have some excess space which will be tomorrow’s needed 

adequate space. 

There are two other things. I want to be brief, and I am not 

going through my whole statement, so don’t worry about that. I am 

going to be very brief. We have a lot more data in the statement. 

But there are two things that the judiciary has done to change its 

policies. As a result of the GAO report, we learned a lot. As a result of questions from this committee, we learned a lot. The examination and scrutiny of this committee has been extremely helpful 

10 

to the judiciary, and as a result we have changed some policies, 

and here is one key change. 

When Ferguson was planned, there were no courtroom sharing 

policies. Today, the judiciary has courtroom sharing policies. We 

have adopted them in 2008 for senior judges, for magistrate judges, 

and now we have adopted them for bankruptcy judges. So that is 

a huge policy change and hopefully will make our planning better 

in the future. 

The second big policy change for the judiciary, as a result of all 

of this, has been that we formerly used a caseload methodology. So 

what we did is we predicted Miami will grow. We predicted the 

caseload will grow. If you have a certain amount of new cases, you 

need a new judge. We figured out the number of new judges needed, and then we planned space for new judges. 

We were good at predicting the growth in Miami. We were good 

at predicting the caseload growth. But what we were not good at 

predicting is how many new judges we would get. Congress has not 

created the new judgeships. That is a fact. So we are no longer 

planning for judgeships based on caseload and new judges because 

that has proven to not be workable—we have not gotten them. 

Right now, there is a request for three new judgeships for Miami, 

OK? So that was part of the planning for the Ferguson. But we are 

no longer planning for future judgeships. We are only planning for 

existing judgeships, with some small growth built into a building. 

Also, you don’t want a building 100 percent full the day you open 

the building because it is going to have a 50-year life. 

So I think it is very important that the judiciary has a good 

working relationship with this committee. We are interested, highly interested in the work of this committee. We are grateful for the 

work of this committee, and we have refined our planning policies. 

Lastly, I want to talk about peaks and valleys, and I want to use 

two analogies. One is the power grid, and the other one is the fire 

department. 

The judiciary has to be ready. When there are speedy trial demands, we have to have the courtrooms. We have to be prepared. 

We cannot plan for the power grid for spring when we don’t need 

air conditioning. We have to plan the power grid for peak demands 

in August. We cannot afford to be overwhelmed. We have to have 

places and judges to try the cases. 

So we plan for the peaks. We actually don’t plan for the valleys 

because we have to be able to handle the August peak. 

The fire department is another good analogy. It is not perfect. It 

can be attacked. But even if there is only one fire every week in 

Miami, we don’t just have one fire station. You plan in case, on 1 

day, there are two fires, and that is what happens with us. We are 

providing a valuable Government service. We cannot be overwhelmed. We have to be ready. 

So has our planning been perfect? No, it has not been perfect. 

Have we learned a lot of lessons, and are we going forward with 

a better planning process? The answer is yes. I think it is highly 

appropriate that we build not only for today, which we have done 

in Ferguson, but that we have some growth space. The demographics are that Miami is going to grow 35 percent in the next 10 

to 15 years. It is going to happen again. And as a result of the 

11 

work of this committee and the courts working together, we are 

going to be ready to handle that caseload. 

So I thank you very much, and I am more than happy to answer 

any of your questions. We want to establish a good working relationship with the committee because we have the same interests. 

Thank you. 

Mr. MICA. Thank you, Judge Hull. 

We will turn now to Mr. David Wise, and he is the Director of 

the Physical Infrastructure team of U.S. GAO. 

Welcome, and you are recognized, sir. 

Mr. WISE. Thank you. Chairman Mica, Chairman Denham, and 

Congressman Diaz-Balart, I am pleased to be here today to discuss 

the Federal Government’s efforts to collect data on its excess and 

underutilized real property assets and the need to better and more 

effectively manage these assets. 

In 2004, the President issued an Executive order establishing the 

Federal Real Property Council, chaired by the Office of Management and Budget. The Executive order required the FRPC to work 

with the GSA to establish and maintain a single, comprehensive 

database describing the nature, use, and extent of all real property 

under the custody and control of executive branch agencies, except 

when otherwise required for reasons of national security. 

The FRPC created the Federal Real Property Profile to meet the 

requirements and began data collection in 2005. In 2010, Federal 

agencies reported about 3.35 billion square feet of building space 

to the Federal database, which has a vast portfolio that the Federal 

Government faces substantial management challenges. 

The courthouse where we are sitting today is an example of the 

large challenges facing the Federal Government in effectively managing its real property. 

My statement today will make three main points. One, the Federal Government needs better data and a national strategy to improve Federal real property management. Two, potential cost savings achieved from efforts to improve property management are unclear. And three, agencies still face longstanding challenges to 

managing their real property portfolios. 

The FRPC has not followed sound data collection practices in designing and maintaining the FRPP database, raising concerns that 

the database is not a useful tool for describing the nature, use, and 

extent of excess and underutilized Federal real property. The FRPC 

has not ensured that key data elements, including buildings’ utilization, condition, annual operating costs, mission dependency, and 

value, are defined and reported consistently and accurately. 

For example, we documented buildings reported to the FRPP as 

underutilized even though they were fully occupied. We also documented others that were vacant but reported as utilized. In addition, we observed severely dilapidated buildings that were reported 

as being in excellent condition. At 23 of the 26 locations we visited, 

we identified inconsistencies and inaccuracies related to these data 

elements. As a result, FRPC cannot ensure that FRPP data are 

sufficiently reliable to support sound management and decisionmaking about excess and underutilized property. 

The Federal Government has sought ways to generate cost savings associated with improving management of excess and underVerDate Aug 31 2005 10:15 Oct 15, 2012 Jkt 000000 PO 00000 Frm 00021 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\8-6-12~1\75438.TXT JEAN
12 

utilized properties. However, the potential savings are unclear. For 

example, in response to requirements set forth in a June 2010 

Presidential memorandum for agencies to achieve $3 billion in savings by the end of fiscal year 2012, GSA reported approximately 

$118 million in lease cost savings resulting from four new construction projects. However, the GSA has yet to occupy these buildings, 

and the agency’s cost-savings analysis projected these savings 

would occur over a 30-year period, far beyond the timeframe of the 

Presidential memorandum. 

Even though the cost savings achieved from efforts to improve 

property management are unclear, the Federal agencies that we reviewed have taken some actions to better manage excess and underutilized property, including using these properties to meet space 

needs by consolidating offices and reducing employee work space. 

As we reported and testified in the past, Federal agencies still 

face longstanding challenges to managing these properties. These 

include the high cost of property disposal, legal requirements prior 

to disposal such as those related to preserving historical preservation and the environment, stakeholder resistance, and remote property locations that are difficult to sell or dispose. 

To address these concerns, we recommended that OMB, in collaboration and consultation with FRPC member agencies, develop 

and publish a national strategy for managing Federal excess and 

underutilized real property. In addition, we also recommended that 

GSA, in collaboration and consultation with FRPC member agencies, develop and implement a plan to improve the FRPP consistent 

with sound data collection practices, so that the data collected are 

complete, accurate, and consistent. 

This concludes my prepared statement. I would be happy to answer any questions from the committee. 

Mr. MICA. Thank you, and we will hold questions until we have 

heard next from Mr. John Smith, who is Region 4 Commissioner 

of the Public Building Service of GSA. 

Welcome, sir, and you are recognized. 

Mr. SMITH. Thank you, Mr. Chairman. Good morning, Chairman 

Denham, Chairman Mica, Congressman Diaz-Balart. My name is 

John Smith. I am the Regional Commissioner for the GSA’s Public 

Building Service in the Southeast Sunbelt Region. Thank you for 

the opportunity to join you here today at the David W. Dyer Federal Building and United States Courthouse, a property GSA will 

be repositioning and one that highlights the unique challenges of 

moving real property. 

The administration has set aggressive goals to better utilize Federal real property, and GSA’s Southeast Sunbelt Region is doing its 

part to help achieve savings on behalf of the American taxpayer. 

In GSA’s capacity as one of the many landholding agencies, we 

supply office space to other Federal agencies in support of their 

mission. GSA has a robust asset management program to track the 

utilization of our inventory, strategically invest in our assets, 

where needed, and aggressively dispose of unneeded assets. 

Following the President’s memorandum entitled, ‘‘Disposing of 

Unneeded Federal Real Estate,’’ which charged civilian agencies to 

utilize space, reduce operating costs, and dispose of unneeded property more effectively to save $3 billion by the end of 2012, GSA has 

13 

played a role in both generating savings from its own real estate, 

as well as helping other agencies to find savings. The administration recently announced that the Federal Government will not only 

meet but will exceed this $3 billion goal. 

While GSA has a large real estate portfolio to manage, the broader Federal Government portfolio is far more extensive. Of almost 

900,000 buildings and structures reported in the fiscal year 2010 

Federal Real Property Profile, GSA controls 9,400 of these assets. 

GSA’s Southeast Sunbelt Region is responsible for 1,500 of these 

assets. 

As a result of our efforts, GSA leads the market with our vacancy 

rates and utilization; 3 percent of our portfolio has been classified 

as an under or not utilized asset. In the Southeast Sunbelt Region, 

2 percent of our portfolio is under or not utilized. Although we 

work diligently to identify unneeded assets for disposal, it is important to note that not all properties labeled as underutilized are 

available for sale. For example, some underutilized assets can be 

buildings under renovation. When we find underutilized space in 

areas where there is a continuing Federal need, GSA works aggressively to renovate and reuse the asset to achieve greater utilization. 

In the Federal Real Property Profile, GSA identified 124 assets 

as excess to our own agency’s needs and began the disposal process 

for these assets. Of those 124 assets, the Southeast Sunbelt Region 

had only 1. 

Our low numbers of underutilized and excess assets are a testament to a major restructuring in our portfolio implemented over 

the past decade aimed at right-sizing our real estate portfolio. In 

the last 10 years, we have disposed of more than 280 GSA assets, 

valued at over $260 million. Thirty-four of these assets were from 

the Southeast Sunbelt Region, generating almost $25 million. 

One example of a recent disposal in the Southeast Sunbelt Region is the James O. Eastland Federal Building and Courthouse in 

Jackson, Mississippi. The Eastland Federal Building, which has 

115,000 gross square feet of office space and related space and is 

situated on 1.5 acres of land, was listed in the National Register 

of Historic Places in 1976 as a contributing property to the Smith 

Park Architectural District. The property was sold through an online auction for about $1.4 million, and was conveyed to a local 

Jackson, Mississippi developer, David Watkins, on March 1, 2012, 

to be transformed into an institute for the arts. 

Today, the committee has chosen to host a hearing at the historic 

Dyer Courthouse, a property for which we are actively exploring 

repositioning strategies. The Dyer Courthouse was constructed in 

1933 and listed in the National Register of Historic Places in 1983. 

Until 2008, the building was substantially occupied by the courts 

and court-related activities. 

In 2008, GSA completed construction of the new Wilkie D. Ferguson U.S. Courthouse, and tenants of the Dyer Building vacated 

to occupy the newly constructed courthouse. As part of GSA’s efforts to right-size the portfolio, and in accordance with the direction 

provided by the administration on disposing of unneeded real estate, GSA intends to reposition this property in the near future. 

14 

On August 1, 2012, GSA issued a Request for Information seeking ideas from members of the development community interested 

in redeveloping and preserving this property. Developing a strategy 

to reposition the courthouse will not be without some unique challenges. The utility infrastructure, parking lot, courtyard and tunnels are shared with its adjacent property, the C. Clyde Atkins 

U.S. Courthouse, and the cost to separate connections and create 

two separate stand-alone operations is estimated to be in excess of 

$10 million. GSA will look at all potential repositioning strategies 

and engage the private sector to find the strategy with the highest 

chance of success and the highest return to the taxpayer. 

As one of many landholding agencies in the Federal Government, 

GSA continues to manage our inventory aggressively to dispose of 

unneeded properties and increase the utilization of our buildings. 

We continue to work in concert with the administration and other 

landholding agencies in the Government to utilize real estate more 

effectively. 

The Southeast Sunbelt Region is pleased to be able to assist with 

these efforts. The Dyer Courthouse is one property that helps highlight the challenges of developing long-term asset strategies in 

changing fiscal times, and the unique characteristics of the property that can present hurdles to repositioning. GSA looks forward 

to finding the best strategy to reposition this property and working 

with the committee to continue our efforts to utilize Federal real 

estate more effectively. 

I welcome the opportunity to be here, and I am happy to answer 

any questions. 

Mr. MICA. Thank you, and I thank all three of our witnesses. 

We will now turn to questions, and I am going to yield first to 

Mr. Denham, Chairman Denham. 

Mr. DENHAM. Mr. Smith, why do you think we are having this 

hearing today? 

Mr. SMITH. Sir, I believe we are attacking the problem of 

unneeded real estate. 

Mr. DENHAM. I just heard your testimony. It sounds like we don’t 

have a problem. I mean, if GSA is doing everything great, which 

this is the first time I have heard anybody in front of this committee that has taken that position, if you are actually going to hit 

at least $3 billion and GSA is following each of the Executive orders that the President has laid out, it would appear that there 

would be no reason to have this hearing. 

You talk about aggressively disposing of property. When did this 

property go up for evaluation? 

Mr. SMITH. Sir, this property was vacated in 2008, and at the 

time we were looking for design money to relocate costly leases 

back into this facility. 

Mr. DENHAM. OK, so 2008. It is 2012. Four years. Is that aggressively disposing of property? 

Mr. SMITH. Sir, the region did aggressively request funding all 

the way through recovery because the idea of being able to take 

some of the 3 million square feet of lease space here and consolidate it into this facility still had applicability. We did not receive 

the funding for that. And after the Recovery Act, then we started 

to move to another disposition. 

15 

Mr. DENHAM. You received nearly $6 billion in stimulus dollars. How much more money do you need beyond the $6 billion? 

Mr. SMITH. Sir, it wasn’t enough to prioritize every building, and 

the Dyer did not receive the prioritization there. 

Mr. DENHAM. OK. I am going to go through these really quickly 

here because my main questions were for Mr. Wise and Mrs. Hull. 

The Old Post Office in Washington, DC, how long did that sit vacant? 

Mr. SMITH. I don’t have the information on that, sir. I believe—— 

Mr. DENHAM. Well over a decade. I will tell you, well over a decade. To me, that is not aggressively disposing of a property. 

The old Cotton Annex in Washington, DC, which we held a hearing there as well, sat for over 5 years. That is not aggressively disposing of property. And the Georgetown power plant, which took us 

having a hearing in before they even put up a For Sale sign is not 

aggressively disposing of property. So let me ask you one last question before I switch. 

Three billion dollars. You are going to hit a $3 billion number, 

which was the President’s goal. Where are you coming up with the 

$3 billion number? Is that just in disposal costs in fiscal year 2012? 

Mr. SMITH. Sir, GSA has its own number. We aren’t making the $3 billion. We are helping other agencies with that. I don’t have all 

the details on exactly what costs were counted with that. I do know 

we have aggressively looked at every cost that we have and included specific costs within the facilities that we will be saving 

money on. 

Mr. DENHAM. Is it money coming back into the Federal Government to reduce our debt, or is it cost avoidance? 

Mr. SMITH. My understanding is that it is a combination of both. 

Mr. DENHAM. And during that same time period, this year, 2012, did we also enter into a lease for $500 million for the SEC, and 

now most recently a $350 million lease for unneeded space up in 

New York? 

Mr. SMITH. Sir, those are outside of my region, so I can’t—— 

Mr. DENHAM. They are not outside of mine. This committee is 

looking at all of them. So I take great offense when somebody sits 

here in front of this committee and says things are going great, because they are not. The conference that was held this week, the 77 

conferences that have happened since the President issued his Executive order, the $1 million conference that happened in Las 

Vegas last week, and now to see an agency going around Congress 

and signing a $350 million lease when it breaks three different 

laws within our Constitution, to me that is not aggressively disposing of property. To me, that is offensive as a committee chairman that an agency is not only going to ignore Congress and ignore 

this committee, but ignore the Commander in Chief. So I don’t believe the $3 billion is a real number. In fact, I think 

that GSA is going backwards on a number of these different issues, 

doing illegal leases and doing leases that are putting the taxpayer 

on the hook for money we don’t have. 

Mr. Wise, the $3 billion that is being talked about as being saved 

this year, is it a 2012 savings? 

Mr. WISE. Well, Congressman, as I mentioned in my statement, 

the whole issue about savings is one that is very difficult to quanVerDate Aug 31 2005 10:15 Oct 15, 2012 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\8-6-12~1\75438.TXT JEAN
16 

tify with certainty because, as we discussed in our Excess and Underutilized Property report, we found that agencies were counting 

many different things as savings. As you mentioned in your question, some of it had to do with cost avoidance, and as I mentioned 

in my statement, the GSA goal, nearly half of it has been quantified as saving money from leases for new buildings constructed 

that they haven’t moved into. 

Mr. DENHAM. Let me simplify my question. To me, a savings is 

I can take money and I can put it in the bank for a rainy day or 

I can pay off my loan. We have a huge debt right now. In fiscal 

year 2012, is there money that has been generated from liquidation 

of properties that can reduce our current debt by $3 billion? 

Mr. WISE. Well, we simply don’t—we weren’t able to tell from the 

information that we were able to gather from GSA. We only were 

able—— 

Mr. DENHAM. How many properties have been sold this year? 

Mr. WISE. For GSA, I don’t have that answer right now. 

Mr. DENHAM. $3 billion worth? 

Mr. WISE. Well, it is impossible to know based on what they told 

us. We only have the figure that they gave us for the amount of 

money that they said they are saving relative to the Presidential 

memorandum, and they were not very forthcoming in trying to give 

us details about that information. 

Mr. DENHAM. Mr. Wise, if you don’t know, and Mr. Smith doesn’t 

know, how can the President know that his Executive order was 

actually met, and how can he prove that to the taxpayer? 

Mr. WISE. Well, that is why we stated in our report very clearly 

that the savings are questionable. We aren’t really able to say with 

certainty whether they all add up. We just couldn’t get the information, and there were many different agencies counting many different ways of savings in order to say that they were reaching this 

goal. 

Mr. DENHAM. Thank you. 

Ms. Hull, let me just address one last question before I turn it 

back over to the gentleman to my left. On this courthouse, I have 

huge concern about this courthouse because of what it means to me 

in my home State of California, seeing L.A. open a new courthouse 

or build a new courthouse when we have a similar situation of less 

judges now than we did 10 years ago, and having currently two 

courthouses, one sitting vacant and one that has excess room. I 

have some questions that are relative to this courthouse here. 

I agree with you. I am a business owner. I look at a 5-, 10-year 

projection. You have had to deal with Congress and the amount of 

judges they said they were going to have. I understand that you 

have to build a suitable size for the future. So my question is not 

necessarily should they have built a building that is 20 percent vacant right now, or 20 percent beyond what was currently needed. 

I get that you have a plan for the future. 

My question is, if they have 3 million square feet of leased space 

in the local area, just like in L.A. they have over 1 million square 

feet of leased space, why wouldn’t we have filled that space for the 

last 4 years so that it is 100 percent occupied? 

Judge HULL. Are you talking about space leased to the judiciary? 

I don’t think that is leased to the judiciary. 

17 

Mr. DENHAM. No, no. It is not. I am saying that they overbuilt 

the—— 

Judge HULL. I can only speak for the judiciary space. 

Mr. DENHAM. The question is could they have co-located the FBI 

or the bankruptcy court, or is there any other tenant out of the 3 

million square feet that are in this local area that could have filled 

that? 

Judge HULL. OK, I just wasn’t understanding your question. 

That could have been placed where, Congressman? 

Mr. DENHAM. In the 200—is it 238,000 square feet that is sitting 

vacant in the new building? How much vacant space is sitting in 

the new building? 

Judge HULL. I would be happy to tour you through the building, 

but it has been filled out. It has chambers and courtrooms, and for 

future planning we have two shell courtrooms. So it is just the 

walls around the courtroom. That is one thing we have done with 

planning. Don’t build up that courtroom until you have that judge. 

So it is—— 

Mr. DENHAM. It is a shell. 

Judge HULL. It is a shell. Thank you. I appreciate all the help 

I can get. 

Mr. DENHAM. This is the 10th floor of the Ferguson Building? 

Judge HULL. Help me with the question. I am sorry. I am not 

trying to avoid it. I am trying to answer it. I am just not understanding it. 

Mr. DENHAM. Well, my point is, if the 10th floor of the Ferguson 

Building, which has the possibility to build four new courtrooms, 

if it sat vacant, if it is just a shell for the last 4 years, why couldn’t 

we have put office space in there and housed other employees from 

other agencies from around the area? 

Judge HULL. I think it is just a cost-benefit analysis that has to 

be done, which is beyond my pay grade, frankly. If you are going 

to build an annex to have more courtrooms, and then you build out 

interiors for office space in the two shelled courtrooms, you will 

later have to deconstruct that and build the courtrooms again. 

Also, I think there are security concerns. There is a high level 

of security in that courthouse. There are multidefendant trials 

here. I don’t want to take a lot of your time documenting all that. 

But I am looking at the 10th floor. Judge Martinez is an active 

judge. He has a full caseload. He is on that floor. We do have two 

shell courtrooms. You are correct there, and that is a question, 

should you put another tenant there while you wait for it to be 

built out. I mean, that is a fair question. 

But I believe the determination has been made that, in a costbenefit analysis, that moving people in, moving people out and so 

forth, you would be destroying the space to then build a courtroom 

and chambers, and I think the building would have to be redesigned. You would want them to come in on the ground floor. If you 

were going to have tenants in a courthouse, you would want to put 

them on the first couple of floors, and then the court up above. You 

wouldn’t want to put them right in the middle of the building. 

Is that responsive? 

Mr. DENHAM. Thank you. 

18 

Judge HULL. It may not be a good answer, but I want to be responsive. 

Mr. DENHAM. It is an answer. 

Judge HULL. I want to be responsive. 

Mr. DENHAM. Thank you. 

Mr. Wise, can you give us a brief response to that question? 

Mr. WISE. Yes. First of all, I would like to thank John very much 

for making his staff available yesterday, on Sunday, so we got a 

very comprehensive look at the entire facility around here, the various courthouses, including Dyer and Wilkie Ferguson. 

But relative to your question about Ferguson, in our view and as 

we testified in the past, Ferguson doesn’t appear to be full. As the 

judge noted in her testimony, there are two shell courtrooms, plus 

there is one courtroom that is not being used, and there are also 

two senior judges that have a very limited amount of cases that 

they actually hear. 

So from the perspective of current, notwithstanding what may 

happen in the future, it certainly doesn’t appear to be full at this 

point. 

Mr. DENHAM. I am out of time here, but I just wanted to clarify. 

There is excess space. There has been excess space for 4 years, and 

you do believe that some tenant, out of the 3 million square feet 

that is leased here in the greater Miami area, that some tenant we 

could have found to put in there for the last 4 years. Is that fair? 

Mr. WISE. You are asking me? 

Mr. DENHAM. Yes. 

Mr. WISE. As far as what tenant could come in here, I can’t speculate, but I can say that it doesn’t appear that the Ferguson Courthouse is full. 

Mr. DENHAM. Thank you. 

I yield back. 

Judge HULL. And I can only say it is going to be filled sooner 

rather than later. That is clear. There is one vacant courtroom 

there, but there is a vacancy on that court, and there is a replacement judge coming. Again, there is excess capacity there, Chairman Denham. We are not running away from it. 

Mr. DENHAM. I understand. 

Judge HULL. OK. It is for future growth. 

Mr. DENHAM. I understand. We need to make good decisions as 

we are growing, and certainly as we are building. My greater concern is that this is not a Miami issue, that this is a GSA issue that 

goes countrywide. We are facing the same thing in L.A. and New 

York and many other big cities around the Nation. 

So my concern, while it is still a concern to have that vacant 

space there for the last 4 years, obviously we are holding the hearing here because this is a problem. Much like in California and 

L.A., we have an empty building like this, and we have a newer 

courtroom that has levels of that facility that are sitting vacant, 

and GSA wants to go outside of Congress to build a brand new 

courthouse next door. 

So the question goes way beyond the brand new courthouse that 

has levels that are sitting empty. The question is why aren’t we 

selling off the older one, the historic building, or redeveloping it, 

or utilizing it for some type of benefit to the taxpayer, rather than 

19 

just letting this one sit and not only cost us over $1 million a year 

but getting mold in the process? Let’s build a community. Let’s create jobs. And let’s lower our debt in the process. 

I yield back. 

Mr. MICA. Mr. Diaz-Balart. 

Mr. DIAZ-BALART. Thank you, Mr. Chairman. 

Let me thank the three of you for being here today and, Your 

Honor, for traveling here from outside. Thank you for your service 

to the country. 

Let me thank Mr. Wise. I know that the GAO, sometimes you 

must feel that people aren’t listening, but Congress is so appreciative, and these three members here are so grateful for the job 

that you do, and all your folks do, day in and day out. 

And Mr. John Smith, again, thank you. As Mr. Wise has said, 

even for allowing your people to be around on Sunday. Again, 

thank you for being here. 

Before I start my line of questioning, I am a little bit confused 

about the Ferguson Courthouse. Is there sharing, or is there not 

sharing? Mr. Wise, from what I hear from our side here, there is 

no sharing in the courthouse. Is that correct? 

Mr. WISE. Yes. My understanding is there is currently no sharing. 

Mr. DIAZ-BALART. Right, and that—— 

Judge HULL. Absolutely, that is correct. 

Mr. DIAZ-BALART. OK. 

Judge HULL. That is what I think I said in my statement, or I 

tried to. 

Mr. DIAZ-BALART. All right. I just wanted to make sure I heard 

that right. Thank you. 

Judge HULL. Yes. It wasn’t planned at the time the judiciary had 

those policies. The first sharing policy was in 2008. 

Mr. DIAZ-BALART. Mr. Chairman, why don’t you—I will always 

yield to the chairman. 

Mr. MICA. Well, I thought you had said that at the circuit level 

you were sharing? 

Judge HULL. The circuit is in the King Building, Chairman Mica, 

and there is sharing. Because of the nature of a circuit court, we 

sit with judges 3 at a time, and we have only 1 courtroom in 

Miami, and all 17 judges share that one courtroom. But the work 

of the circuit court is vastly different. 

Mr. MICA. OK. Thank you. 

Judge HULL. But there is considerable sharing. All the circuit 

judges not only share that courtroom, but we share chambers. 

Mr. MICA. But it is not possible to do it in—— 

Judge HULL. Not in the way the circuit court does. The district 

court operates totally different. 

But let me be clear, we are committed going forward in our planning process to courtroom sharing, and I think Congressman DiazBalart makes a very good point. Right now in Ferguson, there is 

not sharing. We are going to have seven active judges take senior 

status. We are going to have continuing increases in caseloads. We 

have one vacancy. We are going to have a replacement judge for 

sure. Down the road for these buildings, I suggest it is not going 

to be long, before they are going to be over capacity. 

20 

But today, there is not sharing at this point in time. 

Mr. MICA. I thank the gentleman for yielding. 

Mr. DIAZ-BALART. Thank you, Mr. Chairman. 

Judge Hull, you mentioned in your testimony that the Ferguson, 

the new courthouse, was constructed to replace this courthouse, the 

Dyer Courthouse. But in the prospectus submitted to this committee in 2001, it indicates that this building was going to be continued to be used. Specifically, that proposal for the Ferguson 

Courthouse asserted that the Dyer Building would house one district judge, one magistrate judge, four bankruptcy judges, the Public Defender’s Office. So clearly at the time, it didn’t sound like a 

replacement. It sounded like basically expanding this space. 

Now, you mentioned, and it makes a lot of sense, obviously, 

about the security issue, and we all understand that. But if that 

is what was stated before in the prospectus, that those entities that 

I just mentioned were going to be housed here, then why did this 

building, why was it totally vacated when that is not what was 

stated as the justification for the new building? 

Judge HULL. Well, I can directly answer that. 

Mr. DIAZ-BALART. Good. 

Judge HULL. The Federal district trial court moved to Ferguson 

because that is where you have all your major—well, all the criminal trials. And the plan at that time, as I understand it, not being 

involved in it but trying to study the record in preparation for this 

hearing, was that we were going to backfill Dyer. The backfill was 

going to require some renovation money, and the renovation money 

was requested in 2004 and in 2007, and it was not funded. 

Now, whether that is right or wrong, I don’t speak to that. But 

you are absolutely correct. The original plan was to backfill Dyer, 

to bring public defenders in here, to have very limited but I would 

say some trial space for a district court, and to bring the bankruptcy judges here, because they don’t have the criminal security 

issues, and that has not happened. 

The bankruptcy judges have stayed where they are. They haven’t 

been moved. And as I understand it—I will have to check with my 

legislative counsel here to make sure I am correct—but I believe 

money was requested by GSA to backfill in 2004, in 2007, and now, 

because of courtroom sharing, we don’t need to backfill here, OK? 

So we have King and Atkins and Ferguson. Those are all very 

good facilities, and they will serve this community, I believe, well, 

thanks to your help in getting those facilities. 

Mr. DIAZ-BALART. Great. And again, Your Honor, I understand 

that you are dealing with—— 

Judge HULL. And this is a moving target, and I am trying to be 

responsive. 

Mr. DIAZ-BALART. Trust me, we understand that. 

Judge HULL. OK. 

Mr. DIAZ-BALART. So don’t worry about that. We understand 

that. 

Judge HULL. OK. 

Mr. DIAZ-BALART. I think we understand where you are at. 

Mr. Smith, the GSA’s press release for the RFI boldly states, 

‘‘GSA seeks ideas to develop the Miami Courthouse.’’ That is now, 

after 5 years. I am assuming that is not the first time that was 

21 

done. Has GSA itself done evaluations as to what would be best for 

the taxpayer, number one? And number two is, when were other 

RFIs submitted, and how were they submitted, and did you not get 

a response for those or what? Or were they not submitted before? 

Mr. SMITH. Sir, I believe this is the first RFI we have done for 

the Dyer Building. It is a—it is not a common practice, but it is 

used with disposal process throughout the Nation. 

The other efforts and the reason we don’t have RFIs coming out 

earlier is we had requests in for design money and construction 

money, and as the judge explained, there were previously plans to 

backfill this space. If we couldn’t backfill it with judiciary or other 

courts, then we have enough lease space in the Miami area that 

we would have consolidated those into this area as well. 

The problem with that is we did have some authorization for design. We didn’t get appropriation for design. We also looked to our 

central office to fund several times into this building because we 

do have adequate space here, but it does require several million 

dollars to build it out for other tenants. 

Mr. DIAZ-BALART. Mr. Smith, I have to admit to you that I 

thought I was throwing you a softball. I mean, I really did. I 

thought, well, obviously, there have been other RFIs before this, 

that this is not the first one, and I really thought that I was throwing you a softball. Now I will tell you that I am almost speechless, 

which is rare for me, that all of a sudden—— 

Mr. DENHAM. It is rare. 

Mr. DIAZ-BALART. It is rare, as my colleagues will tell you. So the 

day that the hearing is here is when, all of a sudden, the RFI goes 

in. Now, we are finding that as we go across the country. I, frankly, 

am speechless. I am absolutely speechless. 

Now, I keep hearing the fact that, well, there is an issue of funding. Look, it was fully authorized. How do I put this kindly? Six 

billion dollars is real money. GSA was given an additional—$5.9. 

I stand corrected. GSA was given an additional $5.9 billion with, 

frankly, a lot of flexibility. So it was authorized. Out of the blue, 

GSA is given an additional $6 billion, additional. It is hard to keep 

hearing that, well, the money wasn’t there. 

And again, I have to tell you this, Mr. Chairman, both chairmen, 

when I saw this, I figured, OK, this is kind of a reminder of—the 

committee is here, so it is a reminder to GSA to do this RFI. Now 

when I hear that this is the first time this has been done since this 

building has been vacated is unbelievable. 

Can you imagine if this was in private hands? I mean, this looks 

like the Biltmore. We could be in one of the ballrooms of the Biltmore, except for this furniture. And it took this long for the GSA 

to even move forward? 

With all due respect, sir, I am almost speechless, I really am. 

During the last 5 years, has GSA looked—are there any internal 

studies or reviews or evaluations completed by GSA in the last 5 

years for either selling or re-using or developing this building? 

Mr. SMITH. Yes, sir. The initial plan was to try and relocate 

leases into this building. When that fell through, we also tried to 

determine—the complexity of this is that the power plant for this 

building powers the Atkins Building. It is expensive, and I said in 

22 

my statement it is at least $10 million to separate the utilities for 

these two pieces. 

This is an historic building, it is a national treasure, and it needs 

to be preserved as well. One of the issues with the disposition of 

it is the security and the separating of the utilities, which makes 

it rather difficult. 

Mr. DIAZ-BALART. I understand that. But again, the RFI was released whenever—I mean, this week? Last Friday. With all those 

technical issues that you are telling me about, this was done just 

last week, which is, frankly, crazy. 

Going back to Chairman Denham’s question, I guess there are 

Government agencies that lease properties here in south Florida, 

in the Miami area? 

Mr. SMITH. Yes, sir. We have a little over 2.5 million square feet 

of lease space. 

Mr. DIAZ-BALART. 21⁄2 million square feet, which we are paying 

for, the taxpayers are paying for the leased property, when we have 

this vacant building. 

How aggressive was the effort to try to relocate? If you tell me 

now that it is a lack of money, again I go back to the $6 billion. 

That may not sound like a lot to the Federal Government, but $6 

billion of additional, over-the-top money just parachuted in, that is 

real money. 

So can you explain to me how aggressive, what was done to try 

to get those other agencies that have properties that are being 

leased throughout the county to come here once you got the $6 billion? What was the effort to try to get part of that $6 billion to do 

that? 

Mr. SMITH. Sir, GSA prefers to have its tenants in owned buildings, and we are very aggressive in moving toward that, and we 

have been for a number of years with our portfolio restructuring. 

It is the preferred avenue. It is cheaper for us, and we know in the 

long term it is better to own than to lease, unless there is a shortterm requirement. 

The recovery funds were prioritized throughout GSA, and we did 

a lot of great work with that $5.9 billion. Dyer did not fall into the 

priority of that. But it is our effort and we had attempted—the region requested funding, and we fought hard for it at the central office for it to be prioritized in that manner. But there were a number of needs beyond just what we had here, and we didn’t prioritize 

high enough on that list. 

Mr. DIAZ-BALART. Judge Hull, let me ask you this. You mentioned in your testimony that the judiciary no longer occupies this 

building and it is up to GSA to determine what to do with it, and 

nobody is denying that. Do you know, does the court have a process 

to actively consider what is going to happen with the building that 

is being vacated, as opposed to just GSA is going to deal with it? 

What role does the court, if any, have in that, and should it be 

more involved in that, with once it vacates a building which, in essence, it occupied for a long time? Or is that, frankly, just basically 

no, folks, stay away, that is GSA’s responsibility and we will deal 

with it? Do you know how that plays out? 

23 

Judge HULL. Well, I think the court does try to work hand in 

hand with GSA. They are our landlord. We are the tenant. We try 

to work together. 

As I mentioned earlier, there was a plan. Yes, we do try to consider what we are going to do when we vacate something. Are we 

going to immediately turn it back over so it can be leased? That 

happens. Are we going to use part of it and lease part of it? That 

happens. 

The plan here was to backfill it with some court usage, but then 

the funding did not occur. I don’t know what else to say. Plus, we 

learned a lot about planning. We adopted courtroom sharing policies. So that has impacted everything. We have adopted a different 

methodology for planning. 

So, yes, we try to work with GSA. We did for a few years work 

with them trying to get some money for remediation here, but we 

were not successful. So what I am saying at this point in time— 

not from the get-go, but this point in time—yes, it is now a decision 

of GSA. I hope that is helpful. 

Mr. DIAZ-BALART. Thank you. Yes, absolutely. 

Thank you, Mr. Chairman. You are being very generous in allowing me to ask this many questions. 

Mr. Smith, the committee has identified a number of buildings 

during its investigation that are either vacant or underutilized, and 

yet, as the chairman said, that are not listed as such in GSA’s 

database. The Cotton Annex in DC, it has been vacant for 5 years, 

but it is not listed. This vacant building has been listed as mission 

critical. Can you explain that? 

Mr. SMITH. Sir, the Federal Real Property Profile, which these 

properties are listed in, is a snapshot in time. It is an annual report, and it may or may not be accurate from 1 year to the next 

because of dispositions that happen. I believe this would have been 

listed as mission critical with our efforts to consolidate leases into 

this facility because we had plans for it, and that is probably the 

cause for that listing. 

Mr. DIAZ-BALART. Thank you. 

I yield back, Mr. Chairman. Thank you very much. 

Mr. MICA. Thank you. 

A couple of questions. The first is to Mr. Smith. 

It has actually been known since 2001 that this property would 

be vacated. It took several years to construct the building. Prior to 

2007, I guess, it was finished, and they moved into the other building. Do we have a requirement that we have a utilization plan for 

buildings that are going to be vacated and we know far in advance? 

Mr. SMITH. Sir, I believe the design funds had been requested 

prior to the courts moving out of this building. 

Mr. MICA. So, actually, we go beyond the 5 years. We are probably looking at 7 years or more in which they had an opportunity 

to do something with this building. Is that right? 

Mr. SMITH. I didn’t have this portfolio then, sir, but we do ask 

for a—— 

Mr. MICA. Well, 5 plus 2 would be 7 at least. 

Mr. SMITH. We do ask for funding prior to buildings being vacated. 

24 

Mr. MICA. And we heard that substantial funding, $5.9 billion, 

with great discretion was made available to renovate buildings, and 

nothing was done with this building to get it ready to be utilized 

for leasing or whatever. Is that correct? 

Mr. SMITH. It didn’t fall high enough in the priority. A number 

of buildings that we had did not fall into those priorities. 

Mr. MICA. Well, here again you testified—our staff says we have 

$2.5 to $3 million worth of leased property in south Florida, and 

then you just said a few minutes ago that it is your policy and it 

is better to own rather than lease. Does the Federal Government 

have title to this property? 

Mr. SMITH. Yes, sir. And that—— 

Mr. MICA. Does that constitute ownership? 

Mr. SMITH. Say again, sir? 

Mr. MICA. Does that constitute ownership, if we have title to this 

property? 

Mr. SMITH. Yes, it does. 

Mr. MICA. Yes, that is pretty obvious. And we would save money 

if we could be utilizing this building, as opposed to paying some 

landlord since we own it, right? 

Mr. SMITH. Sir, we can’t just move people directly into a facility. 

Mr. MICA. No, and you can’t move people into this building. I 

mean, this is a very sad day for the taxpayers because this building 

has sat vacant for 5 years. It has also cost the taxpayers at least 

$1.2 million a year. That is $6 million. I started off and all the attention has been on a quarter-of-a-million-dollar conference, another one three-quarters-of-a-million, and that is huge waste, significant waste. But here, that totals $1 million. We have wasted $6 

million in maintaining this building, and not maintaining it very 

well, because I know the day that people left here, the mold and 

the other conditions were not the way they are today. Is that correct? 

Mr. SMITH. Sir, we put as much effort as we can to minimize the 

operational cost, and to preserve assets like this, and the Congress 

has been very supportive of us to do that. 

Mr. MICA. This is an historic building and it has value. Actually, 

it is in a lot better shape. I was a developer. I could get this building leased and operational with some revenue. I mean, Miami is a 

very competitive—Florida is a very competitive market for commercial or professional space, and it has value, but it sat here vacant 

costing, again—this is $6 million. Unfortunately, this is a repeated 

pattern from sea to shining sea. We will be in Los Angeles next 

week. We just did three in Washington, DC. We could do one a day 

probably for a month in Washington, DC. 

So it is a very, very sad day. It has been a very sad 5 years that 

we would let an historic building further deteriorate to the condition of this building. And it is a beautiful historic building. I 

walked around it today and examined it, so I am very concerned. 

Let me ask you a question. This might get a little personal. Did 

you get a bonus, any of the bonuses from GSA? 

Mr. SMITH. Yes, sir. 

Mr. MICA. You did. So you got a bonus. Can you tell the committee how much they gave you a bonus? 

25 

Mr. SMITH. I would have to get back to you, sir. I don’t recall the 

exact amount. 

Mr. MICA. A guesstimate? Is it $5,000? $10,000? 

Mr. SMITH. It showed up in my paycheck. I don’t really pay much 

attention to it. It is not what motivates me to do this job. 

Mr. MICA. Well, again, someone else made the decision on you 

getting the bonus, in contravention to the Presidential edict. It is 

just like everything else with GSA. We have fought, Mr. Denham 

and I, from the week we took over a year-and-a-half ago, the very 

first hearing. We knew something was wrong when the administrative costs of GSA had ballooned 300 percent in a year, and we 

asked for information on what they were doing with the money. 

They gave us back single sheets and one-line answers. It took investigations from the Inspector General’s Office, and finally, even 

after stonewalling time and time again, we finally got some information on one outrageous conference with the notorious Mr. Neely 

in his hot tub, thumbing his nose at the committee and the Congress. That took us, what, Mr. Denham, over a year, a year-anda-half? Well, not a year-and-a-half. A year and 2 months. 

So we are very frustrated. I am frustrated on the bonuses. We 

asked questions. Our investigators, some of them here today, asked 

questions about the bonuses that were given. They said $10 million 

to our committee and our staff. Thank God for the press. They 

asked for a Freedom of Information request before ours about the 

same thing and found another $33.5 million in bonuses, a total of 

$43 million in bonuses, and you got one. It turns out GSA has 1 

percent of the Federal employees. How many employees, staff, 

12,000 or 15,000? Thirteen thousand, 1 percent of the Federal employees, and you all got 10 percent of all the bonuses, which were 

not even allowed by an edict of the President of the United States. 

Now, you begin to wonder who is in charge when you see a magnificent structure like this sitting idle, people getting bonuses, and 

assets in the billions of dollars across the United States—and we 

are supposed to be trustees for the taxpayers—going to rot, or mold 

in this instance. And you told me, Mr. Smith, you told the committee—let me see. What was the amount you told the committee 

that you were talking about, what you disposed here? Thirty-four 

properties, $25 million; is that right? 

Mr. SMITH. I believe that is correct, sir. 

Mr. MICA. In your region, that you see. Twenty-four million is 

nothing. It is astounding. They must have been pretty small parcels and not very good deals for the taxpayers. 

But just on a regional basis, there are thousands in every one— 

how many regions are there? 

Mr. SMITH. There are 11 regions. 

Mr. MICA. Eleven regions. Well, then I am right, we are probably 

in the 1,000-plus properties. But don’t worry, folks, we got rid of 

34, and we brought in $25 million for the taxpayer. Man, we are 

really on our way. 

Thank you for highlighting this. It is astounding. 

Mr. Denham, you know, we did this little thing at the power 

plant, the Power Building, a beautiful building in Georgetown. 

They put that sign up the day before. I have to congratulate GSA, 

26 

they are really moving forward in an expedited basis. When did 

this come out, sir? Friday? 

Mr. SMITH. August 1st. 

Mr. MICA. So at least it wasn’t the day before. I guess that is a 

weekend and people don’t work, so they got that done. 

Well, it is totally frustrating. It has got to be frustrating for the 

American taxpayer. 

Mr. Wise, is there something in the law we are missing that 

doesn’t give GSA the discretion to do this? When we gave them the 

authorization, way back even before they testified, to do something 

about this property, there was $5.9 billion given to GSA with great 

discretion by the administration, stimulus money, 3 years ago. It 

sounds like we could fit in enough money to make this property 

utilized, and that was 3 years ago, before the mold was probably 

in the back of the building. 

We saw the mold in the back there. It is absolutely disgusting 

that a property would be allowed to deteriorate that is taxpayer— 

you know, we are in charge of this stuff. It is just three of us out 

of 435 in the House and 100 in the Senate, but we are in charge 

of this. The people are expecting us to do something responsible. 

Mr. Wise, is there something we are missing that we didn’t give 

discretion? Do I need to change the law? What do we need to do? 

Mr. WISE. Well, Congressman, specifically referring to Dyer, we 

were looking at excess and underutilized property. In the work that 

we did, since Dyer is not classified as excess, it did not fit into our 

scope. 

Mr. MICA. It’s just sitting there. 

Mr. WISE. But speaking in a more—— 

Mr. MICA. Sitting there deteriorating, sitting there molding. 

Mr. WISE. Yes, that is pretty much what is happening. 

Mr. MICA. And if we hadn’t held this hearing today, this wouldn’t 

even have been issued Friday. Is that right? 

Why isn’t it on the list? Well, again, it doesn’t have to be on the 

list. It is an historic building. It could have utilization. I could answer a whole bunch of these questions, but my question is have we 

missed the mark as Congress? I know we have missed the mark 

in not having people aggressively go after this before Mr. Denham 

and I, and Mr. Diaz-Balart. Here is the report here that I made 

up for this year. ‘‘Sitting on Our Assets: The Federal Government’s 

Misuse of Taxpayer-Owned Assets,’’ October 2010. We were in the 

minority. 

If you go to the first page, we just didn’t make it up. GSA—the 

Dyer Building is in this report, too, I just told my staff. 

So again, I come out of the private sector. None of this makes 

sense, but we have got to get a handle. What is really irritating 

me, and I told you, that you are an appropriator. Now, listen to 

what they have done. We have tried for 2 months to hold hearings. 

We finally held one last week. We couldn’t get anyone to come in 

because they were on vacation. One of the principals who is involved in this in the second tier of GSA leadership took a medical 

leave. The Deputy Administrator wouldn’t come in because she is 

on tape drumming at the conference. 

Then we wanted someone—Mr. Denham and I are convinced that 

the private sector could do a better job. But what is absolutely inVerDate Aug 31 2005 10:15 Oct 15, 2012 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\8-6-12~1\75438.TXT JEAN
27 

credible about this, and we have tried to get witnesses to come in, 

they will tell us off the record that they could do a better job and 

we could find a better model, but none of them will come in and 

testify because they have been so intimidated by GSA, which is the 

primary property holder in Washington and the country, that they 

will not testify. 

So we find ourselves in an interesting situation here in Miami, 

one more example of incredible, wasteful spending, not just in the 

millions but this is the tip of a multibillion-dollar fiasco across the 

country. 

I don’t know what else to do but continue our hearings. We will 

do them week after week. We will work down the list of the structures. Something has to motivate these people. Now we have an 

acting administrator, we have the agency in disarray, and we have 

everybody being rewarded. One reason the guy didn’t show up last 

week was he got, what, a $50,000 bonus? And, no offense to Mr. 

Smith, he got a bonus. So I guess, I don’t know, maybe we just continue paying more for getting less and poor performance. That may 

be a new formula. 

I yield back to—let me yield time now to Mr. Denham, Chairman 

Denham. 

Mr. DENHAM. I think the answer is we hold them accountable, 

from the top down, which is why I am glad that Mr. Diaz-Balart 

is here, because it is important that our two committees work together. We are going to continue to hold hearing after hearing 

across the Nation addressing each of these different issues, and ultimately if we are not going to be—if GSA is not going to reform, 

we will reform it through the appropriations process. 

I understand that you feel like you haven’t had enough money, 

but we are going to make sure you have even less if you can’t reform what you are currently doing. 

This is why it is important for the agency administrator to be 

here today, last week, next week, because what we are dealing 

with here is not just a regional problem. This is not one courthouse 

that is an issue. I understand that the $6 billion in stimulus money 

may not have been prioritized correctly. I would not have spent 

money on border stations on the northern border that have a border crossing of 50 people or less, and we spent $15 million. That 

would not have been my priority. I understand that is outside of 

your region as well. 

But where my concern lies with these courthouses is, in this instance, GSA took all of its money and built a new courthouse, an 

oversized courthouse. Planning in the future, fine. Utilize not only 

that excess space but, more importantly, leave yourself enough 

money so that you can keep this building in nice shape so that you 

can move a new tenant in here. 

Now, this is not just your problem or a regional problem. Right 

now, today in Billings, Montana, we have just completed a new 

courthouse within the last 2 years and leaving the other courthouse 

vacant. So we are replicating the same problem today that you 

have had to deal with for the last 4 years. At the same time, the 

hearing we are going to hold next week in Los Angeles even takes 

it much further. They are going to spend $340 million that they 

don’t have on a building that is too big and unneeded, without havVerDate Aug 31 2005 10:15 Oct 15, 2012 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\8-6-12~1\75438.TXT JEAN
28 

ing any redevelopment money for the historic courthouse that is 

going to sit vacant like this one. 

GSA is not learning from past lessons, and that is what should 

have every taxpayer concerned. That is why we need the agency 

administrator here, because it is not just a regional problem, it is 

not just a Miami problem. This is an issue across the Nation with 

misspending money and then furthering the problem because you 

are leaving vacant courthouses empty. 

Let me ask each of you a question. Actually, let me start with 

you, Mr. Smith. How many people work in the four buildings in 

this complex? 

Mr. SMITH. I don’t have that answer, sir. 

Mr. DENHAM. Mr. Wise, how many people in the—— 

Mr. WISE. I don’t know, Congressman. 

Mr. DENHAM. Ms. Hull, do you—— 

Judge HULL. I am sorry. I have no idea. 

Mr. DENHAM. So there are four buildings in this complex, and 

none of you know how many employees are in there. 

We have about 1 million square feet of office space. If you have 

no idea of how many employees are in there, I bet you can’t tell 

me what the utilization rate is. 

Mr. Smith, what is the utilization rate of—— 

Mr. SMITH. Sir, we measure utilization rate by the number of occupancy agreements that we have in the facility. 

Mr. DENHAM. So how many occupancy agreements do you have? 

Mr. SMITH. Well, these buildings would be considered fully occupied. There are some vacancies—— 

Mr. DENHAM. Is this building fully occupied? 

Mr. SMITH. This building is not. 

Mr. DENHAM. Is the Ferguson Building fully occupied? 

Mr. SMITH. It has a slight vacancy rate in it. It has the two shell 

courtrooms. 

Mr. DENHAM. Mr. Wise, what is the utilization rate? 

Mr. WISE. In the courts here? Again, Congressman, as I mentioned earlier, due to the way we scoped our assignment on excess 

and underutilized properties, we didn’t do any courthouses because 

they weren’t listed as excess. As a result, we do not know how they 

relate to the FRPP and the utilization rate and other factors that 

go into those data elements. 

Mr. DENHAM. I understand this is a problem with the United 

States Government. I could give you a utilization rate of every single one of my warehouses because I make money based on the utilization rate of how quickly we are turning our pallets. I can tell you 

the utilization rate in my office space because before I go hire a 

new salesperson, or before I hire somebody in my operations, I 

know what my utilization rate is. My kids’ college fund depends on 

it. What is the future of our kids as a Nation if we can’t figure out 

how we are utilizing our properties? 

Now, as a Congressman, I can tell you the utilization rate of 

every single one of my offices based on how many employees we 

have. When we get some interns in, we are really cramming some 

utilization rate. 

I get it from a national perspective. It is a heavy task to do, especially when you have a great deal of reform that is needed. But you 

29 

can’t tell me in your region, you can’t even tell me what the utilization rate is between these four buildings. How can you ever justify 

putting this on the auction block or redeveloping it if you don’t 

know what your utilization rate is on the other three buildings? 

That is a huge problem. 

I yield to Mr. Diaz-Balart. 

Mr. DIAZ-BALART. I am speechless. 

Mr. DENHAM. Again? 

Mr. DIAZ-BALART. Yes. It is just unbelievable. I am, frankly, just 

speechless. Mr. Chairman, when that $5.9 billion that was part of the stimulus landed on the laps of GSA, a lot of that funding was—the priority was to refit in order to make green buildings and more energy-efficient buildings. Now, we obviously all want to make sure 

that all buildings are as energy efficient as possible, and if they can 

be lead certified, that is wonderful. 

But one of the things that I am having a hard time dealing with 

here is—and again, this is on the national level, but it filters all 

the way down. So you have here and elsewhere buildings that are 

empty that the taxpayer owns. You have, then—you are maintaining those buildings, and unfortunately not so well, because now 

this building has mold, which means that if and when another 

usage would be found or another tenant, you are going to have to 

now spend an additional probably in the millions of dollars to get 

rid of that mold. And yet, buildings, other buildings where taxpayer money was spent to make them more green, while these 

buildings are leaking green. 

It is, frankly—and I have to tell you that when you were talking 

about you as a private-sector man, how you do know what your utilization is because that is how you make your decisions. 

So I, frankly, probably for the first time in my entire public years 

of service, I am just—I don’t know what to say. I don’t know what 

to say, but I do know what to do. Mr. Chairman, it is so crucial, 

and I want to thank you and Chairman Mica for your leadership 

in this, to make sure that when the appropriations process takes 

place, clearly we are going to have to take some serious steps to 

make sure that those funds are prioritized, to make sure that if 

you look at the amount of money that can be saved—Mr. Wise, do 

you know how much GSA spends on maintaining vacant and underutilized buildings? 

Mr. WISE. I do not have that information at hand, Congressman. 

Mr. DENHAM. Annually? 

Mr. DIAZ-BALART. Annually, yes. Do we know that? 

Mr. DENHAM. It’s about $2 billion. 

Mr. DIAZ-BALART. Governmentwide, it is about $2 billion? We are 

emphasizing today GSA, but it is not the only issue out there. 

About $2 billion. 

So if you could utilize those buildings and not have to maintain 

empty buildings, and started getting lease money for it, rent money 

for it, imagine what you could do, imagine what you could do. 

Mr. Chairman, I am, again, for the first time in many, many 

years of doing this, I am just totally—there are no words to describe my—Your Honor, you deal with difficult cases. So I don’t 

know what you do when you have a case that is just really frusVerDate Aug 31 2005 10:15 Oct 15, 2012 Jkt 000000 PO 00000 Frm 00039 Fmt 6633 Sfmt 6633 P:\HEARINGS\112\ED\8-6-12~1\75438.TXT JEAN
30 

trating. You just have to contain yourself. But this is unbelievable. 

This is unbelievable, the attitude of—well, again, I do not mean 

this as disrespect to Mr. Smith because we don’t know the circumstances. But when you have this kind of thing happening and 

then bonuses are given out, the question has to be asked what is 

the criteria for those bonuses? I don’t know. 

We obviously will continue to work on this, but I think it is so 

important, Mr. Chairman, to coordinate the appropriations process 

with the work that this subcommittee and this committee is doing, 

because we obviously have a serious, serious flaw. 

Mr. Wise, lastly, Chairman Mica asked you about specific legislation. Is there something that we are missing? And I apologize. We 

are just—I can tell you that I am just in awe in a negative sense. 

Is there legislation that we could do to allow—are there obstacles 

to GSA being able to do some of these things to fix some of these 

problems? 

Mr. WISE. Well, Congressman, as you may know, there is legislation that is in various stages of the legislative process. There are 

several proposals. The administration has a proposal, the Civilian 

Property Realignment Act. Congressman Denham had worked on 

and sponsored a House bill, 1734. We testified earlier that CPRA 

represents steps in a direction that would help work on some of the 

problems associated with real property management, getting at 

issues such as the stakeholder influences, and could result in some 

cost savings. 

The Senate also has a proposal. I think these are steps that 

could work towards the direction of helping to improve the management of the Federal portfolio and rightsize through a BRAC-like 

process. We talked about that at the previous hearing, Congressman Denham. 

So there is some movement in that direction that I think could 

be viewed as positive. 

Mr. DIAZ-BALART. Thank you, Mr. Chairman. 

Mr. DENHAM. Mr. Smith, we were talking about the Civilian 

Property Realignment Act. Do you think that would help your job 

in setting up a BRAC-like commission? 

Mr. SMITH. Sir, we support the administration’s position, and we 

also think that any—— 

Mr. DENHAM. What is the administration’s position? 

Mr. SMITH. The current legislation that is out there, and that if 

there is a civilian BRAC, that it needs to have some means of 

incentivizing agencies, taking care of stakeholder interest, and also 

cutting the cost of disposal upfront. As I believe Mr. Wise has discussed in his report, some type of force structure. BRAC has been 

pretty successful because they start with a force structure, and if 

the Federal Government were to have something similar to that, 

that would be extremely helpful. 

Mr. DENHAM. Thank you. 

Chairman Mica. 

Mr. MICA. Thank you. 

Mr. Smith, who made the decision to put this notice out Friday? 

Mr. SMITH. Sir, that came between my office and the Office of 

Property Disposal in central office in Washington, DC. 

31 

Mr. MICA. Did you initiate it, or did Washington ask you to initiate it? 

Mr. SMITH. It comes from our region. We initiate the activity in 

this region, and we talk to the Office of Property Disposal, which 

has a governmentwide mission. They not only dispose of governmentwide properties, but they dispose of all GSA properties. So it 

is a joint venture between us and that office. 

Mr. MICA. But it basically was prompted because of the hearing? 

Mr. SMITH. No, sir. It is part of our process. 

Mr. MICA. So it just was accidental? 

Mr. SMITH. It was coincidental. It was the decision of us to go 

forth. We are looking—this is actually the start of the marketing 

for this, and we are looking at any and all possibilities to—this is 

a complex property, it is an historic property we need to preserve. 

Mr. MICA. I went to Miami Dade Community College. Is it still, 

or is it a State college? One of the campuses is across the street. 

It would probably make some great classrooms. But now we have 

incurred, I think with the deterioration of the building, even more 

cost. So we have paid $6 million by simple calculation to keep it 

vacant and lost the opportunity to utilize this. 

When I went to Miami Dade in the beginning, we had some converted chicken coops up on 95th Street or 102nd, before they moved 

over to the Opa-lacka to finish the base where they built the campus up on the north side. But we would have given our eye teeth 

for anything even near the quality of even the deteriorated structure we are in today. 

Mr. Wise, again, if you could supply the committee—if there is 

anything you could supply the committee with, recommendations, 

maybe you could counsel with others who have looked at this situation, see if we are missing something as far as the law. 

My purpose isn’t to come here and just berate GSA, but this can’t 

happen again. Of course, Mr. Denham and I and Mr. Diaz-Balart, 

we want to hold people responsible and accountable. But we also 

don’t want this to happen again. We don’t want this to continue to 

happen. I don’t know if we can make it through 13,996 properties. 

Mr. DENHAM. This is the new one that was just done with the 

stimulus dollars, and the L.A. Courthouse is the one that is proposed to be done. It is an ongoing issue. It does continue to happen. 

Mr. MICA. I’m sorry. Mr. Diaz-Balart? 

Mr. DIAZ-BALART. Mr. Chairman, that is exactly what I was 

about to bring up. Again, it is insanity that we are here in this 

empty building, and there are others around the country. But it is 

not only the problem that we already have from existing empty 

buildings. In L.A., there is a courthouse that GSA looks like it is 

moving forward to build, which means that there is going to be a 

700,000-square-foot building that will be vacated. So it is not like, 

OK, these were mistakes that were made. It continues to happen. 

Now, the GSA, Mr. Chairman, as you know, can stop that tomorrow and say let’s not spend the money on a new courthouse and 

leave vacant another 700,000-square-foot building that they are 

going to have to maintain as well. Let’s spend less money and 

maybe fix up the existing courthouse. 

32 

So this is not just—we are not talking about sins of the past. 

This continues to happen now as we speak. And that is why it is 

unbelievable, Mr. Chairman. Thank you for your—— 

Mr. MICA. Well, then again, we have seen the agency abuse their 

authority or not use their authority and then people being rewarded for it. I am not picking you out solely, Mr. Smith, but I 

would like you also to provide for our information, for the committee, the amount of your bonus. 

And, staff, make that part of the record of this hearing. If he 

doesn’t provide it, get it from GSA. 

I want to thank Judge Hull for also participating. The courts 

have an important responsibility, and it is the responsibility of 

Congress to make certain that you have adequate infrastructure 

and housing accommodations and facilities to carry out your important work, some of the most important work, I might add, in our 

society. People have a refuge of justice in the United States, but 

we do need to look at how we provide those facilities. 

I think you have provided us with some information about changing some of the database, the manner in which we in the past have 

calculated the use, the requirements, and the future needs that are 

so important, and you don’t want to sell yourself short when you 

do build a new structure. But by the same token, you don’t want 

to leave buildings behind, and we have done that time after time 

in this whole process. 

Staff, I would also like to look at the 2.5 million square feet we 

have leased, see when some of those leases became due, just for the 

record, in the last 5 years. I am certain that there could have been 

some better utilization. The testimony we had here today by GSA 

was it is better to own than to lease, and here they violate their 

own premise and also stewardship of taxpayer dollars when we are 

letting this sit idle and paying to lease somewhere else. I am certain some of those opportunities became available. 

And then working with the community. This is co-located with 

Miami Dade in the heart of downtown, and this can be better utilized. But the sad part is now we have remediation for mold. We 

have a building that sat idle for 5 years. It still probably has a 

great potential life. It is an absolutely gorgeous, historic structure, 

well built, and will be here probably longer than the Ferguson 

Building and some of the others. 

I read, too, the history of it. I guess one of those up there is one 

of the architects or designers of the building. I think he was painted into that mural of the history. But it was built with poured concrete to withstand hurricanes. This is solid as a rock as they get 

in the State of Florida, an historic, beautiful building incorporating 

some of the native limestone and others. So it is on the National 

Historic Register, and I don’t know if we can cite GSA for abuse 

of an historic property, but certainly misuse of taxpayers’ dollars 

and the stewardship that they inherited. 

So thank you, Judge Hull, for coming down. We will continue to 

work with you. You had an opportunity here, and in exchange our 

issues with authorizers, and I can’t be more grateful for Mr. DiazBalart as an appropriator for being here, and also this is an unusual gathering because you have the former chair, chair, current 

chair of the full committee, and all three of us are determined to 

33 

do whatever we can to make certain that we improve this whole 

process. 

Mr. Wise, thank you for your work. We continue to work with 

you, trying to root out some of the answers we seek to do a better 

job. 

Mr. Smith, you can tell we are not happy campers with GSA. 

Sorry you had to take the brunt of this today, but we are expecting 

more out of an agency that plays a very important and vital role 

for the taxpayers and for the Congress and part of the United 

States Government. 

So with that, without objection, I am going to leave the record 

open for 2 weeks. If you would like, you can submit additional testimony or your written testimony. 

Without objection, so ordered. 

And we will also be in that period addressing additional questions to the witnesses for the record. 

There being no further business before the Subcommittee on Economic Development, Public Buildings and Emergency Management, 

and before the House Transportation and Infrastructure Committee, this meeting is adjourned. 

Thank you. 

[Whereupon, at 12:01 p.m., the subcommittee was adjourned.] 

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