Report to Congressional Committees

United States General Accounting Office

GAO

April 2001 ST. ELIZABETHS

HOSPITAL

Real Property Issues

Related to the West

Campus

GAO-01-434
Page 1 GAO-01-434 St. Elizabeths Hospital

April 16, 2001

The Honorable Ted Stevens

Chairman

The Honorable Robert C. Byrd

Ranking Member

Committee on Appropriations

United States Senate

The Honorable C.W. Bill Young

Chairman

The Honorable David Obey

Ranking Minority Member

Committee on Appropriations

House of Representatives

This report responds to the requirement in H.R. Rep. No. 106-1033 at 621

(2000) that we report on various real property issues related to the west

campus of the St. Elizabeths hospital complex in the District of Columbia.

As agreed with your offices, our objectives were to (1) determine who

owns the west campus, (2) determine the historical designations of the

west campus and the corresponding responsibilities, (3) examine existing

cost estimates for stabilizing and mothballing the property1

 and

conducting various studies, and (4) determine what needs to be done to

facilitate a reuse of the property. To do our work, we interviewed officials

from the Department of Health and Human Services (HHS), District of

Columbia government (District), General Services Administration (GSA),

Office of Management and Budget (OMB), and the Advisory Council on

Historic Preservation (Advisory Council). We reviewed documents we

obtained from these officials and researched applicable laws and

regulations. We also visited the west campus to observe the condition of

the buildings and grounds. We did our work in January and February of

2001 in accordance with generally accepted government auditing

standards. On February 1, 2001, we briefed your offices on the information

contained in this letter.

 1

Stabilization includes structurally stabilizing the buildings, controlling pests, and

protecting the exterior and interior from moisture. Mothballing includes securing the

buildings, providing adequate ventilation, and disconnecting and sealing off all utilities.

United States General Accounting Office

Washington, DC 20548
Page 2 GAO-01-434 St. Elizabeths Hospital

We requested comments on a draft of this report from the Secretary of

HHS, Acting Administrator of GSA, Director of OMB, Mayor of the District

of Columbia, Executive Director of the Advisory Council, and Acting

Executive Director of the National Capital Planning Commission (NCPC).

Their responses are discussed later in this report.

The federal government owns the west campus of St. Elizabeths, except

for five buildings that are owned by the District. The west campus has

61 buildings containing about 1.2 million square feet of space on 182 acres.

HHS is the holding agency that is responsible for the federal portion of the

west campus. In 1990, St. Elizabeths was designated a national historic

landmark (NHL). This designation recognized the exceptional national

significance of the property and is the same designation given to the White

House and Capitol. In addition to the buildings on the west campus, the

NHL designation covers the landscaping and grounds, the vistas of the

rivers and city, and a Civil War cemetery that is located on the property.

Agencies that hold NHL properties are required to preserve their historic

character and minimize harm to them. Despite the NHL designation,

officials from HHS, the District, and GSA said that lack of funding and the

absence of a clear direction for the future of the west campus over the

years have left it in a badly deteriorated condition. In January 2001, HHS

officially notified GSA of its intention to declare the federal portion of the

west campus site excess.2

Last year, GSA and HHS jointly developed a cost estimate of $8.5 million

for stabilizing and mothballing the buildings on the federal portion of the

west campus and performing various studies to start preparing it to be

excessed and eventually disposed of by GSA. The $8.5 million estimate

was what GSA and HHS believed was needed to begin the excess and

disposal process and did not reflect all costs that will be needed to prepare

the west campus for reuse. HHS would be responsible for the largest

portion of the estimated cost—$5.3 million to mothball and stabilize the

buildings—which would be used to preserve the west campus buildings

and ensure that no further deterioration occurs while the excess and

disposal process takes place. GSA officials said that this estimate was not

as refined as it could have been because it was prepared under tight time

 2

By declaring a property “excess,” the holding agency has determined that it has no further

use for the property to carry out its responsibilities. The term “surplus property” means any

excess property not required for the needs and responsibilities of all federal agencies, as

determined by the GSA Administrator.

Results in Brief
Page 3 GAO-01-434 St. Elizabeths Hospital

frames; however, they believed it was reasonable given the circumstances

under which it was prepared.

On the basis of our discussions with HHS, GSA and District officials, much

work needs to be done to facilitate a reuse of the west campus. This work

includes determining environmental remediation requirements and

implementing them, addressing historic preservation issues, conducting a

land use study to identify potential uses for the property, and identifying

user(s) for the property through the federal excess and disposal process.

GSA officials said that the west campus is a unique property and that the

entire excess and disposal process will likely take several years to

complete. According to a District planning official, the District does not

oppose HHS’ efforts to excess the federal portion of the west campus.

However, the District official expressed concern that under the normal

excess and disposal process, the District may not have sufficient input into

key decisions. The District official added that although the District may

not be interested in gaining possession of the property, it does have the

greatest long-term interest in what happens to it. GSA officials said that

they intend to work with the District so that the District’s goals for the

property are considered, zoning and other approvals for the property can

be obtained, and the issue of what to do with the five buildings that the

District owns can be addressed.

In commenting on a draft of this report, the Director of the District’s Office

of Planning generally agreed with the report’s findings, but said that the

District should be the lead entity for the planning of the site, working in

close collaboration with GSA. Our evaluation of the District’s comments

appears near the end of this letter and in appendix I. HHS had no

comments and OMB, GSA, the Advisory Council, and NCPC provided oral

technical comments, which we incorporated, where appropriate.

St. Elizabeths Hospital is located approximately 2 miles south of the

Capitol building and is divided by Martin Luther King, Jr., Ave. into what

are known as the west and east campuses. St. Elizabeths began operations

in 1855 as the “Government Hospital for the Insane.” During the Civil War,

St. Elizabeths was used to house soldiers recuperating from amputations,

and the west campus includes a Civil War cemetery. In 1916, Congress

formally changed its name to St. Elizabeths Hospital, which refers to the

historic name of the old royal land grant of which the hospital was a part.

According to an HHS official, during its peak use period in the early to

mid-1960s, St. Elizabeths housed approximately 7,000 inpatients and

employed nearly 4,000 people. As discussed in more detail below, a 1984

Background
Page 4 GAO-01-434 St. Elizabeths Hospital

law authorized the transfer of part of St. Elizabeths to the District. Today,

the District primarily uses the east campus for its mental health services

program.

The west campus—61 buildings containing about 1.2 million square feet of

space on 182 acres—is owned by the federal government, with the

exception of 5 buildings that are owned by the District. HHS is the holding

agency that is responsible for the federal portion of the west campus. The

District owns the east campus, which comprises some 42 buildings

containing 1.75 million square feet on 118 acres. Figure 1 is a map of the

St. Elizabeths hospital complex.

Figure 1: Map of the St. Elizabeths Hospital Complex

Source: District of Columbia and GAO.

Under a use and occupancy agreement between HHS and the District, the

District was, at the time of our review, using about 15 of the west campus

buildings at no charge other than accepting responsibility for

maintenance. The District also provides security for the west campus.

West campus buildings not being used by the District are vacant. In

addition, the District plans to completely vacate the west campus in 2001.

On January 17, 2001, HHS officially notified GSA of its intention to declare

the federal portion of the west campus excess. Under the Federal Property

and Administrative Services Act of 1949 (Property Act), as amended, GSA

The Federal

Government Owns

Most of The West

Campus

N

West

N

East Martin Luther

King Jr. Avenue

Buildings on the west side of the map shaded in grey

indicate ownership by the District of Columbia.

A

A
Page 5 GAO-01-434 St. Elizabeths Hospital

has responsibility for federal real property utilization and disposal of

excess and surplus property.3

In 1984, the St. Elizabeths Hospital and District of Columbia Mental Health

Services Act authorized HHS to transfer to the District all property at St.

Elizabeths Hospital needed by the District to provide mental health and

other services under the District’s comprehensive mental health system

plan.4

 In accordance with that provision, on September 30, 1987, the

Secretary transferred to the District title to almost all of the portion of St.

Elizabeths that is known as the east campus and several buildings on the

west campus. The act contemplated that the remaining portion of St.

Elizabeths that was not so transferred, which would include most of the

west campus, would be subsequently transferred to the District after

Congress approved a master plan prepared by the District for the use of

such property. The act, as amended, also stated that Congress would

approve and enact a law transferring the remainder of the property at St.

Elizabeths within 2 years after the plan was submitted to Congress.5

Athough the master plan was submitted to Congress in 1993, it was never

approved.

The 1993 master plan recommended renovation of the west campus, after

which approximately 52 percent of the west campus would continue to be

used for the District’s mental health program. The remainder of the west

campus would be adapted for other institutional-type uses, retail facilities,

and support buildings. The plan also included estimated costs ranging

from about $116 million to $128 million for implementation. A District

official informed us that the District does not intend to use the west

campus at St. Elizabeths for mental health programs because it currently

intends for mental health services to be community-based. Because

Congress did not approve the 1993 master plan and did not enact

legislation transferring the west campus of St. Elizabeths from HHS to the

District, and because the District no longer needs or intends to use the

west campus to provide mental health services, HHS is preparing the

property to be excessed to GSA under the normal process for excessing

federal real property.

 3

40 U.S.C.§§ 470 et seq. The implementing regulations for disposal of federal excess and

surplus real property are found at 41 C.F.R. Part 101-47.

4

Section 8 of Pub. L. No. 98-621 (1984), 24 U.S.C. §225f.

5

Section 3(b) of Pub. L. No. 102-150 (1991), 24 U.S.C. § 225f.
Page 6 GAO-01-434 St. Elizabeths Hospital

St. Elizabeths was designated a national historic landmark (NHL) in

December 1990. This is the same designation given to the White House and

the U.S. Capitol Building; and, according to an Advisory Council official, is

granted to a very small percentage of historic properties.6

 Agencies that

hold NHL properties are responsible for preserving their historic

character; and the National Historic Preservation Act (NHPA) provides

that the agency responsible for the property shall, to the maximum extent

possible, undertake such planning and actions as may be necessary to

minimize harm to such a landmark.7

 The NHL designation for the west

campus recognized the exceptional national significance of the property

and mandated the highest level of national preservation priority. The west

campus comprises the oldest portion of the St. Elizabeths complex and

consists of the buildings with the most historic importance. In addition to

the buildings on the west campus, the NHL designation covers the

landscaping and grounds, the vistas of the rivers and city, and a Civil War

cemetery that is located on the property. Figure 2 shows the Center

Building, which opened in 1855 and served as the main hospital building

on the west campus; the Civil War cemetery, which houses the remains of

about 300 Confederate and Union dead; and the vistas.

 6

The Advisory Council is an independent federal agency that advises Congress and the

President on matters related to historic preservation and provides a forum for influencing

federal activities, programs, and policies as they affect historic resources.

7

16 U.S.C. § 470h-2(f). Also, see 36 C.F.R. Part 65 relating to NHL properties.

The West Campus Is A

National Historic

Landmark
Page 7 GAO-01-434 St. Elizabeths Hospital

Figure 2: The Center Building, Civil War Cemetery, and Vistas at St. Elizabeths

Source: GAO and the District of Columbia.

"NHL designation

covers grounds

and landscaping,

the vistas of the

rivers and city,

and a Civil War

cemetery"... N

West

A

D

C

B

C

DD

BB

AA

The west campus,

with 61 buildings, is

owned by the federal

government with

the exception of five

buildings (shown in

grey) that are

owned by the

District.

Photos shown and

located on the map

are:

(A) Center Building

(B) Civil War cemetery

(C) View towards Virginia

(D) View of Washington
Page 8 GAO-01-434 St. Elizabeths Hospital

Prior to the NHL designation, St. Elizabeths was listed on the National

Register of Historic Places. In 1989, HHS, the District, and the Advisory

Council entered into a Memorandum of Agreement (MOA) on St.

Elizabeths. The MOA detailed specific measures for preserving the historic

character of St. Elizabeths in accordance with the Department of the

Interior’s standards for maintaining historic properties. Despite the NHL

designation and the MOA, officials from HHS, the District, and GSA said

that lack of funding and the absence of a clear direction for the future of

the west campus over the years have left it in a badly deteriorated

condition. Figure 3 shows examples of the deterioration that has occurred

on the west campus.
Page 9 GAO-01-434 St. Elizabeths Hospital

Figure 3: Deteriorating Conditions at St. Elizabeths

Source: GAO.

Deteriorating

conditions and

ceiling damage

(A) and (B)

exist in the

Center Building

(C) on the west

campus at

St. Elizabeths

BB

AA

CC

A
Page 10 GAO-01-434 St. Elizabeths Hospital

During fiscal year 2001 congressional budget deliberations, GSA and HHS

jointly developed a cost estimate of $8.5 million for stabilizing and

mothballing the federal portion of the west campus and performing

various studies to start preparing it to be excessed and eventually

disposed of by GSA. Table 1 shows the cost estimates that were developed

and identifies who would normally be responsible for funding each item

under existing laws and implementing regulations.

Table 1: Cost Estimates for Stabilizing and Mothballing the Federal Portion of the

West Campus of St. Elizabeths and Performing Various Studies

Purpose Cost ($millions)

Responsible

agency

Stabilization and mothballing 5.3 HHS

Phase II environmental studya0.1 HHS

Phase II archeological studya0.1 HHS

National Environmental Policy Act (NEPA)

compliance 2.0 GSA

Land use studyb1.0 GSA

Total 8.5

a

HHS informed us that it will be able to fund the Phase II environmental and archeological studies with

funds available from its fiscal year 1994 appropriation.

b

An HHS official told us that on January 17, 2001, OMB directed HHS to provide GSA with funds for

the land use study under a reimbursable work authorization. According to a GSA official, in general, if

the local jurisdiction does not fund a land use study, GSA would consider funding it, as needed, as

part of the planning process to provide input into the environmental impact statement and to help

create awareness of the property.

Source: GSA and HHS.

According to GSA officials, the $5.3 million for stabilization and

mothballing would have been used to prevent further deterioration of the

buildings and prepare them for approximately 5 years of nonuse while the

process of preparing the property to be excessed and disposed of takes

place and a plan for reuse is developed. As the holding agency for the

property, HHS is responsible for funding this item. The regulations

implementing the Property Act require the holding agency to be

responsible for the protection and maintenance of property pending its

transfer to another federal agency or its disposal.8

 NHPA adds an

additional requirement in that the heads of all federal agencies are

responsible for the preservation of historic properties that are owned or

controlled by the agency. Prior to the approval of any federal undertaking

 8

41 C.F.R. 101-47.402-1 and 101-47.402-2.

Cost Estimates For

Beginning the

Excess and Disposal

Process
Page 11 GAO-01-434 St. Elizabeths Hospital

that may affect any NHL, the head of the responsible federal agency shall,

to the maximum extent possible, undertake planning and action to

minimize harm to the landmark.9

 Mothballing and stabilization of the

property are actions HHS intends to take that will prevent further

deterioration and minimize harm to the historic St. Elizabeths property.

According to GSA and HHS officials, they developed this estimate by using

a previous estimate HHS had developed for stabilizing and mothballing the

west campus. The previous estimate was based on a detailed study of five

west campus buildings that was prepared by a team of experts HHS

contracted with in 1998. GSA and HHS applied the cost per square foot to

stabilize and mothball these five buildings to the entire square footage of

the west campus to come up with a total cost. A GSA official said they

used the total square footage for the west campus, including the Districtowned buildings, to add some flexibility to the estimate to compensate for

inflation and additional deterioration that would have occurred since 1998.

However, the official said that the $5.3 million would have been used to

mothball and stabilize only the federal portion of the west campus.

According to GSA officials, there were other attempts to develop a

stabilization and mothballing estimate. In March 2000, GSA estimated the

cost at about $11 million. However, this estimate was not based on an

analysis of actual conditions, and GSA and HHS decided to contract for an

estimate in the summer of 2000. The contractor estimated a cost of

$2.6 million, but GSA and HHS officials were not satisfied with the

estimate because of their knowledge of the conditions of the buildings and

past experience. GSA and HHS then decided to rely on the $5.3 million

estimate that was derived from the 1998 HHS estimate discussed above

because there was pressure to provide the estimate for the fiscal year 2001

budget deliberations. GSA officials acknowledged that the $5.3 million

estimate was not as refined as it could have been because of the time

constraints but said they believed it was reasonable given the

circumstances under which it was prepared. GSA officials recognized that

a better estimate would be based on a more thorough assessment of the

conditions in all the buildings. They also said that because the $5.3 million

 9

16 U.S.C. §§ 470h-2(f) and 470f. The NHPA regulations at 36 C.F.R. 800.16 define

“undertaking” as a project, activity, or program funded in whole or in part under the direct

or indirect jurisdiction of a federal agency, including those carried out by or on behalf of a

federal agency; those carried out with federal financial assistance; those requiring a federal

permit, license, or approval; and those subject to state or local regulation administered

pursuant to a delegation or approval by a federal agency.
Page 12 GAO-01-434 St. Elizabeths Hospital

was not funded for fiscal year 2001, the estimate might have to be adjusted

to reflect additional deterioration that likely has occurred and inflation.

The Phase II environmental and archeological studies are required prior to

disposal. During fiscal year 2000, GSA contracted for a Phase I

environmental study of the west campus that was paid for with HHS funds.

This involved analyzing records and visiting the site, but it did not include

any test borings or soil analyses. The Phase I consultants concluded that a

Phase II study would be needed to test various sites where sufficient

evidence of hazardous wastes was found. The Phase II archeological study

is a follow-up to prior work by consultants that concluded that there was

sufficient evidence to warrant additional study because of the potential for

finding archeological sites. If sites are found, GSA officials said they would

be responsible for developing guidelines for mitigation measures, such as

excavation by subsequent owners in identified areas as part of the disposal

process. An Advisory Council official added that avoidance and

preservation-in-place, where potential sites would remain untouched,

could be another option. HHS, as the holding agency, is responsible for

funding the Phase II environmental study on the basis of GSA’s

implementing regulations for the Property Act.10 HHS is also responsible

for funding the Phase II archeological study because of its responsibilities

under NHPA.11 According to HHS officials, because they have funds

available for the Phase II environmental and archeological studies, this

would not require a new appropriation. GSA officials said that the cost

estimates for these studies are based on prior experience with similar

properties.

GSA, as the disposal agency, is required to comply with NEPA.12 According

to GSA officials, due to the size, complexity, and historical importance of

the site, this will probably mean an environmental impact statement at an

estimated cost of $2 million, based on past experience. Similarly, the

estimate for the land use study of $1 million is also based on GSA’s

experience with these kinds of properties. GSA said it would consider

hiring consultants to prepare a land use study to identify reasonable land

use options and plans to coordinate this work with the District. A GSA

official said that, in general, GSA will consider funding the land use study

 1041 C.F.R. 101-47.401-4.

1116 U.S.C. §§ 470h-2 and 470f.

1242 U.S.C. §§ 4321 et seq.
Page 13 GAO-01-434 St. Elizabeths Hospital

when it is needed and is not funded by a local community. However, an

HHS official told us that on January 17, 2001, OMB directed HHS to

provide GSA with funds for the land use study under a reimbursable work

authorization and that this action was completed soon thereafter. A

District planning official whom we interviewed expressed concern that $1

million may not be enough for a sophisticated, high-quality land use study.

It is important to note that these costs do not reflect all of the federal

government’s costs that will be needed to prepare the west campus for

reuse. For example, according to a GSA official, if industrial contaminants

are found, which is likely, there will be costs associated with remediation

that will be the responsibility of the holding agency pursuant to the GSA

implementing regulations for the Property Act.13 An HHS official said that

these additional costs would be unknown until the Phase II environmental

study is completed in late 2001. Another item that GSA said may require

funding is the preparation of historic preservation covenants to be added

to the property title when it changes hands. These covenants are designed

to ensure the historic preservation of the property. If needed, GSA

estimates that drawing up these covenants could cost up to $500,000 given

the complexities of the issues at the site. This cost was not included in the

$8.5 million estimate. GSA officials also said that because the District is

vacating the west campus, including the buildings it owns, it would likely

have little reason to continue its maintenance and protection

responsibilities for the entire west campus. GSA officials said that GSA,

HHS, and the District are in the process of developing memoranda of

understanding that will outline responsibilities for costs and actions

during the excess and disposal process.

Much work needs to be done to facilitate a reuse of the west campus.

Because HHS officially notified GSA of its intention to declare the

property excess, the Property Act, as amended, and related GSA

regulations for disposing of excess real property govern this process.14 On

the basis of our interviews with HHS, GSA, and District officials, we

identified a number of key actions that need to take place to facilitate a

reuse of the site.

 1341 C.F.R. 101-47.401-4.

1441 C.F.R. Part 101-47.

Much Work Needed

To Facilitate

a Reuse of the

Property
Page 14 GAO-01-434 St. Elizabeths Hospital

As mentioned before, the vacant buildings on the west campus are in a

badly deteriorated condition, and action is needed to prevent the situation

from getting worse. The work is needed to preserve the buildings while the

excess and disposal process takes place; and this work is the

responsibility of HHS, the holding agency, under the Property Act and

NHPA.15

The District plans to vacate the west campus and likely will have little

reason to continue providing protection and maintenance services.

Therefore, protection and maintenance plans and funding will need to be

reevaluated for the period during the excess and disposal process. Also,

GSA officials said that a well-planned interim use policy could sometimes

help generate reuse of the site, but poor conditions may not make interim

use a feasible option.

The extent of environmental remediation needed at the site is not yet

known. However, GSA officials said that it is likely that medical wastes

will be found and asbestos, lead paint, and hazardous substance

conditions will be analyzed for future action. HHS is responsible for the

environmental assessment and any required remediation under the GSA

implementing regulations for the Property Act.16 In addition, GSA is

required under NEPA to consider the impact of the federal government’s

actions to dispose of the site. GSA said that the District would have input

to this part of the process.

Given the property’s NHL designation, several historic preservation issues

will need to be addressed as part of the excess and disposal process. At a

minimum, HHS, GSA, the District, and the Advisory Council would be

participants in a consultation process to address these issues. GSA

officials told us that as the disposal agency, GSA would prepare historic

preservation covenants, if needed, that will be part of the property title

when it changes hands. They said that these covenants are designed to

ensure the historic preservation of the property and will likely have an

impact on how it is eventually used. According to an official with the

 1516 U.S.C §§ 470h-2 and 470f.

1641 C.F.R. 101-47.401-4.

Stabilizing and Mothballing

the Buildings

Protection, Maintenance,

and Interim Use

Environmental Issues

Historic Preservation
Page 15 GAO-01-434 St. Elizabeths Hospital

Advisory Council, the covenants and the scope of restriction placed on

redevelopment could be made flexible and would be a subject of

discussion during the consultation process.

GSA will consider hiring a consulting team to identify reasonable land use

options for the west campus and intends to work with the District so that

the District’s goals for the site are considered, the necessary zoning and

other approvals for the proposed use can be obtained, and the issue of

what to do with the five buildings the District owns can be addressed. The

land use study, according to GSA officials, would include a building and

infrastructure assessment, a market and economic viability analysis, an

assessment of financing options, and recommendations for reusing the

site.

GSA officials said that once the land use study is close to completion and

the environmental and historic preservation requirements are fully

understood, a disposal strategy can be developed. To help identify user(s)

for the site, GSA goes through several levels of screening that are set forth

in the Property Act and related regulations as the land use study is being

prepared. The first level of screening involves determining whether there

are other federal uses for the site. If there are no federal uses, the next

level of priority is for the site to be screened for use by the homeless under

the Stewart B. McKinney Homeless Assistance Act, as amended.17 If the

site is not used for the homeless, federal agencies can work with nonprofit

organizations that may want the site for public use, such as a park,

museum, or educational facility. The next level of screening involves

determining if state or local governments where the property is located

want to acquire the site. Finally, if none of these screening processes

produce a user, the site becomes available for public sale with full and

open competition. GSA officials said that the west campus is a unique

property, and the entire excess and disposal process will likely take

several years to complete.

A District planning official whom we interviewed had concerns with

allowing the federal portion of the west campus to be disposed of through

the standard excess and disposal processes outlined by the Property Act

and implementing regulations. This official said that the District does not

 1742 U.S.C § 11411.

Land Use Study

Identifying User(s) for the

Property
Page 16 GAO-01-434 St. Elizabeths Hospital

oppose HHS’ efforts to excess the site. However, the District official was

concerned that the District will not have enough input on key decisions

regarding what will happen to the site under the normal disposal screening

processes discussed above. The District official believes that another

approach could be to either obtain a waiver from GSA or obtain special

legislation that would exempt the site from the screening processes so that

a joint commission could be established to determine the best use for it.

The regulations that implement the Property Act make reference to such a

waiver.18 However, a GSA official informed us that the McKinney Act

requirements related to consideration for use by the homeless cannot be

waived.

The District official said that a possible approach could be a three-way

partnership involving the federal government, the District, and possibly a

private investor to develop the site as part of a public-private partnership.

This official said that it is likely that the District would be willing to

commit some funds to such a partnership because the site is critical to the

redevelopment of that part of the District. This official said that the

District’s only concern is that the disposal is properly planned and that the

site ultimately enjoys its highest and best use. This official added that

although the District may not be interested in gaining possession of the

site, it does have the greatest long-term interest in what happens to it. An

HHS official said that the federal government will review the District’s

proposals while the excess process continues.

The west campus of St. Elizabeths is a unique property that according to

HHS, GSA, and District officials, is in a badly deteriorated condition. Our

evidence suggests that a significant amount of money and much work

would be needed to prepare it for reuse. This work includes stabilizing and

mothballing the buildings for the period of time when the excess and

disposal process will take place, developing plans for protection and

maintenance, addressing environmental and historic preservation issues,

studying potential uses for the property, and identifying user(s). The

historic significance of the property, as well as the economic implications

of its reuse for the District, will be key factors to be considered in

determining the future use of the property. Attaining a successful outcome

that is agreeable to all the interested stakeholders and is in the best

interest of the government will be a challenging and complex task.

 1841 C.F.R. 101-47.203-5.

Conclusion
Page 17 GAO-01-434 St. Elizabeths Hospital

In response to our request for comments on a draft of this report, HHS’

Acting Inspector General, on behalf of the Department, informed us that

HHS had no comments. Budget review staff from OMB, the Executive

Officer of GSA’s National Capital Region, a Historic Preservation Specialist

with the Advisory Council, and the Director of NCPC’s Office of Plans

Review provided oral technical comments, which we incorporated where

appropriate. The Director of the District’s Office of Planning provided

written comments that are reprinted as appendix I.

The Director of the Office of Planning generally agreed with the report’s

findings and said that planning for the west campus of St. Elizabeths is

critical to the overall revitalization goals of the District in general and, in

particular, the area of the city where St. Elizabeths is located. In

commenting, the Director said that the District should be the lead entity

for the planning of the site, working in close collaboration with GSA.

According to the Director, this was due to the critical role community

involvement will play in the ultimate reuse of the west campus, the

importance of weaving west campus development into the myriad

planning efforts being undertaken in that area, and the critical role St.

Elizabeths can play in the District’s overall economic development goals.

As discussed in the report, the Property Act, as amended, and related GSA

regulations, govern the excess and disposal process, and GSA will have the

responsibility for managing it. As also discussed in the report, a GSA

official said that in general, if the local jurisdiction does not fund a land

use study, GSA would consider funding it, as needed, as part of the

planning process. Although GSA will be responsible for the land use study

because it was provided with the funds for it, the Executive Officer of

GSA’s National Capital Region said that the District would have an integral

role in the process. The Director of the Office of Planning also made other

specific points to clarify the District’s views on St. Elizabeths and we

subsequently discussed some of the Director’s comments with the

Executive Officer of GSA’s National Capital Region. Our comments on

some of these additional points are contained in appendix I.

We are sending copies of this report to the Chairmen and Ranking

Members of several congressional committees with jurisdiction over HHS,

GSA and the District; the Honorable Tommy G. Thompson, Secretary of

HHS; the Honorable Mitchell E. Daniels, Jr., Director of OMB; the

Honorable Anthony A. Williams, Mayor of the District of Columbia;

Thurman M. Davis, Sr., Acting Administrator of GSA; Patricia E. Gallagher,

Acting Executive Director, National Capital Planning Commission; and

Agency Comments

and Our Evaluation
Page 18 GAO-01-434 St. Elizabeths Hospital

John M. Fowler, Executive Director of the Advisory Council on Historic

Preservation. We will make copies available to others on request. Major

contributors to this report were Susan Michal-Smith, David E. Sausville,

Gerald Stankosky, and Wendy Wierzbicki. If you or your staff have any

questions, please contact me on (202) 512-8387 or at ungarb@gao.gov.

Bernard L. Ungar

Director, Physical Infrastructure Issues
Appendix I: Comments From the District of

Columbia

Page 19 GAO-01-434 St. Elizabeths Hospital

Appendix I: Comments From the District of

Columbia

Note: GAO comments

supplementing those in

the report text appear at

the end of this appendix.

See comment 2.

See comment 1.

Note: GAO comments

supplementing those in

the report text appear at

the end of this appendix.
Appendix I: Comments From the District of

Columbia

Page 20 GAO-01-434 St. Elizabeths Hospital

See comment 4.

See p. 16.

See comment 3.

See p. 17.

See comment 3.
Appendix I: Comments From the District of

Columbia

Page 21 GAO-01-434 St. Elizabeths Hospital

See p. 17.
Appendix I: Comments From the District of

Columbia

Page 22 GAO-01-434 St. Elizabeths Hospital

The following are GAO’s comments on the letter from the District of

Columbia.

1. We recognized in our report that the $8.5 million estimate—which

includes the mothballing and stabilization costs—represents what GSA

and HHS believed would be needed to begin the excess and disposal

process and that more funds will be needed to prepare the west

campus for reuse. We did not do work to assess the 1993 estimate.

However, once the land use study is completed, the stakeholders will

be in a better position to assess the potential costs of different options.

2. Exploring potential financing mechanisms was outside the scope of

our review. However, as stated in the report, the land use study,

according to GSA officials, will assess financing options.

3. As pointed out in the report, GSA officials said that a well-planned

interim use policy could sometimes help generate reuse of the site.

However, they recognized that the poor conditions at the site may not

make interim use a feasible option. If interim use does not take place,

the District’s concern about this type of use becoming permanent

would not be an issue. Furthermore, the Executive Officer of GSA’s

National Capital Region told us that the land use study process would

seek to identify a comprehensive solution for the site that would be

agreeable to all stakeholders and that would prevent a fragmented,

piecemeal approach.

4. The Executive Officer of GSA’s National Capital Region told us that it

was too early to determine with more specificity how long the excess

and disposal process would take, but GSA intends to work with the

District soon to develop a schedule for the process.

GAO Comments

(393013)
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