FEDERAL REAL 

PROPERTY

Improved Cost 

Reporting Would Help 

Decision Makers 

Weigh the Benefits of 

Enhanced Use Leasing

Report to the Chairman, Subcommittee on 

Federal Financial Management, Government 

Information, Federal Services, and International 

Security, Committee on Homeland Security and 

Governmental Affairs, U.S. Senate

December 2012

GAO-13-14

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-13-14, a report to the 

Chairman, Subcommittee on Federal Financial 

Management, Government Information, 

Federal Services, and International Security, 

Committee on Homeland Security and 

Governmental Affairs, U.S. Senate 

December 2012

FEDERAL REAL PROPERTY 

Improved Cost Reporting Would Help Decision 

Makers Weigh the Benefits of Enhanced Use Leasing 

Why GAO Did This Study

The federal government owns 

underutilized properties that are costly 

to operate, yet challenges exist to 

closing and disposing of them. To 

obtain value from these properties, 

some agencies have used EULs, 

which are generally long-term 

agreements to lease property from the 

federal government in exchange for 

cash or non-cash consideration. 

However, agencies also incur costs for 

EUL programs. We have previously 

reported that agencies should include 

all costs associated with programs’

activities when assessing their values. 

This report addresses (1) the extent to 

which agencies attribute the full 

benefits and costs of their EULs in their 

assessments of their EUL programs 

and (2) the experiences of agencies in 

using their EUL authority.

GAO reviewed property data and 

documents from the largest civilian 

federal real property agencies 

including four agencies that use 

EULs—VA, NASA, the Department of 

State, and the Department of 

Agriculture—and applicable laws, and 

regulations and guidance. GAO visited 

nine sites where agencies were using 

EULs. 

What GAO Recommends

To promote transparency about EULs, 

improve decision-making regarding 

EULs and ensure more accurate 

accounting of EUL benefits, GAO 

recommends that OMB coordinate with 

affected agencies to ensure that 

agencies consistently attribute all 

relevant costs associated with EULs to 

their EUL programs. Agencies 

generally agreed with our findings and 

recommendation.

What GAO Found 

Agency officials told us that enhanced use leases (EUL) help them utilize their 

underutilized property better; commonly cited benefits include enhanced mission 

activities, cash rent revenue, and value received through in-kind consideration. 

However, some agencies we reviewed do not include all costs associated with 

their EULs when they assess the performance of their EUL programs. Guidance 

from the Office of Management and Budget (OMB) does not specify what costs 

agencies should include in their EUL evaluations, resulting in variance among 

agencies. For example, the Department of Veterans Affairs (VA) and the 

Department of State do not consistently attribute EUL-related costs of consultant 

staff who administer the leases, and VA does not attribute various administrative 

costs that offset EUL benefits. Without fully accounting for all EUL costs, 

agencies may overstate the net benefits of their EUL programs.

Based on recent agency experiences, EULs may be a viable option for 

redeveloping underutilized federal real property when disposal is not possible or 

desirable, but two agencies raised issues pertaining to EUL use that affect their 

use or budgetary treatment. First, National Aeronautics and Space Administration 

(NASA) officials said that the limit on its authority to receive in-kind consideration 

as part of its EUL program has limited its ability to encourage the use of EULs for 

underutilized NASA property. Specifically, NASA officials said prospective 

lessees are reluctant to make costly capital improvements to a property that will 

have to be returned to the government at the end of the lease without other 

compensation, such as a reduction in cash rent. Second, VA and CBO disagree 

on the extent to which VA should account for the budget impacts for EULs that 

could include long-term government commitments. VA has made multi-year 

commitments with certain EULs without fully reporting them in its budget. 

Assessing and recognizing the budget impacts of EULs is complicated and may 

be interpreted differently by agencies with EUL authority. In particular, VA EULs 

can include long-term commitments that are recognized in the federal budget in 

different ways.

View GAO-13-14. For more information, 

contact David Wise at (202) 512-2834 or 

wised@gao.gov. 
Page i GAO-13-14 Federal Real Property

Letter 1 

Background 3

Agencies Attributed Benefits of EULs to Their EUL Programs, but 

Did Not Always Do the Same with All Costs 6

Agencies’ Experiences in Using EULs Provide Illustrative 

Examples about EUL Use 16

Conclusions 20

Recommendation 20

Agency Comments 21

Appendix I Objectives, Scope, and Methodology 22

Appendix II 16 Case Study Enhanced Use Leases by Location, Property 

Type, and Tenant Use 25

Appendix III Comments from Veterans Affairs 26

Appendix IV GAO Contact and Staff Acknowledgments 30

Tables

Table 1: General Description of EULs at Selected Agencies 5

Table 2: Agencies’ Reported Cash Rent Revenue from EULs, Fiscal 

Year 2011 9

Table 3: VA EUL Leaseback Costs in Fiscal Year 2011 19

Table 4: EULs by Agency 25

Figures

Figure 1: Department of State EUL for the Hôtel de Talleyrand in 

Paris, France 8

Figure 2: Department of State’s EUL for a Condominium 

Development in Singapore 10

Contents 
Page ii GAO-13-14 Federal Real Property

Figure 3: Housing Facility Located on Property that VA Leases to 

the Vancouver Housing Authority in Vancouver, 

Washington 12

Abbreviations

CBO Congressional Budget Office

Energy Department of Energy

EUL enhanced use lease 

FRPP Federal Real Property Profile

GSA General Services Administration

Interior Department of Interior

Justice Department of Justice

NASA National Aeronautics and Space Administration

OMB Office of Management and Budget

SLSDC St. Lawrence Seaway Development Corporation 

State Department of State

TVA Tennessee Valley Authority

USDA Department of Agriculture

USPS United States Postal Service

VA Department of Veterans Affairs

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. The published product may be reproduced and distributed in its entirety 

without further permission from GAO. However, because this work may contain 

copyrighted images or other material, permission from the copyright holder may be 

necessary if you wish to reproduce this material separately.
Page 1 GAO-13-14 Federal Real Property

United States Government Accountability Office

Washington, DC 20548

December 19, 2012

The Honorable Thomas R. Carper

Chairman

Subcommittee on Federal Financial Management, Government 

 Information, Federal Services, and International Security

Committee on Homeland Security and Governmental Affairs

United States Senate

Dear Mr. Chairman:

The federal government owns many underutilized properties that are 

costly to operate. However, closing or disposing of them can present 

challenges, including covering the costs associated with federal real 

property disposal, addressing legal requirements agencies must adhere 

to, such as requirements for screening and environmental cleanup, and 

negotiating competing stakeholder interests that can arise over the 

disposal of property. We have designated federal real property 

management as a high-risk area, in part because of the presence of 

underutilized properties.1 As an alternative to increased agency use or 

disposal, some agencies initiated enhanced use lease (EUL) programs. 

EULs are typically long-term lease agreements that allow public or private 

entities to use the property.2 Agency EUL programs have allowed entities 

to develop or occupy federal properties such as power plants, housing 

and healthcare facilities, office space, and parking facilities, and in return, 

federal agencies receive cash or in-kind consideration.3 However, 

agencies also incur costs for EUL programs. We have previously reported 

that in any assessment of the cost/benefit of an agency’s activities, all 

program costs should generally be included and any excluded costs 

should be disclosed and explained.4

 

1

GAO, High-Risk Series: An Update, 

In 2011, we raised concerns about 

GAO-11-278 (Washington, D.C.: February 2011). 

2

There is no government-wide definition of EULs. This definition was drawn from GAO, 

Federal Real Property: Authorities and Actions Regarding Enhanced Use Leases and 

Sale of Unneeded Real Property, GAO-09-283R (Washington, D.C.: Feb. 17, 2009). 

3

In-kind consideration refers to goods or services that a lessee provides to an agency in 

lieu of cash rent payments. 

4

GAO, GAO Cost Estimating and Assessment Guide: Best Practices for Developing and 

Managing Capital Program Costs, GAO-09-3SP (Washington, D.C.: March 2009).

 
 

Page 2 GAO-13-14 Federal Real Property

how the Department of Defense monitored the costs of its EUL program.5

1. To what extent do agencies attribute the full benefits and costs of their 

EULs in their assessments of their EUL programs? 

To help inform the discussion surrounding agencies’ recent use of EULs 

to manage their federal real property portfolio, you asked us to examine 

issues related to these leases. Specifically, we addressed the following 

research questions:

2. What have been the experiences of agencies using their EUL 

authority?

To answer these questions, we reviewed prior GAO reports on enhanceduse leasing and capital financing6 and identified agencies as candidates 

for a detailed review of EUL use.7 To identify candidate agencies, we 

used Federal Real Property Profile data; the General Services 

Administration’s (GSA) 2008 document Real Property Authorities for 

Federal Agencies; a prior GAO report on enhanced use leasing;8

 

5

GAO, Defense Infrastructure: The Enhanced Use Lease Program Requires Management 

Attention, 

and 

interviews with officials at the four agencies that indicated they use 

EULs—the the Department of Veterans Affairs (VA), the National 

Aeronautics and Space Administration (NASA), the Department of State 

(State), and the Department of Agriculture (USDA). We reviewed relevant 

documentation related to these agencies’ enhanced use leasing, 

including laws providing agencies with EUL authority, and agencies’ EUL 

guidance. We also interviewed agency officials involved with developing 

and managing EULs. We chose a sample of 16 EULs from among the 

four agencies to review as case studies. We selected this sample to 

represent a variety of (1) lease purposes (e.g., leasing vacant land for 

development and leasing unused office space); (2) estimated financial 

benefits (e.g., cash benefits and in-kind consideration); and (3) 

geographic locations. We conducted site visits at nine of the 16 case 

GAO-11-574, (Washington, D.C.: June 30, 2011). 

6

GAO, GAO-11-574; GAO, NASA: Enhanced Use Leasing Program Needs Additional 

Controls, GAO-07-306R (Washington, D.C.: Mar. 1, 2007); and GAO, Capital Financing: 

Partnerships and Energy Savings Performance Contracts Raise Budgeting and Monitoring 

Concerns, GAO-05-55 (Washington, D.C.: Dec., 16, 2004). 

7

We excluded the Department of Defense (DOD) because GAO recently issued a report 

on DOD’s EUL program, see GAO-11-574. 

8

GAO-09-283R. 
 

Page 3 GAO-13-14 Federal Real Property

study locations to observe the properties.9

We conducted this performance audit from October 2011 to December 

2012 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

These site visits included 

NASA’s Ames Research Center in Moffett Field, California; VA sites in 

Maryland, New Jersey, and Washington; and a USDA agricultural 

research center in Beltsville, Maryland. We interviewed agency officials 

and lessees about their experiences with EULs at these locations. In 

addition, we interviewed State officials about that department’s EULs for 

properties located in Istanbul, Turkey; Paris, France; and Singapore. See 

appendix II for a list of case studies and descriptions of the properties and 

lessee uses. We reviewed the agreements between VA and its lessees 

and the past work of the Congressional Budget Office (CBO) and the 

VA’s Office of Inspector General on VA’s EULs in Chicago, Illinois; North 

Chicago, Illinois; and Mountain Home, Tennessee. We conducted

interviews with officials from the Office of Management and Budget 

(OMB), CBO, and GSA to better understand government-wide views, 

guidance, and practices concerning EULs. See appendix I for more 

detailed information on our scope and methodology.

EULs are typically long-term leases of federal land or buildings to public 

sector or private sector companies. Some agencies with EUL authority 

are authorized to accept in-kind consideration, such as improvements to 

agency properties or construction of new facilities in place of cash rent. 

There is no government-wide definition of an enhanced use lease and 

agencies’ EUL authorities and guidance vary, as these examples 

illustrate:

• VA was authorized to enter into EULs for up to 75 years with public 

and private entities for leases that contributed to VA’s mission and 

 

9

Because this is a nonprobability sample, observations made based on our review of the 

16 case study locations do not support generalizations about other EUL sites. Rather, the 

observations made provided specific, detailed examples of issues that were described by 

agency officials and lessees. 

Background 
 

Page 4 GAO-13-14 Federal Real Property

would enhance the use of the property for cash or in-kind 

consideration; however, this authority expired on December 31, 2011. 

Prior to the expiration of VA’s EUL authority, VA entered into 92 EULs 

that remain active. In August 2012, VA’s EUL authority was 

reauthorized through December 2023, but the current authority allows 

VA to enter into EULs up to 75 years only for the provision of 

supportive housing for veterans or their families that are at risk of 

homelessness or are homeless. VA may accept cash consideration, 

or it may enter into an EUL without receiving consideration, and it is 

prohibited from entering into leasebacks.

10 VA may not enter into an 

EUL without advanced written certification from OMB that the lease 

complies with the statutory requirements.11 VA reports annually on the 

details, benefits, and costs of its EUL program. The annual report 

states that it gives a transparent view of the measureable outcomes of 

the cost-effective benefits to veterans that the EUL program provides. 

• NASA is authorized to enter into EULs of agency properties for cash 

consideration or, if the EULs involve the development of renewable 

energy production facilities, in-kind consideration.12 NASA may not 

enter into leasebacks.13 NASA policy requires that EULs relate to and 

support the agency’s mission of research, education, and exploration. 

The agency’s longest EUL term is 95 years.14 NASA’s EUL authority 

expires in December 2017. NASA reports annually to Congress on its 

EUL program’s status, proceeds, expenditures, and effectiveness.

• State is authorized to enter into EULs for its properties acquired in 

foreign countries for diplomatic and consular establishments.15

 

10A leaseback is an arrangement in which an agency leases an asset to another entity, 

then leases back services or property from the lessee. For example, an agency may lease 

a warehouse facility to the private sector and then rent back some space for its own use. 

State’s 

longest EUL term is 99 years and expires in 2090. According to State 

officials, the agency does not have a formal EUL program. It has only 

1138 U.S.C. § 8162.

1251 U.S.C. § 20145(b). 

1351 U.S.C. § 20145(e)(1).

14According to NASA officials, the total potential term of this lease is 95 years, comprised 

of a 5-year initial term, a primary term of 60 years, and lessee’s right to three unilateral 

extensions of 10 years each.

1522 U.S.C. § 300.
 

Page 5 GAO-13-14 Federal Real Property

utilized EULs in three instances. State uses EULs on a case by case 

basis when directed by Congress to retain properties or when it does 

not consider disposal a desirable option due to the strategic or historic 

value of an asset. For example, State was required to retain the 

Palazzo Corpi building in Istanbul, Turkey.16 State carries the EULs in 

its property inventory and monitors the transactions and the cash 

flows but does not report externally on its EUL program.

• USDA is authorized to demonstrate whether enhanced use leasing of 

agency real property at its Beltsville Agricultural Research Center and 

the National Agricultural Library for cash consideration will enhance 

the use of the leased property.17

Table 1 shows how the four agencies we reviewed used EULs.

The authority requires that EULs be 

consistent with the USDA’s mission and have terms no longer than 30 

years. USDA’s EUL authority expires in June 2013. USDA reported to 

Congress on the management and performance measures associated 

with its EUL demonstration program and is required to report on the 

success of the program upon completion in 2013.

Table 1: General Description of EULs at Selected Agencies

Agency General description of EULs

VA EULs are located on VA sites throughout the nation and vary from individual buildings on VA campuses to 

entire VA campuses.

NASA EULs are currently only located at the Ames Research Center in California and the Kennedy Space Center in 

Florida, and are used for leasing space in existing buildings and leasing land for construction of buildings. 

The majority of NASA’s EULs are located at the Ames Research Center in California.

State EULs are for former U.S. diplomatic sites in France, Singapore, and Turkey.

USDA Single EUL is limited to greenhouse space at a facility in Beltsville, Maryland.

Source: GAO analysis of agency data.

OMB coordinates and provides guidance on federal real property 

management government-wide in its role as Chair of the Federal Real 

Property Council, which is composed of federal real property-holding 

agencies. For example, OMB Circular A-11 provides general guidance on 

evaluating the performance of federal programs and on the budgetary 

treatment of federal leases, including EULs and leaseback 

 

16Pub. L. No. 108-199, § 633(e) (Jan. 23, 2004).

177 U.S.C. § 3125a note.
 

Page 6 GAO-13-14 Federal Real Property

arrangements.18 OMB’s guidance does not provide specific information 

about the treatment of EULs, but does require EULs with leasebacks 

above certain threshold amounts be submitted to OMB for their 

budgetary-scoring impact. OMB’s instructions also outline how budget 

authority for the cost of leasing an asset is to be recorded in the budget, 

depending on how risk is shared between the government and the lessee, 

for three types of leases: operating leases, capital leases, and lease 

purchases.19

Agency officials told us that EULs provide a variety of benefits to the 

government in addition to better utilization of underutilized federal 

property. The commonly cited benefits include enhanced mission 

activities, cash rent revenue, and value received through in-kind 

consideration.

 

18OMB, Circular A-11 Preparation, Submission, and Execution of the Budget (August 

2012). 

19Operating leases are defined in OMB Circular No. A-11 as meeting the following criteria: 

(1) Ownership of the asset remains with the lessor during the term of the lease and is not 

transferred to the government at or shortly after the end of the lease term; (2) the lease 

does not contain a bargain-price purchase option; (3) the lease term does not exceed 75 

percent of the estimated economic life of the asset; (4) the present value of the minimum 

lease payments over the life of the lease does not exceed 90 percent of the fair market 

value of the asset at the beginning of the lease term; (5) the asset is a general-purpose 

asset rather than being for a special purpose of the government and is not built to the 

unique specification of the government as lessee; and (6) there is a private sector market 

for the asset. A capital lease is any lease other than a lease-purchase that does not meet 

the criteria of an operating lease. Lease-purchase means a type of lease in which 

ownership of the asset is transferred to the government at or shortly after the end of the 

lease term. Such a lease may or may not contain a bargain-price purchase option.

Agencies Attributed 

Benefits of EULs to 

Their EUL Programs, 

but Did Not Always 

Do the Same with All 

Costs 

Agencies Cited Various 

EUL Benefits
 

Page 7 GAO-13-14 Federal Real Property

Officials from the four agencies we reviewed said that EULs contribute to 

their ability to conduct mission-related activities; for example:

• VA officials said that EULs provide the agency mission-related 

benefits such as veterans’ priority placement for housing. For 

example, according to VA, its EUL with Vancouver Housing Authority 

in Washington to develop a previously vacant site at a VA medical 

center campus supports the agency’s strategic goals of (a) eliminating 

homelessness among veterans by providing housing and (b) reducing 

its inventory of vacant and underutilized capital assets.

• NASA officials said that EULs provide the agency mission-related 

benefits, such as research and development of aerospace 

technologies. For example, according to a NASA official, NASA’s EUL 

with a company that researches and develops battery systems for 

electric vehicles advances the agency’s mission of developing new 

power and propulsion systems for vehicles used in space launches.

• State officials said that EULs provide mission-related benefits by 

allowing the department to maintain properties symbolic of U.S. 

history and diplomacy. For example, State declared the historically 

significant Talleyrand building in Paris excess (see fig. 1) but chose 

not to dispose of it because the building had served as the 

administrative headquarters for the Marshall Plan, the postwar 

American reconstruction plan for Western Europe. According to State 

Department officials, State’s EUL lessee supports the agency’s 

mission by maintaining the building and retaining space inside of it for 

the George C. Marshall Center including a permanent exhibit 

commemorating the Marshall Plan.

Enhanced Mission Activities
 

Page 8 GAO-13-14 Federal Real Property

Figure 1: Department of State EUL for the Hôtel de Talleyrand in Paris, France

• USDA officials said that the agency’s EUL program allows it to better 

utilize property while also collaborating with researchers on missionrelated goals. For example, USDA officials told us that its EUL of 

greenhouse space at its Beltsville Agricultural Research Center has 

allowed the agency to advance its mission of developing more 

efficient crops because the lessee conducts research at the EUL site 

directly linked to this goal. According to USDA officials, each EUL 

lessee is required to have a formal collaborative research agreement 

with the agency.

All four agencies we reviewed reported cash benefits from EULs. 

Individual EULs can generate millions of dollars for the federal 

government, but most EULs generate small amounts of cash revenue. 

For example, the average VA EUL generated about $25,000 in cash 

revenue in fiscal year 2011.20

 

20While most of VA’s EULs did not generate cash revenue in fiscal year 2011, among the 

17 of 53 VA EULs that generated cash revenue, the average was about $79,000 per EUL. 

See table 2 for the total cash rent revenue 

the four agencies in our review received in fiscal year 2011.

Cash Rent Revenue 
 

Page 9 GAO-13-14 Federal Real Property

Table 2: Agencies’ Reported Cash Rent Revenue from EULs, Fiscal Year 2011

Agency Total cash rent revenue Number of EULs

NASA $8.0 million 71

State $1.8 million 3 

VA $1.3 million 53

USDA $15,569 1 a

Source: GAO analysis of agency data.

a

The following represents examples of the cash rent revenue that 

agencies received as part of EULs:

Rental income commenced May 20, 2011.

• NASA’s most lucrative EUL is its lease for land on which its lessee 

plans to build office and research and development space for its 

employees. NASA receives about $3.66 million per year from this 

lessee. Over the 40-year lease, NASA expects to receive 

approximately $147.7 million in cash revenue.

• At one of its EULs, State received an up-front, one-time cash lump 

sum of $46 million and receives nominal annual cash rent payments 

for the 99-year EUL of its former chief of mission residence and land 

in Singapore.21

 

21According to State officials, the agency receives an annual nominal rent payment of 

$1,000 Singapore dollars (or about $760 U.S. dollars), a payment that is a common 

practice for long-term, prepaid leases.

The lessee, a developer, constructed condominiums 

on the land (see fig. 2). Over the course of its 51-year lease for its 

Istanbul embassy property, State will receive approximately $20.6 

million in cash revenue.
 

Page 10 GAO-13-14 Federal Real Property

Figure 2: Department of State’s EUL for a Condominium Development in Singapore

• VA received cash rental income of $340,000 in calendar year 2011 for 

its Somerville, New Jersey, EUL. The lessee renovated the 

warehouse and rented it to tenants.

• USDA received cash rental income of $15,569 in fiscal year 2011 for 

greenhouse space at its Beltsville Agricultural Research Center. The 

lessee uses the facility to research genetically modified plants.

VA, State, and NASA have also reported in-kind consideration as benefits 

of EULs. Specifically, VA estimated that it received in-kind consideration 

worth about $232 million from fiscal years 2006 through 2010. NASA 

estimated that it received in-kind consideration worth about $987,000 

from fiscal years 2007 through 2011. State estimated that it received 

about $46 million in in-kind consideration from fiscal years 2008 through 

2010. The specifics of in-kind arrangements with EUL lessees and the 

benefits claimed by agencies vary, for example:

• VA received priority placement for veterans in a housing facility built 

by the Vancouver Housing Authority as in-kind consideration in lieu of 

cash rent for its EUL in Vancouver, WA. VA officials said that this 

priority placement allowed VA to move patients from the hospital to 

transitional housing earlier, thus freeing up beds for other patients and 

reducing costs. (See fig. 3.) VA estimated the value of this priority 

placement at $2,866,327 in fiscal year 2011. At a different EUL site in 

In-Kind Consideration
 

Page 11 GAO-13-14 Federal Real Property

Vancouver, WA, the Clark County government leased VA-owned land 

and constructed a four story community-health building on it. 

According to VA officials, in lieu of paying cash rent for the land, Clark 

County provided VA with approximately 23,000 square feet of free 

office space in the new building as in-kind consideration in fiscal year 

2011. VA also received priority placement for veterans for all 

programs and services offered in the community-health building as inkind consideration. VA estimated the total value of its in-kind 

consideration at $7,225,879 in fiscal year 2011. However, in 2012, the 

VA OIG found that VA often overstated the value of in-kind 

consideration in its annual report on the performance of its EUL 

program.22 According to VA officials, VA is recalculating and updating 

its EUL methodology used to report expenses and benefits. VA 

officials stated that, as required by law, the revised EUL lease 

consideration calculations will be reported in VA’s fiscal year 2014 

budget that the agency plans to release in February 2013.23

 

22VA Office of Inspector General, Department of Veterans Affairs, Audit of the EnhancedUse Lease Program (Feb. 19, 2012).

23Each year as part of the annual budget submission of the President to Congress, the VA 

Secretary is required to submit a detailed report of the consideration received for each 

enhanced use lease, along with an overview of how VA is using such consideration to 

support veterans. See 38 U.S.C. § 8168(b).
 

Page 12 GAO-13-14 Federal Real Property

Figure 3: Housing Facility Located on Property that VA Leases to the Vancouver 

Housing Authority in Vancouver, Washington

• A NASA EUL lessee at the Ames Research Center made 

improvements, such as investments in fire protection and electrical 

systems, to the facility the lessee rents as in-kind consideration in lieu 

of some of a cash-rent requirement to NASA. NASA estimated the 

total value of this in-kind consideration to be $586,044 from 2004 

through 2009. One of NASA’s EULs includes a provision for in-kind 

consideration of about $1 million if the lessee built a new water tower, 

park, and security gate under certain time frames.24

 

24According to NASA, the lessee did not complete the projects by the required deadlines 

and therefore had to repay NASA the cash value of in-kind consideration already provided 

to the agency (approximately $890,000); however, per the terms of the EUL, the lessee is 

still required to construct the infrastructure, share it with the agency, and convey it to the 

government upon completion of the infrastructure improvements.
 

Page 13 GAO-13-14 Federal Real Property

• State’s EUL with a lessee for the Talleyrand building in Paris also 

included in-kind consideration. In exchange for reduced cash rent of 

$46 million, the lessee renovated the entire building including space to 

house the Department of State’s George C. Marshall Center.

Some of the agencies we reviewed do not include all costs associated 

with their EULs when they assess the performance of their EUL 

programs. Federal agencies are required to assess and report the full 

costs of their activities to provide relevant and reliable cost information to 

assist the Congress and federal executives in making decisions about 

allocating federal resources, assessing costs and benefits to compare 

alternative courses of action, authorizing and modifying programs, and 

evaluating program performance.25

NASA and USDA attribute consultant costs to their EUL programs, but VA 

and State do not. Agencies use consultants to provide subject matter 

expertise and technical support for their EULs, such as conducting real 

estate appraisals, market analyses, engineering studies, and general 

consulting services.

However, OMB Circular A-11 

guidance is broad and does not specify what costs agencies should 

attribute to their EUL programs, resulting in variance among agencies. 

Without fully accounting for all EUL costs, agencies may overstate the net 

benefits of their EUL programs. Specifically, we noted variances in 

whether agencies attributed consultant costs, termination costs, and 

leaseback costs to their overall EUL program costs.

• According to NASA officials, the agency spent about $2 million on 

consultants to support its EUL program from fiscal years 2006 to 

2011. Agency officials added that these costs are attributed to NASA’s 

total EUL program costs in NASA’s annual budget reports to provide a 

fully transparent accounting of the net benefits of the program.

• According to USDA officials, the agency incurred one consultant fee 

as part of its EUL program—a $10,250 market appraisal to determine 

rental rates for properties selected for the program. USDA officials 

said that the agency attributed the consultant costs to its EUL 

 

25Federal Accounting Standards Advisory Board, Statement of Federal Financial 

Accounting Standards 4: Managerial Cost Accounting Standards and Concepts, 

Pronouncements as Amended, Version 7 (June 2008).

Some Agencies Do Not 

Attribute All Costs of EULs 

to Their EUL Programs in 

a Consistent, Appropriate 

Manner

Consultant Costs
 

Page 14 GAO-13-14 Federal Real Property

program and plans to include all costs, including consultant costs, in 

its final report at the conclusion of the agency’s EUL demonstration 

program.

• According to VA officials, consultants are generally realty specialists 

who provide support throughout the various stages of executing an 

EUL agreement. In addition to supplying real estate expertise, EUL 

consultants may facilitate obtaining various reports that are generated 

as part of VA’s due diligence on EUL projects. Such reports can 

include environmental site assessments, property appraisals, surveys 

of EUL parcels, title searches, and various other documentation 

required by law. In fiscal years 2006 to 2011, the agency awarded 

approximately $28 million to consultants related specifically to the 

formulation or support of the agency’s EULs. We reviewed VA’s 

consultant costs related to its EUL program and found that VA had not 

attributed any consultant costs to the EUL program.

• State’s consultant fees for developing, implementing, and overseeing 

its EULs in Paris and Istanbul were approximately $723,000 from 

fiscal years 2006 to 2011. State was unable to verify expenses for 

developing and implementing its EUL in Singapore because of the 

age of the project.26

VA and NASA have incurred costs related to terminating EULs that they 

did not attribute to their EUL programs. Costs that result from terminating 

EULs prior to the end of the term are important considerations for 

decision makers when determining if EULs are viable and beneficial to 

the agency. VA has terminated seven EULs since 1991. According to VA, 

in most cases, the agency terminated the lease because either the lessee 

did not fulfill the terms and conditions of the lease or the lease was 

mutually terminated. Most recently, VA terminated an EUL, and according 

State does not attribute the costs of consultant 

fees to its EUL program costs. State officials said that they do not 

have any consultants with sole EUL responsibility and they consider 

consultant fees to be under the category of administrative costs. State 

officials noted that the amount of consultant fees specifically related to 

EULs is a negligible part of the agency’s overall consultant fees 

because EULs represent a very small portion of State’s 20,000 

properties worldwide.

 

26State officials said because the Singapore EUL was awarded in 1991, they no longer 

had information on expenses. 

Cost of Terminating EULs
 

Page 15 GAO-13-14 Federal Real Property

to VA officials, the cost as of fiscal year 2011 associated with terminating 

this lease was $287,000 for ongoing litigation. We reviewed VA’s 

termination costs and found that VA had not attributed termination costs 

to its EUL program. VA officials said that they do not attribute costs 

associated with termination to its total EUL program costs because it 

attributes these costs at a higher budgetary level. 

According to NASA, the Ames Research Center has terminated 11 EULs 

since 2003, which NASA officials told us were mostly short duration 

leases for office space and included three EULs that were terminated for 

the purpose of consolidating them into one new lease with the same 

lessee. NASA officials said that some termination costs, such as time 

spent calculating a lessee’s penalty for terminating a lease, are not 

attributed to EUL program costs. NASA officials told us that these costs 

have been minimal and cannot be tracked to either EULs or activities 

related to terminating leases and are instead considered general 

administrative costs.

Among the four agencies we reviewed, only VA currently leases back 

space or services from its EUL lessees. In fiscal year 2011, VA leased 

back some or all of its space at seven of its EUL sites at a cost of about 

$15.8 million. For example, VA received $340,000 in rent for its EUL in 

Somerville, New Jersey, but at the same time paid approximately 

$181,000 to lease back part of the facility.27

The appropriate treatment of leaseback costs in determining the net 

benefit of an EUL is an area that may require further clarification in OMB 

guidance. It is unclear, for example, whether leaseback costs associated 

with VA’s leaseback arrangements should be taken into account in 

determining the net benefit of the EUL’s rental income. On the one hand, 

According to VA, the agency 

received the use of one loading bay rent free as in-kind consideration and 

paid approximately $15,000 for utilities, operations, and maintenance 

related to that bay. Two years later, VA requested a second bay in the 

facility for which, according to VA, it paid approximately $166,000 in rent. 

The agency did not consider any of the leaseback costs as arising as part 

of the EUL transaction and instead claimed the entire $340,000 in rental 

income as the cash benefit of the EUL.

 

27VA received the $340,000 payment for calendar year 2011 and paid for the warehouse 

space it used for fiscal year 2011.

Leaseback Costs 
 

Page 16 GAO-13-14 Federal Real Property

the $181,000 paid for the leaseback as described above could be viewed 

as an effective reduction in the lease payment from the lessee. On the 

other hand, in the absence of the EUL, it is possible that VA would have 

expended funds to obtain these warehousing facilities in some other way. 

It may thus not represent net additional cost to VA and it may not be 

appropriate to view the leaseback as having effectively reduced the rental 

income of the EUL.

Based on recent agency experiences, EULs may be a viable option for 

redeveloping underutilized federal real property when disposal is not 

possible or desirable, but agencies raised issues pertaining to EULs that 

affect their use or budgetary treatment. First, NASA has reported that the 

limitation on its authority to accept in-kind consideration has limited its

ability to encourage use of EULs and investments in underutilized NASA 

property. Second, recognizing potential budget impacts associated with 

EUL leasebacks and other long-term commitments has proved 

challenging for VA. Although the results of our review cannot be 

generalized to all agencies, these challenges provide illustrative 

examples of the types of issues that can affect a federal agency’s 

decision or ability to use EULs.

According to NASA officials, in-kind consideration is critical for 

encouraging lessees to invest in agency properties. NASA’s ability to 

accept in-kind consideration expired at the end of 2008; it was restored 

on a limited basis in 2011 exclusively for renewable energy projects. 

NASA officials said that this limitation in the agency’s ability to accept inkind consideration has hindered its ability to enter into EULs that could 

improve the property. In particular, according to the NASA officials, 

prospective lessees are reluctant to make capital improvements that will 

have to be conveyed to the government at the end of the lease without 

receiving other compensation, such as a reduction in cash rent. For 

example, a lessee, as previously discussed, agreed to invest $11 million 

in infrastructure projects that would benefit the company during the lease 

but benefit the government during and after the lease in return for a 

reduction in the lessee’s cash rent payments. Representatives from 

NASA and the lessee told us that this provision was critical to 

successfully negotiating the EUL.

VA officials said that assessing and recognizing the budget impacts of 

EULs is complicated and maybe interpreted differently by agencies with 

Agencies’ 

Experiences in Using 

EULs Provide 

Illustrative Examples 

about EUL Use

In-Kind Consideration

Budget Impacts of EULs
 

Page 17 GAO-13-14 Federal Real Property

EUL authority. In particular, VA EULs can include long-term commitments

that are recognized in the federal budget in different ways. OMB’s 

Circular No. A-11 guidance specifies that lease obligations be recorded 

when the contract is signed; sufficient budget authority must be available 

at that time to cover the obligation. However, the obligated amount that is 

to be recorded differs by type of lease. For capital leases and lease 

purchases, OMB Circular A-11 states that the amount obligated should 

equal the net present value of these lease payments over the full term of 

the lease. For operating leases, OMB Circular A-11 states that agencies 

should record an amount equal to the total payments under the full term 

of the lease or the first year’s lease payments plus cancellation costs.28

The CBO report also stated that:

VA views EUL leasebacks as operating leases and consequently does 

not obligate the total amount of these commitments upfront in its budget. 

VA’s leaseback costs are nearly $16 million annually (see table 3), but VA 

and CBO disagree on the extent to which VA should account for the 

budget impacts for EULs that could include long-term government 

commitments. For example, VA’s leaseback costs for its Chicago West 

Side EUL were about $3.5 million in fiscal year 2011. VA regards its 

underlying office and parking purchase agreements as 2-year operating 

leases, as opposed to capital leases or lease purchases. VA officials said 

that the department is properly treating the office and parking purchase 

agreements as operating leases, because VA can cancel the office and 

parking leasebacks at the end of each 2-year agreement. However, in a 

2003 report to Congress on the budgetary treatment of leases, CBO 

found that VA used this enhanced use lease to obtain a $60 million 

regional headquarters building and parking facility. The CBO report stated 

that VA entered into a 35-year enhanced use lease for a four-acre site 

with an owner trust, with VA as the sole named beneficiary. VA 

subsequently leased back space in the building and the parking facility 

that the lessee constructed on the site.

• VA’s lease payments played a crucial role in allowing the lessee to 

borrow funds. VA is committed to a two-year lease of 95 percent of 

 

28For prior GAO reports on the budgetary treatment of federal leases; see, for example, 

GAO-05-55; GAO, Budget Issues: Alternative Approaches to Finance Federal Capital, 

GAO-03-1011 (Washington, D.C.: Aug. 21, 2003); and GAO, Federal Real Property: NIH 

Has Improved Its Leasing Process, but Needs to Provide Congress with Information on 

Some Leases, GAO-06-918 (Washington, D.C.: Sept. 8, 2006).
 

Page 18 GAO-13-14 Federal Real Property

the space in the building and 95 percent of the parking facility; almost 

all of the lessee’s revenue will initially come from VA.

• The initial two-year lease is automatically renewed unless the VA 

takes specific steps at the end of the lease period to halt it. In 

addition, as long as VA chooses to occupy any portion of the facility it 

must make payments that are sufficient to cover amortization and 

interest on the lessee’s debt.

• VA also has the right to purchase the building from the lessee at any 

time for a price that would cover payments on the lessee’s debt.

• Thus, VA has a long-term commitment to cover the lessee’s capital 

costs even if it reduces its occupancy in the building, and this, 

together with an implicit right to renew the lease, would appear to 

make the arrangement either a lease-purchase or, if the trust is not 

viewed as a separate entity from VA, a government purchase 

financed by federal borrowing.

As such, CBO concluded in its report that the intent of the West Side EUL 

project was to provide VA with capital assets (an office building and 

parking facilities for VA staff) without recording the cost of the purchase 

upfront in the budget.29 In general, we have also consistently stated that 

the full costs of the government’s commitments should be reflected 

upfront in the budget.30 In commenting on a draft of this report, VA 

officials said the agency made changes in subsequent EULs to address 

and in their view eliminate CBO’s early concerns related to EULs with 

leasebacks.

 

29Congressional Budget Office, The Budgetary Treatment of Leases and Public/Private 

Ventures, (Washington, D.C.: February 2003) at 33-34 and 45. 

30See GAO-05-55, GAO-03-1011, and GAO-06-918. 
 

Page 19 GAO-13-14 Federal Real Property

Table 3: VA EUL Leaseback Costs in Fiscal Year 2011

EUL location Type of EUL project

VA leaseback costs,

fiscal year 2011

Leavenworth, KS Residential health care $14,989

Milwaukee, WI

a

Office space for VA regional staff $2,448,713

Somerville, NJ Mixed use warehouse $181,391

Salt Lake City I, UT Office space for VA regional and field staff $2,142,451

Salt Lake City II, UT Office space for VA regional and field staff $2,626,209

Chicago (West Side), IL Office space for VA regional staff $3,502,894

Atlanta, GA Office space for VA regional staff $4,910,903

Total $15,827,550

Source: GAO analysis of VA data.

a

VA also has energy project EULs at Chicago West Side, Illinois; North 

Chicago, Illinois; and Mountain Home, Tennessee, which have a similar 

legal structure as the Chicago West Side agreement for the regional 

headquarters building. VA officials stated that they disagree with CBO’s 

conclusions about the budget impacts of these EULs. VA entered into 35-

year EULs for land with owner trusts as part of the energy project EULs.

In return the lessee agrees to build power plants to service on-site VA 

facilities. VA purchases power from the plants at a fixed price,

According to VA, the building was not operational until April 2011, therefore this is not a full year 

payment.

31

 

31For both Chicago EULs, if the established rates for power are at least 25 percent higher 

than available market rates, the rates will be renegotiated.

in lieu of 

GSA energy utility contracts, for stipulated two-year terms, subject to 

certain anticipated renewal provisions. VA is committed to purchase 

power from the lessee at fixed prices as long as the VA center remained 

open and even if VA reduced its level of purchases, VA would continue to 

cover the lessee’s capital costs. These purchase agreements with VA 

provided enough security to allow the lessees to obtain private loans to 

construct the power plants. VA officials said that VA did not report the 

total 35-year commitment for these EULs in its budget because of its 

determination that the cost to provide energy services to VA medical 

centers is not a new expenditure and without the EUL—VA would still 

need to procure services to power medical centers. In addition, VA 

officials said that they believe that accounting for all 35 years of costs 

upfront in the budget would not be technically appropriate, since VA 
 

Page 20 GAO-13-14 Federal Real Property

would be determining in advance that it would prospectively receive 

energy under the purchase agreements for 35 year periods without 

recognizing VA’s two-year renewal options. However, CBO reported that 

VA’s commitment to pay the lessees annual amounts sufficient to service 

the private debt on the power plants—regardless of whether VA uses the 

power produced—as constituting a legally binding obligation of the federal 

government that should be recorded in full upfront in the budget.32

Agencies have shown that EULs have the potential to produce missionrelated and financial benefits for otherwise underutilized federal real 

property, but the costs and benefits of these programs are not fully 

understood, given different agency practices in accounting for EUL costs. 

Some EULs bring in large amounts of cash rent, such as the State 

Department’s $20.6 million Istanbul EUL and NASA’s $147.7 million EUL, 

but most EULs have much more modest benefits to the government 

where the costs could more easily outweigh the benefits. For example, 

the average VA EUL earned about $25,000 in cash revenue last year—

financial benefits that could be outweighed by consultant, termination, 

and leaseback costs, which agencies have not consistently attributed to 

their EUL programs. Lacking clear guidance and failing to incorporate all 

of the costs related to agencies’ EUL programs could cause agencies to 

overstate the net benefits of these programs when reporting the 

performance of their EUL programs or making decisions about future 

EULs.

To promote transparency about EULs, improve decision-making 

regarding EULs, and ensure more accurate accounting of EUL net 

benefits, we recommend that OMB work with VA, NASA, State, and 

USDA, and any other agencies with EUL authority, to ensure that 

agencies consistently attribute all costs associated with EULs (such as 

consulting, termination, and leaseback costs) to their EUL programs, as 

appropriate.

 

32See Congressional Budget Office, The Budgetary Treatment of Leases and 

Public/Private Venture (Washington, D.C.: February 2003).

Conclusions 

Recommendation 
 

Page 21 GAO-13-14 Federal Real Property

We provided a draft of this report to the Deputy Director for Management 

of OMB and the Secretaries of Veterans Affairs, State, and Agriculture 

and the Administrator of NASA for review and comment. In commenting 

on a draft of this report, OMB generally agreed with GAO’s observations 

and recommendation. OMB emphasized that Circular No. A-11 provides 

guidance on budget scoring and is not intended to address the costs and 

benefits of EULs. We amended our recommendation to reflect that there 

are a variety of ways to ensure that the costs of EULs are consistently 

tracked and reported. Veterans Affairs, State, Agriculture, and NASA 

generally agreed with our conclusions and the agencies provided 

technical comments, which we incorporated as appropriate. See appendix 

III for VA’s comments along with our responses to the technical 

comments. 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution until 30 days from the 

report date. At that time, we will send copies to the Deputy Director for 

Management of OMB and the Secretaries of Veterans Affairs, State, and 

Agriculture, and the Administrator of NASA. Additional copies will be sent 

to interested congressional committees. In addition, the report will be 

available at no charge on the GAO website at http://www.gao.gov. 

If you have any questions about this report, please contact me at (202) 

512-2834 or wised@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs maybe found on the last page 

of this report. Major contributors to this report are listed in appendix IV.

Sincerely yours,

David J. Wise

Director

Physical Infrastructure Issues

Agency Comments
Appendix I: Objectives, Scope, and

Methodology

Page 22 GAO-13-14 Federal Real Property

Our objectives were to determine:

(1) To what extent do agencies attribute the full benefits and costs of their 

EULs in their assessments of their EUL programs?

(2) What have been the experiences of agencies in using their EUL 

authority?

To address these both of these objectives we reviewed prior GAO reports 

on enhanced use leasing and capital financing,1 and contacted the Office 

of Management and Budget (OMB), Congressional Budget Office (CBO) 

and 11 agencies: (1) Veterans Affairs (VA), (2) National Aeronautics and 

Space Administration (NASA), (3) Department of State (State), (4) 

Department of Agriculture (USDA), (5) General Services Administration 

(GSA), (6) Department of Energy (Energy), (7) Department of Interior 

(Interior), (8) Department of Justice (DOJ), (9) United States Postal 

Service (USPS), (10) St. Lawrence Seaway Development Corporation 

(SLSDC), and (11) Tennessee Valley Authority (TVA) based on size or 

evidence of EUL authority.2 We identified the 11 agencies based on our 

review of property data and documents from: (1) The 7 largest civilian real 

property holding agencies, by total square footage, as of fiscal year 2010, 

as listed in the Federal Real Property Profile,3

GAO-09-283R

(2) GSA’s Real Property 

Authorities for Federal Agencies (2008), (3) Agencies’ Authorities 

Regarding EULs and Real Property Sales from , and (4) 

interviews with officials from agencies identified in the above 3 sources to 

determine if they used EULs and if they knew of any other agencies that 

used EULs. Using information from the 11 agencies we contacted, we 

 

1

GAO, Defense Infrastructure: The Enhanced Use Lease Program Requires Management 

Attention, GAO-11-574, (Washington, D.C.: June 30, 2011); GAO, Federal Real Property: 

Authorities and Actions Regarding Enhanced Use Leases and Sale of Unneeded Real 

Property, GAO-09-283R (Washington, D.C.: Feb. 17, 2009); GAO, NASA: Enhanced Use 

Leasing Program Needs Additional Controls, GAO-07-306R (Washington, D.C.: Mar. 1, 

2007); and GAO, Capital Financing: Partnerships and Energy Savings Performance 

Contracts Raise Budgeting and Monitoring Concerns, GAO-05-55, (Washington, D.C.: 

December 16, 2004). 

2

We excluded the Department of Defense (DOD) because GAO recently issued a report 

on DOD’s EUL program, see GAO-11-574. 

3

We reported on problems with the FRPP data in GAO, Federal Real Property: National 

Strategy and Better Data Needed to Improve Management of Excess and Underutilized 

Property, GAO-12-645, (Washington, D.C. June 20, 2012), but determined that it was 

suitable for purposes of this report.

Appendix I: Objectives, Scope, and 

Methodology 
Appendix I: Objectives, Scope, and 

Methodology

Page 23 GAO-13-14 Federal Real Property

selected the 4 agencies (VA, NASA, State and USDA) that have used 

their EUL authority to enter into EULs.4

 

4

We excluded several of these agencies because they did not have EULs or EUL 

authority (Interior, Justice, and the St. Lawrence Seaway Development Corporation). GSA 

has EUL authority, but has not awarded EULs. Further, USPS and Tennessee Valley 

Authority officials told us that they do not consider their leases or leasebacks, respectively, 

as EULs. We also excluded DOD because we recently issued a report on its EUL 

program, 

We selected 16 case study EULs 

from the four agencies that have EULs based on a range of lease 

purposes (e.g., leasing of vacant land for development and leasing 

unused office space); estimated financial benefits (e.g., cash benefits and 

in-kind consideration); and varying geographic locations. The case 

studies were located in Chicago, IL; North Chicago, IL; Mountain Home, 

TN; Vancouver, WA; Somerville, NJ; Moffett Field, CA; Beltsville, MD; 

Fort Howard, MD; Paris, France; Istanbul, Turkey, and Singapore. 

Because the 16 case studies were selected based on a non-probability 

sample, observations made based on our review of the 16 case study 

locations do not support generalizations about other EUL sites. Rather, 

the observations made provided specific, detailed examples of issues that 

were described by agency officials and lessees. We also interviewed 

agency officials at the local level and headquarters locations, and 

reviewed relevant laws describing agencies’ EUL authorities and agency 

documentation, including agencies’ regulations and guidance on 

enhanced use leasing. We visited the 9 case studies located in the U.S. 

to observe the properties firsthand, interviewed agency officials and 

lessees about their experience with EULs at these locations, and 

reviewed documentation regarding these properties. The case study 

EULs were located at NASA’s Ames Research Center in Moffett Field, 

California, VA sites in Maryland, New Jersey and Washington state, and a 

USDA agricultural research center in Beltsville, Maryland. For the three 

State case studies we did not visit, we interviewed headquarters officials 

and reviewed relevant documentation including site-visit reports. For the 

four VA sites we did not visit in Chicago, Illinois, Chicago (West Side), 

Illinois; North Chicago, Illinois; and Mountain Home, Tennessee, we 

reviewed the agreements between VA and its lessees and the past work 

of the Congressional Budget Office and the VA’s Office of Inspector 

General. We also interviewed OMB, CBO, and GSA officials to better 

understand government-wide views, guidance, and practices on 

enhanced use leasing.

GAO-11-574. 
Appendix I: Objectives, Scope, and 

Methodology

Page 24 GAO-13-14 Federal Real Property

We conducted this performance audit from October 2011 to December 

2012 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.
Appendix II: 16 Case Study Enhanced Use 

Leases by Location, Property Type, and Tenant 

Use

Page 25 GAO-13-14 Federal Real Property

As shown in table 3, we reviewed 16 case study EULs. We reviewed 8

VA EULs, 4 from NASA, 3 from State, and 1 from USDA.

Table 4: EULs by Agency

Agency Location Agency property EUL tenant use of property

VA Somerville, NJ Warehouse Renovate warehouse

Vancouver, WA Vacant land Construct health care facility

Vancouver, WA Vacant land Construct housing 

Fort Howard, MD Vacant land and buildings Construct housing 

Chicago, IL (West Side) Vacant land Construct office space and parking facility

Chicago, IL Vacant land Construct energy center

Mountain Home, TN Vacant land Construct co-generation plant

North Chicago, IL Vacant land Construct energy center

NASA Moffett Field, CA Animal research facility Animal husbandry and research

Moffett Field, CA Warehouse Electric vehicle research

Moffett Field, CA Vacant land Construct multi-story office buildings and research 

and development space

Moffett Field, CA Hangar Storage of satellite equipment

State Istanbul, Turkey Historic embassy compound Restore and convert buildings, construct hotel

Paris, France Historically significant building Restore building and lease office space

Singapore Embassy property Build condominiums

USDA Beltsville, MD Greenhouse Plant-based research

Source: GAO analysis of agency data.

Appendix II: 16 Case Study Enhanced Use 

Leases by Location, Property Type, and 

Tenant Use
Appendix III: Comments from the Department 

of Veterans Affairs

Page 26 GAO-13-14 Federal Real Property

Appendix III: Comments from the 

Department of Veterans Affairs

Note: GAO comments 

supplementing those in 

the report’s text appear at 

the end of this appendix.
Appendix III: Comments from the Department 

of Veterans Affairs

Page 27 GAO-13-14 Federal Real Property

Now on p. 15.

See comment 4.

Now on p. 14. 

See comment 3.

Now on p. 11.

See comment 2.

See comment. 1.
Appendix III: Comments from the Department 

of Veterans Affairs

Page 28 GAO-13-14 Federal Real Property

Now on p. 15. 

See comment 5.
Appendix III: Comments from the Department 

of Veterans Affairs

Page 29 GAO-13-14 Federal Real Property

The following are GAO’s comments on the U.S. Department of Veterans 

Affairs (VA) letter dated November 29, 2012.

1. VA suggested changing this paragraph related to its energy programs. 

We edited the paragraph to align with the related text in the body of 

the report to which we added context on the different types of EULs 

that can include long-term government commitments, including those 

types described in VA’s comment.

2. We made the changes suggested by VA.

3. VA indicated that it already reports its consultant costs associated 

with its EULs as part of its overall management costs. We continue to 

believe that VA should report all EUL costs as part of its EUL program 

specifically, including consultant costs.

4. VA indicated that it attributed termination costs to its overall 

program—but not its EUL program. We continue to believe that VA 

should report all EUL costs as part of its EUL program, including 

termination costs. 

5. VA indicated that its leaseback of the second bay at Somerville was 

not identified at the time of lease execution, but this contention is not 

supported by the lease agreements.

GAO Comments
Appendix IV: GAO Contact and Staff 

Acknowledgments

Page 30 GAO-13-14 Federal Real Property

David J. Wise at (202) 512-2834 or at wised@gao.gov

In addition to the contact named above, Keith Cunningham, Assistant 

Director; Amy Abramowitz; Melissa Bodeau; Carol Henn; Hannah Laufe; 

James Leonard; Sara Ann Moessbauer; Lisa G. Shibata; and Crystal 

Wesco made key contributions to his report.

Appendix IV: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments 

(542196)
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