69–010 

Calendar No. 755 

110TH CONGRESS REPORT " ! SENATE 2nd Session 110–343 

TO AMEND THE INTERNATIONAL CENTER ACT TO AUTHORIZE THE LEASE OR SUBLEASE OF CERTAIN PROPERTY DESCRIBED IN SUCH ACT TO AN ENTITY OTHER 

THAN A FOREIGN GOVERNMENT OR INTERNATIONAL 

ORGANIZATION IF CERTAIN CONDITIONS ARE MET 

JUNE 2, 2008.—Ordered to be printed 

Mr. BIDEN, from the Committee on Foreign Relations, 

submitted the following 

R E P O R T 

[To accompany H.R. 3913] 

The Committee on Foreign Relations, having had under consider- ation the bill (H.R. 3913), to amend the International Center Act 

to authorize the lease or sublease of certain property described in 

such Act to an entity other than a foreign government or international organization if certain conditions are met, having considered the same, reports favorably thereon without amendment and 

recommends that the bill do pass. 

CONTENTS 

Page 

I. Purpose ........................................................................................................... 1 

II. Committee Action .......................................................................................... 1 

III. Discussion ....................................................................................................... 2 

IV. Section-by-Section Analysis .......................................................................... 3 

V. Cost Estimate ................................................................................................. 4 

VI. Evaluation of Regulatory Impact .................................................................. 5 

VII. Changes in Existing Law .............................................................................. 5 

VIII. Appendix ......................................................................................................... 5 

I. PURPOSE

The purpose of the legislation is to amend the International Cen- ter Act (P.L. 90–553) to permit the lease or sublease of property in 

the Center to an entity other than a foreign government or international organization, subject to the approval of the Secretary of 

State. 

II. COMMITTEE ACTION

H.R. 3913 was introduced on October 22, 2007, by Representative Ileana Ros-Lehtinen. It was approved by the House Committee on 

Transportation and Infrastructure on January 16, 2008. The House 


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of Representatives approved the bill by voice vote on January 28, 

2008. Senator Cardin introduced an identical companion bill, S. 

2322, on November 7, 2007. It is cosponsored by Senators Coleman 

and Stevens. 

On May 20, 2008, the committee ordered H.R. 3913 favorably re- ported, without amendment. 

III. DISCUSSION

Forty years ago, Congress set aside several dozen acres of feder- ally-owned land in northwest Washington, DC (bordered roughly by 

Connecticut Avenue, Tilden Street, Reno Road and Yuma Street), 

to serve as a site for the construction of foreign embassies. The legislation helped enable the United States to fulfill its obligation 

under Article 21 of the Vienna Convention on Diplomatic Relations, 

which requires a ‘‘receiving State’’ to ‘‘either facilitate the acquisition on its territory, in accordance with its laws, by the sending 

State of premises necessary for its mission or assist the latter in 

obtaining accommodation in some other way.’’ The legislation enacted in 1968, known as the International Center Act (P.L. 90– 

553), authorized the Secretary of State to sell or lease property in 

the Center to foreign governments and international organizations. 

Another purpose of the Act was to set aside land within the International Center for a headquarters building for the Organization of 

American States (OAS); however, the OAS did not move its headquarters to the International Center. 

In 1982, the International Center Act was amended in several respects. One purpose of the 1982 legislation (P.L. 97–186) was to facilitate the construction of the headquarters of the International 

Telecommunications Satellite Organization, or INTELSAT, in the 

south-easternmost section of the property. At the time, INTELSAT 

was an international organization that had been established in the 

1960s pursuant to an initiative of the Kennedy Administration. 

Following enactment of P.L. 97–186 and pursuant to a ground 

lease initially signed with the Department of State in 1982, 

INTELSAT constructed its headquarters building in the International Center. The lease, which has been amended several times, 

is for a term of 99 years, with an option to renew for an additional 

99 years. To sum up, the company owns the headquarters building, 

but leases the land under the building from the Department of 

State. 

In the late 1990s, the Clinton Administration and Congress un- dertook an initiative to privatize INTELSAT, which resulted in the 

enactment of the ‘‘Open-market Reorganization for the Betterment 

of International Telecommunications Act’’ or the ‘‘ORBIT Act’’ (P.L. 

106–180). Pursuant to the ORBIT Act, INTELSAT was converted 

into a private company, now called Intelsat, Ltd., on July 18, 2001. 

Thus, as of that date, the company was no longer an international 

organization. The presence of its headquarters building in the 

International Center is, therefore, inconsistent with the provision 

in the International Center Act limiting occupants to foreign embassies or international organizations. Nonetheless, the Department of State has continued to accept lease payments from the 

company, as well as agreed to amendments to the lease, most recently in 2006. Although there is no danger of the Department 

seeking to eject Intelsat from the property, the company considers 


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the current situation a ‘‘cloud’’ on its lease. Accordingly, it has requested support from the Department of State and the Congress for 

the amendment to the International Center Act made by H.R. 

3913. 

The Department of State has indicated to the committee that it 

does not oppose H.R. 3913. In 2007, in response to a request from 

the committee, the Department undertook a new real estate appraisal of the Intelsat building in order to determine the viability 

of federal acquisition of it. The Department leadership, after reviewing the appraisal and various options, decided that federal 

purchase was not viable. See Letter from Jeffrey T. Bergner, Assistant Secretary of State for Legislative Affairs to Senator Biden, May 

16, 2008 (set forth in the appendix). 

It is possible that Intelsat will seek to sell the headquarters 

building and its leasehold interests and relocate its headquarters 

operations. Under the lease with the State Department, the company has the right to assign, sublet or otherwise transfer its leasehold interests to another entity, subject to the approval of the Secretary of State. The terms of the lease empower the Secretary to 

deny Intelsat the right to complete a transfer if the Secretary determines (1) that the use, development or occupancy by the proposed transferee could impair the safety or security of the International Center (under the Vienna Convention, the United States 

has the duty to protect the embassies there), or (2) if the Secretary 

reasonably demonstrates that the use, development or occupancy 

could impair the continued operation of the International Center or 

could be contrary to the character of commercially acceptable uses 

or occupants in the surrounding area. Any determination based on 

safety or security must be made personally by the Secretary and 

shall be final and conclusive as a matter of law. Any determination 

based on other grounds is subject to judicial review. The Department believes that the lease provisions are adequate to protect the 

interests of the United States. See Letter from Jeffrey T. Bergner, 

Assistant Secretary of State for Legislative Affairs to Senator 

Biden, May 23, 2007 (set forth in the appendix). Under the terms 

of the lease, the United States would have no right to any profits 

arising from the transfer of the leasehold interests. 

The committee expects that the Department of State will closely 

review any new tenant or proposed use, consistent with its duty 

under the Vienna Convention and its rights under the lease. The 

committee also expects that the Department will inform the committee about any significant change in the status of the ownership 

or occupancy of the building. 

IV. SECTION-BY-SECTION ANALYSIS

H.R. 3913 has only one section. It adds a new sentence to the 

end of Section 1 of the International Center Act to override the provision in that section limiting the sale, exchange or lease of property in the International Center to foreign governments or international organizations. The provision in H.R. 3913 allows certain 

portions of the International Center to be ‘‘leased or subleased to 

an entity other than a foreign government or international organization,’’ subject to the approval of the Secretary of State. 


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V. COST ESTIMATE

In accordance with Rule XXVI, paragraph 11(a) of the Standing 

Rules of the Senate, the committee provides this estimate of the 

costs of this legislation prepared by the Congressional Budget Office. 

UNITED STATES CONGRESS, CONGRESSIONAL BUDGET OFFICE, Washington, DC, May 29, 2008. 

Hon. JOSEPH R. BIDEN, JR., 

Chairman, Committee on Foreign Relations, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 3913, an act to amend the 

International Center Act to authorize the lease or sublease of certain property described in such act to an entity other than a foreign government or international organization if certain conditions 

are met. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Sunita D’Monte. 

Sincerely, 

PETER R. ORSZAG. 

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

May 29, 2008. 

H.R. 3913 would amend current law to allow private entities to 

lease certain property at the International Chancery Center 

(ICC)—a parcel of land in Washington, D.C., owned by the Federal 

Government. Under current law, only foreign governments and 

international organizations are eligible to lease property at the 

ICC. CBO estimates that H.R. 3913 wouldhave no effect on the 

Federal budget. 

The property specified in H.R. 3913 has been leased to Intelsat 

since 1982. Intelsat was established in 1964 as an international organization, but was privatized in 2001. The act would clarify 

Intelsat’s right to continue under its lease as a private corporation. 

The Department of State reports that since being privatized, 

Intelsat has made all the payments required under its lease, and 

CBO expects it would continue to do so under the act. 

H.R. 3913 also would allow Intelsat to sublet or otherwise transfer its lease to another private entity, subject to approval of the 

Secretary of State. 

H.R. 3913 contains no intergovernmental or private-sector mandates as defined in the Unfunded Mandates Reform Act and would 

impose no costs on state, local, or tribal governments. 

On January 18, 2008, CBO transmitted a cost estimate for H.R. 

3913 as ordered reported by the House Committee on Transportation and Infrastructure on January 16, 2008. The two versions of 

the legislation are similar, and their estimated costs are identical. 

The CBO staff contact for this estimate is Sunita D’Monte. This 

estimate was approved by Theresa Gullo, Deputy Assistant Director for Budget Analysis. 


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VI. EVALUATION OF REGULATORY IMPACT

Pursuant to Rule XXVI, paragraph 11(b) of the Standing Rules 

of the Senate, the committee has determined that there is no regulatory impact as a result of this legislation. 

VII. CHANGES IN EXISTING LAW

Pursuant to Rule XXVI, paragraph 12 of the Standing Rules of 

the Senate, changes in existing law made by the bill, as reported, 

are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italic, and existing law in which no change is proposed is shown in roman). 

INTERNATIONAL CENTER ACT (P.L. 90–553) 

Be it enacted by the Senate and House of Representatives of the 

United States of America in Congress assembled, That in order to 

facilitate the conduct of foreign relations by the Department of 

State in Washington, District of Columbia, through the creation of 

a more propitious atmosphere for the establishment of foreign government and international organization offices and other facilities, 

the Secretary of State is authorized to develop in coordination with 

the Administrator of General Services for, or to sell, exchange, or 

lease to foreign governments and international organizations property owned by the United States in the Northwest section of the 

District of Columbia bounded by Connecticut Avenue, Yuma Street, 

36th Street, Reno Road, and Tilden Street, except that portion of 

lot 802 in square 1964, the jurisdiction over which was transferred 

to the District of Columbia for use as an educational facility, upon 

such terms and conditions as the Secretary may prescribe. Every 

lease, contract of sale, deed, and other document of transfer shall 

provide (a) that the foreign government shall devote the property 

transferred to use for legation purposes, or (b) that the international organization shall devote the property transferred to its 

official uses. Notwithstanding the foregoing limitations, the property 

identified by the District of Columbia as tax lots 803, 804, 805, and 

806 within the area described in this section may be leased or subleased to an entity other than a foreign government or international 

organization, so long as the Secretary maintains the right to approve the occupant and the intended use of the property. 

VIII. APPENDIX

U.S. DEPARTMENT OF STATE, Washington, DC, May 18, 2007. 

Hon. JOSEPH R. BIDEN, JR., Chairman, Committee on Foreign Relations, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: Thank you for your letter of April 26 regarding Intelsat, Ltd.’s request for a legislative amendment to the 

International Center Act (P.L. 90–553) to permit the continued 

presence of its headquarters building at the International Center 

in Washington, D.C. The answers to your questions are enclosed. 


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We hope this information is helpful in addressing your concerns. Please feel free to contact us further on this or any other matter 

of concern to you. Sincerely, 

JEFFREY T. BERGNER, Assistant Secretary Legislative Affairs. 

Enclosure: As Stated. 

QUESTIONS AND ANSWERS

Question 1. Does the Department support the proposed amendment to the International Center Act? If so, why? 

Answer. At this time we do not oppose the proposed amendment. 

The proposed legislation would serve to correct the anomaly of a 

commercial corporation holding an International Center lease. This 

anomaly arose incident to Intelsat’s privatization. 

Question 2. Has the Department considered the feasibility of pur- chasing the building from Intelsat? Would it be of any use to the 

Department operations? Could the building be purchased, followed 

by the removal of the building, and the sale of the vacant land? 

Please elaborate on the factors relevant to these questions. 

Answer. The Department originally considered the feasibility of purchasing the building from Intelsat in 2003. At that time the 

market purchase price was between $120 and $138 million, The 

Department found the building inefficiently designed, with considerable unusable space. The Department still believes the building 

will not meet our current and planned office space needs. However, 

due to the time lapse since the last appraisal, a new appraisal for 

the land has been contracted and should be done by August 30. 

Question 3. Are there any limitations on Intelsat’s ability to as- sign the ground lease? 

Answer. Under Article 7–1(B) of the amended lease, Intelsat has 

the right to assign and transfer the ground lease to: (1) an International organization or a foreign government acceptable to the Department, for the official uses of an International Organization or 

for Legation purposes, or to an agency or instrumentality of the 

United States Government; (2) a Non-Official Party, as provided in 

Article 7–2 or as otherwise provided by the express terms of the 

Lease, for purposes of performing Lessee’s obligations to construct, 

reconstruct, repair, or maintain Improvements and/or transfer by 

such Non-Official Party to an International Organization or a foreign government for the official uses of an International Organization or for Legation purposes or to an agency or instrumentality of 

the United States Government; or (3) by Novation to the Successor 

Entity upon transfer of the Improvements to the Successor Entity. 

In addition, Intelsat has the right to assign, sublet or otherwise 

transfer the property subject to the approval requirements summarized in the response to question #4 below. 

Question 4. What ability does the Department have under the 

ground lease to review or reject any assignee? 

Answer. Under Article 7–1(B) of the amended lease, Intelsat 

must provide the Department a written request prior to any Transfer at least 60 days prior to the date of the proposed Transfer. The 

Department may deny Intelsat the right to complete the transfer 


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if the Secretary of State determines that the use, development or 

occupancy by the proposed Transferee could impair the safety or 

security of the International Center or the Secretary reasonably 

demonstrates that the use, development or occupancy could impair 

the continued operation of the International Center or could be contrary to the character of commercially acceptable uses or occupants 

in the surrounding area. Any determination based on safety and 

security considerations must be made personally by the Secretary 

and is final and conclusive as matter of law. 

Denial of permission to complete a transfer on the other grounds specified is subject to judicial review. 

Question 5. Are there any zoning matters under District of Co- lumbia law that should be addressed prior to congressional consideration of the legislation? 

Answer. While zoning issues could arise regarding potential fu- ture uses for the property, the Department is not aware of any current issues. 

Question 6. Are there any applicable laws or regulations administered by the General Services Administration that would govern 

any assignment of the lease of which the Committee should be 

aware? 

Answer. No. 

Question 7. Does the Department believe any additional provisions are necessary in any legislation in order to protect the interests of the United States? 

Answer. The Department believes the terms of the lease as 

amended adequately protect the interests of the United States Government. 

U.S. DEPARTMENT OF STATE, Washington, DC, May 16, 2008. 

Hon. JOSEPH R. BIDEN, JR., 

Chairman, Committee on Foreign Relations, 

U.S. Senate, Washington, DC. 

DEAR MR. CHAIRMAN: The Department of State wishes to provide 

you with an updated report regarding Intelsat, Ltd.’s request for a 

legislative amendment to the International Center Act (P.L. 90– 

553) to permit the continued presence of its headquarters building 

at the International Center in Washington, D.C. 

The Department’s position has not changed from last year. We 

do not oppose H.R. 3913, which passed the House earlier this year. 

The legislation would serve to correct the exception of a commercial 

corporation holding an International Center lease. 

The Department contracted for a new appraisal of the Intelsat 

building to include an evaluation of the viability of federal ownership. The current market value of the building is approximately 

$81,000,000 plus an amount to terminate the land lease. Since the 

building is inefficiently designed for a single occupant such as the 

Department, we also looked at the possibility of using the 14 separate pods as potential sites to house foreign embassies as an expansion to the International Chancery Center (ICC). Excluding the cost 


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of purchasing the building, the total renovation costs under this 

use scenario is estimated to be $19,000,000. 

On a practical matter, the viability of the Intelsat Building as a 

possible expansion of the ICC is questionable and far exceeds the 

original intent of establishing an ICC in which each chancery is 

built and maintained by the particular foreign government, with 

only minimal oversight by the Department. Given this, the Department continues to believe that it is not within its best interest to 

attempt to purchase the Intelsat building. 

We hope this information is helpful as you consider H.R. 3913. 

Please feel free to contact us further on this or any other matter 

of concern to you. 

Sincerely, 

JEFFREY T. BERGNER, Assistant Secretary Legislative Affairs. 

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