Today, the Governmental Affairs Committee will examine the challenges the federal government faces in managing its real property. The government’s real property assets are worth an estimated $328 billion and include more than 3 billion square feet of building space. Some of the federal government’s assets are historically significant and valuable, yet deteriorating and rundown.

In January of this year, the General Accounting Office (GAO) added federal real property to its High Risk List, which it reserves for programs that are particularly vulnerable to waste, fraud, abuse, or mismanagement. GAO’s work in this area has shown that the federal portfolio is in an “alarming state of deterioration,” in large part because of the federal government’s ineffective management of these assets.

The federal government also has considerable property that it no longer needs. Just weeks ago, the General Accounting Office released a report identifying 600 vacant properties and 327 underutilized properties owned by three agencies: the General Services Administration, the Department of Veterans Affairs, and the U.S. Postal Service. These 927 properties represent more than 2,000 acres and 32.1 million square feet of vacant or underutilized space. By way of comparison, the Pentagon consists of approximately 3.7 million square feet of office space. This means that the GSA alone currently possesses the equivalent of almost five Pentagons worth of vacant or underutilized space, which is costly to maintain, and could be put to better use. We can and must do better.

To see an example of underutilized federal property, the Committee staff visited the
L. Mendel Rivers federal building in South Carolina. It has sat vacant since it was damaged in a hurricane in 1999, despite the fact that it is located on valuable property on the edge of downtown Charleston. Another example of underutilized federal property is right down Pennsylvania Avenue. Due to government inaction, the Old Post Office Pavilion Annex has been empty for more than 10 years.

Adding insult to injury, the federal government spends considerable money to maintain this empty space. This is government waste, plain and simple.

Today I have asked David Walker, the Comptroller General of the United States, to report to this Committee on the long-standing challenges facing the federal government in this area.

Federal property is, after all, the property of the American people. An example of the mismanagement of taxpayers’ property can be found right in the Capitol’s backyard. St. Elizabeths Hospital was founded in 1855 to provide for treatment of the mentally ill. This hospital served as the first and only national federal mental health facility. At its height in the early to mid 1960s, St. Elizabeths had almost 4,000 employees who cared for approximately 7,000 patients. The deterioration of the West Campus of St. Elizabeths Hospital is a particularly tragic example of how the federal government’s mismanagement of its real property can result in massive waste of taxpayer dollars. This hearing will examine how this once elegant, thriving federal property deteriorated to the point that it could cost nearly $500 million to rehabilitate its buildings.

Many people mistakenly believe that St. Elizabeths Hospital is owned by the District of Columbia. In fact, that’s only half right. St. Elizabeths is fairly equally divided between an East and West Campus, the former of which was given to the District of Columbia by an Act of Congress in 1984. The 182-acre West Campus is still owned by the Department of Health and Human Services, but is currently occupied by the District of Columbia Department of Mental Health under a use permit signed in 1987. As a result, HHS and the District Government share responsibility for its deplorable condition. Although the District Government, by agreement, was responsible for the upkeep of St. Elizabeths, HHS, as owner and landlord, should never have allowed St. Elizabeths to reach such a deplorable state. The poor oversight of St. Elizabeths by HHS and the District is inexcusable. What was a valuable asset in the mid-1980s is today a massive liability.

I have visited this historic property, and its condition is truly deplorable. The Committee’s staff has documented the extensive damage resulting from the neglect of this property and will be presenting the results of their investigation today.

I have also asked witnesses from HHS and the District of Columbia government to testify today about the management of St. Elizabeths.

Although St. Elizabeths Hospital may be an extreme example of mismanagement of federally owned property, it is not an isolated case. If a 182-acre historic landmark just two miles away from the Capitol can be so mismanaged, what confidence can we have that thousands of other federal buildings scattered across the country are being managed properly to preserve their value and to ensure their best use?

I look forward to hearing the testimony of all our witnesses today.