A House subcommittee held a hearing Thursday in the empty warehouse to highlight the need to better utilize federal real estate. The Government Accountability Office estimates that management of vacant or under-utilized property costs about $1.67 billion annually.
John L. Mica (R-Fla.), who chairs the subcommittee, said the warehouse at 49 L Street SE was one of thousands of properties that ought to have been put to better use long ago.
An official for the General Services Administration, which manges federal real estate, told the representatives that the 32,013-square-foot brick building was no longer needed by the government and that the agency was in the process of preparing it to be sold or traded for construction services on other projects, for which the GSA is in need of funding.
“Given the high real estate value and rate of growth in the surrounding Capitol Riverfront neighborhood, the 49 L Street property presents us with many potential opportunities to find a better use for or to dispose of a vacant property from the federal real estate inventory and provide considerable savings to taxpayers,” said Michael Gelber, acting deputy commissioner of the GSA’s Public Buildings Service.
That the building could become available was music to the ears of residents of the neighborhood who have put together a plan for what they call Half Street Market, that would combine a neighborhood foodie spot with a workforce development program.
“Half Street Market presents a unique and exciting opportunity to create a public amenity that will promote economic development, support small businesses, and prepare D.C. residents for D.C. jobs,” the group said in an 11-page proposal.
House Democrats Eleanor Holmes Norton (D-D.C.) and Gerald Connolly (D-Va.) expressed enthusiasm for the neighborhood’s plan, with Connolly saying that the input of local residents was important to consider when selling federal property. “It seems to me we have a responsibility to take that very seriously,” he said.
The District government may be interested in buying it to enable the market, according to D.C. Council member Tommy Wells (D-Ward 6). Wells backed the market idea even though his ward already includes Eastern Market and Union Market. If the price was $19 million — a number Mica mentioned — Wells said the District would “absolutely” look into buying it.
Even Mica said he thought the city ought to have a chance to buy the property so long as it did not sit vacant any longer. “We have a willing buyer in a public entity,” he said.
In an interview following the hearing, Mica said he would be okay with the property being sold to the city for fair market price “if it’s going to stay in the public arena.” The Joint Chiefs of Staff utilized the warehouse until 2009, but it has been vacant since.
The GSA, however, is not in the business of giving away property at a discount even if its acting administrator, Dan Tangherlini, is a former D.C. city administrator and transportation official. Gelber reiterated in an interview that the agency’s preference was to trade the building for construction services, similar to the way the GSA is trying to use the J. Edgar Hoover Building as a trading chip for a new FBI headquarters elsewhere in the region.
GSA has not disclosed how much it believes the L Street warehouse is worth but Gelber said putting it up for auction, as the agency did with the West Heating Plant, would likely fetch the highest price. Adding a requirement that a market be part of the redevelopment wasn’t likely to help the sales price — quite the opposite. “The more conditions you put on a sale the more that you affect valuation,” he said.
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