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Capital Business
Posted at 01:56 PM ET, 06/19/2012

House subcommittee criticizes failure to sell Georgetown heating plant


The West Heating Plant in Georgetown has been vacant since 2000. Here, an exterior shot of the plant’s machinery. (Jonathan O'Connell - Capital Business)
Blackened walls, peeling beams and a labyrinth of decrepit pipes set the backdrop for a congressional subcommittee hearing Tuesday at West Heating Plant, in Georgetown, where members of the House berated federal officials for allowing the plant to lie nearly vacant since 2000.

The General Services Administration recently began taking steps to sell the steam generating plant, at 1051 29th Street NW, having posted basic information about it on realestatesales.gov.

The 2.08-acre property is considered one of the most valuable undeveloped sites in Georgetown despite the zoning, historic preservation and environmental approvals required for its development.
The view from the roof of the heating plant. (Jonathan O'Connell - Capital Business)
Some developers have said the plant (with its four above-ground fuel storage tanks) requires so much cleanup that tearing it down and replacing it with a new building may be less expensive than salvaging the existing property.

Officials from the GSA — their agency already under fire for a Las Vegas conference scandal that led to the resignation of chief Martha Johnson — were unable to persuade members of the House subcommittee with oversight of federal buildings that they were moving expeditiously to sell it.

Flavio Peres, an official in the GSA’s Public Buildings Service, testified that the plant was on the market and would be sold via online auction this fall. He said that during the past 12 years it had been used as a backup plant and a place to store fuel and spare parts.

But Reps. John Mica (R-Fla.) and Jeff Denham (R-Calif.) were not convinced that adequate effort was being made, particularly given the estimated $3.5 million cost of maintaining the building during the past decade. The building has not been added to a list of 14,000 excess federal properties. Mica asked why spare parts weren’t moved out of the building until recently if the GSA had been trying to sell it.

“It took us 10 years to move out the spare parts?” Mica said.

Peres said that the agency was working to sell the property and had already hosted developers for tours. He said the agency also planned to
A for-sale sign on the premises of the 2.08-acre property. (Jonathan O'Connell - Capital Business)
hire a private consulting firm to assist with the sale.

But Mica wasn’t swayed. He asked Peres when the “for sale” sign on the side of the building had been posted. The answer: yesterday afternoon. “It just doesn’t seem like anyone is minding the store,” Mica said.

Denham said the subcommittee would consider hearings on site at federally owned vacant properties around the country until the GSA began more actively disposing of them. “The job is not getting done,” Denham said.

Del. Eleanor Holmes Norton (D-D.C.) said the GSA’s seeming reluctance to move more quickly to sell the heating plant was also evident at other federal properties in the city, such as a Secret Service building at 9th and H Streets NW, and a warehouse at 49 L Street SE, near Nationals Park.

The GSA auctioned off another local prime property online, when it sold an empty Bethesda office building, 7550 Wisconsin Ave. However, the agency got well below the price it expected for the property; after asking for a starting bid of $14 million, the building sold to Rockwood Capital and Akridge for just $12.5 million.

Peres said the Bethesda auction “wasn’t able to obtain fair market value” because of bad market timing. The heating plant sale, he said, would be different.

“We want to get national and international feedback” from potential buyers, he said.

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz

By  |  01:56 PM ET, 06/19/2012

Tags:  West Heating Plant, Georgetown, commercial real estate, GSA, John Mica, Jeff Denham

 
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