The House Public Works Committee will conduct hearings Wednesday in connection with an investigation of a decision by the head of the General Services Administration ordering federal land be sold to the city of San Francisco for use by Marriott Corp. as part of a redevelopment project.
A subcommittee has been investigating GSA chief Gerald P. Carmen's decision, which is also being reviewed by the inspector general of GSA.
Inspector General Joseph A. Sickon ordered an internal audit of Carmen's decision, which according to reports was made shortly after the GSA administrator met with a lawyer for Marriott in November 1981. Sickon could not be reached yesterday, and an assistant IG for auditing would say only that "a review is under way."
According to published reports, two lower level GSA officials had recommended that the agency either demolish two existing, but unused, buildings on the site and construct a new federal building, or trade the property to the city of San Francisco for comparable land. Whether there were other similar or differing recommendations about the parcel and whether Carmen knew of them could not be determined yesterday.
Carmen made the decision to sell the land to San Francisco for the project after the city had tried for three or four years to buy it, according to a city official.
Sometime before the decision was made, Fred Malek, a Marriott vice president and former White House official in the Nixon administration, sent Carmen a letter saying that the property sale would benefit "not only the city of San Francisco but also President Reagan."
Asked what Malek meant by saying the sale would benefit the president, a Marriott spokesman said the intent of the letter was to emphasize that the federal government would gain by reducing its inventory of surplus property and "to a smaller extent, it would aid the budget process through the sale."
Marriott officials and members of the Marriott family and the firm's political action committee have been major financial contributors to the Republican Party.
Earlier this year, Carmen named an advisory board of several business executives and a union member to assist GSA in improving the efficiency of its operation. As of January 1982, the panel included a representative from the Marriott Corp. A spokesman for the company said yesterday he was unaware of Marriott's participation on the panel.
Malek could not be reached for comment yesterday but a spokesman for the Bethesda-based corporation said Malek wrote the letter to Carmen at the request of San Francisco officials. The city's Redevelopment Agency "asked us to express our point of view," the spokesman said.
The transaction would also provide "an example of the private and public sector working together and an example of the tax program, which at that time allowed faster depreciation rates for projects of that type."
The property in question is part of the Yerba Buena Center redevelopment project, which has been in various stages of development for the past 10 years. San Francisco's Redevelopment agency chose Marriott as a joint-venture partner to submit a design proposal for a 1,500-room hotel projected to cost $100 million. Marriott's share of the total venture is 23 percent; 75 percent belongs to Olympia and York Equities, which brought together the joint venture partners; and 2 percent belongs to Beverly Willis, a San Francisco architect. According to the city agency, the fair market value of the land is $17.4 million.
The project also will include a convention center, offices, a fine arts center and park.
Sale of the property has not been completed. When the land is sold, the city of San Francisco is expected to lease the property to Marriott on a long-term basis.
San Francisco Mayor Dianne Feinstein was quoted as describing the dispute over the GSA decision as "a tempest in a teapot." A Marriott official yesterday declared: "To the extent of the implication that there is cause and effect between Marriott's actions and GSA's actions is a dramatic oversimplification."