George Basiliko, who was Washington's biggest slum-property speculator in the 1960s and once pleaded guilty to 8,000 building code violations, is still in the real estate business. He rents property to the District of Columbia government.
The city had 14 leases with Basiliko, more than with any other landlord, for a total rent of $326,628 in the fiscal year that just ended, according to a list of the city's leases compiled by the District's new Financial Management System computer.
The city pays rent to Basiliko for halfway houses, youth group homes, a maternity clinic, and even for the big alcohol detoxification center at 619 N St. NW.
While cashing in on the city's shortage of space and uncertainties about the District government's construction program, Basiliko is in good company. The landlords on the list of leases include such pillars of the Washington business establishment as the Cafritz Co., and American Security Bank, as well as church groups and failed businesses that found a client for their vacant storefronts.
City officials say they have no qualms about renting from a man with Basiliko's history. "I could care less who the owner is," said Alcus McConduit, a leasing officer in the Department of General Services.
But the city officials are concerned that the financially strapped city government has to lease 3.2-million square feet of space in a city where real estate is so expensive. According to the computer printout, the property-leasing program cost $11.9 million last year, which was $1.4 million over budget.
"Our object is to reduce the amount of leased space of all descriptions," said Carroll Harvey, acting director of the Department of General Services, leasing agent for most District government departments. "In the last five years we have reduced the payroll by about 5,000 persons but we have not commensurately reduced our space. I feel that we can, and we will," Harvey said. However, there appears to be little prospect for a substantial reduction until the proposed Municipal Office Center at 4th and D streets NW and the Mount Vernon Square campus of the University of the District of Columbia are ready. Neither is under construction.
Even when those major facilities are ready, there will still probably be a need for the kind of space the city rents from Basiliko. Community-based corrections and health programs require small units in residential neighborhoods -- and landlords willing to use their properties for such purposes.
The District Government leases more space than it owns, in 165 contracts at 135 different sites. The lease contracts cover not only Basiliko's Corrections Department halfway houses, but luxury offices in expensive parts of town, parking space, and a radio tower at the WRC studio on Nebraska Avenue NW.
Basiliko leases the most properties, but he does not get nearly the most money. The single biggest lease is for an annual rent of $1.32 million for the Presidential Building, at 12th Street and Pennsylvania Avenue NW, where the Board of Education has its offices. That rent, according to the computer, is paid to Laszlo N. Tauber, trustee for the Westwood Management Co. of Bethesda. Tauber, a Northern Virginia surgeon who was born in Hungary, has made a fortune in Washington-area real estate over the past 30 years.
Other major contracts are for $1.03 million a year to rent the Potomac Building, at 613 G St. NW, from Potomac Associates, whose address is in care of a lawyer in New Jersey; for $728,467.20 to lease space from Walker & Dunlop Inc. at 122 C St. NW used by the Department of Human Services; for $700,000 to rent space from H. L. Rust Co. in the old Pepco Building at 10th and E streets NW for the university; and for $337,020, paid to the Cafritz Co. to rent offices in the Universal Building at Connecticut and Florida avenues NW, one of the city's most desirable and expensive areas. Those offices are also used by the Department of Human Services.
There are 14 separate contracts for parking space rental, at a total annual cost of $43,411. Asked if any of that space was used by individuals for their private cars, Harvey said, "I don't think so," unless they are employes who use their cars in the performance of their duties.
Harvey said the identity of the owner of a particular property has nothing to do with the city's decision of whether to rent it. If a city government department tells him it needs the space and if city appraisers determine that the rent is competitive, the deal is made, he said. With Basiliko or anyone else, he said. "We don't blacklist. Under the law we can't blacklist. You take each case, you weigh it for value, you do an appraisal, and if it's good, we go."
McConduit said that "generally the agency that wants the space locates the property. We used to do some of that, but now we only have two people on the staff and no car." He said that "a few years ago, when there were gobs of space in the city, we could be more selective.But now they're standing in line." Harvey said his department has undertaken a "space inventory and analysis. Everything is being looked at, lots, offices, warehouses," to see if they are really needed. "Our project is to reduce the amount of lease space of all descriptions," not just because the city work force is shrinking but because the demand for office space in Washington is driving rents up beyond the city's reach.
Mayor Marion Barry, in a note accompanying the city budget for the 1982 fiscal year, said that "the District will significantly reduce its lease budget by consolidating office space and converting school buildings to offices." That is just what he was urged to do by laid-off city workers who picketed the District Building last month; they claimed that the city could save enough money by putting empty school buildings to use to save some of their jobs. But McConduit, who has been leasing space for the city for more than 10 years, said it is not always easy or efficient to use schools that way.
"You've got questions of heat, questions of air conditioning, questions of who's going to pay for renovation," he said. "It depends on what kind of program you want to put in. Sometimes it's cheaper to rent than renovate."