The General Services Administration has announced that it will purchase for $27.2 million, in May, a complex of three buildings in Austin, Tex., from the Teamsters Central States, Southeast and Southwest Areas Pension Fund.
The decision has touched off a controversy within the agency, with associate GSA administrator Charles S. (Terry) Davis, charging that GSA yielded to pressure from the Office of Management and Budget to buy buildings that need repair work, are not suitable for long-term federal tenantcy and were not at the top of a list of buildings that GSA was considering for its purchase program.
"Why did OMB pull this building to the top of the list, why is OMB still micro-managing GSA?" Davis asked. "Why they are getting into our knickers like this? I don't understand."
Davis said GSA's regional office in Texas had the building "ranked third, behind two other good buys in Houston." Other regions submitted similar lists, all of which were sent to OMB for review.
Other officials termed Davis' criticisms incorrect.
Steve Tupper, an OMB spokesman, said he would look into the issue.
The 735,000 square foot complex, which have been reconfigured for computer services, serves as an Internal Revenue Services Regional Center, a Veterans Administration's Data Processing Center and as a disbursement center for the Treasury Department. The purchase includes just over 51 acres of land.
In past years, Rep. J.J. (Jake) Pickle (D-Tex.) has charged that GSA should not be in the building at all since it was taken over by the Teamsters in 1977. The Austin American-Stateman last week quoted a Pickle aide as saying the congressman "has always been uncomfortable with the idea that the Teamsters own the IRS building. I think he's happy to see the pending sale."
Pickle had been concerned because the Teamsters acquired the building through foreclosure proceedings after making a loan to a Las Vegas partnership that included a casino owner. Both the casino owner and the Teamsters were under federal investigation, the American-Stateman reported, for mismanagement of the fund's real estate loans and allegations of ties with organized crime.
Tim Ganous, chief of staff to Public Buildings Service Commissioner William F. Sullivan, said Davis is "wrong, entirely" about the sequence of events that led up to the purchase. According to Ganous, who has been with GSA a month and relied on other buildings service officials for the information, the decision to buy the Austin building was made by former GSA administrator Ray A. Kline and former Public Buildings Commissioner Lester L. Mitchell in January. (Both have left the government, Kline on March 4, Mitchell on Feb. 2.)
Ganous said that GSA reevaluated the regions' ranking -- perhaps without Davis' knowledge -- and determined that it was more economical to purchase the Austin building than either of the Houston properties.
Ganous said that the Austin property was "well below our appraised fair-market-value for the property." He did not give specific figures. The Houston properties, he said, were "at or above fair market value. They weren't good deals."
But, from Davis' point of view, the deficiencies aired by the regional office far outweighed the advantages.
"It should have been scuttled," Davis said, adding that the building had a faulty heating and air conditioning systems, it did not have uniform raised flooring for the computer cabling throughout and it was "a good guess that it will not meet future expansion needs for the data center."
Sullivan said he was miffed that Davis would air the issue without trying to stop it within GSA.
"As far as I know there was no disagreement on this project before it worked its way to OMB and was approved, at Kline's request," Sullivan said. "I'm going to have to get with Terry and see what his problems are."
Roger Dierman, deputy associate administrator for administration, said that the decision to buy Austin was "concurred in by Terry Davis. I have certainly not heard about any major debate over buying this building. I'll have to get into it."
Although the deal is not set to be signed until May, he could not say if there was time to cancel it due to any objections.
"I can't say right now that it should be canceled," he added.
The property was bought under GSA's "Opportunity Purchases" program, which is designed to snare attractive, and generally new, buildings at below-market rates. The Austin property is 17 years old.
The buy is the third made by GSA in the controversial three year old program. The first property purchased, for $7.2 million, was the so-called Griffin Square building in Dallas. Last year, GSA bought the Judiciary Square building in Washington for $12.6 million.
A third buy, for more than $100 million, would have given the federal government the new building at 1300 New York Avenue, N.W. The arrangements fell through after an often heated debate over the merits of the purchase that worked its way through OMB and GSA.
GSA estimates that the purchase of the Austin building will save $19 million over continued rental over the next 30 years. However, that estimate was based on guesses, GSA officials said, since the government's four separate leases for the property expire in 1987, 1988, 1989 and 1995 and there are no facts to presume what the new rental rates would be.
Sullivan said that the "opportunity purchase program has a lot of merit, if it's done right. I wasn't in the loop on this project. But I'm going to be watching carefully what is submitted in the future."