Real property, real solutions

Rob Portman
After four years of trillion-dollar annual deficits and an accumulated $16 trillion debt, Washington badly needs a course correction. Just as many Ohio families have had to scale back their spending in this tough economy, Washington needs to act now to get the spending under control and make government more efficient.

One immediate way to save taxpayer dollars is by better managing the massive real estate holdings of the federal government, the largest landowner in America. Billions of dollars could be saved just by speeding up the sale of surplus and excess property and subjecting costly government leases to greater scrutiny.

That is why my colleague Senator Tom Carper (D-DE) and I introduced the Federal Real Property Asset Management Reform Act of 2012, which last month passed out of the Homeland Security and Governmental Affairs Committee, and we hope will be on the Senate floor soon.

The federal government has thousands of properties it does not need and cannot afford to maintain, both owned and leased. In FY 2010, in fact, it had more than 78,000 underutilized buildings in its real estate portfolio. Unfortunately, the taxpayer was on the hook to the tune of more than $1.6 billion to operate these buildings. This is unacceptable wasteful spending.

Our bill tackles this problem with some sensible reforms, saving billions of dollars for deficit reduction over 10 years.

First, it speeds up property sales, giving government agencies a two-year deadline to act on a given property. If an agency fails to do something with that property, they won’t be able to buy or lease new property. If you ask me, that’s pretty commonsense.

Second, the bill requires that at least 80 percent of the money that comes in from sales go to reduce the deficit. The bill targets savings of $15 billion over a decade, including by limiting the ability of agencies to use sale proceeds to cover the administrative and management costs of their real estate. When you give money to a charity, you want as little of it as possible going to overhead. The same thing is true here of federal property. These much-needed sales should not subsidize the existing bureaucracy.

Third, we put in a place a better decision-making framework across the federal government by tracking how well agencies are selling off underutilized properties. The agencies themselves will have to come up with comprehensive plans for their real estate before they are allowed to go shopping for new properties. As a former Director of the Office of Management and Budget, I can tell you these measures are sorely needed.

Fourth, the bill curtails the ability of agencies to enter into leases independently without consulting the General Services Administration (GSA).

The need extends beyond the commercial real estate market in the D.C. area. There’s a lot of opportunity in Ohio and around the country for the private sector to better utilize underutilized federal properties.

Back in February, I saw an example of this when I visited MPR Supply Chain Solutions in Bellaire, Ohio on the Ohio River. This shipping company, which moves goods from the river to roads and rail, has been growing as a result of Marcellus Shale natural gas production. They need to expand, which would create jobs, and next door to them is a vacant former Army Reserve center that has been in the possession of the GSA.

For three years, Belmont County officials have been trying to acquire the property for this needed economic development. Unfortunately, getting this property transfer completed turned out to be a long, painstaking process.

Finally, thanks to interventions by my office as well as Congressman Bill Johnson, the sale has gone through, and the Belmont County Port Authority will soon lease the property to MPR, which is looking to add dozens of jobs.

This is a great example of a win-win – reduce the government’s property costs, and create a new site for private-sector job growth. But it should be easier to do, all across America.

Reforming the federal government’s bureaucratic real property procedures is a bipartisan no-brainer that will save the taxpayer billions of dollars. At this time of record deficits and debt it is exactly the kind of thing Washington should be doing.

Rob Portman is a United States Senator from Ohio.