Cuts in federal building costs under review
President Obama wants to trim $3 billion in federal building costs in the next two years, but early signs suggest mixed success at selling off extra office buildings, courthouses, embassies and storage sheds.
The orders could eventually result in thousands of renegotiated or canceled leases and the divestment of other notable government-owned properties.
The federal government owns about 1.2 million facilities with an annual operating and maintenance budget of $19 billion, according to the Office of Management and Budget. An inventory completed during George W. Bush's administration identified about 14,000 vacant buildings and another 55,000 underused locations.
Administration officials initially unveiled the cuts as an $8 billion package, but only $3 billion of the cuts are new, mostly from the departments of Energy, Homeland Security and Transportation, officials said. The other $5 billion is part of the Defense Department Base Closure and Realignment Commission process.
Agencies submitted proposed cuts last month and OMB said this week they are more than halfway to the goal. Here are some early examples:
-- The Navy is selling Naval Air Station Treasure Island -- used for civilian purposes since 1993 -- to the city of San Francisco for $55 million. The government may receive another $50 million if private investors redeveloping the island achieve a certain level of return, OMB said. Official transfer of the island and payments won't occur until environmental reviews are completed, a process that can take several years.
-- Private developers in August purchased a General Services Administration building in Bethesda for $12.3 million. The building once housed offices of the National Institutes of Health and sold for almost $2 million less than the original asking price.
-- A federal office building in Springfield, Mass. sold for $2,4 million. The city moved its school headquarters into the building and Baystate Health will move in later this year.
-- The government has also sold a federal building in Omaha for $1.2 million and a building and courthouse in Rockford, Ill. for $1.2 million.
Agencies are also planning to consolidate about 2,000 government data centers that account for much of the government's building costs and environmental footprint. Early government estimates suggested agencies operated a combined 1,100 data centers, but an inventory published last month discovered another 900 locations. OMB said it will unveil plans to consolidate the data centers next month.
Capital Business staff writer Jonathan O'Connell contributed to this report.
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| October 27, 2010; 7:20 AM ET
Categories: Budget, Eye Opener
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