On Wednesday, May 4, both the Obama Administration and Rep. Jeff Denham, R-Calif., chairman of the US House of Representatives Public Buildings Subcommittee released legislative proposals to streamline the sale of surplus federal property. These proposals were drafted in the spirit of cooperation after Chairman Denham and federal officials agreed to five key principles related to surplus federal properties at a hearing on April 6. Those principles include: maximizing the return to the taxpayer, maximizing space utilization, reducing the reliance on leasing, creating value in underperforming assets, and improving the overall management of federal properties.

The Obama Administration proposal and Chairman Denham’s legislation both would create a civilian Base Closure and Realignment Commission (BRAC) disposal process which would include an independent board tasked with identifying and analyzing thousands of surplus federal properties and making recommendations about which properties should be sold. According to the Administration, the federal government owns more than 12,000 federal buildings and properties that it no longer needs. A list of these properties may be found here.

Current laws and regulations have made it difficult for federal agencies to sell excess properties easily. In addition, decisions about shutting down or selling federal buildings and properties often become politicized due to the impact on local economies. The independent board created by these proposals is similar to the Base Closure and Realignment Commission (BRAC) that Congress created to shut down and consolidate domestic military bases. The BRAC approach, which requires Congress to either approve or reject all of the Commission’s recommendations at one time rather than individually, has support among because it allows decisions to be made based on merit rather than parochial politics.

The Administration’s “Civilian Property Realignment Act” legislation:

• Creates a Civilian Property Realignment Board (CPRB) that would identify and analyze surplus federal properties and make recommendations listing which properties should be sold, transferred, or disposed of another way that benefits taxpayers.
• Requires the CPRB to hold public hearings (except when discussing classified information) and take into consideration the views of stakeholders including recommendations made by federal agency representatives.
• Requires CPRB to take into account the impact that selling a federal building or property would have on the local community.
• Requires the CPRB to transmit at least twice annually a report containing its recommendations to the Office of Management and Budget, which must approve or disapprove of its findings.
• Requires Congress to hold an up or down vote, without amendments, to approve or disapprove of the CPRB’s recommendations once they clear OMB’s review process.

The Administration’s concept to sell excess federal properties has bipartisan support in Congress. Chairman Denham issued a press release yesterday describing the Administration’s proposal as a “good first step.” The bill he introduced (HR 1734), also called the Civilian Property Realignment Act, is similar in many respects to the Administration’s proposal.

However, there are also some significant differences between the Chairman’s bill and the Administration’s proposal. For instance, the Administration’s proposal minimizes the role of the General Services Administration (GSA) in identifying federal buildings and properties that can be sold. Instead, it requires each federal agency to submit information on surplus property directly to the independent review board with recommendations on which properties should be sold.

Under Chairman Denham’s bill, federal agencies are required to submit to the GSA data on all properties under their jurisdiction as well as a list of surplus properties. GSA would then review this data and submit its recommendations to the independent review board on which properties it believes should be sold. Overall, the Chairman’s bill provides GSA with a much larger and influential role in this process.

Chairman Denham has announced plans to hold a hearing on his legislation as soon as next week. The Ranking Member of the subcommittee, Rep. Eleanor Holmes-Norton, D-DC, has been working in a bipartisan manner with the Chairman on this issue and we expect that she will support the final legislation. The hearing will also allow subcommittee members the opportunity to discuss the Administration’s proposal.

The Obama Administration and Chairman Denham estimate that selling the federal government’s excess buildings and properties will generate $15 billion in revenue and provide long term savings for taxpayers. Given the focus on the deficit, and cutting the federal budget, we believe there is significant interest in this issue in Congress and that the Chairman’s bill will likely be considered by the full House during this session.

The emphasis on reducing federal property leases may have significant implications for developers nationwide. The Arent Fox Public Buildings Practice group will be monitoring this issue closely during the 112th Congress. For further information on the Administration’s proposal or Chairman Denham’s legislation, please feel free to contact one of the authors or the attorney with whom you regularly work with on your matters.

Link to Administration bill:
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Link to Rep. Denham’s statement on the Administration bill:
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Link to Rep. Denham’s Civilian Property Realignment Act:
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Summary of Rep. Denham’s Civilian Property Realignment Act:
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