The Feds' Costly Waste of Space

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In the 1980s and early '90s, the Chicago postal system couldn't exactly be counted on to deliver. Literally tons of mishandled mail was unearthed in the basements, backyards and car trunks of active and retired workers. A government task force of postal experts declared the city’s postal system "in disrepair." More than a decade later the service problems have been largely cleared up, but one monumental emblem of those humiliating bygone days—all 2.5 million square feet of it—still sits undisturbed.

It is the old main post office, the largest postal facility in the world when it was completed in 1934 but now just a hulking, dilapidated symbol of federal mismanagement. Since it closed in 1996 as the sparkling— and notably smaller—new state-of-the art facility opened across the street (after its own $133 million in cost overruns), virtually nothing has happened with the vacant building, except that taxpayers keep shelling out $2 million each year in "holding costs" to pay for security guards and bare-bones electrical and heating costs. Assorted stakeholders—federal and local government officials, potential private developers and landmark preservation activists—squabble periodically about what should become of the vacant building. Among the proposals bandied about over the past ten years but never acted upon: a shopping mall, hotel, restaurants, condos, even a water park.

At a time when the federal budget deficit continues to soar, the old Chicago Post Office is just one of a countless number of aging, vacant federal properties that are literally wastes of space and money. So it was that first thing Monday morning, Republican Senator Tom Coburn of Oklahoma, the chairman of the Senate subcommittee on federal financial management, signed a liability waiver and joined high-ranking postal officials on a 45-minute walking tour of the mammoth mothballed structure. "The federal government has no complete record of what properties it owns or what their condition or availability is," declared Coburn, who also held a formal committee hearing on the issue that same day. "We need to be better stewards of the taxpayers' money," said Coburn, just after completing his eye-opening tour on the crumbling building’s third floor.

The most recent indicator of the breadth of the building inefficiency scourge comes from a 2003 U.S. Government report that identified 927 vacant and underused federal properties controlled by just three agencies: the General Services Administration, Veterans Affairs, and the U.S. Postal Service. Under Coburn’s questioning, Get Moy, the Director of Installation Requirements and Management at the Department of Defense, conceded that he could not offer a firm number for how much the Pentagon spends to maintain underutilized buildings, though he could offer that between 1998 and 2004, the department met its own target of shedding 86,000 sq. feet of obsolete facilities. However, Coburn pounced again when Moy could not say how much inventory was added during that time, rendering the analysis next to meaningless. The Senator further noted figures compiled from the Government Accounting Office indicating that the dollar amount spent by the Defense Department annually to maintain buildings it did not need came to "between $2000 and $3000 per active duty soldier."

Several agencies represented at the hearing, however, did report progress on getting a handle on their inventory. William Matthews, an assistant commissioner at the General Services Administration, said that it now maintains 376 vacant and underused assets, including office buildings, courthouses, laboratories and warehouses, out of a total of nearly 9,000 properties. The VA reported that 5% of its nearly 150 million square feet is vacant, including the main VA hospital in Milwaukee. In a federal budget that President Bush just proposed at $2.77 trillion, several billion dollars on unused office space may seem insignifcant. But Democratic Senator Barack Obama of Illinois, who joined Coburn at the hearing, stressed that every penny counts. "Regardless of what sides of the aisle we sit on, we all agree we are in dire financial straits and we need to manage our assets in the most cost effective way possible to close the gap," said Obama. "A dollar wasted on a building not being used is a dollar that’s not going to someone who needs the help." And if the old Chicago Post Office is any indication, many of these buildings are beyond saving.