Government Needs Buyers for Unused Federal Real Estate
The federal government may not have a bridge to sell you, but it does have an ammunition plant, an access road, and a handful of lighthouses.
They’re all part of the government’s ongoing effort to unload unused and unwanted federal real estate to save money on maintenance—and bring in some bucks from the real estate market.
Even though budget cutters say there are as many as 55,000 under-used federal properties—many of which aren’t being used at all—the government is only selling a relative handful at a time.
In June, President Barack Obama issued an executive order directing the government, which is the single largest real estate owner in the country, to unload enough property by 2012 to produce $3 billion in savings.
“Both taxpayer dollars and energy resources are being wasted to maintain these excess assets,” Obama wrote.
And this month, the co-chairs of the fiscal responsibility commission proposed saving at least $1 billion in the year 2015 in real estate costs, noting that the government inventory “includes 1.2 million buildings, structures, and land parcels. This includes 14,000 building and structures currently designated as excess.”
But the General Services Administration referred CNBC to the website of its Office of Real Property Utilization and Disposal, which is responsible for auctioning off the unwanted federal real estate. That site doesn’t show auctions for anything like 55,000 properties. In fact, a search of the site for all properties in all states turned up just under 40 properties available for auction now.
To get the savings Obama and the fiscal responsibility commission are after, the General Services Administration is going to have to turn its website into the eBay of federal property—and soon.
So what is for sale?
Well, the government is offering up the Old Orchard Light Stationin Lower New York Bay off Staten Island. Completed in 1893, the light station stands in 17 feet of water, has a white flashing light that is visible for seven miles in clear weather and includes a keeper’s quarters (unoccupied).
But the government notes “there is guano in the interior and exterior,” and that the property is subject to flooding from tidal surges. Still, the minimum bid is just $45,000.
In Hackensack, NJ, the government is selling a former Social Security Administration Trust Fund building for a minimum bid of $500,000. It’s a fairly uninspiring brick building of nearly 15,000 square feet, but it sits on almost a full acre, and it comes with 43 surface parking spaces.
And in Connecticut, the government is selling Point Stratford, formerly known as the Stratford Army Engine Plant. The government says it's "an extraordinary 76 acre brown field redevelopment opportunity in Fairfield County."
The property includes a whopping 1.72 million square feet, in three main buildings and nearly 50 out buildings, and will be sold by sealed bid. But it goes as-is, so buyer beware.
Part of the difficulty in realizing the huge savings that the Obama Administration would like to see is that the law mandates an extremely convoluted process before selling any federal property to interested buyers.
First, the property must be offered to other federal agencies that may have a need for it.
Next, the government must decide if the property could be of any use to homelessness prevention efforts, and consider conveying it to a charity for that purpose. The General Services Administration also looks into selling the property to state and local governments or to non profits that offer a “public benefit.”
After all those options have been exhausted, the property can be put up for auction to private buyers.
Watch Eamon Javers' TV report about government buildings for sale on "Street Signs," today at 2pm ET and look for future stories Javers and other CNBC correspondents about government spending and the federal budget in our special "Fleecing of America" series.