GSA PBS Client Enrichment Series – An Overview of Real Property Disposal

>>In order to view
videos of our CES sessions, please understand we are
recording today’s session. Andrea, could you
start recording? Thank you. Hello, hello, hello. Good day everyone and thank
you for joining us today. My name is Rebecca Hood,
Customer Relationship Specialist out of Chicago, and
I am your host for today’s Client
Enrichment Series session of an overview — oh? Hello? – An overview of Real
Property Disposal: Mission, Services and Opportunities. Our presenters today are
Brian Key and Ralph Connor. Brian Key is the Chief
of Staff of the Office of Real Property
Utilization and Disposal, and Ralph Conner is the Director
of Real Property Utilization. Brian, could you put
the presenter slide up for us, please? Thank you. The Office of Real Property
Utilization and Disposal works with all federal
land holding agencies to develop real estate
strategies, conveyances, exchanges, relocations
and sales both to identify and better manage
underutilized assets. The Real Property Utilization and Disposal program offers
federal clients a wide range of realty services, expert
guidance, analytical tools, and contract vehicles
to meet your needs. We will also answer
any questions you have about utilizing and
disposing of real property. To give you some background
on Brian, as Chief of Staff for the Office of Real Property
Utilization and Disposal, Brian collaborates
with regional directors to attain program objectives. He manages the program’s
national budget and oversees and performs analysis
on key program concerns. He works to find
workable solutions to complex operational issues
and improves program efficiency in reporting accuracy. Prior to his current
role, Brian worked in Real Property
Utilization and Disposal as a Lead Program
Analyst for several years. His career includes posts
in the Commissioner’s Office and assisting the PBS Chief of
Staff and as a Budget Analyst in the Facilities
Management Division at GSA’s National
Capital Region. Brian entered federal service
with GSA in 2009 after working for several years in private
sector consulting firms. Brian earned his Bachelor’s in
Economics from the University of Virginia and an MPA from the
Virginia Tech School of Public and International Affairs. And to give you some
background on Ralph Connor, Ralph is the director of
Real Property Utilization. Mr. Connor has been
working in government and government relations
since 1988. Mr. Connor has been
with GSA since 1997 and he began his GSA career
in the Office of Congressional and Intergovernmental Affairs. Initially he served as a Senior
Advisor for Real Property. In 1998, he was named Deputy
Associate Administrator for Congressional Affairs. In the fall of 2000, Mr.
Connor accepted a position with the Public Building
Services office of Real Property
Utilization and Disposal. Working out of GSA’s
region one office in Boston, he served as the Senior Advisor to the Assistant
Commissioner for Real Property. In 2004, Mr. Connor returned
to Washington to work in PBS as the Director of Real
Property Utilization. Before coming to GSA, Mr.
Connor was the Director of Governmental Affairs
for the National Tire Dealers Association. There he served as an
industry advocate on behalf of the 4,300 member small
business trade association. Prior to that, Mr. Connor worked for US Representative Brian
Donnelly, Boston, Massachusetts. Mr. Connor served as a
Legislative Assistant in the Congressman’s
Washington DC office. Before I turn the presentation
over to Brian and Ralph, I’d like to share a couple
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let’s begin our presentation. Brian, it’s all yours.>>Thank you. Thank you for that introduction. Welcome everybody. We’re glad you could join us. I’m sure some of you have done
some work with us in the past and many others are just kind of
interested in what we can offer and what we can do for you guys. So here’s some, as
discussed, we’re the Office of Real Property
Utilization and Disposal. We’re located, well
first here’s the Overview of what you’re going to see
here, kind of what we want to get out of this is for you
to learn about our mission, our services, what
we can offer you, what types of expertise
we normally provide. I mean, what kind of outcomes we
like to help our clients get to. And then beyond that we’ll talk
about where we fit in with GSA and the federal agency’s
framework. Go over some real property
kind of fundamentals just to make sure we’re
all on the same page and that will really
guide us as we get into the disposal
process portion, where we discuss
the disposal process that Federal Government
follows in most cases. And finally we’ll, we’ll get
into a little more detail about some of the realty
services we offer specifically, and how to obtain
those services from us. So again, our mission is to
lead the Federal Government in optimizing its real
property portfolio through effective disposition
and utilization strategies. One thing to note there is we
don’t, we do more than just, just help dispose
the properties. We offer a variety of services
which we’ll get into later but that’s, we’re not
just a one-stop-shop for disposal or not. You can see a picture
there some of the variety of projects we’ve worked on. So again, we, we provide
a sophisticated center of expertise for real federal
real property disposal. We’re available to all
land holding agencies across the, across the country. We also offer a variety of
strategic asset management tools to those land holding
agencies and we generally, we, we serve as a cost-effective
partner and we try to facilitate outcomes tailored
to each agency’s objective and actually to each
individual property’s challenges and opportunities. So we have a lot of flexibility
in the services we can provide and can really customize what
we, what we provide to y’all. So again, here are
some of the basics here of land holding agency. It’s the agency that has
a custom-built custody and accountability for any real
property involved and owned by the Federal Government. It has certain responsibilities,
reporting and maintain, maintaining and currently
there, at recent count there is about 34 land holding
agencies and just note that not all bureaus within
a land holding agency can necessarily hold
land themselves. And there’s a link, hopefully
that came out on the PDF file if you want to take a
look at that actual list. And as for our, our offices, we’re located all
throughout the US. The different colors there
represent our major zonal offices and then the red dots
are our zonal headquarter cities, but we have a variety
of field offices as well. And the key, so the key
takeaway here is we have people who are familiar with
the different markets, the different dynamics at
play in each different region, different parts of the country. We have relationships with
different real estate groups and vendors and brokers. And we kind of have
people who specialize in markets in different areas. So it’s, no matter where
the federal property is that we’re helping you with,
we have people who are familiar with that area and
the unique challenges and opportunities
within that area. So again, here’s the terminology
and fundamentals to kind of guide the rest of
this presentation. There’s two things in real
property and personal property. Real property is essentially
land, permanent structures, any facilities on that land and in some cases can
include structures or items attached to that land. But personal property
is, is movable property, stuff like desks,
phones, vehicles, helicopters, that kind of thing. So what we’re dealing with here,
our program deals specifically with real property but
there is an office in GSA and Federal Acquisition
Services who deals with personal property. So you may need to
reach out to them if you have any personal
property issues but it’s good to know, good to
note the difference. They’re two different,
two different things and they’re managed by
two different offices. And yeah, just some examples
of federal properties. Obviously, they vary
widely, lighthouses, parks, military bases, courthouses,
you name it. So there’s all sorts of things
out there and one thing to keep in mind here is the
central questions for any real property
transaction or any real property
strategy is: What do I own? What can I do with it? Do I have a marketable
title and what is my path to regulatory closure? So those four questions really
are the core of what you want to get into when we, we help you
with the property and you figure out the best strategy
for that property.>>Yeah, I’ll jump in here
too and I think it’s good to build right off of that last
slide with the What can I do? What do I own? and What can I do with it? I mean, that is essential to
the whole real estate exercise. So but “What do I own?” is what is the clear ownership,
what are the conditions that run with the property, what rights
were conveyed to other entities? And then What can I
do with the property? What, do we have any land
use controls on the property? Are there any activity
use limitations? What are the surrounding
uses of the property? Understanding the market
conditions that you’re in. The issue of marketable
title is understanding all of those challenges are
encumbrances to ownership, being able to articulate them
so they can be understood by the new user or
owner of the property. So marketable title. It can have clouds on title,
it can have incumbrances, it can have conditions in there,
but just understanding them as you present that property
to market is critical for that repositioning. And then that path to regulatory
closure is really this, that’s the long pole in the
tent in any divestiture. It doesn’t matter what authority
you’re operating under. So this is satisfying
environmental laws, historic laws, wetlands,
endangered species, critical habitat,
migratory birds. There’s a whole host of
cultural, biological, environmental, historic
laws that intersect with the divestiture
of property. So understanding that path the
regulatory closure is critical to the stakeholder management
and expectation management as you move through it. So all of those things
are defined and understood through the deeds that articulate the
interest in property. So the, the legal
depiction of that is known as “The Bundle of Sticks”. Most people in the real estate
game have probably heard this phrase but it really tries to demonstrate what all
the ownership rights are, rights that may have
been acquired to use or restrict development on
adjacent lands or vice-versa, rights that you have given
away on your property or sold to allow or prohibit
certain uses and activities. So if you have all the
rights, that is known as is Fee Simple Ownership,
and then that, the articulation of those, goes all
living the instrument, that is the deed, alright? So you can, you can sell those
rights, you can allow use of those rights and
you can acquire rights without acquiring
the full thing. So as we move on, just
to kind of go back to what Brian was talking
about again with, you know, we talk about a deed as the
instrument of conveyance for real property, so we
do, there is the conveyance of personal property
and, you know, there are pretty
unique situations where a property
is not connected to the land it sits on. So we’ll divest of that
through a Bill of Sale. If you have a, you know,
you buy or sell a car, you do that through
a Bill of Sale. You buy or sell a house,
you do that through a Deed. So just understanding how to
differentiate between the two of those things from the
legal instrument that, that kind of governs
that, that transaction. So as we talk about
what can be conveyed and how can the federal
government convey real property, we convey the whole Fee Estate. We are happy to do that, we want to transfer all right,
title and interest. We can transfer or
acquire property by lease and that’s just the
right to use the property for a specific period
of time with terms and conditions tied to that. A little less formal
document might be something like a license or a
permit which, you know, entitles the person that owns
the property has a greater portion of those rights
and really has the ability to terminate it whenever
they want but oftentimes, interim
agreements. You want to have a
clear understanding of what rights you have
to use that property and what rights the owner has. And it can take different forms. So just to give, you know, general familiarity
with those things. So, the other types of rights
that impact value significantly, because I’m not, again, real estate derives its
value not just from dirt and improvements but also
from development potential. So if you have additional
development potential tied to your property, that
can enhance value. If you have limited
or prohibited or restricted development
rights, that will affect your value. So we, you know, we have
conveyed air rights for property where the government required
the use of the bottom, the land, the dirt, but not the area
above it and we have been able to identify, describe
those properties and sell the air rights as
a real estate transaction. Developmental rights,
particularly in urban areas, you know, there are
allowable heights that properties can be built to. If a property is not built
to its allowable height and there are, there
are additional floors that could be put
on that building, you may never actually
add to that, but those development rights
can be marketed and sold. You know, particularly out
west with water rights. Water rights are
enormously valuable, the ability to draw water
from flowing rivers. You know these, these
things are all tied to the value of the property. Which ones go with the
property, which ones need to be acquired in
addition to it. And then, you know, again,
out in the west and southwest, the mineral rights are
often far more valuable than the dirt above it. So the gas and oil below that
soil often has enormous value. And then easements and rights
of way to allow for anything from utilities to,
to road access, these things the government
can either acquire them or convey them to
another entity. So when we talk about
the Deeds and all of these things are represented
and included and built into the deeds which we
talk Full Fee Simple, that’s the full ownership
of the property. And when the government
acquires property, we insist on a Warranty Deed. So we have warranty
on the ownership. When we divest the property,
we only provide a Quitclaim. We do not provide a
Warranty Deed to entities when we dispose of
that property. And a Quitclaim Deed or a Deed
Without Warranty depending on what locality you’re in, the
Quitclaim is the common language that we use is really just
providing all the information we have about the property. Now, anybody who’s
going to buy a piece of federal property is going
to get title insurance anyway. That Title insurance is going
to identify any limitations or deficiencies, but again,
this isn’t the government trying to get out of something. We do the Quitclaim
Deed Without Warranty because of the Anti-deficiency
Act. You know, twenty years
down the road we can’t sign up to something. If there’s a claim against the
government bring that claim and we’ll go through
that process, but we don’t provide a
warranty because of that. That’s the foundational
rationale behind it. So that gives you kind of
an idea of some of the forms of ownership and all the
different pieces that are built into a deed and into an
instrument of transfer. So when we talk about, we talked
about the kinds of services that we provide, oh, we going
to do publicly and private?>>Yeah. So, publicly and
privately owned assets, I think it’s key to point
out many of the differences in the real estate
field that we work in versus the private sector. You know, so we’re
dealing with public assets. There’s a whole variety of
stakeholders and expectations that come along with
those stakeholders that a private sector
entity wouldn’t deal with and that includes like the
local community estate, other federal agencies in the
area as well as local, you know, environmental groups,
economic development groups, what have you. So we always have to
keep that in mind when, and work with all those groups
as we, we work to reposition or dispose or otherwise do some, do some redeployment
of those properties. Another thing to notice is as
public assets, we have to comply with certain set
of environmental and cultural resources laws. And cultural resources
laws are things like historical preservation
acts, and then laws that again, the private sector
generally doesn’t have to deal with anywhere near
the same extent. So that’s something that we’re
very unique in that respect. And I think the key point to
think about here is we’re not, you know, we’re not out
here to maximize profit like a private entity would be. We try to balance the public
benefits with any proceeds that can come back
from that property. So if it’s more in the benefit
of the community to, you know, turn over a surplus federal
building to the local county for them to use as a new
school, that, you know, that might be the best socio and economic value
for that community. You know, we won’t be
getting any proceeds off that essentially but, you
know, again, we’re what’s sort of the best for the community
with this public, public asset. It also protects the
interest and investment that the taxpayers have put
in this asset over the years. And also again with these
publicly owned assets, there’s a kind of some
unique title issues and also there’s
infrastructure concerns. Obviously, some of
the properties and the federal real property
portfolio of certain kinds of environmental issues,
you know, old DoD sites, that type of things, where you
have to kind of take, you know, really do a lot of
work and get that ready to even dispose of or redeploy. And finally, the
variety of missions that the federal government
takes on means there’s a lot of properties and parcels
that are really specialized so they’re not easily
adaptable to commercial use. You know, we have one
in Texas we’re working on now that’s an underground
helium storage facility. It’s one of the only ones
in the world so you know, disposing of that is a
challenge of in and of itself. You know, it’s not
something you can sell, and someone’s just going to
take it and build, you know, townhouses on top of it. So there’s all sorts of specialized government use
type properties that, you know, we have to be creative with
finding ways to reuse them to the benefit of the public. And again, this brings us
all back to What do I own? What can I do with it? Do I have a marketable title? and What is my path to
regulatory closure?, which has Ralph mentioned,
is often the key challenge in this whole process. So with that, we’ll get into the
actual real property disposal process we follow in most cases. Some of the responsibilities
of the land holding agencies, as you can see one of the bottom
ones there is promptly reporting to GSA real property that’s
determined to be excess to their mission needs. So we’ll be notified and
receive that Report of Excess. That’s one of the
responsibilities of LHAs. And what are the
benefits of doing this? Why would the land-holding
agency want to dispose of real property? Well number one, they can
possibly generate funds through the sale of a real
property asset and just, this is a question
that comes up a lot. It varies from agency to agency. Some agencies can retain
those proceeds and use them, reuse them on their own. Other agencies do not have the
ability to retain any proceeds so those either go to a disposal
receipt account which is used to fund future projects or that
money goes back to the Treasury or in some instances it goes to a special account
set up by legislation. But it’s unique to each
agency and each bureau. And nonetheless, they’ll be
saving money, avoiding cost of maintenance throughout
the years once they divest of that property. They’ll be complying with a
variety of executive orders on right sizing our
federal portfolio and then in some cases they can
leverage the equity to have on that excess property to
help get them another building elsewhere through GSA’s, through
our relocation authority. And what is a disposal agency? Essentially, it’s an
agency that’s designed to transfer excess or dispose
of surplus or real property and at GSA, generally
we’re the disposal agency, from those agencies designated
under the 40 US Code Chapter 5 which we refer to
as the Property Act. Some agencies over the years
have gotten the ability to dispose of properties
on their own but for those that don’t, they have
to send it our way and to be worked on that. And this is the process
that follows. First, a property is reported
as Excess and that means its “Excess” to that particular
agency’s needs or missions. We screen that property to see
if other federal agencies or, you know, can potentially
use that property. So after a certain
amount of screening, if there’s no interest
or no viable applications for that property, it
becomes, it becomes Surplus to the federal government
and that means its surplus to all the federal government,
all the federal agencies and cannot be used
by, by any of those. I mean, at that point
we screen it for what’s called
Public Use Conveyances, public benefit conveyances. So that gives the opportunities
for to a variety of groups, local government, nonprofits,
law enforcement entities to apply to get that
property and many, excuse me, in many cases for free as long as they use it in
a certain manner. And we’ll get into
those public benefits of entities a little more
in the following slides but essentially,
we screen for that. We see if we get
in the applications for public benefit conveyances. And if we get through
that process, we look at negotiated sale
with the local government or a local economic
development entity and we have to get fair market
value for that. We can’t just give the property
away if it’s going to be used with no restrictions on it. And finally, Public
Sale is when we offer it to sell often via
auction or sealed bid. We have a variety
of sales methods. It’s important to
note that about 75% of all properties reported
Excess to us go all the way to this Public Sale,
Public Sale method. So even though that’s there’s
a variety of other methods out there, the vast
majority make it all the way to Public Sale. And just I want to reiterate
here there’s a difference between Excess real property
and Surplus real property. Excess means the
property is just excess to that mission’s need, the mission who is the
land-holding agency. And Surplus means it’s surplus
to all the federal agencies and they don’t need that. So you, you’ll hear those two
terms used interchangeably but in reality, they
mean two specific things, two different things. So again, public
benefit conveyances. This is what I referred
to before when we could essentially
donate properties to different groups
who apply for them. And it can be done variety, there’s a variety
of PBC’s out there. There’s one for homeless
groups, airport use, you can see there law
enforcement training facilities, wildlife conservation. So when we screen
a federal property for the public benefit
conveyances, a variety of groups can apply
to get that property using, under one of these
categories and you know, in the application they have
to include how they’re going to meet that mission
need or how they’re going to meet the requirements of
that PBC and how they’re going to fund what they
want to do with it and if it’s viable or not. But there’s a whole variety of
PBCs out there that we screen for with pretty much
most of our properties. Obviously, we’re not going
to screen certain types of properties for every
single PBC depending on the property itself as
it may not be even viable and we won’t get any
applications anyway, but these are, you can see
there’s a large variety that can be used. And in sponsoring agencies,
so going back to those PBCs, you know, for example if someone
applies to get a property or parcel of land to, to
do a, you know, wildlife, a wildlife conservation park
or use it as Parks and Rec or federal law enforcement,
we’re not the experts in those things so
the sponsoring, each, each one of those PBC types
has a sponsoring agency who would review
that application. And, for example, if a local
law enforcement group applied to get a property to use it
for law enforcement training, you know, we’re,
GSA is not going to be the one who
evaluates that. It’ll be an entity
of DOJ to see if, to see if that application
makes sense and is compliant with the PBC rules
and has a good chance of being carried out. So we call those agencies who sponsor the different
PBC’s the Sponsoring Agencies. Another one to who
ultimately approve or disapprove the proposed,
proposed use to see, you know, if those applicants can
get that property or not. And as a sponsoring agency, they may have particular
responsibilities, you know, including compliance potentially or educating a new owner
regarding all the conditions of that conveyance
to them to make sure that they use it
in a proper manner. So now we’ll get specifically into the services we
can, we can offer. We like, like we said, we
have a large variety of them.>>Sure. So GSA works with,
as Brian said earlier, we work with every federal
land-holding agency, you know, help them get a better
understanding of their asset and look to reposition or
divest of unneeded assets. We’re really agnostic as
to what authority we use. We have the Property Act and if an agency doesn’t
have another authority or there’s not an
available authority, the Property Act is
a great tool but it’s by no means the only tool. And, you know, we don’t, we don’t have a preference
for the Property Act. So if an agency has
their own authority, some of our largest customers
have their own authority so we work with them to understand what really
the outcome are they after and what analysis do we need to
do to support or, or to validate to really inform the strategy. So rather than creating
a strategy first, go out conduct your due
diligence, get an understanding of the asset, answer those
fundamental questions of “What do I own?” or “What can I do with it,? “What’s my path to
regulatory closure?” but also “what’s going
on in the market? What’s going on surrounding
land use? What’s going on, what are the
community expectations there?” and understanding all of these
things pay enormous dividends towards the ultimate
disposition. So we try to create
the resources necessary to quickly be able to,
to get that analysis. So when we talk about
some of the things, obviously do it all
begins with due diligence. You have to understand the
property: how it was acquired, and when it was acquired,
what the past uses were; what encumbrances
have been over it; have you had any
environmental releases? Is it historic? You go through this
whole litany of analysis to understand the asset so you
can get ready to reposition it. And we serve as the broker
during this whole thing. So when an agency
seeks GSA services, whether under the property act
or under their own authority, we’re the broker in this deal. So, people say they report
property access to GSA. You’re giving us information
about the property. The property doesn’t
come to GSA. So, it’s still held by
that agency, but we serve as the Broker to move it
through whatever Authority or transactional framework
we’re going to operate under. So, as we get through that
we can we can get into some of the really key pieces. And stakeholder coordination,
that goes back to some of what Brian was talking
about with the difference between publicly owned and
privately owned property. With publicly owned property,
there’s an expectation that the community
will be involved. So, we don’t run from that we
move towards it, we engage it. So, early outreach, the initial
site visits, we want to line up meetings and sit
with the city managers, you know depending on the
structure of the community, mayors, city councilors,
economic development groups, zoning and planning entities;
people that will play a role in this future divestiture, we
want to get their understanding. And part of what we’re
looking for from them, federal property is unentitled, there’s no zoning
on federal property. So, there are no limitations or
allowances on what can be done. But the minute it leaves federal
ownership its immediately subject to local
zoning and planning. So, doing a little upfront work,
engaging with those entities to understand what kind of
development they are most likely to entitle, or to allow,
you know, the zoning, the allowable uses,
the densities, those sorts of things. Communities are more
than willing to give you an indication
of what they want to see because it’s in their
best interest. And most communities are looking for tax-based jobs
and redevelopment. And that’s all derived through
the entitlement package, the zoning and planning, the
densities, the allowable uses that they’d go forward with. So, we want them to articulate
what they’d like to see; we want that to be understood
by the development community; and then allow them
to bid accordingly. So, as we move through that the
stakeholder coordination really is critical, it’s essential, you know that’s really what
drives the whole process. If a community has these
public uses, Brian talked about all the public
benefits there, we want to understand them and understand how they
would work together. If it’s a single building
built to the property line, there’s probably
only one use for it. But if it’s, you know
we divested campuses and military bases. Some thousands of acres,
so there are all kinds of different things that
can be done with it. So, we want to look at it with
an eye towards how do we come up with a comprehensive
disposition? We want to divest of every
single acre of the property, not just the 30 acres at the
gate with the road frontage, that’s all clean but we need to
deal with every single thing. So if there are different
public benefit uses, we want to understand those,
we want to put those entities, the community, the
school districts, the law enforcement
group, put them together with the proper sponsoring
agency so they can understand
what the requirements and criteria are
for that program. And then we want to
be able to manage it so that these uses are
compatible with one another because again, we’re looking
at divesting of all of it. So, that’s stakeholder
engagement is what informs those decisions as we move forward. So, this is just, you know we
call this the “wagon wheel”, but this is a typical
stakeholder group. And I’ll tell you, it’s not hard
to start a stakeholder group. It becomes challenging
to manage it. Everybody wants to get in early
and talk about what their vision for the property is, so then
it becomes our job to utilize that stakeholder
group to develop and drive towards some
kind of a consensus. So, this is just a typical type
of, the type of participants that would gather around
a particular property. And as you see there,
the site’s in the middle and all these other entities
are around that, and all want to participate and be involved. And we invite that. So, as we go on, the kinds
of things we do we’ve talked about an awful lot
of things here. So, we tried to develop the
resources make them readily available; the contract
vehicles, the expertise, the capability, Brian
talked earlier about the way we’re
arrayed across the country which gives us experience and
involvement within individual — every community is
a little different, every state’s a little
different. We’ve got people transacting,
closing deals in these in these states in these
different regions all the time, so they have that familiarity. But part of the services
that we look to develop, you know it’s really everything from that initial due diligence
review, targeted asset reviews. We look at, you know,
valuation and appraisal, understanding viability
of potential exchanges, look at the variety of
authorities that are out there. So, we provide all of these
services and we try to make them as available as possible
through the contract vehicles that we have. We rely heavily on private
sector support on these things. We have a large Blanket
Purchase Agreement that has eight prime real
estate firms on it, and each one of those primes has eight
to ten sub partners. So, it gives us really
broad access, but it’s some of the biggest real estate
firms in the country. So, we’ve got ready access to, to pretty sophisticated
real estate capability. So, we utilize all these
tools and all this expertise and all these different
resources on as wider variety of properties, as
you can imagine. I mean, you can see here you
know you’ve got somewhat modern federal buildings, industrial
properties, you know, Reserve Centers, entire islands, lighthouses, historic
properties. So, they’re very
unique properties; no two properties are alike. And this is just a, you
know, a broad sampling of the kinds of properties. Everything from single-family
residential properties, to, as you know, you see down there
in the bottom right-hand corner, Plum Island Animal
Disease Center. So, you know really challenging,
sophisticated things, and then other really
straightforward basic divestitures. Go to the next slide,
we’ll talk, we’ll hit you with a quick case study
of a unique situation that we were brought
into a few years ago. NASA headquarters decided they
were going to close a facility out in California known
as the Moffett airfield. You know, the, the airfield
operation NASA headquarters said was no longer needed. The local folks at the facility
said no, it’s absolutely needed. So, we had headquarters
in the region not agreeing on exactly what needed
to be done. It was clear that
mission activity was down, but the locals, the
folks on base were saying that they needed to retain it. So, we came in took
a look at it. One of the big challenges,
the building you’re looking at right there is
known as Hangar 1, and Hangar 1 is a blimp hangar. So, obviously there’s not much
reuse for a blimp hangar today. But the, you see it right there, and it’s fully sided
and operational. That siding was deteriorating, and there were PCBs
in in the siding. So, that was going
into the ground and heading towards
San Francisco Bay. So, the remedy was address the
source, take the siding off. Well this is a on the National
Register of Historic Places, so when they took the siding
off the historic preservationist said you need to re-side that. NASA went to Congress to get
the money for the re-siding to preserve the historic
resource and, and Congress was not
inclined to give them the 40 to 50 million dollars they
needed for that one hangar. So, this was part of what
was driving NASA’s decision to divest of it. So, again, we’ve got
these two sides looking at what do we do with this? So, our proposal was, because
this is on the National Register of Historic Places, there’s
an authority available to every federal agency to
do historic ground leases. You can do it, we looked at
the market conditions here, this happens to be
Silicon Valley, so you have very strong market. Very, you know a lot of high-dollar interested
entities want to want to play in this game. So, as we looked at it, we
looked at this one building which is seven acres
under roof, and we looked at the entire airfield
operation, which NASA acknowledged
was less activity today than it was 10 years
ago, but still had needs. And then there were two
other wood frame hangars that were both on the register. So, we looked, rather than doing
this one facility, why not look at this operation,
and three hangars? And while we were at it,
let’s throw in a golf course. There was a golf course there
depending on who you talk to at NASA, the golfers
said it broke even, the people who didn’t play
golf said it lost money. So, as long as we were going out
and doing this, we’re looking at a runway, and a runway
operation, you can argue whether or not that’s historic. We looked at it, runways
rely on hangers, hangers rely on runways, there’s synergy,
there’s a connection, in the historic world
that’s called the “area of potential effect”. The “area of potential
effect” included the runway, the three hangars,
and the golf course. So we’re able to go out, market
this property, put it out there, private sector come in,
manage the airfield operation, roughly $8 million a year. Reserving rights for NASA to use
it, the specific amount of times that they need in each year,
and then the renovation, restoration, and preservation
of three historic hangars, oh, and a golf course. So, the good news was that we
had a lot of interest in it, some pretty high-dollar,
high-value interest. We were able to put a, what
amounted to a 96-year lease as you can see here in the
notes, with a 60-year firm term, but three 12 year options
that will generate roughly one and a half billion dollars
for NASA that they can spend, not subject to authorization
or appropriation. But the only restriction is
they can spend it, or they have to spend it on other
historic properties within their inventory. So, this is a nice cash
flow that comes out of it, helped address an issue of an
unneeded, underutilized property that was within the
footprint of an overall needed and mission-critical facility. So, just kind of a
good middle ground of identifying the right
tool to achieve the outcome that everybody was looking for.>>Hey, Ralph? Can I share a question from one of our call-in customers
on the phone? Because you were
talking about air rights. The question is: “So, I
don’t really have to get rid of a property, but I could
sell the rights to some of it while maintaining
ownership?”>>We’re talking about, this
is somebody who’s a federal asset manager?>>I’m not sure. It’s just. You know what?>>Take the question generally.>>Sure.>>I’ll answer the
question by way of example. So, 10 years ago, we
sold the air rights over the train tracks
at Union Station. The government owned
the air rights to ensure that the tracks would
always be there, the tracks themselves
were owned by Amtrak, but we owned the air rights. We didn’t need the air
rights, anymore we sold them for 10 million dollars. So, in that instance
we didn’t own the dirt, but we own the rights
associated with the air, right? So, we sold those air
rights and now there’s going to be a development,
a planned development, building over the train tracks. Plan to be mixed-use
residential. Another example I
can think of is when the Nike missile site
program was operational, DoD would go out,
acquire property to build a a missile site. They didn’t need all the
land, you know, for hundreds of acres around, but they
needed line-of-sight easements. So, they went out to the
surrounding landowners, who were mostly farmers, and bought the rights
prohibiting any structure. You could grow crops and
do that kind of thing, but you couldn’t build on there. DoD gets rid of the
missile sites, we still own those rights,
the associated landowners, we go back, and we sell the
rights back to those owners. So, there’s a couple of
two different examples where we were able to
convey rights associated with what you can do to
develop over the land.>>Okay, thank you. So I think in answer to
our customers question, it really depends on
what your property is. So, feel free to contact
the guys about that. And just so you know Ralph was
talking about the Union Station in Washington D.C., Those air
rights in that development. Thanks guys.>>Thank you, thank
you, critical detail. So, I’ll just move on. So, to give you an idea, we talk
an awful lot about what we do and how we do it, so I just
wanted to give you a little bit of a trends analysis,
give you an idea. So, we just looked at ’14 to ’18 with compiling the ’19
information right now. But you know, that we’ve closed over 900 deals during
that period of time. And that’s everything
that comes through. That’s giveaways, sales,
federal transfers, you name it. But you know that’s
roughly a 180 a year, so we’re we’re closing three
to four deals every week around that, around the nation. But as Brian said, and this
is important statistic, 75, roughly 75 to 80% of
our properties they go through this process
end up going to sell. And I think that’s largely because the communities they’re
located in want to see some kind of economic development, and for
economic development it’s most likely going to be a sale
to a private sector entity. Give you an idea of the number
of acres, and then you look at, this is the kind of the proof
and the conversation, 900 deals, 700 of them went to auction
or were negotiated sales. And it generated about
330 million dollars, so, you know just give us just
a broad overview of the kind of work we do and what
some of the results are. So, the question is on everybody’s mind I’m sure
is how do I do work with GSA? So, you know it really comes
in two flavors I would say. Property Act is available,
the good news with the property act
is we’re appropriated for Property Act work. So, once the report of excess
comes in to us we manage that process all the way
through right up to the sale and divestiture or the
conveyance through a PBC. We’ll manage all of
that and that’s all done on our appropriated dollar. But agencies with their
own authority are wanting to use an authority available
to other federal agencies other than the Property Act. We develop a reimbursable
agreement, it’s actual cost we don’t
have any administrative fees or profit built into it. It’s the actual cost of
time and and the direct and indirect expenses, so
contract expenses as well as the time of the
staff working on it. And like I said, you know
the Department of Defense, probably our largest customer, and they have more real estate
authorities than anybody. The Department of Homeland
Security, you know, Coast Guard has authority
to go directly to sale and we do boatloads of sales for them every single
year moving properties with them all the time. So, you know really,
we’re indifferent as to what Authority, we want
to identify the right authority to achieve the outcome
that makes the most sense. If it’s our authority, it’s a
great Authority we understand that we’re happy to use it. If there’s another Authority
that you want to look at, we’re all ears, look
forward to working with you. And so, we take all of
this, everything that Brian and I have talked about
over the last hour, and we try to make it
much of it as available to federal real estate
professionals as we can. We have a resource center up
there and we try to put up all of our guidances, our best
practices, our case studies, our process diagrams and charts,
and we want to put it all up there and make it available. This is all in front
of the firewall, it’s available to anybody. And on the next page, I think
there are all the websites, and there’s Brian and
I’s contact information. So, that’s federal real property
in a nutshell, in under an hour.>>Yep and just to note
that if you want to see some of the properties we’re selling
by auction at the moment, you can actually go to
our auction site there. I don’t think we have any
real high value ones there at the moment, but obviously
they change from time to time. Sometimes we’ll have a whole
bunch with a whole lot of money up for sale, and other times
there won’t there isn’t quite as many.>>I mean, that’s important
we don’t control the flow of properties that come to us. Agencies contact us. You know, a couple months ago
we had a property up there that sold for $55 million you
look today you might see some houses in the Midwest out there, and an odd-looking
lighthouse down off of Florida. So, you know it really,
it ebbs and flows. There are sometimes
where there’s lots of high value properties,
very interesting properties, and other times it’s less
interesting I’ll say.>>Well that blimp hanger
was sure an image, my gosh.>>Yes, you know
just to reiterate, I mean there’s projects like
the blimp hangar, right, and there’s also and we run the
gamut, there’s also you know in the last five years we’ve
sold hundreds and hundreds of single-family homes for
the Corps of Engineers, the Housing Assistance
Program houses. So, all of those were a lot
more simple transactions. But I think you’re going from
the hangar on one extreme to all these single-family
homes on the other. We do a wide variety
of disposals in complexity and value. We’ve probably seen all
sorts of different properties that one wouldn’t even realize
the federal government has in their portfolio,
and work with those. So, it’s a lot of variety and
we can usually provide service for just about —
anything you may have.>>Everything from
you know from 7,000, 8,000 acre military
industrial facilities, to an offshore lighthouse that
doesn’t even come with any land. So and everything in
between: general purpose, office buildings, courthouses,
warehouses, laboratories; really anything that’s
in the federal inventory that is no longer serving
mission need is property that we can divest of. We work with agencies to help
them come up with strategies to get them off their books.>>Do you think it’s worth
talking about our role in the BRAC process, or?>>Sure. I don’t know if
there’s any DoD people on. And I mean but it’s, for those
of you that may be familiar with the BRAC process, Base
Realignment And Closure. It’s a process there were five
rounds of the BRAC process, wherein the military leaders,
the generals and the admirals, made recommendations
about the things that provided the
least military value. They went to an independent
board, the BRAC Commission. The BRAC Commission took
those recommendations and approved them, modified
them, adjusted them, went forward, and then
they were divested. You know, as I said there were
five rounds, the last round was in 2005 so it’s been
a little while. But what what the I guess
the important intersection is that when they looked at a way
to depoliticize the divestiture of military properties, they
looked at the Property Act. So, we were required by law
to delegate the Property Act to the Secretary
of Defense, that, and then they use the Property
Act under that delegation to divest the properties in
accordance with the BRAC law.>>Thank you so much guys. We really appreciate
you Brian and Ralph, and you’re a very
informative presentation. And thank you, all
of our clients, who are able to join us today. We only have the one question
unless someone else has a question. But we will address
— we will address it in a written document, so
you can refer back to it. Ah let’s see, we’ll
be posting it on our website: If anyone has any
questions or comments, we still have a few
more minutes here, you can put them
in the Chat pane. And while you’re thinking of any
questions, I’ll share with you that our regular offerings
on eRETA are continuing. Our next Client Enrichment
series session will be on Thursday, October 24th. That’s the eRETA
Advanced session, presented by Steve Sacco. And then we’ll have the
eRETA Basic overview sessions on Tuesday, November 12th,
and Tuesday December 3rd. And in case you missed the
Customer Dashboard session that we presented in September, there will be an encore
performance of that on Tuesday, December 10th. And that one’s called Customer
Dashboard Puts PBS Data at Your Fingertips. You can easily register
for any of these programs, or any of our upcoming
programs at And Andre has put it
in the Chat pane there if you want to copy it. The goal of the Client
Enrichment Series is to engage our audience and
workplace topics that contribute to your mission success and
to your effective management of your real estate
and workplace programs. If you would like to share
additional feedback with us, you’ll have the opportunity to
do so via a link in an email that you will receive with
your certificate of attendance. Thank you again, and
everyone have a wonderful rest of your day. Oh, Brian, can you advance
a slide one more please?>>Oh, I think that’s
the last one there.>>Oh okay. Oh yeah, Andrew, okay. Thank you, guys.>>Thanks all, have
a good evening.>>Thanks, you too. Thanks everybody.

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