Tuesday, May 22, 2012

Why does the GSA pay millions for space it isn't using?

The Washington Examiner has a great story about another GSA spending spree.

You probably remember the news about how the agency blew $800,000 at an employee conference in Las Vegas. Well, the Examiner reports, they're "also paying millions every month to rent property that almost nobody in the government uses."

There is a map associated with the story and it lists two locations in the area. Curiousity got the better of me so I went to the GSA website and downloaded the March 2012 lease inventory report. I'm not happy with what I found - and you shouldn't be either.

There are 14 properties listed for Lucas County and none of them have an occupancy rate above 12%. But they're costing $3,771,630.90 a year to rent!

In Perrysburg, they lease a building at 1900 W. South Boundary for $42,678.09 per year and it had an occupancy rate of 8.2%.

Just in case there were timing issues of occupants coming and going, I checked the same properties for December 2011. The Perrysburg location had the same occupancy rate then - 8.2%. The rates for the Lucas County properties was also the same as in March.

One 922 square foot office at 420 Madison had an occupancy rate of .7% - only 2.5 days per year - at a cost of $24,961 per year. That's a pretty steep price to pay for an office that only has someone in it less than three days.

Couldn't one of their other 13 locations accommodate whoever needs to use that office for that short amount of time and save taxpayers $25,000??? This definitely qualifies for 'stuck-on-stupid' designation.

In fact, the GSA rents five offices at that same location for a total cost of $1,041,573.77. The combined occupancy rate for those spaces is 32.8%. Perhaps a single office would suffice for all the needs, rather than five. I can't imagine that they couldn't arrange schedules to ensure there was enough room on whatever day the space was needed.

Interestingly, the lease on the 922 sq. ft. space expired in November 2011 - and was renewed until March 8, 2012! This certainly begs the question of WHY!

They're also leasing several spaces at 433 N. Summit St.

One 16,669 sq. ft. space, costing $285,252.41 per year, is only occupied 6.3% of the time - and the lease doesn't expire until July 31, 2020.

Another 8,702 sq. ft. space that costs $224,788.30 per year is only occupied 3.43% of the time - and that lease is good to August 31, 2021.

Also, doesn't it seem a bit strange to you that a 8,702 sq. ft. space costs nearly as much as a 16,669 sq. ft. space? They're both 100% office space according to the GSA report, so why does an office that has only 52% of the space cost 78% of the price?

The smaller office is $25.87/sq. ft. while the larger one is $17.11/sq. ft. Perhaps there is a discount for taking a larger office, but would that account for nearly a 1/3 difference? Not being in the office real estate business, I don't know, but as a taxpayer, I certainly question it.

The bottom line is that this is atrocious.

What kind of person looks at the dismal occupancy rates of existing office space and then decides that a new office lease is needed?

What this indicates is that the federal government is so large and cumbersome that even the simple process of leasing office space for various entities has gotten completely out of control. Perhaps we need a law (though I shudder at the thought of the unintended consequences) that says no agency or federal entity can rent or lease any space in any city while there is existing space already available in another agency's location. That would certainly make more sense than funding each agency's individual office needs and ending up with 14 various offices all with less than 15% occupancy each.

And if this the Toledo experience, imagine the waste that is present when you combine the rest of the nation.

Obviously there is significant room for improvement in the management of office space. The only thing is - I doubt the federal government can handle it.

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