National Health Museum

Good morning Mr. Chairman, and Members of the Subcommittee. My name is Tony Costa and I am the Assistant Regional Administrator for Public Buildings for the National Capital Region of the General Services Administration (GSA) Public Buildings Service. Thank you for inviting GSA to appear before you today to discuss the National Health Museum proposal as it relates to the future use of Federal Office Building 8 (FOB 8) at 2 nd and C Streets, SW.

I'd like to start by giving you a brief description of the building and its status. FOB 8 was constructed in 1965 as laboratory space for the Food and Drug Administration (FDA) and has been used for this purpose ever since. The property is located in a prime commercial location not far from the Mall with excellent transportation services. The site is approximately two acres, with a total building square footage of approximately 545,500 gross square feet, including mostly specialized laboratory space. FDA is relocating to a new FDA facility GSA is constructing in College Park, MD. The move is scheduled to be completed in September 2001. FDA will complete environmental remediation for the labs in FOB 8 after their move. FOB 8 is a specialized building in need of major renovations.

For long-term needs, it is more cost effective for the government to house federal offices in owned space rather than leased space. Currently, GSA is leasing approximately 18 million square feet of space in the District of Columbia. GSA did a preliminary study on renovating this building and determined that for a cost of approximately $67.1 million the building would yield a little over 573,000 gross square feet of office space. When compared to leasing, the 30-year present value of the cost of renovation is approximately $81,000,000 less than leasing.

In addition to improving GSA's cost competitiveness, this renovation or new construction would give GSA the added benefit of consolidating additional agencies into Government owned space. And, it is important to note that the Public Buildings Service funds its operations and capital needs through income generated from its real property activities. Therefore, any loss of property that could generate income for PBS diminishes the ability of the Service to provide space and services to our customer agencies.

Although FOB 8 has significant value as part of GSA's real estate portfolio, we understand that some in the Congress may wish to direct the disposition of this site in order to provide a National Health Museum located near the Mall. The Administration believes that any such directed disposition should require that the government be reimbursed for the full fair market value of the site. In this way it might be possible to pursue alternative uses for the site while protecting the interests of the nation's taxpayers.

Mr. Chairman, this concludes my formal statement. Again, thank you for inviting GSA to appear before the Subcommittee today. I would be happy to answer any questions you may have.