This is one in a regular series exploring how federal agencies are finding and implementing innovative ways to drive efficiency and cut costs.
Despite a lousy real estate market, the federal government has been able to sell off surplus government properties to reduce the deficit.
Latest major transaction: a building in Nome, Alaska for $1.68 million.
According to the OMB, the Nome building sale is just one of the many buildings and properties that make up more than $5.6 billion in real estate savings in the first quarter of fiscal 2012. And they say there will be more to come. President Barack Obama has directed that the government save $8 billion in real estate savings by the end of the year — $5 billion by closing surplus military installations and $3 billion in non-military real estate. So far, OMB says the government has achieved $3.25 billion in BRAC (Base Realignment and Closing Commission) savings and $2.4 billion in non-BRAC savings.
Take the Nome sale. According to Alaska Business Monthly, the building, which was built in 1958 to house federal agencies and federal courts, was sold to Front Properties, LLC, an Alaska firm. The 27,503 square foot building is in the heart of Nome, and will continue to house State of Alaska offices and a Post office. The rest of the building will get a $500,000 facelift with an eye to renting it privately, said Front Properties Managing Member Steve Zelener, told the business website.
“Through the upgrades, we intent to keep the building as one of the most historically distinguished and desirable buildings in Nome,” he said.
Another major sale reported by OMB is the Moscow, Maine, radar site – 1,425 acres was once used as a part of a system to track potential military attacks on the Eastern seaboard. It went for $750,000 at auction. Significantly, the Moscow, Maine site is featured on a website called “Cold War Relics,” and was aimed at protecting the East Coast from attack by from the other Moscow – the one in Russia. Once Communism fell in 1991, the system was no longer needed.
The Bangor Daily News reports that a local Maine firm, Cianbro, bought the facility and hopes to turn it in to a power plant or a business complex. Local elected officials say while the federal government may be pleased to be rid of the facility, they are happy to have it on local tax rolls.
OMB controller Danny Wurfel, in a blog, said the Obama administration is hoping that Congress will pass a law allowing swifter sale of surplus federal property. The Civilian Property Realignment Act, modeled after BRAC, would create an independent board of experts to identify and sell off extraneous property. The House passed the bill in February, but the Senate has not yet acted.
Other properties also have “Sold” signs on them, including the historic old Portland Custom House in Portland, Oregon, which went for $4.7 million. The developers who bought the structure, Eastern Real Estate LLC out of Woburn, Mass., won’t say what they plan for the site, but the firm has experience in retail centers and hotels, according to the Oregonian newspaper.
“We are thrilled and honored to be the new stewards of this important piece of Portland history,” Brian Kelly, one of the firm’s principals, told the newspaper. “It is an absolute gem of the Pearl District and the city….”
And, in a situation that the Obama administration says is better for federal taxpayers, it’s off the government property list.