Power Struggle in Hearing over FTC Space Needs

“Man Controlling Trade” sculpture outside FTC headquarters building

Two Art Deco sculptures adorn the Federal Trade Commission (FTC) headquarters at Constitution and Pennsylvania avenues, depicting muscular men wrestling rebellious stallions and symbolizing government’s role in controlling trade. But a contentious hearing on December 3rd of the House Subcommittee on Government Operations suggests another interpretation: the ongoing battle over what power federal agencies can exercise over their real estate.

Chairman of the committee, Rep. John Mica (R-FL), staged the hearing in the modern, privately-owned Constitution Center on Seventh Street, SW, D.C. Mica has advocated since 2008 that the FTC move out of its 70-year-old Apex building and two other D.C. buildings to consolidate operations in the leased Constitution Center. Similar field hearings last winter drew attention to Mica’s frustration over slow disposition of excess courthouse space in Miami and vacant and underutilized Agricultural Research Services Center buildings in Maryland. This time, photos of outmoded interior features of the Apex building accompanied Mica’s presentation on the taxpayer savings possible by giving the building to the National Gallery of Art, which would raise private funds for renovations. In his view, the FTC’s 600–700 headquarters staff should join other agency employees moving this spring from lease-expired satellite facilities to the Constitution Center, allowing consolidation of data centers and elimination of FTC’s shuttle service and other expenses. But testimony by FTC and GSA officials revealed starkly different viewpoints.

David Robbins, executive director of the FTC, delivered a statement emphasizing his organization’s commitment to efficient use of federal real estate assets and taxpayer dollars. The FTC satellite staff already moving to the Constitution Center will use less space than currently (to average 119 SF per employee, with some contractors and others in workstations and hoteling space), and there is not enough room remaining to accommodate the headquarters staff. Said Robbins in prepared remarks, “The GSA has determined that the FTC requires a minimum of 446,054 SF for its entire space needs in D.C.; the entire SW quadrant [of the Constitution Center] totals only 358,537 SF.” Robbins also notes that moving headquarters employees from an owned building to leased space would cost an estimated $172 million over 30 years. “These additional costs,” said Robbins, “would have to be absorbed by the FTC budget, and, given the current funding environment, these costs would most likely be at the expense of pursing the agency’s mission to protect competitive markets and consumers.”

GSA Assistant Commissioner Chris Wisner’s testimony put the controversy in the context of GSA responsibilities to provide cost-effective space for many partner agencies. Constitution Center space became available when the Securities and Exchange Commission in 2010 leased 900,000 SF of the 1.4 million SF building, but later recognized the space was not needed (and lost its independent leasing authority along the way). The GSA scrambled to backfill the vacant space. The Office of the Comptroller of Currency and the Federal Housing Finance Agency leased portions, leaving 358,000 SF, which the GSA offered to the FTC, the National Endowment of the Arts (NEA) and the National Endowment for the Humanities (NEH). A timely move for NEA and NEH is essential to the GSA plan to redevelop the historic Old Post Office through outleasing to the Trump Organization. Renovations for all the new tenants are underway, and employees are scheduled to move into the Constitution Center by March 2014. According to Wisner, re-allocating the endowments’ space to the FTC, as Mica advocates, would cost millions in renovation and moving expenses already incurred—and would imperil the Old Post Office agreement.  Further, the 446,054 SF needed for FTC consolidation at current staffing levels would not be available even without the endowments at the Constitution Center. In his prepared testimony, Wisner asserted, “Given the size limitations and costs associated with such a move, consolidating the FTC’s entire Washington presence into Constitution Center is not feasible.”

Representative Mica rejected the FTC and GSA arguments, accusing the agencies of inflating the FTC’s space needs in a ruse to avoid consolidation. Subcommittee member Mark Meadows (R-NC) also criticized the GSA of poor asset management overall, saying, “There are empty buildings all over town.” Mica demanded that the GSA submit a list of all vacant D.C. properties. Citing a 2011 Transportation Committee resolution favoring FTC relocation, Mica fumed,  “It is inexcusable for the FTC to willfully reject Congress’ intent to consolidate its operations into a more efficient, modern government-leased office space.” Yet Robbins of the GSA countered that along with moving and leasing costs, the $92.8 million value of Apex building would be lost to federal workspace if it were handed to the National Gallery. “The cost to the American taxpayer would be prohibitive,” said Robbins.

Who will win this wrestling match? A post-hearing statement from Mica’s office reiterated his attacks on the GSA and concludes, “I will not stop until this agency is held accountable.”