Federal Real Property:

Public-Private Partnerships Have a Limited Role in Disposal and Management of Unneeded Property

GAO-16-776R: Published: Aug 30, 2016. Publicly Released: Aug 30, 2016.

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Contact:

David J. Wise
(202) 512-2834
wised@gao.gov

 

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What GAO Found

Federal and state agencies have used public-private partnerships to dispose of unneeded property to a limited extent. General Services Administration (GSA) officials stated that public-private partnerships are explored on a case-by-case basis along with other options for disposing of a federal property and that partnerships are considered for fewer than 10 cases each year. While partnerships can take many forms, GAO identified three main categories of partnerships used by GSA: (1) enhanced use leases (long-term agreements in which the ownership of the property is not transferred, but a private party manages the property for a specific period of time); (2) swap exchanges (in which the title of a federal property is transferred to a developer or other property recipient in exchange for the construction of a new asset or completion of other construction or renovation); and (3) negotiated sales (which may include certain requirements or activities be completed as a condition of the sale). Based on our literature search and interviews with stakeholders, the use of public-private partnerships to dispose of unneeded real property at the state level appears to be limited; of the three states GAO identified as possibly using public-private partnerships for this purpose, none could identify any recent partnerships in their state.

Public-private partnerships can provide government agencies with additional tools for managing and disposing of unneeded real property, but may not mitigate previously identified challenges to disposing of real property. For example, according to stakeholders GAO interviewed, partnerships can provide a way for agencies to leverage existing assets to obtain needed improvements and facilities without procuring funding. However, partnerships may not mitigate other challenges such as the costs involved in accurately assessing the overall value and environmental remediation costs associated with a property or balancing the interests of numerous stakeholders. In addition, GSA officials acknowledged the additional challenge that negotiating successful public-private partnerships requires unique expertise and organizational experience with public-private partnerships and exchanges that GSA currently lacks, but is gaining.

Why GAO Did This Study

Federal real property management is on GAO’s High-Risk list, in part, due to long-standing challenges federal agencies face in managing federally owned real property, including disposal of excess and underutilized real property. High profile projects, such as the proposed FBI headquarters consolidation and the transformation of the federal-owned Old Post Office in Washington, D.C., to a hotel, are examples of the federal government using public-private partnerships to manage its real property portfolio. GAO was asked to review how federal and state government agencies have used public-private partnerships to manage and dispose of excess or unneeded real property. This report discusses: (1) what is known about the extent to which federal and state agencies have used public-private partnerships in managing and disposing of unneeded real property and (2) the benefits and challenges, as reported by stakeholders, associated with using public-private partnerships to manage and dispose of federal or state real property.

GAO reviewed relevant literature and analyzed three examples of public-private partnerships involving federal properties purposefully selected to include a variety of property and partnership types. GAO reviewed relevant literature and solicited recommendations from key stakeholders about which states might be using public-private partnerships for disposal and management of unneeded properties. From this review, GAO identified and spoke with officials from three states that possibly used public-private partnerships for disposal and management of unneeded real property: Texas, Virginia, and Washington. For the purposes of this report, GAO considered government properties that have been identified as unneeded and were previously or are currently involved in a public-private partnership.

For more information, contact David J. Wise at (202) 512-2834 or WiseD@gao.gov.

 

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