The General Services Administration Has Been Lax in Managing the Columbia Plaza Building Lease

LCD-79-307: Published: Apr 17, 1979. Publicly Released: Apr 17, 1979.

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The General Services Administration (GSA) did not devote enough management attention to the administration of the lease for the Columbia Plaza Building in Washington, D.C. Rather than planning ahead and avoiding problems, GSA waited too long and reacted to problems after they had occurred. Many of these problems and some of the $16.7 million in extra costs could have been avoided.

Construction was slow and the building was sold unfinished at a foreclosure sale. As a result, the lease was modified increasing the cost of the lease to the government. GSA paid rent of $1.58 million while all or part of the Columbia Plaza Building was vacant. In addition, costs of $567,000 incurred to adapt space to meet special needs of the U.S. Customs Service were unnecessary because the agency did not move to the building as planned. The government will incur additional lease costs of about $13.88 million over the 20 year lease because oral agreements were not put in writing and GSA was not in good bargaining position since it had not developed alternative plans for obtaining needed space. GSA did not resolve the issue of whether the lessor or the government is responsible for maintaining the structural integrity of the building. The government has been paying for electricity used by the building's commercial garage since 1974. GSA is paying rent based on 422,118 net usable square feet of space. All available evidence indicates that the building contains less than that.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Administrator of GSA should: resolve the issue of who is responsible for maintaining the structural integrity of the building; negotiate with the lessor for the deduction from the rent payments those costs incurred for repairs and maintenance which were the responsibility of the lessor; require separate metering for utilities in the garage of the building and obtain reimbursement for utilities consumed at government expense since 1974; and determine the amount of net usable square feet available in the building by making a field measurement in accordance with the terms of the lease and, if necessary, adjust the rent payments to conform to the field measurement and negotiate with the lessor for the recovery of any overpayments arising from the rent having been based on more space than was available. In addition, GSA should include interest in its claims for reimbursement.

    Agency Affected:

 

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