This is the accessible text file for GAO report number GAO-03-816R 
entitled 'Status of the L. Mendel Rivers Federal Building Exchange' 
which was released on June 26, 2003.

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June 26, 2003:

The Honorable Ernest F. Hollings:

United States Senate:

Subject: Status of the L. Mendel Rivers Federal Building Exchange:

Dear Senator Hollings:

The L. Mendel Rivers Federal Building (Rivers Building) in Charleston, 
South Carolina, has been vacant since it sustained damage in 1999 from 
Hurricane Floyd. For several years, the General Services Administration 
(GSA) has been working with the City of Charleston to negotiate an 
exchange of the Rivers Building and its site for land and a building to 
be constructed by the City. This report responds to your March 21, 
2003, request for information on the progress of GSA's efforts to 
exchange the Rivers Building with the City of Charleston. To determine 
the current status of the exchange, we interviewed GSA officials and 
reviewed the draft Memorandum of Understanding (MOU) between GSA and 
the City of Charleston. We performed our work during May and June 2003.

GSA and the City of Charleston have developed a MOU setting forth the 
terms and conditions for the exchange. Under the MOU, in exchange for 
the Rivers Building, the City of Charleston would convey to the federal 
government a parcel of city-owned land at 101 Broad Street and 
construct a building on it to support existing federal functions. This 
newly constructed federal building will be located next to the existing 
federal courthouse. GSA would have to approve all plans and 
specifications for the new building. The City would also construct a 
parking garage near the new building that would be used in part by the 
occupants of the new building but would not be part of the exchange. 
The MOU also states that the City would be responsible for the 
demolition and asbestos abatement of the Rivers Building. GSA will 
retain ownership of the Rivers building until the new federal building 
is constructed at 101 Broad Street and the exchange is completed.

According to a GSA official, the MOU was approved initially by 
Charleston's City Council and GSA's regional office. The MOU was then 
sent to GSA's Headquarters Office of Portfolio Management and reviewed 
by GSA's Office of General Counsel. We were informed that the General 
Counsel's Office made some technical changes to the MOU, and it was 
sent back to the City for the Mayor's signature. According to a GSA 
official, the Mayor signed the MOU on June 17, 2003, and the 
Administrator of GSA is expected to sign it in early July.

According to the MOU, the City plans a three-phase construction 
project. It would start with the construction of the new building, 
followed by the parking garage and then the demolition and 
redevelopment of the Rivers Building site. The City and GSA are working 
to develop the requirements for the new building. Once the MOU is 
executed, the City of Charleston can begin the process of selecting a 
developer for the new building. When construction of the building is 
completed and an independent appraisal shows the value of the new 
building and land is equal to the appraised value of the Rivers 
Building and its site, the exchange can occur. If the values of the 
properties are not equal and the City of Charleston cannot reach an 
agreement with GSA to provide additional consideration to recover the 
disparity in value, GSA retains the right not to complete the exchange. 
According to the MOU, if the exchange does not occur by February 10, 
2007, the agreement will expire, and neither party will have any 
obligation to the other.

Please contact me at (202) 512-6670, or at, if you 
or your staff have any questions. We are sending copies of this report 
to the Administrator of GSA and will make copies available to others 
upon request.

Sincerely yours,

Mark L. Goldstein:

Acting Director:

Physical Infrastructure:

Signed by Mark L. Goldstein: