Better Planning Needed Regarding Reuse of Old Courthouses
GAO-14-48: Published: Nov 7, 2013. Publicly Released: Dec 9, 2013.
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What GAO Found
Of the 66 old federal courthouses that GAO reviewed, the General Services Administration (GSA) retained 40, disposed of 25, and is in the process of disposing of another. Of the retained old courthouses, the judiciary occupies 30 of them, 25 as the main tenant, most commonly with the district and bankruptcy courts. When determining whether to retain and reuse or to dispose of old courthouses, GSA considers, among other things, a building's condition, the local real estate market, and the existing and projected base of federal tenants. GSA officials said that after the judiciary moves to new courthouses, old courthouses often require renovations to be reused. Moreover, GSA officials said that it can be challenging to find new tenants for old courthouses due to the buildings' condition and needed renovations, among other reasons. Among the retained old courthouses GAO reviewed, excluding one building that was under major renovation, about 14 percent of the total space (nearly 1-million square feet) in them was vacant as of May 2013--significantly higher than the 4.8 percent overall vacant space in federally-owned buildings in 2012.
GAO found that GSA took about 1.4 years to dispose of old courthouses that the agency determined were no longer needed. GSA officials told us that multiple parties' interest in re-using the old courthouses, the historic status of many buildings, and their specialized designs can slow the disposal process.
GSA is not specifically required by statute to include plans for old courthouses in its proposals to Congress for new courthouses. However, as with other building proposals over a certain dollar threshold, GSA is required to include, among other things, a "comprehensive plan" to provide space for all federal employees in the area, considering suitable space that may be available in nearby existing government buildings. In addition, GAO and the Office of Management and Budget have previously reported that complete cost estimates are a best practice in capital planning. GAO found that renovations needed to reuse the old courthouses, totaling over $760 million to date, were often not included in GSA's new courthouse proposals. Specifically, for 33 of the 40 retained old courthouses, the new courthouse proposals described plans for reuse by federal tenants, but only 15 proposals specified whether renovations were needed to realize these plans, and only 11 included estimates of the renovation costs. GAO found that some old courthouses were partially or wholly vacant while awaiting renovation funding, sometimes resulting in money spent leasing space in commercial buildings for the judiciary.
Why GAO Did This Study
During the last 20 years, GSA built 79 new courthouses for the judiciary that replaced or supplemented 66 old courthouses. Retaining and re-using or disposing old courthouses can be challenging for GSA because many of them are more than 80 years old, do not meet current court security standards, and have historic features that must be preserved by federal agencies in accordance with historic preservation requirements. GAO was asked to review how GSA and the judiciary are planning and managing the reuse or disposal of old courthouses. GAO examined (1) how the government is re-using old courthouses that were retained and the challenges involved; (2) how GSA disposed of old courthouses, the process involved, and the results; and (3) the extent to which GSA's proposals for new courthouses considered the future use of old courthouses. As case studies, we selected 17 old courthouses to represent a mix of retained and disposed buildings located in geographically diverse areas.
What GAO Recommends
In proposing new courthouses, GSA, in consultation with the judiciary, should include plans for re-using or disposing of old courthouses, any required renovations and the estimated costs, and any other challenges to re-using or disposing of the buildings. GSA concurred with the recommendation and AOUSC agreed that GSA and the judiciary should work together to address the judiciary's housing needs.
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Recommendation for Executive Action
Status: Closed - Implemented
Comments: In November 2013, we reported that during the previous 20 years, GSA built 79 new courthouses for the judiciary that replaced or supplemented 66 old courthouses. However, we found that of the 40 old courthouses that were replaced and retained, some were partially or wholly vacant awaiting renovation funding, sometimes resulting in money spent leasing space in commercial buildings for the judiciary. Furthermore, we reported that only 15 of the proposals for new courthouses specified whether renovations were needed to realize plans the old courthouses' reuse by federal tenants, and only 11 proposals for new courthouses included estimates of the old courthouses' renovation costs. To improve the transparency of cost information regarding the retention and reuse of old courthouses, we recommended that when proposing new courthouses, GSA include (1) plans for re-using or disposing of the old courthouses, (2) challenges with implementing those plans, including any required renovations and related cost estimates, and (3) when the plans involve re-locating federal tenants from commercially-leased space to the old courthouses, estimates of the long-term costs of occupying the old courthouses versus continuing to occupy commercially leased space. In response, GSA developed a template for language to address the reuse of old courthouses in proposals for new courthouses starting in fiscal year 2016 that substantially addresses the three elements of our recommendation. In addition, in its fiscal year 2016 proposal to Congress for a new courthouse in Nashville, TN, GSA discussed how it plans to re-use the old courthouse, the challenges associated with the plan, and related long term lease cost avoidance. As a result, Congress and other stakeholders will have key information needed to make informed decisions about new courthouse projects.
Recommendation: To improve the transparency of cost information regarding the retention and reuse of old courthouses, and when proposing new courthouses, the Administrator of the General Services Administration, in consultation with the judiciary as appropriate, should include (1) plans for re-using or disposing of the old courthouses; (2) challenges with implementing those plans, including any required renovations and related cost estimates, to be updated as needed; and (3) when the plans involve re-locating federal tenants from commercially leased space to the old courthouses, estimates of the long-term costs of occupying the old courthouses versus continuing to occupy commercially leased space.
Agency Affected: General Services Administration