1 Real Property Initiatives & Strategies Meaghan Hakala

2 Outline  Executive Order  Presidential Memorandum  OMB Memorandum  M  Asset Management –Targeted Asset Review –RPSSS Contract

3 What is Executive Order 13327?  Promotes the efficient and economical use of Federal Real Property Assets as part of the President’s Asset Management Initiative.  Executive Order 13327, “Federal Real Property Asset Management” was signed in February Its major provisions include: –Federal Real Property Council (FRPC) –Federal Real Property Profile (FRPP) –Senior Real Property Officer (SRPO) –Asset management plans: Requires Federal Landholding Agencies to develop these plans

4 What is the Presidential Memorandum? On June 10, 2010, the White House issued a Presidential Memorandum on Disposing of Unneeded Federal Real Estate – Increasing Sales Proceeds, Cutting Operating Costs, and Improving Energy Efficiency.

5 What is the OMB memorandum? In response to the Presidential Memorandum, on July 1, 2010, the OMB issued a Management Procedure Memorandum on the Development of a Real Property Cost Savings and Innovation Plan.

6 What is the latest directive from OMB? OMB Memorandum M-12-12, Promoting Efficient Spending to Support Agency Operations:  States CFO –Act agencies shall not increase the total square footage of their domestic office and warehouse inventory compared to the FY 2012 baseline.  Agencies submit a Revised Real Property Cost Savings and Innovation Plan, and in future years, an Annual Agency Evaluation, which will describe the agency's overall approach in managing its real property usage and spending.  mplementation-of-freeze-the-footprint-guidance.pdf mplementation-of-freeze-the-footprint-guidance.pdf

7 What is Real Property Portfolio Asset Management?  Real property portfolio management develops national strategies for optimizing an agency’s assets’ performance in its portfolio, by analyzing and balancing: –Mission Need –Market Conditions –Asset’s Financial and Operational Performance –Social and Economic Priorities

8 What is Asset Management? As defined by the Government-wide Federal Real Property Asset Management Principles, 1996:  The relationship between a real property holding entity and the real property that such an entity holds an interest in.  This relationship includes, but is not limited to:  Financial management  Management of the real property itself  Satisfaction of the tenants  This relationship covers the life cycle of a real property asset.  Asset management succeeds when organizations adopt effective asset management principles and use strategic planning as the framework for making real property asset management decisions.

9 What are GSA’s Asset Management Principles?  Customer needs drive portfolio composition.  Assets must perform financially.  Assets should be put to highest and best use for Federal needs.  Reinvestment is essential.  Income/Expense should be comparable to the market.  Redeploy assets in a timely way.  Use industry practices and metrics.

10 BALANCING ACT: an attempt to cope with several often conflicting factors or situations at the same time.

11 Key Stakeholders Landholding Agency Sponsoring Agency Community Leaders Civic organizations Chamber of Commerce Congressional Delegation Mayor and City Officials County Executive and County Officials State Officials Tribal Organizations

12 Targeted Asset Reviews (TARs)

13 What is a Targeted Asset Review (TAR)?  An asset management tool that: –Includes a comprehensive review of a Federal Real Property Asset –Retention and disposal decisions for an agency –Provides asset utilization recommendations

14 Background of TARs  PBS introduced the TAR concept in 2002 to provide: –An alternative to Executive Order Real Property Utilization Surveys –An approach to help agencies implement sound asset management and redeployment strategies  Pilot tested with the Coast Guard’s Civil Engineering Unit in Miami  GSA has done over 250 TARs for 14 agencies

15 What is the purpose of a TAR?  A TAR is a real estate utilization study designed to assist an agency with real property asset management by: –Increasing its knowledge of individual assets. –Understanding the role of each asset in supporting the agency’s mission and objectives. –Examining current and future utilization alternatives. –Reviewing due diligence work, which includes collecting and organizing title, environmental, historic and cultural information. –Identifying real estate and community issues affecting the property.

16 What is the TAR Process?  Step 1: GSA will develop the Statement of Work (SOW) in collaboration with the Agency, and create the Independent Government Estimate. –SOW can be customized to particular Agency needs or unique property characteristics.  Step 2: GSA will compete the SOW using a Blanket Purchase Agreement (5 vendors).  Step 3: GSA will award the TAR and then conduct a conference call with landholding Agency and selected vendor.  Step 4: The Contractor then conducts the TAR: 1.Data Gathering and Records Review. 2.Site Visit. 3.Report Preparation - completed within 60 days.

17 What is included in a TAR Report? 1.Size, property description, buildings, and other improvements. 2.Title history and all appropriate source documents. 3.Easements, permits, and licenses. 4.Environmental concerns: Lead-based paint, PCBs, asbestos, and presence/history of hazardous substances. 5.Historical/cultural considerations. 6.Community/stakeholder Interests. 7.Recommendations for most efficient asset utilization/disposition.

18 Results: TARs  48 properties have been put through the Disposal Process  Annual cost savings of $2.8M  Combined proceeds of $27M

19 What happens after a TAR? Should the property be disposed? No Yes TAR Yes Is there an internal agency need? No ROE Report the property to GSA as excess

20 What is the Disposal Process under the 40 USC, Chapter 5? ExcessFederal Transfer Public Use Conveyance Negotiated Sale Public Sale Agency Reports Property Excess to GSA for Disposition Determined Surplus If Not Transferred to Another Federal Agency Property Available for Certain Public Uses Up to 100% Discount To Eligible Public Bodies for Other Public Uses Fair Market Value Required Offered to Public and Private Parties Via Auction or Sealed Bid Fair Market Value Required

21 TAR Case Study: U.S. Coast Guard Housing, Miami FL  Purchaser: Miami-Dade County  Negotiated Sale: acres  Relocation funds enabled acquisition of additional property for housing construction in Florida Keys.

22 TAR Case Study: Crisis City, KS  Air Force property  Air Force permit to the Department of Army  Department of Army License to the State of Kansas  Encroachment by State of Kansas on US Air Force property: Looking at Emergency Management PBC

23 What are other tools GSA provides?  Some of the other tools GSA has provides recently include: –Broker’s Price Opinion –Energy Audits –Facility Condition Assessments –Sustainability Audits –Marketability Studies  GSA can customize TARs to provide additional work requested by agencies

24 New Contracting Vehicle: RPSSS  Real Property Sale and Support Services BPA  Augment our expertise by leveraging the industry to provide the following critical real estate services: –Market analysis –Due diligence services –Sales related services –Marketing – Advertising –Valuation/appraisal –Property utilization studies –Environmental consulting –Financial performance

25 Questions…