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Newsletter

Public Buildings Service
US General Services Administration

Mid-Atlantic Region
SPRING 2003 Issue

Index of Highlights Inside: (Click on a Number to View)

Jan Ziegler
Assistant Regional Administrator
Public Buildings Service
Mid-Atlantic Region

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GSA Preserving America's Architectural Legacy

On March 3, 2003, President George W. Bush signed Executive Order 13287, Preserve America. The Executive Order calls on the federal government to protect, enhance, and use historic properties owned by the government; to build partnerships with state and local governments, Indian tribes, and the private sector through the use of historic properties to promote local economic development; to maintain accurate information on federal historic properties and their condition; and to seek opportunities to increase public benefit from federally owned historic properties, including heritage tourism.

GSA is proud to be a partner in this initiative to strengthen government wide preservation efforts. Nationally, GSA Public Buildings Service (PBS) manages over 400 historic buildings, including 33 national historic landmarks. Most of the directives set forth in the new Executive Order have long been underway at GSA, including working with communities to ensure public benefit from the federal presence and creating an active strategy for using historic buildings and keeping them viable. PBS also honors exemplary preservation projects and initiatives with our annual Heritage Awards program.

Projects nominated for Heritage Awards are judged on their success in meeting preservation goals, overall quality, innovation, and benefit to GSA tenants and the public. Two buildings recently recognized with Heritage Awards were the Owen B. Pickett U.S. Customhouse in Norfolk, Virginia, and the William J. Nealon Federal Building and Courthouse in Scranton, Pennsylvania.

The restoration and renovation of the Owen B. Pickett U.S. Customhouse, originally constructed in 1851, provided the U.S. Customs Service with a well equipped, modern working environment, and also restored a historic treasure to the city of Norfolk. The project at the William J. Nealon Federal Building and Courthouse involved both the construction of a new annex and the restoration of the 1931 building to its former glory, allowing the historic structure to maintain its visual dominance in the Scranton community.

Through our historic preservation efforts, we are restoring the classical treasures of these buildings to their original grandeur, while updating them with the amenities demanded in today’s modern office environment. We are ensuring that these treasures are maintained and preserved not only for the towns and cities that they serve, but also as landmarks for future generations.

For more information on Executive Order 13287, Preserve America, please visit the Advisory Council on Historic Preservation’s website at: http://www.achp.gov/

For more information on GSA’s Historic Preservation efforts, please visit GSA’s national Historic Preservation website at: http://www.gsa.gov/historicpreservation

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New Broker Contract Provides Increased Opportunity and Flexibility

GSA Public Buildings Service (PBS) is continually evolving into a project management organization with a strong focus on cultivating customer relationships and understanding the customer’s mission and workplace needs. In providing realty services to our customers, we realize building the customer relationship is just as important, if not more important, than the transaction or "the deal" itself. With this understanding, GSA has been working over the past several years to establish partnerships with private sector real estate firms. Through “broker contracts” between GSA and these firms, we seek to utilize their expertise in the real estate market to perform realty transactions.
GSA is currently in the process of establishing a broker contract for use by PBS throughout the nation. In the interim, GSA’s Mid-Atlantic Region has awarded a new regional broker contract to real estate services firm Cushman & Wakefield. These efforts allow PBS Realty Specialists to spend more time improving our understanding of the mission and needs of our customers.

The contract, awarded in October 2002, covers the entire GSA Mid-Atlantic Region and includes lease acquisition and associated support services. The nine-year contract includes one firm term base year and eight potential one-year extension options. GSA can utilize Cushman & Wakefield to perform complete lease acquisition services, or they can be called upon to perform individual tasks from a menu of services. This flexibility allows the PBS Realty Specialists the option of utilizing Cushman & Wakefield for specific tasks rather than the entire procurement.

When developing this new contract, GSA sought feedback and lessons learned from over 10 years of experience in using similar contracts, and used this information to improve upon previous broker contract efforts. When compared to previous contracts, the new regional broker contract contains pricing that serves the government's purposes more effectively and economically. Pricing for full service lease acquisition services in Cushman & Wakefield’s contract is based on a square foot basis, as opposed to a percentage of lease value as was the case in the past. The previous method did not give contracted brokers an incentive to negotiate the best lease deal for the government. Furthermore, the structure of GSA’s contract with Cushman & Wakefield contains a mix of pricing for other services, including costs based on a square foot basis, per transaction, and per hour, depending on the service being provided. This flexible structure covers a variety of services and aims to satisfy both GSA's and our customers' needs in the most cost effective manner.

Cushman & Wakefield is headquartered in Philadelphia, providing close proximity to PBS Realty Specialists located in our Mid-Atlantic Regional office. The firm has offices in New Jersey, Delaware, Maryland, and Virginia, and has established a consulting relationship with a firm in West Virginia in order to serve our customers in that state as well. With offices throughout our region, Cushman & Wakefield brings to the table the market knowledge essential to negotiating effective real estate deals.

GSA is currently training Cushman & Wakefield in the federal leasing process, which is quite different from the private sector process. Concurrently, we are training PBS Realty Specialists on the effective use and management of the broker contract. PBS Realty Specialists have received guidelines for their role as project manager in broker assisted projects.

GSA remains focused on our mission to provide superior workplaces for federal workers and superior value to American taxpayers. With our broker contracts, we are working to refine the process of providing space acquisition services on behalf of the federal government, while at the same time creating an opportunity for increased understanding of our customer’s mission and workplace needs.

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2003 PBS Customer Satisfaction Survey—Coming Soon

Beginning this May, GSA will distribute the 2003 Public Buildings Service (PBS) Customer Satisfaction Survey in selected GSA owned and leased buildings throughout the nation. This survey provides an opportunity for you to voice your opinions about the services we provide. Your feedback provides GSA with an opportunity to address any needed improvements to our operational services including heating and air conditioning, maintenance, repairs, cleaning, and building amenities.

The PBS Customer Satisfaction Survey is administered by the Gallup organization. Gallup provides GSA with expertise in survey methodology, internal controls, and analysis of the results. The confidentiality of your feedback is maintained, though we ask you to identify your agency so that we can identify common agency concerns across buildings.

One example of customer feedback leading to building improvements can be seen at the Social Security Administration District Office on Penn Circle in Pittsburgh, Pennsylvania. On the 2001 survey, our customers at Penn Circle said they were satisfied overall with GSA’s services; however, they did voice concerns regarding the need for repainting of the building interior and the inadequacy of the restroom ventilation at the time of the survey.

Based on survey feedback, GSA developed and implemented an action plan that included interior painting of the facility as well as improving restroom ventilation as part of a scheduled restroom renovation project. By responding to our survey this year, our customers at Penn Circle will have the opportunity to let us know if these changes have improved their workplace environment. Of course, your input on GSA service delivery is always welcome.

Across the nation, we are in the process of shifting the survey cycle from every two years to every three years based on customer feedback regarding survey frequency.

Tenants in a sample of delegated buildings and customer agency delegated leases will be surveyed as well. Tenants in those locations not surveyed this year will be surveyed in 2004. Visit www.gsa.gov/midatlanticsurvey to find out when we will be administering the survey in your building.

When you receive the survey, we ask that you please take a few minutes to give us your opinion. Your feedback helps us deliver superior workplaces at superior value and ensures that our services continue to support your operations.

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A Unique Solution for Meeting Bureau of the Public Debt’s Expanding Space Requirements

The Department of Treasury Bureau of the Public Debt (BPD), headquartered in Parkersburg, West Virginia, met with GSA in the summer of 2001 to discuss space requirements for housing their expanding Administrative Resource Center (ARC). BPD currently occupies space in six leased facilities throughout Parkersburg. The ARC, which provides accounting, human resources, and facilities services for other agencies, is dispersed among the leased locations. The current housing situation has made communication and coordination among ARC employees a challenge. Housing their 250 employees together will allow ARC to function more efficiently and improve service to their customers.

BPD initially requested 154,000 square feet of expansion to be delivered in a relatively short amount of time. GSA recognized that this large amount of space would be difficult, if not impossible, to lease in the current Parkersburg real estate market. Through collaborative discussions, the team agreed to pursue a Real Estate Masterplan, which would more fully explore BPD’s space requirements. The Master plan provided a comprehensive real estate management strategy and differentiated BPD’s short- and long-term space requirements. The plan also addressed the site selection process for the facility. Completed in late January 2002, this Master plan revealed an immediate space requirement of approximately 80,000 square feet would best accommodate BPD’s consolidation of their ARC function. This strategic approach would now afford real estate developers the opportunity to accommodate the smaller requirement in a shortened timeframe.

On February 7, 2003, GSA awarded a lease contract for the design and construction of a 79,975 square foot building. GSA awarded this lease construction project using our Design Excellence Process. This process stresses design creativity as well as streamlining procurement times, while reducing the cost of competing for GSA contracts. The innovative facility design and site plan meet BPD’s immediate space requirements while allowing for potential future on-site expansion to accommodate BPD’s long-term space needs. The site plan, facility architecture, and building operating systems are all designed to accommodate future expansion of the facility.

“I am very excited about this project and what it means to the Administrative Resource Center of the Bureau of the Public Debt,” said ARC Executive Director Glenn Ball. “By constructing this new complex, we have an opportunity to continue to grow our franchise business, where we provide various administrative services to other federal agencies on a reimbursable basis.”

This project is a partnership among the developer, Lowe Enterprises Mid-Atlantic, Inc.; the architect, Studios Architecture; and the contractor, James G. Davis Construction Corporation. Construction is scheduled to begin in late summer 2003, with occupancy anticipated in September 2004.

The City of Parkersburg has been instrumental in the planning and site selection process. Mayor Jimmy Colombo said the expansion of the Bureau of the Public Debt benefits the city as well as the Bureau. “I feel this is wonderful for the future of Parkersburg. It will bring more jobs and bring more people downtown. And we can do some of the long range planning we’ve talked about for years,” Colombo said. Both GSA and the Bureau of the Public Debt are proud to be part of this vision for the Parkersburg community.

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Financing Energy-Saving Facility Upgrades Through Private Sector Partnerships

The winter of 2002-2003 hit us hard in the Mid-Atlantic Region. Although we are now well into spring, memories of high utility bills stemming from a cold, hard winter are not far behind. Over the years, we have done a great deal to improve the energy-efficiency of our inventory and to minimize utility costs. We have included energy efficient and sustainable design language in our construction documents and lease agreements. We have completed many energy efficient upgrades, decreasing total energy consumption in our facilities by 22.5 percent since 1985.

However, with the budget constraints we all are facing, it is becoming increasingly difficult to secure federal funding to cover the up-front costs of energy-saving upgrades, even when we know the upgrades will significantly reduce future operational costs. An innovative partnership between GSA and the private sector has led to a smarter solution for financing such upgrades at the J. Caleb Boggs Federal Courthouse in Wilmington, Delaware. To improve energy efficiency at the facility, GSA’s Mid-Atlantic Region recently awarded its first Energy Savings Performance Contract (ESPC) to Honeywell, a diversified technology and manufacturing company.

An ESPC is a federal and private sector partnership whereby the government awards a competitive contract to an energy service company, which in turn pays the up-front costs of purchasing and installing new energy efficient equipment. The government then repays the energy service company over the life of the contract. Payments come from the energy savings realized by the installed energy conservation measures.

“The Boggs Courthouse presents an opportunity for real energy and cost savings,” said GSA Project Manager Christopher McAlee. “The ESPC enables us to fund energy-saving upgrades using the savings from future utility bills.”

Through this partnership with Honeywell, GSA is now moving forward with a project to upgrade and automate the heating, ventilating, and air conditioning (HVAC) systems at the Boggs Courthouse. Four new energy efficient boilers will replace the existing 30-year-old boilers. New energy efficient bathroom fixtures, fan motors, and lighting will also be installed to reduce energy consumption. A new Energy Management Control System will also be installed.

Currently, the Boggs Courthouse can only be heated in the winter months and cooled in the summer months. This upgrade will allow heating or cooling to any part of the Boggs Courthouse throughout the year. In addition, HVAC in Boggs’ perimeter offices, currently controlled using four zones (north, south, east, and west), will be controlled using 24 zones. This upgrade will improve the property manager’s ability to provide more comfortable temperatures throughout the building.

“The ESPC allows us to accomplish more upgrades for less money,” says Leann Esposito, GSA property manager at the Boggs Courthouse. “We are essentially completing $2.3 million worth of upgrades with only a $1.8 million down payment. We will reduce energy consumption, save on operation costs, and improve tenant comfort throughout the building, all at the same time.”

Through the ESPC, the government will begin saving energy as soon as upgrades are completed and will continue to save energy beyond the financing period. Upgrades made possible through the ESPC will result in an estimated energy cost savings of $78,000 per year.

Federal partnerships with the private sector, such as the ESPC in place for the Boggs Courthouse, will continue to strengthen the quality of GSA’s portfolio of properties and improve the efficiency and effectiveness of federal operations.

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Portfolio Restructuring—Improving Our Federal Inventory

The Public Buildings Service (PBS) is proud of our history of providing superior workplaces for federal agencies at best value to them and the American taxpayer. Improving the condition of government buildings and providing our customers with modern, efficient workplaces remains a top priority here at PBS.

Nationally, we manage a portfolio of over 330 million square feet of workspace for a million federal employees in 2,000 American communities. Our inventory includes over 1,700 government-owned buildings. Funding for needed repairs, modernization and improvements of these buildings comes from our Federal Buildings Fund—a revolving fund administered by GSA. The rents we receive from our federal customers are deposited into this fund. Over time, the cost of repair and replacement reinvestment needs of these buildings has outstripped the capacity of the Federal Buildings Fund. GSA does not have the legal authority to borrow funds for needed improvements, which have been estimated at several billion dollars.

In response to these outstanding repair and alteration needs of our buildings, PBS has engaged in a comprehensive, thorough review of our federally owned inventory. Some of you may recall a letter about this subject sent from PBS Commissioner F. Joseph Moravec in October 2002 to senior agency officials in our customer agencies. Under this review, all GSA owned properties will be evaluated based on such factors as federal need, vacancy rate, rental rate, operating expenses, customer satisfaction, and repair and replacement needs. This comprehensive assessment will allow PBS to make market-driven reinvestment decisions that best serve the needs of our customer agencies.

GSA will:

• align its portfolio with GSA’s mission to keep owned buildings in good repair and to provide federal agencies with quality space and services at competitive cost.
• concentrate reinvestment on the properties that perform well and meet long-term federal needs.
• restructure or dispose of assets that are expensive to operate and maintain, require significant capital repairs, and do not adequately serve our customer agencies.

What will happen to a property identified as an under-performing asset? Such properties have been placed on a national “watch list” to determine which changes could best remedy the nonperformance. Each property will be considered on a case-by-case basis. Tenant needs, the building’s historic value, community consequences, and environmental impacts all will be taken into account. Options for such buildings include rent renegotiation, transfer to current tenants, out leasing to private interests, and exchanges or disposal. The number of “watch list” properties in the Mid-Atlantic Region is minimal, and we have already commenced active, collaborative discussions with the representatives of the few affected agencies.

By selecting to retain assets based on their financial performance and customer need, PBS will have more funds to devote to the reinvestment requirements of fewer buildings. As noted by our Commissioner, “This is not a new way of doing business for GSA; it is a renewed and needed emphasis in support of our aim to be the provider of choice for federal agencies, to be easy to do business with, to help federal agencies use real estate more efficiently, and to provide lasting value in everything we do.”
If you have any questions about Portfolio Restructuring plans in the Mid-Atlantic Region, please contact Albert Torjman, Director of Portfolio Management, at albert.torjman@gsa.gov or (215) 446-2844.

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