September 4, 2014
The New York Daily News is reporting that the Postal Service has sold the Bronx General Post Office to Youngwoo & Associates. Back in February, The Real Deal had reported that Youngwoo was proposing to use the site to build a marketplace in the vein of the company’s unsuccessful plan for the Kingsbridge Armory in the Bronx.
The founder and principal of Youngwoo & Associates (YWA) is Young Woo, a Korean immigrant with connections to the Korean-American community. According to the YWA website, Mr. Woo is an active philanthropist, a regular lecturer on real estate, and an alumnus and former trustee of the Pratt School of Architecture.
There's a good profile of Mr. Woo by Adam Piore in The Real Deal. Piore notes that Mr. Woo has gotten into some controversies, including a $100 million lawsuit filed against him by Robert De Niro’s Tribeca Film Festival and a legal battle with a South Korean bank with which he had partnered on a deal to buy a Wall Street building.
Such controversies may be par for the course in the world of New York City real estate, but the choice of Youngwoo as the winning bidder for the Bronx GPO raises yet more questions about how CBRE, the Postal Service's exclusive real estate broker, is going about the sales of post offices. One of the main allegations raised by investigative reporter Peter Byrne is that CBRE has been selling postal facilities to its own clients and to other businesses with which it has done deals, often at prices that were below market value.
According to Byrne’s Going Postal: U.S. Senator Dianne Feinstein's husband sells post offices to his friends, cheap, by selling postal facilities at low prices in this way, CBRE and its partners may be profiting at the expense of the Postal Service.
That’s a matter of particular concern because, at least until recently, the chairman of the board of CBRE was Richard Blum, Senator Feinstein’s husband. Blum stepped down as chairman in May, but he continues to be a major stockholder.
While the Bronx GPO was estimated to be worth $14 million, the Daily News doesn’t say what the sales price turned out to be, and the Postal Service has not made any formal announcement about the deal. Whatever the price, though, there’s no doubt that Youngwoo and CBRE have a prior relationship.
On the CBRE website, Youngwoo is listed as a client of CBRE Vice President Rima Soroka. The two companies have also done several deals together.
In 2009, in one of the biggest deals of the year, Youngwoo & Associates partnered with Kumho, a South Korean investment bank, to buy AIG’s NYC headquarters and the adjacent building, 70 Pine Street and 72 Wall Street. According to Crain’s, the properties represented a total of 1.4 million square feet of commercial space, worth about $140 million. CBRE brokers Darcy Stacom and William Shanahan represented AIG in the sale. That deal ended up in court when Youngwoo accused a former employee of seeking to oust the company as development manager for the site.
In 2010, an IT outsourcing company named Compucom leased 16,000 square feet of office space at the Southwest Corporate Center in Houston. Jon Lee of CB Richard Ellis represented Compucom in the transaction. Bonnie Kelley, also of CB Richard Ellis, represented the landlord, Woo Westwood, LP, an affiliate of Youngwoo & Associates.
In January 2012, the New York Post reported that Youngwoo, along with the San Francisco-based Bristol Group, selected CBRE (Stacom and Shanahan again) to market a 10-story, 240,000-square-foot property at 325 Hudson Street in New York City.
The Postal Service’s contract with CBRE has been the subject of several audit investigations by the USPS Office of Inspector General, concerning conflicts of interest, dual agency, and related issues. The OIG is currently working on an audit about whether or not the sales have sometimes been below market value, as documented in Byrne’s book. That audit may be out soon. (There’s more on these OIG’s audits in this previous post and this one.)
A related issue is that CBRE CEO Robert Sulentic also serves on the board of directors of Staples, where a pilot program has been underway to see if the Postal Service could cut costs by outsourcing retail services to big box stores.
It’s also of note that Youngwoo & Associates has lobbied several New York City elected officials, as indicated on the NYC.gov's Lobbyist Search site.
In a statement on his website, Congressman Jose Serrano, who has been fighting the sale of historic post offices, said the following: “The United States Postal Service has sold one of the Bronx’s most important community and historic treasures in a completely irresponsible manner — ignoring historic preservation law, without considering other options, and without properly consulting the community and listening to its concerns. The USPS has disregarded the voices of the Bronx community, elected officials, historic preservationists, and their own employees — all of whom opposed this process and this sale. Moreover, they have failed to formally announce the sale and provide details to the community.”
Over the coming days and weeks, we’ll be hearing more about the sale, Youngwoo’s plans for the building, and the Postal Service’s plans to relocate retail services. But unless the OIG looks into the matter, we’re not likely to hear much more about the new owner’s relationship with CBRE and how it may have helped shape the deal.
(Photo credit: Bronx GPO, Evan Kalish)
August 29, 2014
The Bronx General Post Office has been sold. There’s no word yet on who the buyer is or what the plans for the building are, but the post office was definitely sold two weeks ago. On the USPS-CBRE website, the listing says simply, "Sold."
The Postal Service has not made an official announcement about the sale, and it is apparently not ready to release any information. When an attorney working on behalf of the Bronx GPO asked for basic details, the Postal Service’s lawyer suggested filing a request under the Freedom of Information Act. That usually takes weeks, even months.
The fate of the Bronx GPO is obviously a matter of public concern in the Bronx, and it’s not clear why the Postal Service is so reluctant to share information about who bought the building, how much it sold for, what the plans are, where the postal retail operation is relocating, and so on. Hopefully, the Postal Service will be more forthcoming about providing answers to these questions soon.
The listing for the Bronx GPO on the CBRE-USPS Properties for Sale website includes several documents related to the property. One of them is a lease agreement saying that the Postal Service “will require a temporary lease-back period of up to 12 months while its replacement facility is prepared. During this temporary lease-back period the USPS will pay rent of $1.00.” Presumably, then, the Postal Service has been looking for a new space in the neighborhood, or it’s going to start looking for one now that the building has been sold.
As for the Bronx GPO itself, the Postal Service has not seemed very interested in sharing information about prospective buyers or consulting with the community about what its needs and preferences might be, but perhaps there have been behind-the-scene discussions with elected officials in the Bronx.
The Postal Service has also not been very influenced by criticisms of how it has been handling the disposal of its historic properties. In April, the Advisory Council on Historic Preservation recommended that the Postal Service refrain from selling historic post offices until it improved its program and procedures.
Mr. Tom Samra, Vice President of Facilities at the Postal Service, responded with a detailed letter dismissing the ACHP report as “very one-sided and distorted.” Now, despite the ACHP’s recommendations, Mr. Samra has approved the sale of the Bronx GPO.
The Postal Service’s decision to close and relocate the Bronx GPO was controversial from the moment the plan was announced back in January 2013. Last year Bronx activist Julio Pabon and yours truly, Steve Hutkins, challenged the decision in an appeal to the Postal Regulatory Commission, but the PRC dismissed the case as a “relocation” decision and outside its jurisdiction. That ruling is currently being contested in the D.C. Circuit Court by attorney Elaine Mittleman on behalf of Pabon and Hutkins. Even with the Bronx GPO sold, this appeal may go forward in order to address several important issues raised by the case.
Many organizations and elected officials have come out in opposition to the sale. Letters were submitted by the Bronx River Art Center, the East Bronx History Forum, the National Post Office Collaborate, the National Trust for Historic Preservation, and the Office of the Bronx Borough President. In addition, nine New York City Council members, ten New York State Assembly members, six New York State Senate members, and three members of the U.S. House of Representatives all signed a letter opposing the sale.
In April of this year, a coalition of elected officials that included New York Mayor Bill De Blasio and Senators Kristen Gillibrand and Charles Schumer urged that the sale be put on hold. Congressman José Serrano also introduced legislation halting the sales until the Postal Service implements the ACHP recommendations, just as he had worked to get the Postal Service to stop the sales while the USPS OIG wrote its own report on the matter.
In spite of all the public opposition, legislative efforts, the OIG report, and the ACHP recommendations, the Postal Service went ahead and sold the Bronx General Post Office. We’ll have to wait a bit longer to learn what’s going to happen to the building and to the priceless Ben Shahn murals on its walls.
(Image credit: Lobby of Bronx GPO)
For more on the Bronx GPO:
August 19, 2014
The Postal Service has released a schedule showing when the phase-two mail processing plants will be consolidated next year. The spreadsheet shows the date on which each type of mail will be relocated from a closing facility to a gaining facility. As the schedule shows, the process would begin in January 2015 and continue until October, with much of the activity taking place next summer.
You can see the list uploaded to Google docs here. You can also download it directly from the USPS RIBBS website (or just click here). Note that the first page has an explanation; the schedule itself appears on the second sheet (the tab is at the bottom).
As it explains in a letter to its business customers, “The United States Postal Service is planning to resume the rationalization of our network of mail processing facilities which began in 2012. To provide adequate time for planning and preparation, the Postal Service is providing this six-month advance notice of consolidations, for up to 82 facilities, which will begin early January 2015 and be completed by the fall mailing season.”
Senator Bernie Sanders is leading a push against these consolidations. He and Senators Jon Tester of Montana and Tammy Baldwin of Wisconsin have written a letter to the two top members of the Senate Appropriations Committee to request a one-year moratorium on consolidations. The letter was signed by fifty senators, nearly all of them Democrats. The six Republicans who signed were Roy Blunt (MO), John Hoeven (ND), John Thune (SD), Susan Collins (ME), James Inhofe (OK), Orrin Hatch (UT).
May 22, 2014
The Postal Service has announced that the timeline for implementing POStPlan is going to be extended. Initially, all 13,000 post offices included in the plan were to have their hours reduced by the end of September 2014, and any full-time postmasters still working at those offices would have lost their full-time jobs on October 1 as part of a Reduction in Force (RIF).
According to a notice posted on the websites of NAPUS and the League of Postmasters, there are approximately 3,200 postmasters facing a RIF. Now these postmasters are getting a reprieve — at least for a few months. The new effective RIF date for impacted postmasters is now January 10, 2015.
It's not clear why the Postal Service is extending the RIF date. Maybe headquarters wants to give postmasters more time to find new positions, maybe it has to do with the APWU's pending grievance regarding who should staff impacted offices (PRMs or PSEs), or maybe there are other obstacles to completing the implementation.
The notice from NAPUS and the League does not state explicitly that these 3,200 post offices will remain at their full hours until January, but that’s certainly the implication. It would make no sense to reduce the hours in October, but continue paying postmasters their full-time salaries until January.
No official list of these post offices has been released, but we’ve put together a list of 3,650 post offices where no public meeting has been held or scheduled as of June 12. The list is here; a map is here. (For more about POStPlan implementation, see this previous post.)
Presumably about 450 of these post offices currently have a postmaster vacancy, and they will see their hours reduced over the summer and early fall. At the other 3,200, there’s still a full-time postmaster.
Our list includes the new POStPlan levels that were set back in 2012, but these may not turn out to be the new hours after all. All of these post offices will be evaluated using data from Fiscal Year 2013 to determine the new level and hours.
At offices converting to six hours a day, postmasters still on the job in January 2015 will be demoted by RIF, but they can stay on, albeit at a significantly reduced salary ($12.30 to $18.18). The offices going to two or four hours a day will be staffed by a postmaster relief, so those postmasters won’t be able to remain in their positions.
By extending the implementation deadline by over three months, the Postal Service will be giving postmasters some extra time to look for a new full-time position, if that’s what they want. Some may be ready to retire, and there have apparently been discussions about another Voluntary Early Retirement offer (VER), presumably something like the one postmasters were offered back in 2011. The League and NAPUS notice simply says, “This is still on the table and an important part of future meetings.”
It’s unclear how many positions are available to provide a “soft landing” for these 3,200 postmasters, but it’s apparently the hope of the Postal Service and postmaster organizations that anyone who wants a new position will be able to find one. Of course, that may require a willingness to commute or relocate or take an undesirable position. As the notice says, “Postmasters need to help themselves to become good candidates for available positions and be flexible about new opportunities.”
(Photo credit: Post office in Bangall, NY by J. Gallagher of the PMCC. The Bengall Post Office is one of those on the list of 3,200. In March 2014, New York Governor Andrew M. Cuomo announced that it was being nominated to the State and National Registers of Historic Places.)