Historic Houston post office headed for demolition

May 8, 2015

Next week the Postal Service will close the post office and processing center on Franklin Street in downtown Houston.  It’s a historic building, eligible for the National Register of Historic Places, but it looks as though it is headed for demolition.  

In a "memorandum of agreement" about the disposal, the Postal Service states that it "anticipates demolition of the Houston PO/P&DC in association with transfer of the property."

The Postal Service first offered the property for sale in 2009, and there was talk then about turning it into a public park, an outdoor amphitheater for festivals and performances, or a mixed-use development with housing, a hotel, and entertainment venues.

The Postal Service didn’t accept any of the bids that were offered at the time, and the property has been on and off the market since.  At one point it seemed that the city might buy the building and convert into a criminal justice complex.  Developers argued that there were better potential uses for the property without the building.

The downtown post office is currently listed on the USPS-CBRE Properties for Sale website.  The sales flyer doesn't have much to say about the building.  The flyer focuses on the 16.4 acres of “highly visible” development property with “exceptional views” and a location "in the heart" of Houston’s Central Business District.  

The CBRE website doesn’t list an asking price.  Back in 2009 a real estate expert said that before the market meltdown the site could have sold for more than $35 million.  Property values have recovered, but media reports don't mention any estimates for the property's current value.

Built in 1962, the Franklin Street post office was designed in the Brutalist style by Wilson, Morris, Crain & Anderson, the architects who did the Houston Astrodome, which is currently experiencing its own issues, sitting in limbo, awaiting demolition.

The Franklin Street post office is an iconic building in Houston.  Stephen Fox, an architectural historian and fellow of the Anchorage Foundation of Texas, has called the post office a “distinguished work of 1960s modern architecture by an important Houston architecture firm.” 

At this point, the building is more than 50 years old and eligible for the National Register of Historic Places.  In order to dispose of it, the Postal Service was therefore required to go through a Section 106 process under the National Historic Preservation Act.  

The Postal Service determined that the disposal would have an “adverse effect" (not surprising, considering plans to raze the building), so the Postal Service proceeded to work out a Memorandum of Agreement with the Texas State Historic Preservation Officer, the Advisory Council on Historic Preservation, and other parties.

The Agreement states clearly that “USPS anticipates demolition of the Houston PO/P&DC in association with transfer of the property, thus negating efforts to provide preservation protections or restrictions.”

While the building be demolished, the Agreement still requires the Postal Service to complete a National Register Multiple Property Documentation (MPD) Form identifying other Modernist buildings in the area. 

The Agreement also promises that several historic elements of the building — some stainless steel legged customer tables, a metal eagle hanging in the Caller Service transom, a stylized stone/cast stone eagle sculpture located in the front plaza — will be relocated to other post offices in the area.

In addition to going through a Section 106 process to dispose of the property, the Postal Service was required to go through two other procedures in order to consolidate the processing operation and close down retail services.

In July 2010, a public meeting was held as part of the process for consolidating the mail processing operations with another facility on the north side of Houston.  The consolidation process has been underway for some time, and it will be completed on May 15.

It’s not clear when the Postal Service also went through the required process for discontinuing or relocating retail services.  Some sort of town hall meeting was held in March 2015, but if that meeting was intended to fulfill the Postal Service’s legal obligation to discuss the closure with the public, it was strictly for show.  The decision to shut down the facility had been made long before. 

In any case, according to the Houston Chronicle this week, the retail operation, including PO boxes, is being relocated to the Midtown carrier annex on Hadley Street. 

And that will be that for the downtown post office.

In 1984, the Franklin Street facility was renamed the Barbara Jordan Post Office after the first African American congresswoman to come from the Deep South.  Last year Congresswoman Sheila Jackson Lee expressed concern about the "dignity" of dumping a building named for the Houston icon.

It will be injury to indignity on the day the wrecking ball strikes.

UPDATE: May 12, 2015: The Chron.com reports that the Postal Service "appears to be close to finding a buyer" for the property.  Spokeswoman Dionne Montague said the most recent bid solicitation period has closed and the postal service is “in the process of negotiations,” which may be finalized by the end of the year.  Montague said she was not permitted to provide any additional details “as it may compromise the negotiations.”

(Photo credit: Barbara Jordon Post Office)

OIG recommends terminating the USPS-CBRE contract and refers cases for criminal investigation

April 30, 2105

The Postal Service’s Office of Inspector General has issued its fourth report criticizing the Postal Service’s oversight of the contract with its real estate broker, CBRE.  It’s entitled “Postal Service Management of CBRE Real Estate Transactions.”

The OIG finds fault with both the leasing deals and the sales of postal property, and it recommends terminating the contract with CBRE.  The OIG has also turned several cases over to the OIG’s Office of Investigations to determine if laws have been broken.

The possibility that illegalities occurred involves both the lease negotiations and sales.  The OIG examined about 4,700 leases that had been negotiated by CBRE and found 57 where there was a huge rate increase — 200 percent or more than the previous lease rate.  Considering that the average increase was about 8 percent, that looks suspicious. 

The OIG also found many cases where the lessors said that CBRE was including commission fees in rents paid by the Postal Service, which is contrary to the contract, so this matter has also been referred to the Office of Investigations. 

Finally, in the case of several property sales, the OIG found potential relationships between the buyer and CBRE.  Those cases have been referred to the Office of Investigations as well.

Given these and many other problems in the arrangement with CBRE, the OIG has recommended that the Postal Service terminate the current contract with CBRE and “recompete” it, i.e., put it out for bid again with a new "request for proposals."

The OIG leaves it to the Postal Service to decide whether the new contract should be with CBRE, another contractor, or a group of contractors (the GSA’s model) — or if Postal Service personnel should do more of the work (as in years past).  Whatever happens, says the OIG, “the idea of terminating the current contract is to ensure that future lease and sale negotiations are done with the Postal Service’s best interest in mind.”

The Postal Service has already rejected the idea of terminating the CBRE contract.  In his letter responding to a draft of the OIG’s report, Mr. Tom Samra, USPS Vice President of Facilities, says that the Postal Service has hired a consultant to evaluate the leasing program with CBRE against industry best practices. 

Pending review of the consultant’s report, Mr. Samra says that the Postal Service has insufficient personnel to manage all the lease renewals.  Besides, Mr. Samra says he doesn't think CBRE is doing anything wrong.


The sales

The sales of postal properties came under scrutiny in 2013, when investigative journalist Peter Byrne published Going Postal: U.S. Senator Dianne Feinstein’s husband sells post offices to his friends, cheap.  (Available on Amazon here.)

Byrne’s year-long research into over 50 sales (concluded from May 2010 to April 2013) indicated that about 80 percent of the properties had been sold below their assessed value, sometimes to CBRE’s clients and business partners. 

The discovery was particularly troubling because the chairman of CBRE at the time was Richard Blum, the husband of California Senator Feinstein.  (He’s still a major stockholder and remains on the Board of Directors.)

The OIG looked at 21 sale transactions, “judgmentally selected” from the 48 sales that were conducted by CBRE between January 2012 and September 2013.  The OIG found problems with 14 of the 21 sales.

The period of the OIG’s study overlaps with the timeframe examined by Byrne, so the OIG and Byrne looked at many of the same sales, but the OIG report does not list which sales it reviewed, so it’s not possible to determine if the OIG included the more egregious examples that Byrne uncovered.

The OIG compared the sale prices with the appraised values obtained by CBRE, not the assessed value that Byrne used, so the two reports don’t examine the same data, but they come to many of the same conclusions.

Actually, Byrne had submitted a FOIA request to the Postal Service for the appraisals on the properties he was examining, but it was denied, so he spent months researching the 52 properties to determine their assessed value.

A word here on the terminology.  The assessed value is the most recent sale price for a property, adjusted to reflect local market trends.  The appraised value is an estimate of the fair market value of a property based on comparables, market trends, potential rental revenues, etc.  Normally, property values go up, so the appraised value is usually higher than the assessed value.

That’s why when Byrne found that properties were being sold below assessed value, it was compelling evidence that they were being sold below their market value.  Now it seems that there’s even more to the story: The appraisals are themselves a problem.

Oregon's Congressional delegation asks to meet with PMG on plant consolidations

April 28, 2015

The members of Oregon’s Congressional delegation have written to Postmaster General Megan Brennan requesting a meeting to discuss the Postal Service’s plan to consolidate mail processing facilities and the future of delivery standards.

The letter is signed by Senators Ron Wyden and Jeff Merkley and Representatives Peter Defazio, Kurt Schrader, Greg Walden, Suzanne Bonamici, and Earl Blumenauer.

 “We have concerns,” states the letter, “that moving forward on closing processing facilities will cause delays in on-time delivery, hurt local businesses, eliminate middle class jobs, and impair the Postal Service’s long-term viability.

“As you know, three mail processing facilities in Oregon are set to close by the end of July 2015, which will leave only two mail processing facilities in the state.  Oregon communities depend on reliable and quick mail delivery to support local business, receive medications, keep up with current events, and to vote.  We would like to better understand how USPS intends to meet the timely needs of our constituents, if mail processing facility consolidations continue and service standard times are extended.

“We understand that USPS has already started to consolidate mail processing facilities, with Bend and Pendleton plants set to close by mid-April. Due to the urgency of these pending closures and the severe ramifications for our state, we would like to schedule a meeting with you as soon as possible.”

The three Oregon processing centers slated for closure are located in Bend, Eugene, and Pendleton.  The Pendleton facility is formally known as the John F. Kilkenny Post Office and Courthouse.  It's located at 104 S.W. Dorion in a historic building that dates back to 1916, and it's on the National Register of Historic Places.  (The nomination form is here.)  The Postal Service has not said much about the future of the building, but it could be headed for sale if the processing operations move out.  

(Photo credit: John F. Kilkenny Post Office and Courthouse; Pendleton PO in 1984, National Register nomination)

USPS suspends delivery due to dog, judge files complaint with PRC

April 27, 2015

It’s not uncommon for the Postal Service to suspend delivery to a residence or even a whole block as a result of a dog problem.  The issue usually gets resolved after the customer takes steps to restrain the dog.  It’s not the kind of thing that typically ends up going to the Postal Regulatory Commission for adjudication. 

But that’s what happened last week.  A complaint has been filed with the PRC challenging the Postal Service’s suspension of mail to a resident in Pomono, California, over a dog issue.  It may be the first such PRC complaint of its kind.

In January, the Postal Service stopped delivering the mail to the home of Rosalyn Goodman because there was allegedly a “vicious dog” on the premises.  Mrs. Goodman is 91 years old and unable to get around very well, so she depends on the Postal Service to deliver food and other necessities. 

As it turns out, Mrs. Goodman’s son is James D. Goodman, an Administrative Law Judge who works in the Office of Disability Adjudication and Review (ODAR) in Pasadena.

As one might expect, Judge Goodman’s complaint is extremely formal and thorough, and it includes lengthy excerpts from several relevant statutes in postal law and federal disability law.

The complaint states that “the contention that there is a ‘vicious dog’ on the premises is a pure canard calculated to avoid the requirement that mails be delivered to the standard mail box located on the curb, adjacent to the street, or to the front door of the house, where the mails exceed the capacity of the standard mail box.”  It goes on to note that over the past four years there have been many mail delivery problems at this address.

According to the complaint, “The dog, on the premises, is a good natured animal used for comfort and companionship, and is never outside the interior of the premises, except in a gated backyard, while Rosalyn Goodman is at home alone.  All of these facts were made known to Alejandro L. Peralta and other employees and other agents of the U.S. Postal Service.  Despite knowledge of these circumstances, Rosalyn Goodman has been deprived of reasonable accommodation as required under Title 26, Chapter 126 (Americans With Disabilities Act).”

In January, Judge Goodman also filed a FOIA request for documents related to the case, but the complaint states that “the Postmaster General, the Postmaster of Pomona California and their employees have failed or refused to comply with FOIA as demanded in Exhibit B.”

The Postal Service has informed Mrs. Goodman that in order to have her mail service restored, she will need to meet with a delivery supervisor at the post office. She is also being required to bring a copy of the current Dog License and Rabies Vaccination Certificate for her dog and to sign a commitment to restrain the animal.

The Goodman complaint states that “there is no authority of the postal service to impose documentary indemnification, bonding or other assurances from home owners as a condition of mail delivery.  Absent reasonable cause, carriers are required to make home delivery to the mail recipient at the addresses designated for delivery. “

The complaint concludes by asking the Commission to order the Postal Service to re-institute mail service to the Goodman residence “without condition or limitation, impose sanctions upon each of the respondents including removal, award damages, costs and fees as allowed under the circumstances and provide such other additional relief may be appropriate.”

There’s no procedural schedule for the complaint yet.  The regulations say that the Commission has 90 days to rule.  The Postal Service will probably file a response in a few days. 

(Photo credit: USPS delivering mail)

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