And the winner is . . . Trump selected to redevelop DC’s Old Post Office

February 7, 2012

The General Services Administration has selected Donald Trump to redevelop the Old Post Office building in downtown D.C.  The grand old icon is going to be converted into a luxury hotel, complete with “world renowned restaurants, a spa and conference facilities.”

The GSA says turning the building over to private hands will save the federal government millions of dollars in maintenance.  “The tremendous response from the private sector allowed us to select a proposal that will provide a consistent revenue stream for the Federal Government and better utilize a historic property on our nation’s best Main Street,” said Robert Peck, the GSA’s Public Buildings Service Commissioner.

The sale of yet another historic federal building goes hand-in-hand with the selling off of historic post offices that we’ve been witnessing.  The Postal Service is engaged in “divestiture” — a stage in the privatization process that involves selling off government assets to private companies.  The Postal Service has enlisted the help of the world's largest real estate firm, CRB Ellis, to help sell its properties, and the new USPS-CRBE website lists 78 of them.  There are probably many more USPS properties for, but the Postal Service refuses to release a list of them. 

Over the past few months, the Postal Service has sold New Deal post offices in Westport, Connecticut; Palm Beach, Florida; Ukiah, California; and Pinehurst, North Carolina.  Over the coming months, the same will happen to the post offices in Venice and La Jolla, California; Northfield, Minnesota; Athens, Pennsylvania; and Camas, Washington.

DC’s Old Post Office is not in the same category as these other historic post offices, since it’s not owned by the Postal Service and it hasn’t been an operating post office for decades.  But the push to sell off federal assets, whether they’re under the auspices of the Postal Service, the GSA, or another government agency, is troubling.  Many of these assets are valuable historic buildings that belong to the people of the United States.  Once they’re converted to things like luxury hotels, upscale restaurants, and clothing boutiques, they’re no longer in the public realm and they’re off-limits, except to the privileged few.

Yesterday, the House of Representatives passed something called the Civilian Property Realignment Act (H.R. 1734), which will accelerate the sale of high-value, “underutilized,” federal properties.  “The purpose of 1734 is to actually shrink the size of government,” explained Rep. Jeff Denham (R-CA), one of the bill’s sponsors. If the bill gets through the Senate and signed into law, the legislation would prompt a massive sell-off of $500 million in government-owned real estate over the next three months. The sale of the Old Post Office is a prime example of what the bill aims to expedite. 

When construction was completed in 1899, the Old Post Office was the largest office building in D.C., the first to incorporate a steel frame in the city, the first federal building on Pennsylvania Avenue, and the first government building to have its own power plant.  “Opening ceremonies,” says Wikipedia, “were marred when the postmaster of Washington fell to his death down an elevator shaft.”

In the 1930s, a new post office was built directly across 12TH Street, and the Old Post Office building was almost razed, but there wasn’t enough money around because of the Depression.  For the next 40 years, it was used as an overflow space for several government agencies.  With no agency responsible for it, the building fell into decay, and in the 1970s, it was almost destroyed again, but historic preservations came to the rescue and got funding for some renovation work. 

The building now houses the offices of the Advisory Council on Historic Preservation, the National Endowment for the Arts, and the National Endowment for the Humanities.  They’ll all be moving out soon to make room for Trump’s new luxury hotel. 

Hopefully, things will work out better for this Trump enterprise.  Others have not been so successful.  Back in the early 1990s, two of Trump’s casinos in Atlantic City, New Jersey — the Taj Mahal and the Trump Plaza Hotel — went bankrupt. 

When sales of units in the Trump International Hotel and Tower in Chicago started to lag, the lender, Deutsche Bank, ended up in court for refusing to let Trump lower the prices to spur sales.  In court papers, Deutsche Bank observed that "Trump is no stranger to overdue debt" and noted that he had twice previously filed for bankruptcy regarding his casino operations.  Trump didn’t like that one bit, and he initiated a suit asserting that his image had been damaged.  

Trump has caused endless controversy in New York with his projects, like the Trump SoHo, an out-of-scale 46-story monstrosity located in an historic neighborhood where most of the buildings are about six-to-ten stories.  There have been suits and counter-suits between the architects and developers over design problems, and several condo-buyers filed a suit claiming they were lied to about how well the units were selling.

The Old Post Office is located at 1100 Pennsylvania Avenue, about five blocks from 1600 Pennsylvania Avenue.  The new Trump hotel will be as close as the Donald ever gets to the White House.

UPDATE (Feb. 9, 2011): Looks like Donald's plans may be in for a bumpy ride.  D.C. Congresswoman Eleanor Holmes Norton "isn't ready to celebrate" the GSA's decision.  According to the Washington Business Journal, she says the project is fraught with potential complications that could put an end to the deal before it ever starts.

(Photo credits: The Old Post Office;  the OPO with Trump International logo; the Donald; the Trump SoHo.)

Postal politics gets ugly: The Post attacks the PRC Chair

February 6, 2012

There’s a lot at stake in the battle over postal reform — billions of dollars of corporate profits, the power of unions, the very existence of post offices — so one can’t be surprised that the politics got a little rough this week.  The Washington Post has just run a piece attacking Ruth Goldway, Chairman of the Postal Regulator Commission, accusing her of spending too much time and money on travel.  The hatchet job by Ed O’Keefe makes a mountain out of a molehill, and one has to wonder why it was ever written or published — and who was really behind it.

The slant of the article is clear right in the title: “Postal regulatory chairman’s $70,000 in travel comes under scrutiny.”  That makes it sound like someone else is scrutinizing Goldway and O’Keefe is just reporting on it, but as it turns out, he’s the one who has initiated the whole thing. 

“Days before the U.S. Postal Service announced record-setting losses in September," the article begins, "the nation’s top postal regulator traveled to Scotland for meetings with European envelope manufacturers.” 

O’Keefe would have us visualize the PRC’s chairman out gallivanting around Europe, insensitive to or unaware of the fact that the Postal Service was losing billions.  She should have been in her office doing her job regulating the Postal Service, suggests O’Keefe, instead of worrying about European envelopes.

The article, along with an accompanying interview with Chairman Goldway, paints a picture of a government official globetrotting on the taxpayer’s dime, someone who’s out of the office more than in it.  0'Keefe even had someone count up all the days Goldway was on the road, and he lists her destinations as if she were doing “Around the World in 80 Days.” 

O’Keefe is making a big deal out of nothing.  There’s nothing unusual about Goldway’s travel expenses.  O’Keefe says Goldway has spent $70,000 since she became the PRC chair in August 2009 (after serving as a Commissioner since 1998).  That’s two and a half years ago, so it comes to about $28,000 a year. 

That may seem like a lot to us average Americans, but for a senior government official with national and international responsibilities, it’s not very much.  As O’Keefe’s own investigation revealed, Goldway’s predecessor as chair of the PRC, Dan Blair, spent $58,788 on travel during his two-and-a-half-year tenure — about $23,500 a year, just a few thousand less than Goldway — and there was a lot less going on in postal world back then. 

Goldway’s travel expenses are also in the same ballpark as other high-ranking officials in the postal system.  According to an OIG audit, the nine members of the USPS Board of Governors incurred $163,000 in travel and miscellaneous expenses in fiscal year 2011.  The report doesn’t break it down per person or separate travel from miscellaneous expenses, but if that $163,000 includes the Postmaster General and the Deputy PMG, it comes to over $18,000 per Board member, and if it doesn’t include them, the remaining seven Board members averaged over $23,000 per person in travel and miscellaneous expenses.

Another OIG audit on “Officers’ Travel and Representation Expenses for Fiscal Year 2011” says that the travel and representation expenses for USPS officers totaled about $700,000.  The USPS website has a page of “officers” that lists some 35 of them.  That would come to about $20,000 per officer.

Those USPS executives, by the way, earn a very nice salary, too.  While the Postal Service was wracking up its huge deficit in 2010, the top 38 USPS officials earned more than cabinet secretaries.  (The Post has been silent on that story.) 

The Postmaster General likes to get around himself.  In December, for example, just a few days after the Postal Service had announced plans to close half the country’s processing plants, put 35,000 postal employees out of work, and slow down first-class mail by a day or more, the Postmaster General was off for the COP17 climate conference in Durban, South Africa, where, according to a USPS press release, he “heralded the U.S. Postal Service’s sustainability successes, making the business case to go green.”  (The irony of the PMG discussing the environment is explored in this article.)

Not only are Goldway’s travel expenses comparable to those of her predecessor and other postal executives, the PRC’s travel budget, as Goldway told the Post, represents just one percent of the agency’s total budget. 

Another disturbing thing about the Post article is the way O’Keefe solicited reaction to his big scoop.  Whom did he call for a quote?  Darrell Issa and Thomas Carper. 

Issa is identified in the article as a congressman who “tracks postal issues.”  No mention of the fact that Issa is spearheading legislation in the House that would dismantle the Postal Service by creating a commission to close post offices and plants and basically make the PRC irrelevant.  He’s quoted as saying that Goldway’s travel schedule was troubling.  “When organizations are struggling,” said Issa, “good leaders often make a pointed effort of curbing their own expenses as an example.”

That’s rich.  According to the Watchdog Institute, Issa’s staff has close ties to the billionaire Koch brothers, whose Cato institute advocates postal privatization, and Issa has received generous campaign contributions from the brothers as well.  Issa is also the subject of an ethics complaint issued by American Family Voices with the Office of Congressional Ethics, alleging that he has repeatedly used his public office for personal financial gain.  (See Wikipedia for more.)

The Post might have asked Issa — the richest man in Congress — how he’s  been curbing his own expenses these days.  Back in 2006, issa was described as “the best-traveled member of San Diego County's congressional delegation.”  Issa ranked 24th among all House members on a list of taxpayer-paid travel.  

What’s to hide? The Postal Service turns over some closing lists

February 4, 2012

Getting closing lists out of the Postal Service is like, well, pulling teeth.  Over the past several months, hundreds of post offices have closed, gone into emergency suspension, or received a Final Determination notice indicating they’ll close in 60 days.  But try to find a list of all of these post offices on the USPS website.  One gets the impression that the Postal Service would prefer that the public not have access to this data. 

It’s not as if the information is really secret.  Every community that sees its post office close or that gets a Final Determination knows about it, and there’s usually at least one local news article when a post office closes.  But in a very real sense, most closures take place below radar, and it’s difficult to see what’s happening at a national level.  In the UK, where they’ve closed over 7,000 post offices, something similar has gone on.  They call it “the secret closure programme.”

To make things more transparent, Save the Post Office has been tracking the closings, but it’s been difficult.  The Postal Service turned down a request made under the Freedom of Information Act for materials about the closings.  (Actually, it didn’t turn down the request outright – it just said that the information would cost $650, plus photocopying.)  Compiling data from a variety of sources like news reports is time consuming and prone to error.  The USPS website itself has incorrect information, and important pages are not updated often enough.

Yesterday, we had some good news in the list department.  In response to a request from the Chairman of the Postal Regulatory Commission (PRC), the Postal Service submitted several lists containing information about post office closings and suspensions.  Chairman Ruth Goldway made the information request (see #28) a couple of weeks ago as part of the information gathering required for the PRC’s annual compliance report.

The lists can be accessed in an Excel document (with five sheets) on the PRC website here, and there’s a description of the lists he re.  The lists are readily available on the Save the Post Office website as well (links below).  (Note that the new lists have several errors and anomalies, some of which have already been identified by Going Postal.)

Goldway has requested seven lists.  Five were submitted yesterday, and two more are forthcoming.  Below are links to each list, along with a few comments (not provided by the Postal Service):

a. Post Offices Closed After 1/1/2011: This list contains 430 post offices that closed during 2011. 

That’s considerably more than the 280 USPS VP Dean Granholm indicated had closed as of October 13, and somewhat shy of the 500 that Postmaster General Donahoe said had closed as of mid-November.  It’s also many more than Save the Post Office was able to identify as of just a few weeks ago, when we published a list of 320

b. Post Offices Under Suspension as of 1/1/2012: This list contains 227 post offices — some suspended as recently as June 2011, and others as far back as 1986 — which were still suspended as of the first of the year.  

The list does not indicate the reason for the suspension, but it certainly illustrates how suspensions can go on forever, which amounts to a de facto discontinuance, without due process.  Most of these post offices were suspended during 2008 to 2010.  In March of 2011, the Postal Service gave the PRC a much longer list of about 330 post offices that remained under suspension.  Many of those have apparently re-opened or closed permanently after a formal discontinuance process.  Chairman Goldway mentioned at a meeting of the PRC in January that about 200 suspended offices had closed or were being studied for closure.

c. Post offices Suspended after 1/1/2011: This list contains 211 post offices that were suspended during 2011, as well as two that were suspended in early 2012. 

Like list (b), it does not indicate the reason for suspension, nor does it say what the current status of these post offices are.  A search of news articles about these suspensions suggests that many, if not most, were due to weather-related problems, like Hurricane Irene, the flooding in the Midwest, tornados, and so on, and most of them eventually re-opened.  In some cases, however, the Postal Service chose not to find a new location, and essentially used the natural catastrophe as an opportunity to suspend and subsequently close the post office.  The post office in Reading, Kansas, for example, was destroyed by a tornado in May, and three months later, the town learned the Postal Service was studying the post office for permanent closure.


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