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New PBS Commissioner Dan Mathews On Big GSA Projects, Saving Taxpayer Money

The General Services Administration's new Public Buildings Service Commissioner, Dan Mathews, who is responsible for the federal government's real estate operations, made one of his first public appearances Tuesday at Bisnow's Major Projects event, where he discussed some of the GSA's biggest projects and his ideas for saving the government money. 

GSA Public Buildings Service Commissioner Dan Mathews at Bisnow's Major Projects event

The GSA's most high-profile project, the search for an FBI HQ, suffered a setback this summer when the government canceled the nearly complete selection process and returned to the drawing board. Mathews said the GSA is working on a report to present to the Senate Committee on the Environment and Public Works by Nov. 30, a deadline the committee set in August.

"They wanted to know 'what are the options?'" Matthews said. "So it really would be a report that talks about and explains the different paths forward." 

The main challenge of the search, Mathews said, has been securing the necessary appropriations. Given the scale and nature of the project, he said much of it will need to be built at once, requiring a large upfront financial commitment. 

"It's difficult to phase because the first thing you need to do is build the campus infrastructure, and that's a fair amount of money," Mathews said. "You wouldn't want to build that and have a tiny little office building." 

Another major federal campus the GSA is working on is St. Elizabeths West, where it is consolidating the HQ of the Department of Homeland Security. Mathews said DHS consolidation is an important project that he intends to continue. But he said he hopes to get more clarity on the appropriations strategy to prepare a long-term plan that can allow the GSA to get better deals on leases for existing DHS offices that will eventually move to St. Elizabeths

"We have been doing a lot of short-term extensions over the years and that's not the best deal for taxpayers," Mathews said. "We need to recognize that it's probably going to take a little longer to build out St. Elizabeths. So some of those leases we should replace with longer-term deals where we can reduce the footprint and get better pricing and things like that." 

Holland & Knight partner Bob MacKichan and PBS Commissioner Dan Mathews

Beyond the major projects, Mathews said signing deals with longer lease terms is part of his overall strategy to save the government money across its portfolio.

The average amount of time a federal government tenant stays in leased space is roughly 23 years, Mathews said, but the GSA only signs leases with average terms of about six years. He said these short-term deals mean the government is paying higher rates and getting fewer incentives, such as free months of rent and free move-in costs, than if it were doing longer-term leases.

"If there’s one change that I’ve been pounding into GSA since I got there, when we think we have a long-term requirement, we need to look at replacing those leases with long-term leases," Mathews said. 

The audience of 200 people at Bisnow's Major Projects event in Washington, D.C.

Another way Mathews hopes to save the government money is by increasing its pace of selling properties. A law Congress passed in December, the Federal Assets Sale and Transfer Act, will make it easier to shed properties from the GSA's portfolio. 

A main obstacle to selling properties, Mathews said, has been federal agencies "land banking," or holding onto underutilized properties that they hope to one day get the money to develop. One of the tools the FASTA law creates is a seven-member board that can look through the federal inventory and identify assets that would be prudent to sell. With the Office of Management and Budget's approval, the board can then direct the government to sell the property, whether the agency wants to dispose of it or not.

Mathews said those seven board members will not have the time to pore through the thousands of government properties and all the available data on them, so he called on the 200 commercial real estate professionals in the Bisnow audience to help. 

"They're going to need help from people like you in the commercial real estate sector to identify those pieces of property that lend themselves to sale," Mathews said.