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In many cases they own the land that they are going to use. Most of it is going to lie dormant because the nonpostal needs will not be sufficient to justify the square footage of land they are already on. In many cases they will have to rent more space.
They are going to go and rent some more. What you are doing here is stacking up the debt of GSA that is going to astronomical heights in addition to them having to pay you an awful lot of rent.
I do not think it is very wise to come before this committee and say we are going to do all of this because we will have the money. While you are doing great, GSA will be broke.
That is essentially what it is when you boil it down to fifth grade language. That is what you are saying.
This, sir, is pennywise and dollar foolish.
Actually, our approach to this, talking now about the 18, is simply this, that if the situation that was confronting the General Services Administration caused them to not know or not be able to make any commitment as to when they could go ahead or whether they could go ahead, be the reason whatever it may be, lack of funds, lack of authority that must await action by the Congress, our offer and the Postmaster General's offer was to assure that the program as laid out for these 18 buildings not be delayed by our funding the buildings and causing them to go ahead as programed.
There was only one item that had to be considered since many of them were very old in their planning.
There had to be our getting together with GSA in order to effect some redesigning that might be necessary to reflect current plans.
Mr. GRAY. Well, Mr. Batrus, was any effort ever made by the Postal Service to go to the President's office or the Office of Budget and Management and say, look, here are some projects that have been authorized by the Congress. They are badly needed. The architectural and engineering work is almost finished. We own the land. We could go out for bid very soon. Can you not put these projects that are ongoing and ready into the budget and get them funded ?
Would that not have made much more sense than getting almost across the ocean, deciding you cannot make it, and turn around and swim back?
Mr. BATRUS. Since a number of these had to do with the Postal Service needs we felt to satisfy our needs, as well as those, the problem that confronted the GSA, that we would go ahead with the construction under the law, the amount prevails that Congress enacted last year, and move along with this construction to satisfy both needs. both the Postal Service as well as GSA.
Mr. Gray. But, Mr. Batrus, you have not answered my question.
Do you think it is economically justified after spending that money as a joint project to suddenly pull away when you are almost ready to have a building ?
Mr. BATRUS. This was not a pull away. This was to go ahead with the joint project, as planned, subject only to making revisions on space needs that may have been caused by the period of time that elapsed since the first planning started; in many cases, many years ago.
It is almost identical to the situation, the only difference being it is going to be funded by the Postal Service, and the buildings will be planned accordingly.
Mr. Gray. GSA is reticent to go along with this plan, but it is not a plan unless you can get together and they do not indicate to me that they are going to go along.
Why would they be asking Congress now to go these projects alone ? That is what they are doing. You can read Mr. Kreger's testimony. He said we will send amended prospectuses back to this committee to ask to proceed on most all of these buildings and those we do not proceed on, we will cancel.
That does not sound like a wedding to me.
Did you read Mr. Kreger's testimony? I suggest you take a copy of it along.
Mr. BATRUS. I have read it.
Mrs. Abzug is very interested in the New York project, and unless counsel has some additional questions on this point, I want to show figures on projects to show conclusively as I have said, that the Postal Service is wasting not thousands, but millions and millions of dollars of the taxpayers money,
On June 22, 1970, I met in my office with Mr. Lehne and Jerry Reynolds, congressional liaison officer, concerning a previously authorized project to take care of the postal needs in the metropolitan area of New York City:
Our committee had authorized an expenditure of about $50 million for the construction of a facility that the Post Office Department in 1970 said would meet adequately the future needs of the metropolitan area of New York City.
I might say at that point that the site for this improvement was the Morgan Street Station project in New York City; that scores of low-income people had been displaced from their homes through condemnation; 33 businesses had been put out of operation in order to make this improvement.
The Post Office Department proposed to our committee that a complete revision of the need had been made in New York, and that they wanted to go over into New Jersey for a postal handling facility.
A question at that time was raised, what are we going to do with this valuable land so badly needed downtown in New York for housing.
What are we going to do with it if we build our facility in New Jersey? They said we do not need the space acquired by condemnation in Manhattan, and the property would be declared excess.
On June 22, 1970, I received this letter, and I will read just a part of it:
Dear Mr. Chairman, it was kind of you to spend the time with us to listen to the explanation of our plans for improving the Postal Service * * *—remember now, that overused phrase I mentioned a moment ago—"Improve" in the New York metropolitan area.
During our meeting you stated that we set forth the projected sequence of events for our planned facilities in that area.
I will not read it all, but they merely reiterate that they are going to New Jersey and will not need the site in Manhattan.
The next to last paragraph says: As soon as the New Jersey facility is operational the truck traffic will decrease by about one-half in the Morgan Station area, and the Post Office Department will no longer need the block in question for parking and maneuvering purposes, except, of course, a 16,000 square foot area would be involved in a 20-foot widening of 29th Street.
Now, listen to this:
Thus, of the approximately 160,000 square feet or four acres taken in the block, 144,000, or 90 percent will become available.
Now, gentlemen, that is a definite statement.
Based on this letter of assurance our committee met in executive session, reauthorized the project to go to New Jersey at the request of the Post Office Department, and after holding public hearings in Manhattan, we have not been able to get any kind of a promise out of the Post Office Department to keep a commitment given to the Congress of the United States, to a legally constituted committee of the Congress.
This definite assurance was that these low-income people could have their land back that was taken from them for purposes not used, and now here we are in July of 1971, and the land has not been released.
We heard testimony that some people were living 12 and 14 in a small tenement house because they had to double up in order to have sleeping facilities because their houses were taken.
Now, this is just part of the story of squandering of money. The millions that were paid for that land that was taken from these people—these poor people, is still invested in the Postal Service, not in the taxpayers, but that was not enough.
Since the Postal Service has become fully autonomous, they have gone over into New Jersey to build this facility, and the last account I had was that $50 million has been catapulated into more than $120 million.
I would be glad to have Mr. Lehne tell this committee what the most recent estimate of that New Jersey facility is, but the last count that I had is that the congressional authority given by this committee has already been exceeded by more than $70 million.
Now, just think of that. That is just one project. If they had gone ahead with the Morgan Street plans, the building could be almost finished.
Today, the New Jersey facility is not finished, the taxpayers are going to be hit for over $120 million.
The poor tenement dwellers are still out of a home, and the Postal Service is still hanging onto the parking lot.
I went over to look at it on a Friday afternoon after all the postal trucks were parked, and three-fourths of the lot was vacant.
Now, I think this is ciminal. I think it is a disgrace, and this is just one of many projects that I have documented. We are going to do it regardless of what anybody says is the attitude of the Postal Service.
Mr. Lehne, can you tell the committee in your best estimate at today's prices, what the New Jersey facility is going to cost ?
Mr. LEHNE. Am I limited to that statement alone?
Mr. GRAY. You can say anything you want to. I just want an answer to that particular question.
Mr. LEHNE. Thank you.
When Mr. Blount, after having some consultant study the Morgan station project that was initially conceived when he came to Washington, the latest estimate to build the Morgan station project, as was approved by your committee, was no longer $50 million, sir, but it was well over $100 million. I think that is well documented, and it was decided at that time that
, rather than create additional traffic in the Morgan station area, because the Morgan station building, as you pointed out, was going to be doubled in size by using this other 160,000-square-foot block and build over the street, we were going to have a tremendous amount of additional traffic in that area, more trucks, that it was decided that it would be more economically for both New York City and the area and the taxpayers of the country to build the building in the New Jersey area.
We proceeded on those plans.
You are absolutely correct, the original estimate we had for that project has been exceeded. Our original was $80 million to build the New Jersey project.
Our most current estimate this afternoon is $135 million.
We have awarded the contracts. The project is under construction cognizance of the Corps of Engineers.
We do expect the buildings to be operational in June of 1973.
In the conference that you referred to that Mr. Reynolds and I had with you, and the letter that you wrote, that you quoted from, we indicated that when our project was operational the land would then become available.
It is still the intent of the Postal Service that in June of 1973, provided the schedules are continuing to be met as we now plan them, that that land will be available.
Mr. Gray. Let me interrupt you right there, if I may. That is the first admission that we have had. We invited you, as you know, and you were tied up and could not make it, we had your chief of realty in the New York division, had other people that you personally asked to come and, there at the hearings we sat there all day, and you can see how voluminous they are, and we could not elicit one single promise that 1 inch of that land would be turned back.
Now, are we again today getting a promise that the land, at least 90 percent, will be released when the New Jersey facility is completed?
Mr. LEHNE. Well, we will then dispose of the land that we are talking about disposing of.
I do not know what is going to be done with the land. The letter that we signed is the Post Office policy. The land will no longer be available to it for our use, no longer needed for our use.
The land will not be needed for our use. We have had continuous requests ever since I have been in Washington, starting out with Mavor Lindsay, Governor Rockefeller, and everybody is interested in that piece of property.
We would like to accelerate our plans. We took the recommendations into consideraiton when we decided not to build that big Morgan station monument in downtown New York.
That is one reason we changed, because we wanted to take the Post Office traffic out of these big cities. It does not need to be there, so why should we build an expensive building there?
I do not know what the Morgan station project would have cost. Mr. GRAY. Let me interrupt you right there. Do you know a Mr. Jack Grant?
a Mr. LEHNE. Yes; I know Mr. Grant. Mr. GRAY. What position does he hold?
Mr. LEHNE. Mr. Grant is a retired employee of the Post Office Department.
Mr. GRAY. As of when? Mr. LEHNE. He was formerly head of our real estate function. Mr. GRAY. That is what I mean. He did not have a small position; did he?
Mr. LEHNE. No, sir; he had a very important position.
Mr. Gray. Do you know he was in the realty division as an assistant at the time the decision was made to improve the Morgan Street station, and most all of the people in engineering, logistics, operations, transportation that made that original decision are still employees of the Post Office Department?
Why the 180-degree change in course?
With no oversight of the Subcommittee on Public Buildings and Grounds, accountable to no one, this is just one instance of many that I can cite to you where millions are being squandered; $85 million in this one case.
Mr. LEHNE. I take exception.
Maybe it is a poor choice of words, but it is $85 million wasted any way you look at it.
Mr. LEHNE. No, sir; I do not believe that is true.
Mr. GRAY. When you and I had that meeting in my office, if you had told me you were going to spend $135 million in New York City, I probably would have fainted. I certainly would not have called the subcommittee together,
Mr. LEIINE. Sir, there are an awful lot of expensive buildings being built.
Mr. GRAY. But that is waste. I have the GAO report.
You selected a marshy site, where it did not have the right kind of pilings.
Mr. LEHNE. I object to that statement, sir.
The cost of preparing that site was within the original estimate that was made. That was not the reason the building is costing more.
Mr. GRAY. Do you know a former Assistant Postmaster General under the Eisenhower adıninistration by the name of Keib?
Mr. LEHNE. Yes, sir.