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104th Congress Report
HOUSE OF REPRESENTATIVES
1st Session 104-234
_______________________________________________________________________
ADMINISTRATION OF CERTAIN PRESIDIO PROPERTIES AT MINIMAL COST TO THE
FEDERAL TAXPAYER
_______________________________________________________________________
August 4, 1995.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Young of Alaska, from the Committee on Resources, submitted the
following
R E P O R T
[To accompany H.R. 1296]
[Including cost estimate of the Congressional Budget Office]
The Committee on Resources, to whom was referred the bill
(H.R. 1296) to provide for the administration of certain
Presidio properties at minimal cost to the Federal taxpayer,
having considered the same, report favorably thereon with an
amendment and recommend that the bill as amended do pass.
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. FINDINGS.
The Congress finds that--
(1) the Presidio, located amidst the incomparable scenic
splendor of the Golden Gate, is one of America's great natural
and historic sites;
(2) the Presidio is the oldest continuously operated military
post in the Nation dating from 1776, and was designated a
National Historic Landmark in 1962;
(3) preservation of the cultural and historic integrity of
the Presidio for public use recognizes its significant role in
the history of the United States;
(4) the Presidio, in its entirety, is located within the
boundary of the Golden Gate National Recreation Area, in
accordance with Public Law 92-589;
(5) the Presidio's significant natural, historic, scenic,
cultural, and recreational resources must be managed in a
manner which is consistent with sound principles of land use
planning and management, and which protects the Presidio from
development and uses which would destroy the scenic beauty and
historic and natural character of the area; and
(6) the Presidio can best be managed through an innovative
public/private partnership that minimizes cost to the United
States Treasury and makes efficient use of private sector
resources that could be utilized in the public interest.
SEC. 2. AUTHORITY AND RESPONSIBILITY OF THE SECRETARY OF THE INTERIOR.
(a) Interim Authority.--The Secretary of the Interior (hereinafter in
this Act referred to as the ``Secretary'') is authorized to manage
leases in existence on the date of this Act for properties under the
Administrative jurisdiction of the Secretary and located at the
Presidio. Upon the expiration of any such lease, the Secretary may
extend the lease for a period terminating 6 months after the first
meeting of the Presidio Trust at which a quorum is present. After the
date of the enactment of this Act, the Secretary may not enter into any
new leases for property at the Presidio to be transferred to the
Presidio Trust under this Act. Notwithstanding section 1341 of title 31
of the United States Code, the proceeds from any such lease shall be
retained by the Secretary and such proceeds shall be available, without
further appropriation, for the preservation, restoration, operation and
maintenance, improvement, repair and related expenses incurred with
respect to Presidio properties. For purposes of any such lease, the
Secretary may adjust the rental by taking into account any amounts to
be expended by the lessee for preservation, maintenance, restoration,
improvement, repair and related expenses with respect to properties
within the Presidio.
(b) Public Information and Interpretation.--The Secretary shall be
responsible, in cooperation with the Presidio Trust, for providing
public interpretative services, visitor orientation and educational
programs on all lands within the Presidio.
(c) Other.--Those lands and facilities within the Presidio that are
not transferred to the administrative jurisdiction of the Presidio
Trust shall continue to be managed by the Secretary. The Secretary and
the Presidio Trust shall cooperate to ensure adequate public access to
all portions of the Presidio.
(d) Park Service Employees.--No person who was a career employee of
the National Park Service as of October 1, 1994, and who is employed at
the Presidio as of the transfer of lands and facilities to the Presidio
Trust under this Act shall be involuntarily separated from service by
reason of such transfer.
SEC. 3. THE PRESIDIO TRUST.
(a) Establishment.--There is established a wholly owned government
corporation to be known as the Presidio Trust (hereinafter in this Act
referred to as the ``Trust'').
(b) Transfer.--(1) Within 60 days after receipt of a request from the
Trust for the transfer of any parcel within the area depicted as area B
on the map entitled ``Presidio Trust Number 1,'' dated June 1995, the
Secretary shall transfer such parcel to the administrative jurisdiction
of the Trust. Within one year after the first meeting of the Board of
Directors of the Trust at which a quorum is present, the Board shall
request the Secretary to transfer any remaining parcels within such
area B. Such map shall be on file and available for public inspection
in the offices of the Trust and in the offices of the National Park
Service, Department of the Interior. The Trust and the Secretary may
jointly make technical and clerical revisions in the boundary depicted
on such map. Such areas shall remain within the boundary of the Golden
Gate National Recreation Area. The Secretary shall retain those
portions of the building identified as number 103 as the Secretary
deems essential for use as a visitor center. The building shall be
named the ``William Penn Mott Visitor Center''. With the consent of the
Secretary, the Trust may at any time transfer to the administrative
jurisdiction of the Secretary any other properties within the Presidio
which are surplus to the needs of the Trust and which serve essential
purposes of the Golden Gate National Recreation Area. The Trust is
encouraged to transfer to the administrative jurisdiction of the
Secretary open space areas which have a high public use potential and
are contiguous to other lands administered by the Secretary.
(2) The Secretary shall transfer, with the transfer of administrative
jurisdiction over any property, all leases, concessions, licenses,
permits, and other agreements relating to such property. Upon the
transfer of such property the Secretary shall transfer the unobligated
balance of all funds appropriated to the Secretary for the operation of
the Presidio, together with any revenues and unobligated funds
associated with leases, concessions, licenses, permits, and agreements
relating to properties transferred to the Trust.
(c) Board of Directors.--
(1) In general.--The powers and management of the Trust shall
be vested in a Board of Directors (hereinafter referred to as
the ``Board'') consisting of the following 7 members:
(A) The Secretary of the Interior or the Secretary's
designee.
(B) Six individuals, who are not employees of the
Federal Government, appointed by the President, who
shall possess extensive knowledge and experience in one
or more of the fields of city planning, finance, real
estate, and resource conservation. At least 3 of these
individuals shall reside in the city and county of San
Francisco. The President shall make the appointments
referred to in this subparagraph within 90 days after
the enactment of this Act.
(2) Terms.--Members of the Board appointed under paragraph
(1)(B) shall each serve for a term of 4 years, except that of
the members first appointed, 3 shall serve for a term of 2
years. Any vacancy in the Board shall be filled in the same
manner in which the original appointment was made, and any
member appointed to fill a vacancy shall serve for the
remainder of the term for which his or her predecessor was
appointed. No appointed director may serve more than 8 years in
consecutive terms. No member of the Board of Directors may have
a development or financial interest in any tenant or property
of the Presidio.
(3) Quorum.--Four members of the Board shall constitute a
quorum for the conduct of business by the Board.
(4) Organization and compensation.--The Board shall organize
itself in such a manner as it deems most appropriate to
effectively carry out the authorized activities of the Trust.
Board members shall serve without pay, but may be reimbursed
for the actual and necessary travel and subsistence expenses
incurred by them in the performance of the duties of the Trust.
(5) Liability of directors.--Members of the Board of
Directors shall not be considered Federal employees by virtue
of their membership on the Board, except for purposes of the
Federal Tort Claims Act and the Ethics in Government Act.
(6) Public liaison.--The Board shall meet at least 3 times
per year in San Francisco and at least one meeting shall be
open to the public. The Board shall establish procedures for
providing public information and opportunities for public
comment regarding policy, planning, and design issues through
the Golden Gate National Recreation Area Advisory Commission.
(d) Duties and Authorities.--In accordance with the purposes set
forth in this Act and in section 1 of the Act entitled ``An Act to
establish the Golden Gate National Recreation Area in the State of
California, and for other purposes'', approved October 27, 1972 (Public
Law 92-589; 86 Stat. 1299; 16 U.S.C. 460bb), and in accordance with the
general objectives of the general management plan approved for the
Presidio, the Trust shall manage the leasing, maintenance,
rehabilitation, repair and improvement of property within the Presidio
which is under its administrative jurisdiction. The Trust may
participate in the development of programs and activities at the
properties that have been transferred to the Trust. In exercising its
powers and duties, the Trust shall have the following authorities:
(1) The Trust is authorized to manage, lease, maintain,
rehabilitate and improve, either directly or by agreement,
those properties within the Presidio which are transferred to
the Trust by the Secretary.
(2)(A) The Trust is authorized to negotiate and enter into
such agreements, leases, contracts and other arrangements with
any person, firm, association, organization, corporation or
governmental entity, including without limitation entities of
Federal, State and local governments (except any agreement to
convey fee title to any property located at the Presidio) as
are necessary and appropriate to finance and carry out its
authorized activities. Agreements under this paragraph may be
entered into without regard to section 321 of the Act of June
30, 1932 (40 U.S.C. 303b).
(B) Except as provided in subparagraphs (C), (D), and (E),
Federal laws and regulations governing procurement by Federal
agencies shall apply to the Trust.
(C) In exercising authority under section 303(g) of the
Federal Property and Administrative Services Act of 1949 (41
U.S.C. 253(g)) relating to simplified purchase procedures, the
Trust is authorized, to use as the dollar limit of each
purchase or contract under this subsection an amount which does
not exceed $500,000.
(D) In carrying out the requirement of section 18 of the
Office of Federal Procurement Policy Act (41 U.S.C 416), the
Trust is authorized to furnish the Secretary of Commerce for
publication notices of proposed procurement actions, to use as
the applicable dollar threshold for each expected procurement
an amount which does not exceed $1,000,000.
(E) The Trust shall establish procedures for lease agreements
and other agreements for use and occupancy of Presidio
facilities, including a requirement that in entering into such
agreements the Trust shall obtain reasonable competition.
(F) The Trust shall develop a comprehensive program for
management of those lands and facilities within the Presidio
which are transferred to the Trust. Such program shall be
designed to reduce costs to the maximum extent possible. In
carrying out this program, the Trust shall be treated as a
successor in interest to the National Park Service with respect
to compliance with the National Environmental Policy Act and
other environmental compliance statutes. Such program shall
consist of--
(i) demolition of all structures which cannot be
cost-effectively rehabilitated and are not of the
highest degree of historical significance,
(ii) new construction which would be limited to
replacement of existing structures of similar size in
existing areas of development, and
(iii) examination of a full range of reasonable
options for carrying out routine administrative and
facility management programs.
The Trust shall consult with the Secretary in the preparation
of this program.
(3) The Trust is authorized to appoint and fix the
compensation and duties of an executive director and such other
officers and employees as it deems necessary without regard to
the provisions of title 5, United States Code, governing
appointments in the competitive service, and may pay them
without regard to the provisions of chapter 51, and subchapter
III of chapter 53, title 5, United States Code (relating to
classification and General Schedule pay rates).
(4) To augment or encourage the use of non-Federal funds to
finance capital improvements on Presidio properties transferred
to its jurisdiction, the Trust, in addition to its other
authorities, shall have the following authorities:
(A) The authority to guarantee any lender against
loss of principal or interest on any loan, provided
that (i) the terms of the guarantee are approved by the
Secretary of the Treasury, (ii) adequate guarantee
authority is provided in appropriations Acts, and (iii)
such guarantees are structured so as to minimize
potential cost to the Federal Government. No loan
guarantee under this Act shall cover more than 75
percent of the unpaid balance of the loan. The
Secretary of the Treasury shall collect a commercially
reasonable guarantee fee in connection with each loan
guaranteed under this Act. The authority to enter into
any such loan guarantee agreement shall expire at the
end of 12 years after the date of enactment of this
Act.
(B) The authority, subject to available
appropriations, to make loans to the occupants of
property managed by the Trust for the preservation,
restoration, maintenance, or repair of such property.
(C) The authority to issue obligations to the
Secretary of the Treasury, but only if the Secretary of
the Treasury agrees to purchase such obligations after
determining that the projects to be funded from the
proceeds thereof are credit worthy and that a repayment
schedule is established. The Secretary of the Treasury
is authorized to use as a public debt transaction the
proceeds from the sale of any securities issued under
chapter 31 of title 31, United States Code, and the
purposes for which securities may be issued under such
chapter are extended to include any purchase of such
notes or obligations acquired by the Secretary of the
Treasury under this subsection. The aggregate amount of
obligations issued under this subparagraph which are
outstanding at any one time may not exceed $50,000,000.
Obligations issued under this subparagraph shall be in
such forms and denominations, bearing such maturities,
and subject to such terms and conditions, as may be
prescribed by the Secretary of the Treasury, and shall
bear interest at a rate determined by the Secretary of
the Treasury, taking into consideration current market
yields on outstanding marketable obligations of the
United States of comparable maturities. No funds
appropriated to the Trust may be used for repayment of
principal or interest on, or redemption of, obligations
issued under this paragraph. All obligations purchased
under authority of this subparagraph must be authorized
in advance in appropriations Acts.
(D) The Trust shall be deemed to be a public agency
for the purpose of entering into joint exercise of
powers agreements pursuant to California government
code section 6500 and following.
(5) The Trust may solicit and accept donations of funds,
property, supplies, or services from individuals, foundations,
corporations, and other private or public entities for the
purpose of carrying out its duties. The Trust shall maintain
philanthropic liaison with the Golden Gate National Park
Association, the fund raising association for the Golden Gate
National Recreation Area.
(6) Notwithstanding section 1341 of title 31 of the United
States Code, all proceeds received by the Trust shall be
retained by the Trust, and such proceeds shall be available,
without further appropriation, for the preservation,
restoration, operation and maintenance, improvement, repair and
related expenses incurred with respect to Presidio properties
under its jurisdiction. Upon the request of the Trust, the
Secretary of the Treasury shall invest excess moneys of the
Trust in public debt securities with maturities suitable to the
needs of the Trust.
(7) The Trust may sue and be sued in its own name to the same
extent as the Federal Government. Litigation arising out of the
activities of the Trust shall be conducted by the Attorney
General, as needed; except that the Trust may retain private
attorneys to provide advice and counsel, and to represent the
Trust in proceedings to enforce and defend the contractual
obligations of the Trust.
(8) The Trust shall have all necessary and proper powers for
the exercise of the authorities invested in it.
(9) For the purpose of compliance with applicable laws and
regulations concerning properties transferred to the Trust by
the Secretary, the Trust shall negotiate directly with
regulatory authorities.
(e) Insurance.--The Trust shall procure insurance against any loss in
connection with the properties managed by it or its authorized
activities as is reasonable and customary.
(f) Building Code Compliance.--The Trust shall bring all properties
under its jurisdiction into compliance with Federal building codes and
regulations appropriate to use and occupancy within 10 years after the
enactment of this Act.
(g) Taxes.--The Trust shall be exempt from all taxes and special
assessments of every kind in the State of California, and its political
subdivisions, including the city and county of San Francisco.
(h) Financial Information and Report.--(1) The Trust shall be treated
as a wholly owned Government corporation subject to chapter 91 of title
31, United States Code (commonly referred to as the Government
Corporation Control Act). Financial statements of the Trust shall be
audited annually in accordance with section 9105 of title 31 of the
United States Code.
(2) At the end of each calendar year, the Trust shall submit to the
Congress a comprehensive and detailed report of its operations,
activities, and accomplishments for the prior fiscal year. The report
also shall include a section that describes in general terms the
Trust's goals for the current fiscal year.
(i) Savings Clause.--Nothing in this section shall preclude the
Secretary from exercising any of the Secretary's lawful powers within
the Presidio.
(j) Leasing.--In managing and leasing the properties transferred to
it, the Trust should consider the extent to which prospective tenants
maximize the contribution to the implementation of the General
Management Plan for the Presidio and to the generation of revenues to
offset costs of the Presidio. The Trust shall give priority to the
following categories of tenants: tenants that enhance the financial
viability of the Presidio thereby contributing to the preservation of
the scenic beauty and natural character of the area; tenants that
facilitate the cost-effective preservation of historic buildings
through their reuse of such buildings, or tenants that promote through
their activities the general programmatic content of the plan.
(k) Reversion.--If the Trust reasonably determines by a two-thirds
vote of its Board of Directors that it has materially failed to, or
cannot, carry out the provisions of this Act, all lands and facilities
administered by the Trust shall revert to the Secretary of Defense to
be disposed of in accordance with section 2905(b) of the Defense
Authorization Act of 1990 (104 Stat. 1809), except that--
(1) the terms and conditions of all agreements and loans
regarding such lands and facilities entered into by the Trust
shall be binding on any successor in interest; and
(2) the city of San Francisco shall have the first right of
refusal to accept all lands and facilities formerly
administered by the Trust.
(l) Limitations on Funding.--(1) From amounts made available to the
Secretary for the operation of areas within the Golden Gate National
Recreation Area, not more than $25,000,000 shall be available to carry
out this Act in each fiscal year after the enactment of this Act until
the plan is submitted under paragraph (2). Such sums shall remain
available until expended.
(2) Within one year after establishment of the Trust, the Trust shall
submit to Congress a plan which includes a schedule of annual
decreasing Federally appropriated funding such as will achieve total
self-sufficiency for the Trust within 12 complete fiscal years after
establishment of the Trust. That plan shall provide for annual
reductions in Federally appropriated funding such that the Trust will
be 80 percent self-sufficient at the end of 7 complete fiscal years
after establishment. The plan shall provide for elimination of all
Federally appropriated funding for public safety and fire protection
purposes on lands or facilities administered by the Trust at the end of
5 complete fiscal years after establishment of the Trust. For each of
the 11 fiscal years after fiscal year 1997, there are authorized to be
appropriated to the Trust not more than the amounts specified in such
plan. Such sums shall remain available until expended.
(m) GAO Audit.--Ten years after the date of establishment of the
Trust, the General Accounting Office shall conduct a complete audit of
the activities of the Trust and shall report the results of that audit
to the appropriate congressional committees. The General Accounting
Office shall include in that audit an analysis of the ability of the
Trust to initiate payments to the Treasury.
(n) Separability of Provisions.--If any provisions of this Act or the
application thereof to any body, agency, situation, or circumstance is
held invalid, the remainder of the Act and the application of such
provision to other bodies, agencies, situations, or circumstances shall
not be affected thereby.
purpose of the bill
The purpose of the bill is to provide a cost-effective
approach for the future management of the Presidio of San
Francisco.
background and need for legislation
The 1480-acre Presidio was the longest continuous serving
military base in the history of the country until it was
transferred to the National Park Service (NPS) on October 1,
1994. The former base, located at the foot of the Golden Gate
Bridge, includes many historic buildings, natural resources and
provides opportunities for outdoor recreation.
Overall there are 870 buildings at the Presidio, totaling
about 6.3 million square feet of space (by comparison there are
about 4 million square feet in one of the two World Trade
Center buildings). About 550 of these buildings are historic
and contribute to the national landmark designation for the
entire Presidio. Although the military has funded an $80
million basewide upgrade of utility systems, almost none of the
buildings meet existing codes for electrical, earth quake
protection, etc. The current condition of these buildings has a
negative impact on their revenue/leasing potential.
About half of the overall Presidio is undeveloped open
space. While there are scattered opportunities for outdoor
recreation within the Presidio, most of the recreation areas
are along the Pacific coast and San Francisco Bay. These lands,
totaling about 150 acres, have been managed by NPS for over 10
years, prior to any discussion of the closure of the Presidio.
In 1972, legislation establishing the Golden Gate National
Recreation Area in the San Francisco Bay area was enacted.
Although neither the legislative study completed by NPS or the
bill passed by Congress contemplated that NPS would manage the
entire Presidio area, it was all included in the park boundary
as enacted. Further, the 1972 Act stated that if the Presidio
ever became surplus to the needs of the Department of Defense,
it would be transferred to the jurisdiction of the Secretary of
the Interior for purposes of the Act.
In 1989, the Base Closure and Realignment Commission
determined that the Presidio was surplus and should be closed
by October 1, 1994. NPS subsequently began planning for the
transition of the base into an area to be managed by NPS. The
original decision by the Defense Department to vacate the
Presidio entirely was subsequently modified to permit the 6th
Army to continue to occupy about one third of the Presidio.
NPS quickly determined that the Presidio had facilities far
in excess of agency needs and that it would have to develop a
plan for other uses of the facilities. In 1993, Congress
enacted Public Law 103-175, permitting the Secretary of the
Interior to lease out about 1.2 million square feet of the
Presidio and to retain all funds from that rental without
appropriation. That legislation was designed as an experiment
to determine the viability of NPS as a real estate manager for
the Presidio. The legislation, which was agreed to on a
bipartisan basis, provided for the leasing of some of the most
commercially viable real estate on the entire base. To date,
NPS has not signed leases for any of those facilities; however,
they are in the final stages of negotiating a lease for 73,000
square feet or six percent of that offering.
While this experimental legislation permitting NPS to
implement its plans for the Presidio was enacted, legislation
to fully implement the NPS plan stalled late in the 103rd
Congress due to opposition in both the House of Representatives
and the Senate.
In the fall of 1994, NPS completed their plan for the
Presidio. The NPS plan calls for the establishment of a trust
to manage certain portions of the Presidio to reduce the cost
to the Federal Government. Shortly after the NPS plan was
completed, the Army announced its plan to leave the Presidio
entirely on October 1, 1995. The departure of the Army will
have a significant impact on implementation of the NPS plan,
since NPS was relying on their annual lease payments (estimated
$12-15 million annually) to provide the balance of the annual
operating costs for the Presidio. Under the NPS plan, open
space at the Presidio would be expanded to 65 percent of the
area through the demolition of 276 buildings.
Since the Federal Government already owns the Presidio and
is already spending $25 million per year at this site, the key
question is how to develop an approach which minimizes future
Federal involvement and cost, and yet provides a reasonable
opportunity for success at the Presidio. There continues to be
some pressure for sale of the Presidio lands and facilities. In
fact, the Senate has included sale of the Presidio in their
budget resolution, calculating the value of the property to be
$555 million. That is an amount which is both too high and too
low. It is too high because there is currently no zoning for
the land and it could take 10-20 years to secure an unknown
type of zoning and begin development. On the other hand, it is
too low because the amount is far less than the property would
be worth if fully developed. Thus, land values are extremely
speculative.
One of the major issues at the Presidio has been its
overall cost. The truth is no one has done an analysis to
determine the minimum operating cost for the Presidio. Until
the Army announced their intention to withdraw entirely, NPS
projected the total annual cost of the Presidio to be about $40
million, making it by far the most expensive area managed by
NPS. Now NPS estimates the cost of the Presidio to be about $30
million. Of this total, $25 million would be the annual NPS
cost and the balance would be paid by the tenants.
By comparison, the Fiscal Year 1996 cost to operate the
next most costly park, Yellowstone National Park, is $20
million. The total cost to manage the balance of the 73,000-
acre Golden Gate National Recreation Area, which is the most
heavily visited area in the National Park System, is $11
million.
Of course these annual operating costs do not include the
cost for capital improvements. The NPS plan calls for total
development costs of $741 million. Of this total, NPS projects
nearly $400 million would be the responsibility of tenants,
with the Federal Government responsible for the balance. The
amount to be contributed by tenants for capital improvements is
highly speculative, as these contributions would be in lieu of
rental payments, and at the present time NPS cannot secure
rental payments adequate to cover its annual operating costs of
the Presidio, let alone make the basic improvements to
facilitate leasing of currently unmarketable properties.
The total cost of the NPS plan for both operations and
capital improvements over the 15 year life of the plan is $600
million for operations (15 years at $40 million/year) and $741
million for development, totaling about $1.3 billion.
committee action
H.R. 1296 was introduced on March 27, 1995, by
Congresswoman Pelosi. The bill was referred to the Committee on
Resources, and within the Committee to the Subcommittee on
National Parks, Forests and Lands. On May 16, 1995, the
Subcommittee held a hearing on H.R. 1296. On June 27, 1995, the
Subcommittee met to mark up H.R. 1296. An amendment in the
nature of a substitute was offered by Congressman Hansen, and
adopted by voice vote. The bill was then ordered favorably
reported to the Full Committee in the presence of a quorum. On
July 12, 1995, the Full Resources Committee met to consider
H.R. 1296. Congressman Hansen offered an amendment affecting
the property to be transferred to the Presidio Trust; it was
adopted by unanimous consent. Congressmen Duncan offered an
amendment relating to the authority to guarantee loans and to
reduce the total amount of bonds which can be issued by the
Secretary of the Treasury. It was adopted by voice vote. The
bill, as amended, was then ordered favorably reported to the
House of Representatives, in the presence of a quorum.
section-by-section analysis
Section 1. Findings
This section contains six findings about the Presidio,
including findings about its natural and historical resources
and the proposed management structure.
Section 2. Authority and responsibility of the Secretary of the
Interior
This section outlines the responsibilities of the Secretary
of the Interior at the Presidio, as caretaker of certain
portions of the Presidio until the Presidio Trust is
established.
Subsection (a) allows the Secretary to continue to manage
leases in existence on the date of enactment of the Act.
Additionally, the section provides for the continuation of any
leases which may expire prior to establishment of the Trust.
This section also permits NPS to retain proceeds from any
lease, without further appropriation, to assist in funding for
the Presidio. The bill waives the requirement that the Federal
Government receive only monetary consideration for a lease to
give the Secretary flexibility to negotiate a lease agreement
which would allow the tenant to finance the repair or
rehabilitation of all or part of the building it is occupying.
In addition, this subsection specifically precludes the
Secretary from entering into any new leases. The Committee is
very concerned that the Secretary is currently pursuing leases
which will return less than full fair market value. Any such
action by the Secretary would seriously undermine the ability
of the Presidio Trust to achieve self-sufficiency.
Subsection (b) recognizes the expertise of NPS in providing
visitor information and education programs. This subsection
establishes that the Secretary shall be responsible for these
programs throughout the Presidio, both on lands managed by the
Secretary and on lands administered by the Trust.
Subsection (c) provides that those lands not transferred to
the Trust will continue to be managed by the Secretary as part
of Golden Gate National Recreation Area. These lands consist
primarily of lands within the Presidio which were managed by
the Secretary prior to October 1, 1994. Funding for the
administration of these lands has been previously estimated by
NPS to be about $400,000 and these funds are already included
in the operating base for Golden Gate National Recreation Area.
Subsection (d) protects NPS career employees from adverse
action as a result of the implementation of this legislation.
The Committee recognizes that there are a number of long-term
career employees who could be adversely affected by this
legislation and expects NPS to find suitable positions for
these employees within the agency. The Committee does not
intend for this protection to extend to employees transferred
to the NPS as part of the transfer of the administrative
jurisdiction from the Army to NPS. The Trust may elect to hire
some employees currently working for NPS; however, the
Committee does not intend this language to establish any
requirement that the Trust hire NPS employees.
Section 3. The Presidio Trust
This section establishes the Presidio Trust and outlines
its duties and authorities. The Presidio Trust would be an
independent government corporation established in accord with
the Government Corporation Control Act. The Committee is
convinced that separation of the Trust from the Interior
Department will result in an overall cost-savings to the
government and increase the financial viability of the Trust.
Subsection (b) transfers administrative jurisdiction over
about 80 percent of the lands at the Presidio from the
Secretary to the Trust over a period of up to one year after
the establishment of the Trust. The lands to be retained for
administration by the Secretary include mostly open space areas
and a few historic structures, and constitute the primary
public use areas at the Presidio. The area for which the Trust
would be responsible includes essentially all of the leasable
building space. The Committee rejected a more integrated
approach to management of the lands where the Trust would be
responsible for managing just buildings and the Secretary would
be responsible for managing everything else as unworkable. The
Committee expects that NPS and the Trust will fully cooperate
over the one year transition period as provided for in the
legislation.
NPS does have clear expertise in interpretation and public
education, and the Committee provides for utilization of this
NPS expertise throughout the Presidio. However, NPS does not
have unique expertise in the management of roads or utilities,
grounds maintenance, or even forest management. Assigning these
responsibilities to the Trust would ensure that they are
undertaken in the most cost-effective manner. Furthermore, the
Committee notes that Section 3(d)(2) of the legislation
authorizes the Trust to continue to make use of NPS expertise
in any of these program areas as desired by the Trust.
This subsection also authorizes NPS to establish a visitor
center at the main post of the Presidio. While this site is
outside the boundary of lands to be administered by the
Secretary, the Committee believes this would be a suitable site
for this facility. Since there is a high demand for leasable
space in the Main Post area, the Committee expects other NPS
administrative offices would be located on lands administered
by the Secretary. The Committee directs that the visitor center
be named in honor of the former visionary NPS Director, William
Penn Mott.
Subsection (b) also provides for the future transfer of
undeveloped, open space lands from the Trust to the Secretary.
Over time, it is likely that existing buildings will be removed
and additional open space created. As additional open space
areas are established adjacent to land administered by the
Secretary, it is logical for these lands to be administered by
the Secretary. Such an approach would be consistent with the
original legislative intent of the 1972 Golden Gate national
Recreation Area establishment legislation.
Finally, subsection (b) provides for transfer to the Trust
of all leases negotiated by the Secretary, as well as any
unobligated funds the Secretary is holding for the Presidio.
Since funding for management of lands to be retained by the
Secretary as part of Golden Gate National Recreation Area is
already built into the park base funding, the Committee
believes that no additional funding is necessary.
Subsection (c) provides for establishment of a seven member
Board of Directors to guide the activities of the Trust. The
Committee has included a 90-day deadline for the appointment by
the President of the Board of Directors. The Committee
considers it essential that the Board be established as soon as
possible. The Committee expects the Board of Directors to adopt
guidelines consistent with current Federal law and regulations
concerning ethics, conflict of interest and financial
disclosure.
The Board would be required to meet at least three times
per year in San Francisco. The Committee notes that the Trust
is a government corporation acting on behalf of the public
benefit and interest. The Committee encourages the Board to be
open and accessible to persons and organizations interested in
the activities of the Trust. The Committee encourages the Trust
to develop a process to provide for community input, in
particular input from adjacent neighborhoods, which could be
directly affected by Trust activities.
Subsection (d) directs that the Trust carry out its
activities in accord with Section 1 of the legislation
establishing Golden Gate National Recreation Area, as well as
the general objectives of the approved general management plan
for the Presidio. This section sets forth the authorities of
the Trust.
Subsection (d)(2) authorizes the Trust to enter into
contracts, leases, cooperative agreements, or other agreements
with any person, firm, organization, corporation or government
entity as necessary to carry out its activities. The Committee
notes that under this authority, the Trust could execute an
agreement with NPS to continue to provide for public safety on
lands managed by the Trust, should the Trust determine this
arrangement to be beneficial based on cost or other factors.
This subsection waives the requirement that the Trust receive
only monetary consideration for a lease to give the Trust the
flexibility to negotiate a lease agreement which would allow
the tenant to finance the repair or rehabilitation of part or
all of the building it is occupying.
Subsection (d)(2)(B) would exempt the Trust from a small
number of specifically listed procurement laws. This approach
will streamline the procurement process for the Trust. The
exemptions will help the Trust increase efficiency by allowing
for more innovations in contracting. The Trust faces a
significant challenge in carrying out its responsibilities.
This subsection will simplify procurement actions, but maintain
the integrity of the procurement process.
Subsection (d)(2)(F) directs the Trust to develop a program
to reduce costs associated with the Presidio. The Committee
finds that the cost of the plan for the Presidio as completed
by NPS is unrealistic. While the Committee does endorse the
general objectives of that plan, the Committee recognizes that
development of a reasonable program is essential to ensure the
success of the Presidio Trust and the long-term preservation of
the historical and other resources of the Presidio. A key to
development of a cost-effective program will be an expanded
program of building demolition. The Committee notes that there
is no requirement that every historic structure at the Presidio
be protected in perpetuity. The Committee further recognizes
that not all historic buildings are of equal significance. The
Committee urges the Trust to carefully examine the retention of
each building at the Presidio. The language included in this
section is not intended to exempt the Trust from any
environmental or historic preservation law.
Subsection (d)(4) provides several authorities designed to
augment or encourage the use of non-Federal funds to finance
capital improvements. Section 3(d)(4)(A) authorizes the Trust
to guarantee loans to a potential lessee. This authority could
only be exercised upon approval of the Treasury Department. The
Committee expects this authority to be used to a limited
extent. The main benefit of this authority is that such
authority would have a substantially smaller budget impact than
direct appropriations.
Subsection (d)(4)(C) is identical to language inserted in a
Presidio bill in the 103rd Congress by the Ways and Means
Committee. Under this section, the Treasury Department would be
allowed to purchase debt issued by the Trust to the extent
provided in advance in appropriation acts. The amount of
borrowed funds outstanding at any one time could not exceed $50
million. The authorization of funding under this section would
be based on the Secretary of the Treasury's determination of
the creditworthiness of projects.
Subsection (d)(5) authorizes the Trust to solicit and
accept donations of funds, property, supplies, or services from
individuals, foundations, corporations, and other private
entities. The Committee expects the Trust and the Secretary to
establish written guidelines and criteria concerning the
solicitation of donations. The Committee notes that a tax
deduction would be available for any contributions to the
United States for public purposes. There is substantial
interest in the Presidio in the philanthropic community of San
Francisco and the Committee strongly encourages donations to
promote the pubic benefit at the Presidio.
Subsection (d)(6) authorizes the Trust to retain any
revenues from leases or other agreements concerning property
managed by the Trust.
Subsection (d)(9) provides that the Trust shall work
directly with appropriate local, State and Federal regulatory
agencies. For example, for the purpose of complying with
Section 106 of the National Historic Preservation Act, the
Trust shall work directly with the National Park System, the
State Historic Preservation Office and the Advisory Council on
Historic Preservation and enter into programmatic agreements
where appropriate. The Committee intends for the Presidio Trust
to comply as a Federal agency with the National Historic
Preservation Act, including Section 106, Section 110 and
Section 111 of the Act. By requiring the same level of
compliance with Federal preservation laws that is required of
the Department of the Interior and NPS, the Committee feels
confident that the Presidio Trust will manage historic
properties located at the Presidio in a manner that will
protect and preserve their historic and cultural integrity.
Subsection (g) provides that the Trust will be exempt from
State and local taxes because it is devoted to an essential
public and government function and purpose for the benefit of
the people. The Trust may seek exemption from Federal taxes in
accordance with procedures established by the Internal Revenue
Service. This is similar to the treatment of other government
corporations.
Subsection (h) provides that the financial records of the
Trust shall be audited by a reputable firm of certified public
accountants not less frequently than once per year. This
analysis, along with a detailed annual report, shall be
submitted to the appropriate Congressional committees.
Subsection (j) sets forth the criteria to be used in the
selection of tenants for the Presidio. The Committee is
concerned that strict adherence to potential tenants targeted
in the Presidio general management plan will result in leases
which are substantially below market value and which will
seriously undermine the economic viability of the Trust.
Accordingly, the Committee believes that selection of tenants
which enhance the financial viability of the Presidio is the
most important criteria to be used in the tenants selection
process.
Subsection (k) outlines a reversionary clause for lands and
facilities to be administered by the Trust. The Committee
believes that the establishment of the Trust to manage
properties at the Presidio is not only feasible, but offers the
best chance for long-term preservation of Presidio resources.
However, the Committee also recognizes that this approach is
largely untested and likely to face unforeseen challenges.
Accordingly, the Committee included a reversionary clause in
the unlikely event that the Presidio Trust effort proves
unsuccessful. Under the reversionary clause, lands and
facilities administered by the Trust would revert to the
Department of Defense for disposal following a two-thirds vote
of the Board of Directors that it cannot carry out the
provisions of the Act. The Committee notes that there is no
linkage between this section of the bill and any other specific
section of the bill. The Committee does not intend that if the
Presidio Trust is not self-sufficient within 12 years that the
Board would be automatically required to find that it cannot
carry out the provisions of the Act.
Subsection (l) provides limitations on funding for the
Presidio. The greatest concern of the Committee has been the
cost of the Presidio. The Committee cannot support funding
levels for the Presidio as proposed in the NPS plan. Rather
than authorize a permanent Federal appropriation, the Committee
believes that all Federal funding should be phased out and that
the Presidio Trust should become self-sufficient. The Committee
believes that 12 years is an adequate time period in which to
achieve self-sufficiency. Since the level of annual funding
necessary to meet this objective is unknown, the bill directs
the Trust to submit a schedule for necessary annual finding to
Congress.
Subsection (m) provides for a detailed General Accounting
Office audit of the Trust 10 years after its establishment. The
Committee recognizes the potential of the Trust to generate
revenue in excess to its needs and is specifically seeking this
audit to determine if surplus funds are generated by the Trust
which could be deposited in the Treasury.
committee oversight findings and recommendations
With respect to the requirements of clause 2(l)(3) of rule
XI of the Rules of the House of Representatives, and clause
2(b)(1) of Rule X of the Rules of the House of Representatives,
the Committee on Resources' oversight findings and
recommendations are reflected in the body of this report.
inflationary impact statement
Pursuant to clause 2(l)(4) of rule XI of the Rules of the
House of Representatives, the Committee estimates that the
enactment of H.R. 1296 will have no significant inflationary
impact on prices and costs in the operation of the national
economy.
compliance with house rule xi
1. With respect to the requirement of clause 2(l)(3)(B) of
rule XI of the Rules of the House of Representatives and
section 308(a) of the Congressional Budget Act of 1974, H.R.
1296 does not contain any new budget authority, or an increase
or decrease in revenues or tax expenditures.
2. With respect to the requirement of clause 2(l)(3)(D) of
Rule XI of the Rules of the House of Representatives, the
Committee had received no report of oversight findings and
recommendations from the Committee on Government Reform and
Oversight on the subject of H.R. 1296.
3. With respect to the requirement of clause 2(l)(3)(C) of
Rule XI of the Rules of the House of Representatives and
section 403 of the Congressional Budget Act of 1974, the
Committee has received the following cost estimate for H.R.
1296 from the Director of the Congressional Budget Office.
congressional budget office cost estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, August 3, 1995.
Hon. Don Young,
Chairman, Committee on Resources,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
reviewed H.R. 1296, a bill to provide for the administration of
certain Presidio properties at minimal cost to the federal
taxpayer, as ordered reported by the House Committee on
Resources on July 12, 1995.
We estimate that implementing this bill would cost the
federal government $50 million over the next five years, plus
any subsidy costs associated with new direct loans and/or
guarantees, depending on the level and type of credit subsidies
provided and assuming appropriation of the necessary sums. Most
of such spending would occur after 1998. Enacting H.R. 1296
would affect direct spending; therefore, pay-as-you-go
procedures would apply to the bill.
H.R. 1296 would have no direct impact on the budgets of
state or local governments.
Bill purpose.--H.R. 1296 would establish a wholly owned
government corporation to be known as the Presidio Trust. Once
operational, the trust would accept administrative jurisdiction
of about 80 percent of the property located at the Presidio in
San Francisco. At that time, the trust would assume
responsibility for managing, leasing, maintaining, and
improving this property. The remaining areas of the Presidio,
along with any lands transferred back by the trust, would
continue to be administered by the National Park Service (NPS)
as part of the Golden Gate National Recreation Area (GGNRA).
The bill would require the NPS to transfer all leases,
contracts, and other agreements related to lands under the
trust's jurisdiction, along with: (1) future proceeds from the
agreements, (2) unobligated balances of previous collections,
and (3) unobligated funds appropriated for Presidio operations.
In addition, the bill would authorize the trust to enter into
new leases and other agreements and to accept donations. The
trust would be authorized to retain and use, without further
appropriation, both donated funds and proceeds from commercial
activities for related operation, maintenance, and capital
expenditures.
For the purpose of financing capital improvements to the
transferred properties, H.R. 1296 would authorize the trust to:
(1) borrow funds from the federal Treasury, provided that
outstanding obligations cannot exceed $50 million at any time;
(2) make loans to occupants of trust properties, subject to
appropriation; and (3) guarantee loans to occupants made by
private lenders, subject to approval of the Secretary of the
Treasury and other conditions. All financing provided from
these sources would be subject to appropriation of the
necessary funds.
Finally, H.R. 1296 would provide for future limitations on
federal funding for operation of the Presidio. Specifically,
the bill would authorize the appropriation of no more than $25
million annually for the Presidio until the trust submits a
budget plan to eliminate the need for federal appropriations
within 12 years. For each year covered by the plan, the bill
would authorize the appropriation of the budgeted amount.
Estimated cost to the Federal Government.--
Capital Spending.--The total cost of developing commercial
space within the Presidio is very uncertain. Depending on the
condition of each property and the needs of future tenants,
such costs would include rehabilitation of historic buildings,
construction of new facilities, and demolition of unusable
structures. Based on the limited information available at this
time, CBO estimates that such expenditures would require
funding of between $125 million and $175 million over the next
five years, and additional amounts of between $225 million and
$325 million over the following ten years. Assuming
appropriation of the authorized amounts, we estimate that the
trust would borrow $50 million over the 1997-1999 period for
high-priority projects. Depending on the availability of
nonfederal financing, and assuming appropriation of the
necessary amounts for the subsidy costs of providing credit
assistance, some or all of the remaining capital needs could be
provided through federal loans or guarantees. Because the bill
does not establish any limitations on loan levels or specify
other credit terms, CBO cannot estimate the subsidy cost to the
federal government of projects that may be funded through such
assistance.
Operating Income and Expenses.--For the next few years,
commercial activities authorized by H.R. 1296 would be limited
to the rental of properties that can be occupied without
significant capital improvements. As a result, the trust would
probably produce little or no net income over this period. Once
projects involving more marketable buildings have been funded
and completed, net income would gradually increase.
Authorizations.--H.R. 1296 would authorize the
appropriation of up to $25 million annually for the Presidio,
including the trust established by this bill. Because such
appropriations (except for the trust) are already authorized
under current law, and because recent appropriations for
managing the Presidio are already at the $25 million level,
this provision would not result in additional spending of
appropriated funds. Trust expenses (including start-up costs of
about $2 million for each of fiscal years 1996-1998 and ongoing
administrative overhead of about $5 million annually beginning
in 1997 or 1998) are assumed to be included in the $25 million
operating budget for the Presidio. The bill also provides that
unobligated balances of previous years' appropriations for the
Presidio would be transferred to the trust once it becomes
operational. Presumably any such transfers would be reduced by
any amounts that the NPS would need to operate its portion of
the site.
Basis of estimate.--This estimate is based on information
provided by the NPS, its consultants, and other affected
groups, such as prospective tenants. For purposes of this
estimate, CBO has assumed that H.R. 1296 would be enacted by
early in fiscal year 1996. We assume that members of the
Presidio Trust would be appointed during the year and that the
NPS would transfer all lease properties to the trust sometime
in 1997.
Pay-as-you-go effects.--H.R. 1296 would affect direct
spending by authorizing the trust to collect and spend rental
and other income from commercial activities as well as donated
funds. CBO estimates that offsetting receipts generated from
these sources would be minimal over the 1996-1998 period and
would in any case be offset by additional direct spending.
------------------------------------------------------------------------
1995 1996 1997 1998
------------------------------------------------------------------------
Change in outlays........... 0 0 0 0
Change in receipts.......... (\1\) (\1\) (\1\) (\1\)
------------------------------------------------------------------------
\1\ Not applicable.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Deborah Reis.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
CHANGES IN EXISTING LAW
If enacted, H.R. 1296 would make no changes in existing
law.
DEPARTMENTAL REPORTS
The Committee has received no departmental reports on H.R.
1296.
