Status of the L. Mendel Rivers Federal Building Exchange

Published by the Government Accountability Office on 2003-06-26.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States General Accounting Office
Washington, DC 20548

          June 26, 2003

          The Honorable Ernest F. Hollings
          United States Senate

          Subject: Status of the L. Mendel Rivers Federal Building Exchange

          Dear Senator Hollings:

          The L. Mendel Rivers Federal Building (Rivers Building) in Charleston, South
          Carolina, has been vacant since it sustained damage in 1999 from Hurricane Floyd.
          For several years, the General Services Administration (GSA) has been working with
          the City of Charleston to negotiate an exchange of the Rivers Building and its site for
          land and a building to be constructed by the City. This report responds to your March
          21, 2003, request for information on the progress of GSA’s efforts to exchange the
          Rivers Building with the City of Charleston. To determine the current status of the
          exchange, we interviewed GSA officials and reviewed the draft Memorandum of
          Understanding (MOU) between GSA and the City of Charleston. We performed our
          work during May and June 2003.

          GSA and the City of Charleston have developed a MOU setting forth the terms and
          conditions for the exchange. Under the MOU, in exchange for the Rivers Building, the
          City of Charleston would convey to the federal government a parcel of city-owned
          land at 101 Broad Street and construct a building on it to support existing federal
          functions. This newly constructed federal building will be located next to the existing
          federal courthouse. GSA would have to approve all plans and specifications for the
          new building. The City would also construct a parking garage near the new building
          that would be used in part by the occupants of the new building but would not be part
          of the exchange. The MOU also states that the City would be responsible for the
          demolition and asbestos abatement of the Rivers Building. GSA will retain ownership
          of the Rivers building until the new federal building is constructed at 101 Broad
          Street and the exchange is completed.

          According to a GSA official, the MOU was approved initially by Charleston’s City
          Council and GSA’s regional office. The MOU was then sent to GSA’s Headquarters
          Office of Portfolio Management and reviewed by GSA’s Office of General Counsel.
          We were informed that the General Counsel’s Office made some technical changes to
          the MOU, and it was sent back to the City for the Mayor’s signature. According to a
          GSA official, the Mayor signed the MOU on June 17, 2003, and the Administrator of
          GSA is expected to sign it in early July.

                                                    GAO-03-816R Exchange of L. Mendel Rivers Building
According to the MOU, the City plans a three-phase construction project. It would
start with the construction of the new building, followed by the parking garage and
then the demolition and redevelopment of the Rivers Building site. The City and GSA
are working to develop the requirements for the new building. Once the MOU is
executed, the City of Charleston can begin the process of selecting a developer for
the new building. When construction of the building is completed and an independent
appraisal shows the value of the new building and land is equal to the appraised value
of the Rivers Building and its site, the exchange can occur. If the values of the
properties are not equal and the City of Charleston cannot reach an agreement with
GSA to provide additional consideration to recover the disparity in value, GSA retains
the right not to complete the exchange. According to the MOU, if the exchange does
not occur by February 10, 2007, the agreement will expire, and neither party will have
any obligation to the other.

Please contact me at (202) 512-6670, or at goldsteinm@gao.gov, if you or your staff
have any questions. We are sending copies of this report to the Administrator of GSA
and will make copies available to others upon request.

Sincerely yours,

Mark L. Goldstein
Acting Director
Physical Infrastructure


Page 2                                    GAO-03-816R Exchange of L. Mendel Rivers Building
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