ULI New York YLG presents:

Strategies for Repurposing Government Property

March 28, 2012

Peter Larkin Executive Vice President and National LeaderMODERATOR:Peter Larkin, Executive Vice President and National Leader Public Institutions and Education Solution Team, CB Richard Ellis

PANELISTS:

Ralph Conner, Director of Real Property UtilizationUnited States General Services Administration

PANELISTS:

Theresa Ward, Deputy Commissioner of Real Estate, Facilities Management and ConstructionNew York City Department of Citywide Administrative Services

Joshua Gelfman, Senior Vice PresidentNew York City Economic Development Corporation

Jeffrey Rosen, Director of Real EstateNew York Metropolitan Transit Authority

General ServicesGeneral Services AdministrationAdministrationRalph ConnerRalph Conner

Director, Office of Director, Office of R l P t Utili tiR l P t Utili tiReal Property UtilizationReal Property UtilizationPublic Buildings ServicePublic Buildings Service

March 28, 2012March 28, 2012

G l S i Ad i i t tiGeneral Services Administration

F d l A i iti• Federal AcquisitionService

• Public Buildings Service• Acquisition• Construction• Leasing• Leasing• Realty Repositioning

Disposal ProcessDisposal Process

ExcessFederal T f

Public UseC

NegotiatedS l

PublicS lExcess Transfer Conveyance Sale Sale

AGENCYREPORTSO

DETERMINED SURPLUS IF NOT 

PROPERTY AVAILABLEFOR CERTAINPUBLIC USES

TO ELIGIBLEPUBLIC BODIES FOR OTHER

OFFERED  VIA

AUCTION ORSEALED BIDPROPERTY

EXCESS TO GSA FOR

DISPOSITION

TRANSFERREDTO ANOTHERFEDERAL AGENCY

PUBLIC USESUP TO 100%DISCOUNT

FOR OTHERPUBLIC USESFAIR MARKET

VALUE REQUIRED

SEALED BIDFAIR MARKET 

VALUE REQUIRED

HOMELESSAIRPORT

CORRECTIONAL

SELF-HELP HOUSINGPARK & RECREATIONPORT

USES:

CORRECTIONALEDUCATIONAL

HIGHWAYHISTORIC

PORTPUBLIC HEALTHPOLICE / FIREWILDLIFE CONSERVATION

bli l i l O dPublicly vs. Privately‐Owned Resources:

• Expectations of Community Local Officials and • Expectations of Community, Local Officials, and Congress

• Compliance with Environmental and Cultural Resources Laws

• Balancing Public vs. Monetary Benefits

• Unique Title and Infrastructure Concerns• Unique Title and Infrastructure Concerns

• Specialized Government Uses Not Easily Adaptable

Environmental ConsiderationsEnvironmental Considerations

• NEPA • Historic and Cultural • NEPA

• CERCLA

Historic and Cultural Resources

• Coastal Zone Management • USTs

• Coastal Zone Management Act

• Asbestos

• PCBs

• Floodplains

• WetlandsPCBs

• Lead-Based Paint • Endangered Species

Mutual Gains through a Public SaleMutual Gains through a Public Sale

• Restores tax base• Restores tax base

• Job creation

• Redevelopment opportunities

• Assists in cleanup efforts

• Keeps community out of chain of title• Keeps community out of chain of title

For More Information…

• Visit our Home Page:https://propertydisposal.gsa.gov

Vi it O li A ti Sit• Visit our On-line Auction Site:http://www.realestatesales.gov

Office Space Efficiency Initiative

March 28, 2012

About DCAS

About DCAS Asset Management

• Acts as the real estate arm of the City of New York, overseeing

City owned office buildings, court buildings and commercial

rental properties.

• Operates 55 office and court buildings totaling over 15 million

square feet.

• Negotiates and administers City leases of private property

portfolio of 22 million square feet.

• Administers a public auction program aimed at disposing of

surplus City properties to the highest bidder through sale or

lease auction.

• Advises City agencies in real estate matters, leading the City’s

drive to make the most effective and efficient use of the

property.

• Generates revenue through real estate sales, consolidating the

City’s occupied space, and improving building services for

tenants.

• Asset Management

• provides overall facilities management for 55

public buildings;

• purchases, sells and leases non-residential

real property

• Human Capital

• Supports City agencies’ workforce needs in

recruiting, hiring and training City employees

• Purchasing

• Purchases, inspects and distributes supplies

and equipment for City agencies

• Energy

• Establishes, audits and pays utility accounts

that serve more than 4,000 City buildings

• Implements energy conservation programs

throughout City facilities

• Fleet Management• Provides administrative, technical, and

functional support to promote efficiencies for

the citywide vehicle fleet

City of New York Office Space Reduction Initiative

Why office space?

• Mayor Bloomberg's 2010 State of City speech set a goal for

agencies to reduce office space by 1.2 Million and $36 Million

in annual expense.

• Office space has a clear metric of rsf per employee.

• Office space is the most expensive category of City agency

real estate.

City of New York Office Statistics

• 6.5 Million SF of Owned Office Buildings

• 12.5 Million SF of Leased Office Space

• Instituted mandatory open plan office space guidelines for new

office build-outs

• Reducing rsf/employee through increased use of collaborative

shared space and reducing storage

• Identified underutilization through vacant desks and high

RSF/employee and field verified

• Target underutilized space for terminating, downsizing and

relocating

How is NYC achieving office space

and cost reductions?

Where are we today?

• Reduced office space by 400,000 sf and

$14.75 Million in annual expense

• Open plan and VOIP are standard

• Use leasing for growth and where it

works for agency operations

• Retain owned buildings for uses that do

not change significantly

Where are we going?

• Continue to leverage City assets and tenancies for

greatest economic impact and cost savings

• Example: 210 Joralemon Street – Retail Condo

• Continue to reduce office portfolio – favor both energy

and space efficient buildings and design office space

for recruiting the next generation of municipal workers

• Example: 21st Century Civic Center Plan –

combination of renovation of owned buildings,

leasing of space and disposition of 3 buildings in

Lower Manhattan

• Create more shared resources and less duplication of

facility needs in large buildings

I’ll sell you the Brooklyn Bridge, if only I can get ULURP approval

Josh Gelfman, SVP Real Estate Transaction Services

What is EDC’s role in dispositions

What does EDC do?

Why not auction property?

When and how do we dispose of property?p p p y

NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION

Questions we ask along the project lifecycle

Stage What are we thinking about?

Pipeline Development How can we use our finite resources to maximize our economic development impact and align our work with p p gbroader policy initiatives of the City?

Site Marketing Who will want to respond to this RFP/RFEI? How do we reach them?

Negotiation/Selection

• How quickly and surely can each respondent deliver on their proposal?

• What are direct and indirect benefits?• What risks are we taking in this contract? • How specifically can we craft a project without

compromising land value?Entitlements/Authorization

How long will entitlement process take and what are risks of the public review process?Authorization of the public review process?

Closing How soon can we close?

Post-Closing Deed compliance (construction, use, and transfer)

NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION

Brooklyn Army TerminalBrooklyn Army Terminal

345 Adams

210 Joralemon Retail Project

NEW YORK CITY ECONOMIC DEVELOPMENT CORPORATION

MTA Real Estate: Creating Value for the MTA and itsCreating Value for the MTA and its 

Stakeholders 

Urban Land Institute PresentationMarch 28, 2012

MTA Real Estate

• MTA Real Estate is the real property asset manager for the entire MTA, which is an amalgam of historically independent operating agencies that includes NYC Transit, the Long Island Rail Road, Metro‐North, MTA Bus, and MTA Bridges & Tunnels. 

• The MTA’s territory spans from Poughkeepsie to Montauk to New Haven and• The MTA s territory spans from Poughkeepsie to Montauk to New Haven and encompasses 9 suburban counties as well as all 5 NYC boroughs.   

• MTA Real Estate has thousands of entries in its property database, including ROW segments, station buildings, retail shops, parking lots and garages, train yards, maintenance facilities, warehouses and office buildings.

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MTA Real Estate ‐‐ Objectives

• Amenities for customers

• Cost avoidance

• Recurring revenues from leases, licenses and concessions (> $200 million in 2011) to support the MTA’s operating budget

• Disposition of surplus property to support the MTA’s capital program

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Surplus Property

We continuously review our portfolio in an effort to identify surplus property suitable for disposition However:suitable for disposition.  However:

• Nearly all MTA‐controlled properties are needed for transportation‐related functions, and most surplus property has already been disposed of by the MTA or its predecessors.

• Overbuilds are challenging, and justified only at relatively high densities.

• Few MTA properties are suitably zoned for optimal as‐of‐right redevelopment.

• Much of the property used in MTA operations is leased from other government agencies, subject to reversionary interests and/or otherwise encumbered.

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Outright Dispositions(Example: Office Right‐Sizing)(Example: Office Right Sizing)

• Recent headcount reductions have enabled us to terminate 8 leases duringenabled us to terminate 8 leases during the past 2 years, reducing the rent we pay annually under office space leases by more than $5.5 million (12%).

• Now we’re implementing a plan –involving the re‐stacking and densification of our office building at 2 Broadway – thatof our office building at 2 Broadway  that will allow us to terminate additional leases and make our property at 341‐347 Madison available for redevelopment.

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Overbuilds(Example: West Side Yards)(Example: West Side Yards)

The MTA will receive rent with a present value in excess of $1 billion by leasing air rights parcels over LIRR’s West Side Yards.

T k hi d l ibl h MTATo make this development possible, the MTA:

• designed its rail yard to accommodate the columns that would be needed for a future overbuild.

k d ith th Cit t f ilit t th i f th• worked with the City to facilitate the re‐zoning of the Hudson Yards district for high density development, and sold a portion of its development rights to HYDC for transfer to other sites in the district.

• is extending the No. 7 subway line to a new station adjoining the West Side Yards development. 

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TOD on Surface Parking Lots(Example: Harrison)(Example: Harrison)

The MTA is evaluating its suburban parking lots for their potential to accommodate structured parking surrounded (and screened from view) by new mixed‐use development.

• Remedying existing shortages of commuter parking, without cost to the MTA, while freeing up land for transit‐friendly

TOD development objectives include:

freeing up land for transit friendly development.

• Creating enhanced commuter services and amenities.

• Integrating MTA stations into attractive mixed‐use developments of acceptable density.

bl f l f h d• Favorable fiscal impacts for the MTA and host communities.

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Net Leasing of Suburban Station Buildings(Example: Hartsdale)( p )

The MTA continues to convert under‐utilized historic station buildings to economically viable use through its net leasing program.  We are currently marketing 16 such properties for Metro‐North and the LIRR.

• Tenants make monthly lease payments to the MTA.

• The MTA retains non‐exclusive use of waiting areas and public bathrooms.

• Tenants assume responsibility for maintenance and, in some cases, capital replacementsreplacements.

• MTA customers benefit from tenants’ services.

A id i ifi i d• MTA avoids significant maintenance and property management expenses.

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Fulton Street Transit Center Master LeaseMaster Lease

The Fulton Street Transit Center will include more than 70,000 square feet of commercial space space.  An RFP for a master lease covering the entire building (including public circulation areas) will be issued shortlycirculation areas) will be issued shortly.

• Total project cost: $1.4 billion

• The complex will connect 11 transit• The complex will connect 11 transit lines and serve 300,000 MTA customers daily

• Project completion: 2014

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Questions?

Thank you to our gracious host