John Ransom
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Just a few blocks away from Nationals Park the federal government holds a below-market lease at 2100 2nd Street, SW, Washington D.C.

The 600,000 square foot lease doesn’t expire until May 15, 2018 and is valued at least $48 million in rent and likely represents another $40 million in savings below market rates for commercial real estate.

But, in a time of tight budgets, when taxes have been raised on all Americans to support Washington’s addiction to spending, bureaucrats at the General Services Administration (GSA) have decided to…wait… abandon the cost-effective space, move the employees to a new, higher rent building and pay rent on the vacated building; at the cost to taxpayers of at least $250 million according to sources familiar with the terms of the lease.

And we wonder why the government has such a tough time cutting their budget while having such an easy cutting our household budgets through taxes?  

Sources close to Capitol Hill, however, say there is growing outrage over this specific illustration of the waste of more than $250 million taxpayer dollars.

“The GSA is making a major mistake by neglecting to take advantage of existing below market lease rates for an extended term. It is outrageous that they simply seem to be ignoring a significant cost savings to the taxpayer,” said a source close to Congress. “This is a time we all need to be exercising prudent fiscal responsibility, a basic responsibility of the GSA. They have dropped the ball and had better pick it up soon”.

I guess that’s the reason why the GSA has suddenly gone all “Eric Holder” on Congress, testifying to the House subcommittee responsible for the oversight of federal real estate that the broken lease won’t cost taxpayers a dime, when in fact the opposite seems true. 

From the Washington Business Journal:

The federal government will be on the hook for at least $30 million in lease payments for the Coast Guard's current Buzzard Point headquarters after the agency moves to St. Elizabeths later this year, according to sources familiar with terms of the agency's lease with Monday Properties Inc.

That would contradict congressional testimony from Dorothy Robyn, public buildings service commissioner for the General Services Administration, who told a House subcommittee May 22 that the federal government has an early termination clause with Monday and will not owe any rent.

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John Ransom

John Ransom is the Finance Editor for Townhall Finance.