@StateDept’s Deferred Maintenance Backlog For Overseas Properties Estimated at $3Billion

 

The GAO recently released its review of the State Department’s overseas real property assets:
State’s Bureau of Overseas Buildings Operations operates and maintains over 8,500 owned and leased real property assets, including both buildings and structures. According to State, at least 60 percent of a building’s total lifecycle cost stems from operations and maintenance costs. GAO has reported that deferring maintenance and repairs can lead to higher costs in the long term and pose risks to agencies’ missions.
GAO was asked to review State’s efforts to manage its operations and maintenance needs. This report examines (1) how operations and maintenance funding for overseas assets changed from fiscal years 2016 through 2020, (2) the condition and maintenance needs of State’s overseas assets, and (3) the extent to which State has followed leading practices to address its deferred maintenance backlog.
Officials said they had not found it necessary to specifically request such funding because they only determined that the backlog had substantially increased from $96 million in fiscal year 2019 to $3 billion in fiscal year 2020 after using a new methodology for estimating deferred maintenance and repair. In addition, State does not have a plan to address the backlog, but officials estimated it could take 30 to 40 years to eliminate the backlog with current funding levels.
Dear, lord! What is this going to be like by 2050?

Excerpts from the report:

Assets/Operations Up, Maintenance Funding Nearly Unchanged

–The Department of State’s portfolio of overseas assets and expenditures to operate them have grown, but State-allocated funding for maintenance has stayed nearly the same. For fiscal years 2015 through 2019, both the number and square footage of State’s assets increased 11 percent and operations expenditures grew 24 percent. However, maintenance and repair funding has remained nearly unchanged.

— State’s allocation for Maintenance Cost Sharing—for projects collectively funded by State and tenant agencies overseas—was $399 million in fiscal year 2016 and $400 million in 2020.

From fiscal years 2016 through 2020, building operating expenditures for State and other agencies that work at overseas assets increased by 24
percent, from $530 million to $656 million annually. State’s allocated funding for maintenance and repairs for overseas assets has remained about the same in recent years, averaging $505 million from fiscal years 2016 through 2020.

That $3 Billion Could be Higher

— State set a single acceptable condition standard of “fair” for all assets and did not consider whether some assets, like chancery office buildings, were more critical to State’s mission when estimating its $3 billion deferred maintenance backlog. Had State set a higher condition standard for critical assets, its backlog would be higher.

It All Adds Up Over Time

Older chancery office buildings tend to be in poor condition and are a challenge to maintain. As shown earlier in table 4, we found that 72 of
216 (or 33 percent) chancery buildings—that OBO identifies as mission
condition due to a large amount of deferred maintenance that has built up
over time.

Ambassadorial Residences Take Note

In discussing the condition of ambassadorial residences with State, OBO officials said they have taken steps to evaluate and rank State’s
ambassadorial residences that are in need of major rehabs. OBO officials told us that State has preliminarily identified the need to rehabilitate or
replace ambassadors’ residences in Beijing, China; Kathmandu, Nepal; Nairobi, Kenya; Ottawa, Canada; Paris, France; Sarajevo, Bosnia and
Herzegovina; and Tegucigalpa, Honduras. However, OBO officials said there is no formal schedule for rehabilitating ambassadorial residences
because there is no predictable annual funding for rehabilitating State-only occupied assets.

More than a Quarter of Properties in “Poor Condition”

— More than a quarter of the State Department’s overseas buildings and other real properties are in poor condition by State’s condition standards, including almost 400 buildings and other assets that State considers critical to its mission.

FY21 $100 Million Request: Specific But Not Really

According to OBO officials, they outlined specific funding requested for maintenance and repair, including minor construction and improvement, in an appendix to State’s congressional budget requests. State’s fiscal year 2021 budget requested $100 million to address DM&R for State’s non–cost shared facilities. However, OBO officials noted that this funding was for the minor construction and improvement program (or modernization
budget), which does not specifically address the DM&R backlog.

GAO made five recommendations to the State Department:

The Secretary of State should ensure that that the Director of OBO reassess State’s acceptable condition standard for all asset types and
mission dependencies, to include whether mission criticality justifies a different standard among assets. (Recommendation 1)

The Secretary of State should ensure that the Director of OBO incorporates the mission criticality of its assets when deciding how to target maintenance and repair investments. (Recommendation 2)

The Secretary of State should ensure that the Director of OBO monitors posts’ completion of annual condition assessments that use a standardized inspection methodology, so that State has complete and consistent data to address its deferred maintenance and repair backlog. (Recommendation 3)

The Secretary of State should ensure that the Director of OBO develops a plan to address State’s deferred maintenance and repair backlog, and specifically identifies the funding and time frames needed to reduce it in congressional budget requests, related reports to decision makers, or
both. (Recommendation 4)

The Secretary of State should ensure that the Director of OBO employs models for predicting the outcome of investments, analyzing tradeoffs,
and optimizing among competing investments. (Recommendation 5)

 

Click to access gao-21-497.pdf

Hôtel Rothschild: The Ambassador’s Residence Built by a Child Bride With a Story Worthy of An Opera

Posted: 3:15 am ET
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The Hôtel Rothschild (also known as the Hôtel de Pontalba) the American Ambassador’s residence in Paris is one of the thirty-three properties in the Secretary of State’s Register of Culturally Significant Property. The Register founded in 2000 as a White House Millennium Project, is similar to the National Register of Historic Places that is maintained by the Secretary of the Interior for domestic U.S. properties. It is an honorific listing of important diplomatic overseas architecture and property that figure prominently in our country’s international heritage.  The residence was built by an American, Micaela Almonester Pontalba whose life is the subject of Thea Musgrave‘s 2003 opera, Pontalba: a Louisiana Legacy which is based on Christina Vella’s biography of Micaela, Intimate Enemies: The Two Worlds of the Baroness Pontalba.

hotel-rothschild-paris-france

Below via State/OBO:

No stronger tie between the U.S. and France exists than the U.S. Ambassador’s residence at No. 41 rue du Faubourg Saint-Honoré, built by an American, Micaela Almonester Pontalba, who was born in New Orleans in 1795. An arranged marriage for a merger of fortunes brought her to France at sixteen years of age. Separated in 1831, but loving Paris, she bought on this site in 1836 one of the most famous d’Aguesseau houses in the city. After a visit to New Orleans, the newly-divorced baroness returned to Paris in 1838, demolished the house, and commissioned the architect Visconti to design a new one for the site. In 1845 she returned to New Orleans, where she built two monumental blocks of houses surrounding the church her father, Don Andres Almonester y Roxas, had funded on the now famous Jackson Square. Her monogram “AP,” designed by her youngest son Gaston, is still prominent on the wrought iron balustrades of the city’s most celebrated landmarks.

Baroness Pontalba returned to Paris and built the residence between 1852 and 1855. In her quest for grandeur she bought the state­ ly home of the Havré family and installed its treasures in her new home. Among the most famous of these were the chinoiserie pan­ els in one room that became the talk of Paris. The nineteenth century facade is defined by the famous local buff limestone, a slate mansard roof with dormers, and œil de bœuf lunettes. Her former husband, who had suffered a physical and mental breakdown, was waiting for her when she returned from New Orleans and asked her to take over and manage his affairs, which she did until her death in 1874. According to the Baroness’ wishes, the residence passed to her sons to provide pensions for her grandchildren.

In 1876 the Pontalba sons sold the residence to Edmond de Rothschild, one of the brothers managing the famous Rothschild family banking empire. With architect Félix Langlais, the facade was remodeled, roofline raised, and wings extended. The basic original floor plan was maintained and remains today as the entry hall, along with three salons that were adjusted in size but still overlook an expansive garden, one of the largest in Paris. In the main salon, now known as the Samuel Bernard Salon, Rothschild installed intricately carved paneling from the Left Bank home of Jacques-Samuel Bernard.

In 1934 Maurice de Rothschild inherited the residence from his father Edmond, who had sent many of its valuable items to his son James, owner of the palatial Waddesdon Manor in England. World War II disrupted the elder Rothschild’s ambitious renovation projects for the residence. The family fled Paris as the Nazis moved in, and Hermann Göring used the mansion for his Luftwaffe
offi­cers’ club. The residence was never again to be a strictly private home. After the war, the Allies rented it for three years, and in 1948 the United States purchased No. 41 for the U.S Information Services, USIS. The residence became one of the buildings occupied by individuals working on the Marshall Plan as Averell Harriman began this important endeavor. Prior to this purchase many of the valuable panels in the rooms and other architectural elements had been removed by Maurice Rothschild.

And here you go, the chief of mission residence (CMR) dressed up during various occasions:

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Snapshot: State Dept Overseas Real Property Acquisitions & Disposals (FY2008-2013)

— Domani Spero
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 Via GAO

Our analysis of State’s real property portfolio indicated that the overall inventory has increased. State reported its leased properties, which make up approximately 75 percent of the inventory, increased from approximately 12,000 to 14,000 between 2008 and 2013. However, comparing the total number of owned properties between years can be misleading because State’s method of counting these properties has been evolving over the past several years. OBO officials explained that in response to changes in OMB’s and FRPP’s reporting guidance, they have made efforts to count properties more precisely. For example, OBO has focused on separately capturing structural assets previously recorded as part of another building asset, such as perimeter walls, guard booths, and other ancillary structures. As a result of this effort, State recorded approximately 650 additional structural assets in its fiscal year 2012 FRPP report and approximately 900 more structures the following year in its fiscal year 2013 FRPP report, according to OBO officials.

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Acquisitions: State reported spending more than $600 million to acquire nearly 300 properties from fiscal year 2008 through 2013 (see fig.1).11 State uses two sources of funding to acquire real property. It acquires land for building new embassy compounds (NEC) with funding from the CSCS program. It acquires residences, offices, and other functional facilities with proceeds from the disposal of unneeded property. In fiscal years 2008 through 2013, State reported spending approximately $400 million of these disposal proceeds to acquire approximately 230 properties.

Disposals: From fiscal years 2008 through 2013, State reported selling approximately 170 properties. In doing so, it received approximately $695 million in proceeds (see fig.1). According to State, property vacated when personnel move into newly constructed facilities is the largest source of property that can be disposed of. When State completes construction of a NEC, personnel previously working in different facilities at multiple locations are then collocated into the same NEC, a move that provides State an opportunity to dispose of its former facilities. Further information on State’s acquisitions and disposals from fiscal year 2008 through 2013, can be found in figures 1 and 2 below.

Leases: The majority of State’s leased properties are residences. State reported spending approximately $500 million on leases in 2013 and projects a potential increase to approximately $550 million by 2016 as growing populations in urban centers around the world push rental costs higher and the U.S. government’s overseas presence increases.

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