Uncle Sam, Friendly Dinosaur

If the Clinton administration really wants to bolster thenation's hard-pressed inner cities, it should take a hard look at the federal government's master office-builder: the General Services Administration.

The GSA, deciding it's cheaper in the long run to build rather than lease office space, has launched a gargantuan building program. At a cost of $11.4 billion, the agency expects to throw up office buildings with 23 million new square feet of space by the late 1990s.


"You've got this dinosaur clomping across the land with big economic impacts. It's a friendly dinosaur, but it's under so many pressures its brain may not be large enough to avert some horrendous mistakes," says Richard Bradley, director of the International Downtown Association.

The economic stakes are immense. With commercial development at a virtual standstill in most cities because of recession and overbuilding in the '80s, Uncle Sam is emerging as the builder with the deepest pockets, "really the only game in town," notes Mr. Bradley, whose association focuses on center-city development issues.


The GSA figures it could save billions over the long haul by owning more and leasing less.

In some places, that policy may simply fleece the taxpayers. Take Philadelphia, where there's now an 18 percent vacancy rate and 6 million square feet that could be bought or rented at bargain-basement prices. The government seems intent on building a 1-million-square-foot office tower for $250 million.

"It's blatantly stupid to build in this market," said Peter Linneman of the University of Pennsylvania's Wharton School Real Estate Center.

But the project has a patron, Republican Sen. Arlen Specter, whose backing of the building helped him win trade-union support in his close re-election race last fall.

In Atlanta, the GSA is pushing forward with a 1.9-million-square-foot federal center even though it would empty many existing buildings of government workers that the downtown vacancy rate could move from 30 to 34 percent.

Elsewhere, the issue is not whether the feds will build new structures but where: in center city or the suburbs. An executive order by President Carter directed that when cost and other locational factors are about equal, preference should go to center cities. The Reagan and Bush administrations never revoked the order, but never gave it much attention.

The proposed $126 million headquarters for the Health Care Financing Administration, the agency that runs Medicare and Medicaid, aroused heated controversy in Baltimore. At stake are over 3,000 jobs plus the biggest construction project on the local horizon.

The city proposed a 21-story building next to Oriole Park at Camden Yards. The site is served by light rail and over a dozen bus lines, and is close by where the city is trying to build a medical trade-mart. The city also offered 1,000 free parking spaces and free heat.


A Baltimore County development team countered with a 57-acre campus-like development, parking for 3,000 cars -- and virtually no mass-transit connection. The county bid was $16 million below the city's, though over 30 years the free heat and other incentives would have made the downtown site cheaper.

Lobbied heavily by the suburban-oriented Rep. Helen Bentley, the GSA disregarded the Carter executive order and picked the suburban site last August. Mayor Schmoke said he'd ask the Clinton administration to review the deal, and legal challenges were pending. But in a midnight move, the Bush administration hurriedly bought the suburban land and signed the construction contract.

It may or may not be too late for the Clintonites to reverse the Baltimore decision. But the issue will return again and again: Why build in the suburbs when our nation's cities are bleeding, the specter of more Los Angeleses hangs over us, and urban poverty casts a menacing shadow across our national future?

The thought in the GSA is that urban costs are substantially higher and that, in an age of faxes and easy telecommunications, government offices can go practically anywhere. There are even proposals that the GSA get localities into bidding wars so the federal government could get the lowest price.

Such short-sightedness, as if the federal government were another footloose corporation out to capture cheap labor and milk public treasuries, is appalling. It disregards the immense national social costs of leaving poor city people bereft of employment.

During the 1990s the number of Americans driving alone to work soared 22 million, or 35 percent. Egregious sprawl, air pollution, traffic congestion, dependence on foreign oil are the price. Washington should be fighting those trends, not abetting them. Of course there should be no blank check for federal offices in cities: Mayors and downtown associations, should work early and hard to keep city sites competitive, as Baltimore has.


But once that's done, Mr. Clinton's best policy is summed up by Robert Embry, a former Carter administration official who helped draft the 1978 executive order. "It's easy," he says. "The new administration should build government buildings in the cities."

Neal R. Peirce writes a column on state and urban affairs.