Relocating the Dana Point post office: What’s the point?

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The Postal Service has decided to relocate its postal facility in Dana Point, California.  The Postal Service currently owns a 20,000-square-foot building housing a retail post office and a carrier operation, but postal officials say they need only 11,000 square feet, so they want to sell the building and lease a smaller space.

Diana Alvarado, manager of property management for the Postal Service, says that downsizing the Dana Point facility would save the Postal Service $52,000 annually.  It’s hard to see how.

There’s a detailed description of the Dana Point deal on the USPS-CBRE “Properties for Sale” website right now (if it gets deleted, an archived version is here).  It says that the Dana Point facility is being offered for sale at $6.1 million.  The buyer must also submit an Alternative Quarters offer to provide space for the new facility. 

The new space must be at least 11,511 square feet.  The USPS will sign a 10-year lease with four 5-year renewal options at a rent of $19.50 per square foot.  The website indicates that buyers “are welcome to submit their own ‘market’ rental rate,” so presumably the Postal Service would be willing to pay a bit more.  The terms of the lease include a 2.5% annual increase in the rent.

In the first year of the lease, then, the Postal Service would pay $224,465.  By 2043, those 2.5% annual increases would bring the rent to double that amount.  The total rent paid out over the 30 years of the lease would be $9.8 million.

The Postal Service thus hopes to sell the building for $6.1 million, and it’s ready to pay out $9.8 million in lease costs.  How does that save $52,000 annually? 

If the estimate is somehow correct, the total savings over 30 years would come to $1.6 million.  As an alternative to selling the facility, the Postal Service could subdivide the space and rent out the extra 9,000 square feet.  If it were able to rent the excess space at the $19.50/sf (plus 2.5% annual increases) that it's prepared to pay for a new space, the Postal Service could generate over $7.7 million in revenue over 30 years (minus renovation costs).  

It's hard to see how the relocation deal makes sense for the Postal Service.  As every homeowner knows, renting may be cheaper in the short run, but owning is a better deal over the long term, especially if the owner also has an opportunity to bring in some rental income as well.  

In any case, one entity that is sure to come out ahead on the Dana Point deal is CBRE, the Postal Service’s exclusive real estate broker.  It may make a commission on selling the building and arranging the new lease. 

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Will sale of postal buildings benefit senator? The fact checking continues

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A few weeks ago FactCheck.org examined a blog post that's gone viral accusing Richard Blum, chairman of the board of CBRE, and his wife Senator Dianne Feinstein of profiting off the sale of post offices.  Now the website Fact Checker takes another look.  

As this article points out, selling post offices is not likely to enrich the already quite wealthy Mr. Blum and his wife very much — CBRE just earns a commission of a few percent on each sale, the USPS contract represents a tiny portion of CBRE's revenues, and Mr. Blum takes in a very small percent of CBRE's overall profits.  

But it is still unseemly — and that's putting it mildly — for Mr. Blum and his wife to be profiting in any way off the dismantling of the country's rich legacy of historic post office buildings.  The Senator should be calling upon the Postal Service to be stewards of this legacy, and she should be pushing for legislation that will stop the fire sale.  Read more.

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Smith introduces bill seeking to limit rural post office closures

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A bipartisan bill that intended to ensure that rural post offices are not inappropriately targeted for closures has been introduced by Reps. Adrian Smith, R-Neb., and Mike McIntyre, D-N.C.  H.R. 2615, the Securing Access to Rural Postal Services Act, would cap rural closures and consolidations at 5 percent of total closures in any given year.  Read more.

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Roans Prairie CPO to close because postmaster retires

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The Roans Prairie's post office will forever close and lock the squeaky door customers have walked through for years.  U.S. Postal officials say the Roans Prairie facility is a Community Post Office that's run by a contract employee and since CPO's no longer exist, now that Lois Koenig, he postmaster is retiring, they will no longer staff the facility.  (There are over 400 CPOs, so it's anyone's guess where the notion that they no longer exist comes from.)  Read more.

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Paradise Screwed: The Fernandina Beach post office to close August 10th

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The Postal Service has announced that the historic Fernandina Beach post office on Amelia Island, Florida, will be closing on August 10.  It’s one of the country’s most beautiful small-town post offices, and the closure and subsequent sale of the building will be a real loss to the community.

Built in 1911 in the Italian Revival style, the Fernandina Beach post office was named one of the state’s most endangered sites in 2009 by the Florida Trust for Historic Preservation.  It’s an anchor building in the historic district of a beautiful small town that Coastal Living chose as one of the top ten “best little beach towns” in the USA.

In recent years the Postal Service allowed the building to fall into in disrepair.  In September 2011, Senator Bill Nelson stopped by for a visit as part of the city’s effort to see it restored.  That effort was unsuccessful, however, and a couple of months later the Postal Service announced plans to close the post office.  Then in December 2011 the Postmaster General declared a temporary moratorium on closings, and plans to close the post office and sell the building were shelved.

Now the Postal Service says it wants to sell the building for its appraised value, and it's conducted a discontinuance study to close the office.  The closure will happen on August 10, but it could be delayed for a few months if someone files an appeal with the Postal Regulatory Commission.  

At this point the Fernandina Beach post office seems destined to become something other than a post office.  Maybe some real estate tycoon will turn it into an office building, like in Palm Beach.  It’s a story Carl Hiaasen may tell one day.

(Photo credit: Fernandina Beach post office)

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Historic Norristown PA post office to be sold

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The U.S. Postal Service has announced plans to sell the Norristown Post Office at 28 E. Airy St. and relocate the retail services to a nearby building. The post office was built in 1940 under the New Deal, and it’s a landmark in downtown Norristown, but the opportunity for the public to comment will be limited.  Since it’s a “relocation” decision, the Postal Service will simply make a presentation at a regular city council meeting, on July 16, and that will be that.  Read more.  (Photo credit: Evan Kalish)

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