What are the USPS and CBRE up to? The case of the historic structure report on the Berkeley Post Office

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The fire sale of the country’s post offices seems to be picking up speed.  Yesterday the Postal Service confirmed that it was in contract with a buyer for the 1858 post office in Georgetown, a historic neighborhood in Washington, DC.

The sale of the New Deal post office in the Bronx, New York, also appears to be moving forward with alacrity.  The announcement of a possible sale came at the end of January, and already the public comment period has closed.  There are rumors a buyer is waiting in the wings.

According to the USPS-CBRE Properties for Sale website, many sales are nearly completed.  The 1916 post office in Stamford, Connecticut, the 1934 post office in Saint Paul, Minnesota, the 1940 post office in York, Pennsylvania, and the 1941 post office in Flemington, New Jersey, are all “in contract.”  Two others — the 1934 post office in Somerville, Massachusetts and the 1935 post office in Villa Park, Illinois, are described as “negotiating.  The 1936 post office in Plymouth, Michigan has apparently been sold as well.

The process is also moving ahead to sell the 1914 post office in Berkeley, California.  Recognizing the national scope of the sell-off, Berkeley Mayor Tom Bates has written to 54 mayors across the country asking for their help in fighting what he calls “the privatization of our publicly funded buildings.”

Transparency problems are a big issue in these sales.  In last week’s New York Times’ article about the sell-off, Chris Morris, a senior field officer for the National Trust and project manager for post office buildings, told the Times, “Our biggest concern is the way they’re going about it isn’t transparent….  A lot of us are very confused about the process.”

There’s no indication, for example, that a public bidding process is taking place.  When the Postal Service sells a post office, the public only learns of the buyer’s identity and the sale price after the deal is done.  Everything takes place behind the scenes.

Other federal agencies are much more transparent.  For instance, in 2011, when the General Services Administration sold the historic post office in Modesto, California, the bidding process was open to the public, and one could see the latest bid on the GSA auction site.

It’s not even clear what role the Postal Service’s exclusive real estate broker, CBRE, plays in these transactions. In one news article about the Berkeley post office, the Postal Service and CBRE told the reporter that “when CBRE handles the transactions, it does not advise the Postal Service which facilities to put on the market.”  But another article says that CBRE does advise the Postal Service on “which properties should be sold.”  Dismissing any possible conflict of interest CBRE may have in performing its services, a USPS spokesperson said, “They’re just giving advice, it’s up to us if we want to take it.”

Berkeley city officials have also had difficulty getting information from the Postal Service about the sale.  When asked, for example, what the appraised value of the post office is, the Postal Service refused to divulge the information on the grounds that it was “proprietary.”  The city has been forced to file a request for relevant documents under the Freedom of Information Act (FOIA).

A couple of weeks ago, the Postal Service responded to the FOIA request by sharing several documents with the city.  One of them raises some rather disturbing questions.

 

Customer input welcome

According to federal regulations, when the Postal Service wants to “relocate” a post office — which is how the closure of these historic post offices is being characterized — it must hold a public meeting.  In early February, the Postal Service sent a letter to Berkeley customers informing them that a meeting would be held on February 28.  It begins by saying that the USPS is “proposing the relocation” of the Berkeley post office, and it proceeds to say, “Customer input on this proposed relocation is welcome.”

As reported in the Berkleyside, at the meeting Augustine Ruiz (a USPS communications specialist) and Diana Alvarado (a USPS real estate specialist) gave a presentation about the process that the Postal Service must go through before it comes to a final decision on the sale.

The steps include : Inform city officials of the proposal, hold a public meeting, and open a comment period.  Then local USPS officials make a recommendation to executives in postal headquarters in D.C., and then they make a final decision.  The Postal Service then informs the community of its decision, and the community is given an opportunity to appeal.  At some point (exactly when is a matter of contention), the Postal Service must also go through the steps outlined in Section 106 of the National Environmental Policy Act (NEPA).

At the meeting, the Postal Service representatives explained that no final decision on the sale had yet been made, and Ms. Alvarado noted that in at least a couple of cases (Huntington Beach and Menlo Park), management decided not to go through with the sale after listening to public comments.

Despite these reassurances that the plan to sell the Berkeley post office is a “proposal,” “customer input” is welcome, and no final decision has been made, it looks as though the sale may already be a done deal.

In a letter to the California Native American Commission dated December 8, 2012, a consulting company hired by the Postal Service and CBRE stated the following:

“In accordance with the procedures set forth at 39 C.F.R 241.4, the United States Postal Service is relocating the retail services from the Berkeley Main Post Office on Allston Way….  The Postal Service intends to dispose of (sell) the Main Post Office building and the land upon which the building is located.”

That certainly doesn’t sound as if the plan to sell the Berkeley post office is merely a proposal being reviewed.  Perhaps the consultant didn’t understand that the Postal Service couldn’t make a final decision on the relocation and sale until the process had played out — or perhaps, as suggested in the letter, she was led to believe a decision had already been made.

The letter appears in a “historic structure report” about the building that was commissioned by the Postal Service back in October (if not earlier) and that was completed in January.  The Postal Service shared this report with the city of Berkeley in response to that FOIA request mentioned above, just a few days before the February 28 meeting.

The existence of the report, along with an extensive environmental report done last September, was not discussed at the public hearing.  Perhaps the Postal Service’s spokespersons didn’t know about it, or maybe they just didn’t want to talk about it.

 

Complex world, clear solutions

The structure report, which is based on a site visit that took place in October 2012, provides information about the historic character of the building, its architectural significance, its condition, the “area of potential effect” for future undertakings, and so on.  It’s pretty extensive, running to 35 pages (not counting the appendices), with many photos and detailed architectural descriptions.

According to the report, the Berkeley post office building “retains a high degree of historic integrity, its materials are well preserved, and it is in excellent condition on both the interior and the exterior.”

The report was prepared by a company called Tetra Tech.  According to its website, Tetra Tech is “a leading provider of consulting, engineering, and technical services worldwide.”  It’s “a diverse company” with expertise in a variety of fields, like engineering, construction, and data management, in everything from nuclear energy to wastewater treatment.

Tetra Tech has apparently done some work on studying historic resources before.  It once did a Historic Architecture Reconnaissance Survey for a wind energy project in Kansas, where there were a few historic farm buildings to consider.  It also did a report on a property in Los Angeles where an elementary school was planned.

Neither of those projects involved evaluating a significant historic structure like the Berkeley post office, however.  An Internet search turns up no other historic architecture reports done by Tetra Tech.  A search of the social networking site LinkedIn produces nearly 9,000 current and past Tetra Tech employees, and of these, about 150 are architects, but only two are architectural historians.

There’s nothing about historic architecture on the Tetra Tech website.  A page entitled “Architecture” describes projects involving a bridge in Massachusetts, a “force protection” structure in Iraq, quarters for enlisted men at a Naval station in Washington, and embassy housing in Baghdad, but nothing related to historic buildings.  Tetra Tech’s 10-K financial statement describes the company’s wide range of services, but there’s nothing about historic architecture.  Tetra Tech has a subsidiary called Tetra Tech Architects & Engineers, a design and building firm, but there’s no mention on its website about doing work on assessing the architectural significance or condition of historic buildings.

Tetra Tech, in other words, does not do a lot of work evaluating historic buildings.  The Berkeley report may be one of the only studies it has ever done like this.

It’s not as if there’s a shortage of consulting firms in California that do historic building reports.  The list would include Architectural Resources Group; JRP Historical Consulting; Ver Planck Historic Preservation Consulting; Circa Historic Properties Development; and Past Consultants, just to name a few.  These companies all have a lot more experience doing this kind of work than Tetra Tech.

Another person the Postal Service might have called upon is Michael Corbett, the architectural historian who was hired by the city of San Francisco to do research on the Tenderloin District for the city’s application to the National Register.  He’s been writing about the city’s architectural history since 1973, and he has a couple of books on the subject.

With all the companies and scholars with expertise in evaluating the architecture of historic structures, one has to ask: Why did CBRE and the Postal Service hire Tetra Tech for this particular job?

 

The Blum Connection

The answer to that question may have something to do with the fact that CBRE’s chairman, Richard Blum, has been involved with Tetra Tech for over a decade.  For a while, he owned a large part of a company that partnered with Tetra Tech on major projects in Iraq and Afghanistan.

In 2003, the U.S. Army Corps of Engineers awarded a contract to a company named Perini (now Tutor Perini) to provide goods and services to the U.S. Central Command in Afghanistan.  The contract was eventually worth $500 million.

At the time, Mr. Blum was the principal shareholder of Perini, co-owning 75% of its voting shares.   Because Mr. Blum’s wife is Senator Dianne Feinstein, making profits off the wars in the Middle East gave rise to charges of a conflict of interest.  Apparently, at least partly as a result of these accusations, Mr. Blum divested ownership of Perini in 2005, and Senator Feinstein left the Senate Military Appropriations Subcommittee in 2007.

Tetra Tech was one of the main companies to which Perini subcontracted out work on the Iraq and Afghanistan jobs.  In fact, there are many references in this context to the “Perini/Tetra Tech Team.”  Their work together continues, and last year Perini and Tetra Tech won another contract with the Army Corps of Engineers to help with reconstruction in Iraq, this one for $55 million to build “overhead ballistic covers” to protect U.S. government personnel.

While we’re on the subject, it may be worth noting that a government report issued last week by the Special Inspector General for Iraq Reconstruction revealed that of the $60 billion the U.S. government has spent on rebuilding Iraq, at least $8 billion went wasted.  Included in the report is a reference to the $500 million that went to Perini for work on rebuilding the electricity system in Iraq.

There’s more to the CBRE-Tetra Tech connection.  For example, in 2010, CBRE, working on behalf of the FDIC, hired Tetra Tech to do an environmental assessment for a site in Florida where there were hazardous wastes to deal with.  Tetra Tech is also a tenant in several properties owned or managed by CBRE — in Perington, New York; San Bernardino, California; Tulsa, Oklahoma; Miami, Florida, and Fairfax, Virginia.

 

A few questions

The fact that Tetra Tech is not known for its expertise on architectural history does not mean that the structure report on the Berkeley post office is shoddy.  It was prepared by two historians with MA degrees, and it looks to be a solid enough piece of work, with excellent photographs and lots of details.

The problem is that the Postal Service and CBRE hired a company with which Mr. Blum has a history.  His connection to the Perini/Tetra Tech contracts in Iraq and Afghanistan raised conflict-of-interest issues, and CBRE leases space to Tetra Tech in several cities.  There are certainly many architectural consultants in California who have at least as much expertise and experience as the Tetra Tech staff, without all the baggage.

All of which raises a number of questions.  Why did the Postal Service and CBRE choose Tetra Tech for this project?  Was there any sort of open bidding process for the contract?  Given Mr. Blum’s connections with Tetra Tech, was there not at least the appearance of a conflict of interest in the choice?  What is the ultimate purpose of the structure study, anyway?  Will its findings affect the Postal Service’s decision to sell the post office?  Will the report help determine the selling price for the building, off of which CBRE will undoubtedly earn a nice commission?

Perhaps we will eventually learn the answer to such questions, or perhaps the process will continue to lack transparency.  We’ll soon see.

Whatever happens, one thing seems clear enough.  Mr. Blum is a master of disaster capitalism.  Not only has he managed to make money off the wars in Iraq and Afghanistan, he’s also taken advantage of crises here at home.  In 2009, CBRE secured a con­tract from the California Department of General Services to sell off $2 billion in office buildings the state wanted to privatize to help pay off its massive debt.   (Fortunately, that deal was soon scuttled.)

Now with the Postal Service in financial trouble, Mr. Blum is profiting off the privatization of the country’s post offices.  And that’s how he’ll be remembered in the history books about what happened to the United States Postal Service.

[Photo credits: Berkeley PO post cardBerkeley meeting (Tracey Taylor);Tetra Tech; PeriniCBRE Cares]
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