Where’s the emergency? Suspended post offices in 2011 & a list of leases ending soon

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There’s a moratorium on closing post offices until May 15, but it doesn’t apply to “emergency suspensions,” as we learned at a meeting of the Postal Regulatory Commission earlier this week. That means any post office with a lease expiring soon is in danger, and there are 1,400 of them with leases that end during the moratorium.  A list is here.

An emergency suspension occurs when the Postal Service temporarily closes a post office — often with little or no notice to the community — for emergencies like the postmaster gets sick and there’s no replacement available, or the building is unsafe due to heavy snowfall or a tornado. 

But sometimes the emergency doesn’t seem like an “emergency” at all — it’s just a dispute over a lease renewal.  The Postal Service knows long in advance when a lease will expire, so there should be plenty of time to work out a new agreement or find a new location.  It’s rarely an emergency situation, but sometimes the Postal Service turns it into one.  And sometimes a “temporary” suspension can go on for years. 

The Postal Service often manufactures an emergency by making demands on the property owner that are just too hard to swallow — like insisting on a rent reduction or an early-out clause that gives the Postal Service the right to terminate the lease with 90-days’ notice, or like telling the owner to take over responsibility for maintenance work that the Postal Service had been doing.  When the owner and Postal Service can’t come to an agreement, the Postal Service declares an “emergency suspension” and the post office closes.

These days, with the Postal Service looking for any reason it can find to close facilities, a post office with a lease expiring is in imminent danger of an emergency suspension.  Some 4,500 post offices have leases that expire in 2012, and about 1,400 of them have leases that expire between January 1 and May 15, 2012, the day the moratorium ends. 

The issue of emergency suspensions came up this week at a meeting of the Postal Regulatory Commission, which has an open docket on an investigation into the practice of suspending post offices over lease issues.  That investigation began a couple of years ago, but it looks as if it stalled out because of the PRC’s other pressing business — Advisory Opinions, appeals cases, compliance reports, and all the rest.  Or perhaps because the Commissioners believe the abuses have ended.

At the meeting on Wednesday, PRC Chairman Ruth Goldway made the following comments during a discussion of the scope of the moratorium on closings: “Just for clarification, there have been a couple of small articles I’ve read recently on post office suspensions involving leases that were expired. . . .  If a post office is suspended,” she asked the PRC’s General Counsel, “do citizens have a right to appeal to us?” 

The PRC attorney said no, the statute applies only to closures, and he reminded the Chairman of “concern that suspensions were being maintained for an inordinately long period of time which amounted to a de facto closing, and we’ve had review work done in that area, but when a suspension occurs just because the lease expires, customers cannot appeal that action to us.” 

Goldway then commented, “So there are some post offices that are closing even within this moratorium, but to the best of my knowledge they are ones that involve issues where the Postal Service has been in negotiations and there are just disputes between the landlord and the Postal Service — legitimate disputes about lease terms — and as a result on occasion a post office does close.  But they are no longer using suspensions as a de facto cover for post office closings, as they admitted in some ways were the case because they admitted to us that there was a backlog of 400 or so suspended post offices that they were officially closing in their records that we haven’t received appeals on.  They’ve been at least more honest and straightforward and systematic about reporting their decisions on post office closings, so that’s useful. (Comments at about 32 minutes into the podcast).

The Chairman’s comments suggest that concern over the emergency suspensions has diminished because the Postal Service has become more “honest and straightforward.”  There’s reason to believe, however, that the Postal Service is continuing to manufacture emergencies and to close post offices without due process.  Several post offices closed in 2011 over dubious lease issues, and it looks like some will be suspended during the moratorium as well. 

 

Suspensions in 2011

About thirty post offices have been suspended since the beginning of 2011, and at least eleven of them were over lease problems. [CORRECTION; On Feb. 3, 2012, the Postal Service gave the PRC a list of post offices suspended since Jan. 1, 2011, and it contains 213 post offices.  Most of them involved floods and storms and were subsequently reopened.  Here’s the list of the suspended post offices,]

Here are a few details about some of those that were suspended because of lease issues:

The post office in Mineral Ridge, Ohio was suspended on March 25, 2011, over a lease dispute.  According to a local news report, the Postal Service says it tried to “reach out” to the owner in July 2009, but didn’t get a response until January 2010; the landlord rejected that offer, says the Postal Service, and didn’t make a counteroffer until October.   The owner says different.  He says, "We were never in negotiations.”  He sent the Postal Service a lease with a rent increase for the cost of things the postmaster wanted fixed, but he never heard back.  He emailed the Postal Service to complain: “You are publicly saying you’re trying to negotiate.”  He got an email back saying “they are not willing” to negotiate.

The post office in Johnsonburg, New Jersey, closed in March when the landlord terminated its lease.  No further details are available about why.  The post office has been in this location for a hundred years.

The post office in Arlington, Iowa, closed in April over a lease dispute — on five days’ notice.  According to an article in the Des Moines Register by Kyle Munson (who’s been following the closings in Iowa carefully), “The mayor and the lessor allege that the Postal Service manufactured the lease crisis to set up quicker closure of an office served by a full-fledged postmaster. The Postal Service denies this.”

The owner of the building in Arlington “said that in March he negotiated over the phone with Postal Service officials in Colorado, who had written a one-year cancelation notice into the new contract — effectively turning his five-year lease into a one-year lease.”  The owner didn’t like the new contract, but he “finally capitulated” and faxed the lease on April 19.  He never got a copy back, so he mailed three more.  Then the Postal Service suspended the office, claiming they had not received a signed lease by April 15. 

The landlord says that during all of their negotiations postal officials never mentioned the April 15 deadline, and then they did not return his phone calls about the problem.  Richard Watkins, a Postal Service spokesman based in Kansas City, said that he couldn’t disclose details of specific lease negotiations but added that “there’s absolutely nothing manufactured” about the lease issue in Arlington. “That assertion is just completely false.”

The post office in Earlville, Iowa, was also suspended in April because “the postmaster and landlord haven’t reached a new lease agreement.”  No other details are available.

The post office in Litchfield, Ohio, was suspended in June.  “Postmaster Tanya Bodak said the lease on the building was due to expire June 30 and negotiations did not yield a new one.”  The owner of the building said he spoke with the lease negotiators about a year ago.  He said the rate had been increased every five years for cost of living, but last year, the Postal Service lease negotiators asked him to eliminate the usual increase.  “I said I understand the hard times, no problem.  Then they got back with me and said, ‘We want you to cut the rent $300 less and renew the lease.’”  The negotiators also wanted him to pay for maintenance of the building, which had been the responsibility of the post office since the start of the lease. “There’s no way that I could drop the rent $300 and be their maintenance crew,” the owner said. “If the people want to blame me, that’s their business. But if they had the building, they’d do the same thing.”  The post office had been in this location for fifty years.

The post office in Annapolis, California, was suspended in October because the owners chose not to renew the lease.  They gave the Postal Service plenty of notice, and the town even offered the Postal Service free use of a site for a portable trailer.  But according to a local news report, “postal authorities didn’t take up an offer to meet” with local officials, and the people in Annapolis believe the Postal Service has decided not to replace the post office and is “just going through the motions.” 

The post office in Mount Zion, West Virginia, was suspended in October because of a lease problem. “Officials said the closure has been made because the property holder declined to renew the lease.”  There had been a post office in Mount Zion for over a hundred years. 

The post office in West Liberty, Kentucky, was closed in October “because the building owner and the U.S. Postal Service were unable to agree on new lease terms,” according to a Postal Service spokesman.  Mayor Rosey Miller says the town is buying the building, and it offered the Postal Service a free one-year lease to maintain operations in the building.  "I never heard a word back from them," she said. "They never called. I guess they're still doing a feasibility study."

The post office in Caledonia, New York, was suspended when the term of the lease expired November 30, 2010.  Postal officials say they were unable to reach an equitable lease agreement with the property owner.  At a town meeting about the suspension, residents and town officials said they didn’t buy the lease rationale.  The mayor read a letter from the lessor “stating that he tried to negotiate an equitable agreement with the USPS and that his company even offered to lower the rent in an effort to keep the post office in the property and open to Caledonia customers.”  Residents also questioned whether the Postal Service had made an effort to find a new location and cited several vacant buildings in the business district.

 

Suspensions of RAOI post offices

Some of the suspensions in 2011 are particularly disturbing because the post offices are on the Retail Access Optimization Initiative (RAOI) list.  The moratorium on closings should be covering these post offices — none of the 3,652 post offices on the RAOI list has reached the stage of a Final Determination to close — but that’s not stopping the Postal Service from closing by emergency suspension.

The post office in Homestead, Iowa, closed in November because of “failed lease negotiations” with the Amana Society.  The Amanas is an area in Iowa settled by a group of radical German Pietists who lived a communal life, with a self-sufficient local economy.  There’s been a post office in Homestead since 1852, and it’s been in the same building since 1913.  

The post office in Mahanoy Plane, Pennsylvania, closed at the end of November because the owner of the building decided not to extend the lease.  The post office needed some repairs and winterization, which the owner didn’t want to do because the post office is on the RAOI closing list and it seemed like a waste of money.  There’s a great story about Mahanoy Plane on Going Postal.  (Video here.)

The post office in Fort Blackmore, Virginia, closed suddenly in October, the same day that a meeting on the feasibility for possible closure was to take place.  The landlord is a 75-year-old woman who gets $500 a month rent for the post office.  Apparently, back in July, postal officials said that in the new lease, they wanted her to assume responsibility for maintenance.  The landlord tried to negotiate, but, according to the her daughter, “The Post Office was unwilling to have any give whatsoever.”  The landlord didn’t hear anything from the Postal Service for several months, then on Monday, October 24, at 8:45 a.m., a Postal Service official demanded “an answer by noon or he would close the post office."  The post office closed later in the wekk, on the day of the town meeting.

The post office in Kneeland, California, was suspended on October 3, 2011, the day its lease ran out.  According to a local news report, “Postal service spokesman James Wigdel said the Kneeland site has been on the potential closure list since late July because of the postal service's diminishing revenues.  He said that, combined with the building's lease running out, has led to Monday's closure.”

Kneeland is indeed on the RAOI list, but why that should be considered an emergency and a reason for suspending it is not at all clear.  Being on a closing list is not one of the justifications for suspension mentioned in the Postal Service’s Discontinuance  Handbook (PO-101).  It states that the circumstances that may justify a suspension include, but are not limited to, the following:

  • A natural disaster.
  • Termination of a lease or rental agreement when suitable alternate quarters are not available in the community, especially when the termination is sudden or unexpected.
  • Lack of qualified personnel to operate the office.
  • Irreparable damage when no suitable alternate quarters are available in the community.
  • Severe damage to, or destruction of, the office.
  • Challenge to the sanctity of the mail.
  • Lack of adequate measures to safeguard the office or its revenues.

Perhaps that “not limited to” phrase opens the door for suspending post offices because they are on a closing list.  In any case, the owner of the building in Kneeland said the Postal Service’s communications with him were “lax, making it difficult to renegotiate the rent for the building.”  And he didn’t like feeling like the closure was his fault.  ”I'm relieved that it's finally coming to an end. It's been quite a journey,” he said about the last few years. “It probably could have worked out better.  I just don't think they had the want to continue the post office.”

John Mitchell, a Kneeland resident for more than thirty years, said he contacted the Postal Service several times about the closure, but that “there's no one to talk to.”  He’s especially upset about the closing because he’s a disabled veteran who gets medications through the mail from the VA, and now he has to drive 45 minutes to a post office.  Mitchell says he's tired of having the Postal Service string residents along by stating that the post office is not closed but simply officially suspended. ”It would be nice if they'd just quit playing games with us,” Mitchell said.

 

Suspensions in 2012

The post office in Clearwater Beach Station is also on the RAOI list, but it didn’t make it through the moratorium.  The post office closed on January 20, just a few days before an extension on the lease expired on the 31st.  The building is owned by the city, and when the original lease ended in September, town officials “granted the post office an extension through January at cheaper rent. The USPS then asked for free rent, a bid that was quickly rejected.”  Postal officials said they wanted to keep the post office open, but the City Manager says the USPS had routinely refused to offer up any terms.  Several businesses are looking to move into the space and pay market value, so town officials decided they had had enough of the delays.  "If you say you're going to negotiate with us, then negotiate," the City Manager said. "They're trying to transfer that limbo status to us. That doesn't work for us."   (Video here.)

Over the coming weeks and months, more post offices may suffer the fate of Clearwater Beach.

The post office in North Palm Springs, California, looks like it may close over a lease issue on March 2.  According to building owner Rob Mann of San Francisco, the lease was due to expire in December, and there was an agreement in November for a one-year lease extension.  Mann signed the contract and returned it to the Postal Service, but officials decided not to sign.  Mann said the new lease asked for a rent increase, but that wasn't the point of contention. 

Postal officials were looking to add a 90-day termination clause, which Mann wasn't interested in because he wants more tenant security in this economic environment.  Misty Mullins, a former employee at the post office, said she feels the government isn't acting in good faith for its customers and has drawn up a petition for residents to sign in hopes of saving the little office. (Video here.)

The post office in New Eagle, Pennsylvania, has a lease due to expire on March 31, 2012, and the owner is worried that this one may be suspended too.  He said he has agreed to lower the lease rate at the Postal Service's request numerous times.  During the last 15 years of the lease, the annual rent has ranged from $10,000 to $28,000. This year’s amount is $19,000, but the Postal Service is offering only $15,000 for next year. The owner says that over the last 15 years, he has conceded a total of $90,000 in negotiations to keep the facility open.  "I don't want them to say that I'm not negotiating, because I am.” 

Some post offices are running on a month-to-month basis while the Postal Service decides their fate.  The post office in Buenaventura Lakes, Florida, has been that way for a while. According to local news, “The lease is only month to month because the BVL post office is among those that the U.S. Postal Service is looking at closing.”  Same goes for the post office in Hanamaulu, Hawaii.

The issue of emergency suspensions over lease issues has also caught the attention of DC Congresswoman Eleanor Holmes Norton, who, as a senior member of both the House committee and subcommittee having jurisdiction over the Postal Service, has been vigorously advocating that to keep post offices open.   There are several post offices in DC with leases expiring this year, and Norton has her eye on them.

 

The PRC’s investigation

The practice of lease problems leading to emergency suspensions has a long history.   As part of the PRC’s investigation of the suspensions, the Postal Service reluctantly released a couple of lists of suspended post offices.  One came out in November 2009, showing 97 offices suspended for lease problems over the previous five years.  A second list was released a few months later, with over 300 post offices suspended during the previous five years for building and lease related problems: health and safety issues (103 post offices), disasters (42), lack of adequate measures to safeguard office (11), “cannot negotiate reasonable lease” (11), and “eviction” (142).  That list is here.

The PRC docket on the emergency suspensions (No. PI2010-1) is filled with letters from postal patrons complaining about how their post office was suspended with inadequate notice to the community and under pretenses that did not seem like real emergencies. There are a lot of complaints from citizens stating that “their questions, suggestions, and requests were either ignored or rejected out of hand, leaving the impression that the suspension of their post office was, in reality, a discontinuance.” (Reply Comments of the Public Representatives, p. 7) 

Another part of the problem is that suspended post offices often remain suspended for many years, and thus become de facto discontinuances, without ever having gone through the formal discontinuance process — which is basically against the law.  Back in 1997, a General Accounting Office study found that of the 651 post offices that had been suspended over the previous five years, only 31 had re-opened.  Of the 309 on the list released in 2010, 208 remained suspended, 78 had closed (after a formal discontinuance study), and only 23 had been “restored.” 

The Association of United States Postal Lessors (AUSPL) has weighed in on the PRC case too, with a list of observations about what it members have seen over the years.  The AUSPL observed that the “USPS has a pattern of being non responsive to requests for clarification or discussion on issues affecting AUSPL members.”  It says the Postal Service has also been “insisting on below market rates for buildings” — some as low as twenty percent below market value — as well as “insisting on termination clauses when renewing leases: If lessors don’t agree to this clause, they may face a threat to close the facility under the guise of failure to negotiate a reasonable lease.”  The AUSPL also says that the “USPS does not always timely respond to inquiries from lessors after they submit a signed lease agreement and will frequently reopen negotiations.”  The AUSPL concludes its comments to the PRC as follows:“It appears these issues are a strategic attempt to place lessors in the position of being blamed for PO closings.”

More recently, the lessors have found themselves facing a new problem.  Back in October-November, the Postal Service delegated lease negotiations to CB Richard Ellis (CBRE), the world’s largest real estate company.  Many lessors are concerned, as the AUSPL website puts it, about “being forced to deal with CBRE because it subjects our members to negotiating with less qualified, third party contractors who have no prior experience with the property with the expectation we pay the real estate commission.”  The association is telling its members not to enter into agreements to pay the commission, and not to be “bullied or pressured” by CBRE agents who “threaten” to withhold a recommendation to renew a lease.  (More on the USPS-CRBE partnership here.)

 

Happy ending in Hacker Valley

At least there’s some good news in the emergency suspension story.  One of the most famous of the lease-suspensions cases involved Hacker Valley, West Virginia.

In 2009, the Hacker Valley post office was suspended when the lease expired.  But according to a report in the Wall Street Journal, the Postal Service knew three years earlier that the lease would not be renewed and it failed to secure a new location.  Town residents and a lumber company even offered to build a new post office for the USPS to lease, using donated land, materials and labor. 

As NPR reported, "At first, it seemed the Postal Service was interested, but soon the phone calls from Hacker Valley were going unreturned."  The town appealed to the Postal Regulatory Commission, which issued a determination sharply criticizing the USPS for the way the suspension was conducted.   The PRC also found, based upon the USPS suspension track record, "history strongly suggests that the Postal Service is using its suspension authority to avoid the explicit Congressional instructions to hear and consider the concerns of patrons before closing post offices.”

Well, the good news is that just a week ago, Hacker Valley got a post office again.  It took 30 months of fighting, lobbying elected officials, and an appeal to the PRC, but the work paid off.  Unfortunately, it’s not really a regular post office like the one they had before.  It’s a Contract Postal Unit, or CPU, staffed by a private contractor rather than a USPS postmaster.  And it doesn’t do everything a regular post office does, like bulk mail or passport applications.  Plus, it’s only open 9 a.m. to 1 p.m.  Still, as the CPU operator said, “it's much better than nothing."

Residents of Hacker Valley are certainly happy to have a post office again.  It’s located in the cafeteria of the old elementary school, and on opening day, the entire 67-member student body of Hacker Valley Elementary School crowded into the Post Office lobby to sing the "The West Virginia Hills" and perform a ceremonial ribbon cutting. 

(Photo credits: Notice for North Palm Springs CA suspension; Post offices in Mineral Ridge OHJohnsonburg, NJAnnapolis CAWest Liberty KYHomestead IAFort Blackmore VAKneeland CAClearwater Beach FL;  North Palm Springs CA; CBRE headquarters in LAformer Hacker Valley WVHacker Valley WV ribbon cutting)

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