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September 7, 2011 in Business
USPS saddled with huge Spokane lease on vacant space
The U.S. Postal Service is not only looking to find a smaller downtown Spokane post office – it’s also hoping to unload downtown office space that’s vacant and costing $490,000 per year.
Last month Spokane Postmaster Karen Fairlee said the Postal Service will move out of the historic Riverside station next year to save money..
The cash-strapped Postal Service is also trying to sublease 24,100 square feet of space the federal agency leases on the sixth floor of the Crescent Court Building, 707 W. Main Ave.
Until mid-2009, the space was used as a district office overseeing Eastern Washington and North Idaho, with about 85 workers there. The district office was closed to save money and regional operations were moved to the Seattle district office.
But the Postal Service’s $490,000 lease on the space extends through March 2014.
The lease is with the building’s owner, FPA Crescent Associates, of Larkspur, Calif., which bought the building from Red Lion Hotels Corp. in 2005.
In an effort to sublease the space, the Postal Service is offering a 33 percent discount. The agency pays $18.50 per square foot.
But recent marketing fliers say the sublease will cost $12 per square foot.
No tax dollars are used to pay either the Crescent Court lease or the $350,000 lease for the Riverside Avenue post office. The Postal Service is a self-funded operation, relying on sales of stamps and shipping services. Postal employees, however, draw benefits from the federal government’s health care and pension funds – yearly payouts that come to billions of dollars and which USPS managers say are crippling its finances.
There’s little chance the downtown post office will move into the vacant Crescent Court space, said Ernie Swanson, spokesman for the U.S. Postal Service district office in Seattle.
“It’s much larger a space than we need,” he said.
In addition, the new post office downtown will need to offer easy access for customers and businesses that will rent post office boxes. A sixth-floor office would not offer that option, Swanson said.
He said no tenants for the space are on the horizon: “Up to this point, there’s nothing active.”
Chris Bell, of NAI Black, is the commercial agent representing the Postal Service. In an email, Bell said the Postal Service is “very motivated” to find the right tenant to sublease the space.
The 24,100 square foot space is the largest single block of vacant commercial real estate in downtown Spokane, said Jon Jeffreys, Bell’s colleague with NAI Black.
That large space, in fact, may be a detriment to finding a tenant quickly, said Cory Barbieri, a broker with Spokane-based G&B Real Estate. He said the best option may be to break up the big space into smaller offices.
“There are just not a lot of users out there in this market looking for 24,000 square feet for an office,” Barbieri said.
Another challenge is the lack of adequate parking, Barbieri said. The NAI Black flier notes that the lease includes 25 parking spaces. But those are in the Parkade parking structure two blocks away, said Bell.
A recent federal audit found that 24 percent of the office space owned or leased by the Postal Service nationwide is vacant. The Postal Service owns or leases more than 33,000 facilities around the United States, and about two-thirds of its total interior space is owned by the agency.
The Postal Service has announced tentative plans to close roughly 3,600 offices across the country. Three would be in the Spokane area; one office near the University of Idaho in Moscow is also slated to close.
Garco awarded $35.8 million Joint Base Lewis-McChord contract 
polistra on September 07 at 6:32 a.m.
Use eminent domain to give the PO building to the 300 feuding owners of the Ridpath, and claim the Ridpath for the new PO. Even-up trade. The PO building is more or less indestructible, so the 300 feuding owners can let it go to rack and ruin without causing a fire. The ground floor of the Ridpath would be much more accessible than the existing PO.
D Statler on September 07 at 8:05 a.m.
Great idea for the nicest Post Office in America @ polistra . That alone might bring additional trade to Spokane and the USPS. For the meantime,remove the door locks and let the homeless stay there. :^(
opiemuyo on September 07 at 8:14 a.m.
This is a perfect example of how government run business fails. Flushing money down a rat hole.
Orphan on September 07 at 8:21 a.m.
The USPO is required by the Constitution and should stay in working order.
Maybe we should hire a private company to run the USPO.
Bruce (aka thatoneguy) on September 07 at 8:48 a.m.
The USPS is required by law to deliver to any & every address in the country (probably Guam & Puerto Rico too, I would guess), for a flat rate. Having to keep employees on staff EVERYWHERE (even if they’re just contracted or subcontracted) probably has some effect on their labor costs.
Can’t wait to see what happens when you (meaning “one,” not anyone in particular) walk into a UPS or FedEx office and try to mail a birthday card. I have a feeling that they would charge more than 44 cents to get it across the country in 3 days.
On the other hand, in addition to being able to raise their rates to whatever the market will bear, they’d be able to eliminate unprofitable destinations (like the entire state of Alaska, for instance). That should be fun.
Orphan on September 07 at 9:49 a.m.
I would guess the opposite if UPS or Fedex had the volume they may very well be able to meet the 44 cent fee and deliver as required.
Simply look at the fact that 80% of the USPO budget is for labor alone and that should give us a clue that UPS or Fedex could compete. The USPO is covering the rest of their overhead with only 20% of their budget. Remember that covers all the trucks and facilitys that are needed to service all of the out of the way places.
Remember Section 8 of the Constitution only says “To establish Post Offices and post roads.” No where does it say the mail has to be delivered to specific addresses on specific days or at specific times. Only in very recent times have we had daily mail delivery to specific addresses etc.
Cut out urban Saturday delivery and go to MWF one week and TTS the next week for rural delivery. If some people do need or want every day mail they can rent a PO box and pick it up daily at the post office.
Bruce (aka thatoneguy) on September 07 at 9:53 a.m.
^ Congress’s approval would be required to reduce service. Their approval rating is already so low, they might as well go ahead & do it.
liberal_in_right_wing_land on September 07 at 10:13 a.m.
Yes, lets make it a private business. Because private business never does wrong, right? They never go out of business or bankruptcy, right? They never loss money right or mismanage their finances, right?
Personally I don’t want private business running everything. I don’t want to spend $10 to send a letter to my grandma. I don’t want to spend $20 to drive on a road to get to the grocery store. I don’t want to spend thousands of dollars just to educate my kid at the privately run school. I don’t want my social security run by some Wall Street company that just caused the great recession.
Government might not be perfect, but the people who think private companies are perfect and should run everything in this country, please give me ONE, just ONE example in this world where that works. Please, name me one country that has everything privatized and being run by business and the country is run by a small, hardly noticeable government. JUST ONE EXAMPLE, THATS ALL I ASK.
Orphan on September 07 at 10:49 a.m.
Liberal 1st off I said maybe we should hire a private business to run the Post Office not make the Post Office a private business. Think about it like this every 2 to 5 years private companies get to bid on the contract to manage the Post Office the lowest qualified bid gets the contract. I bet there would be billions in savings and the unions and carriers would not be affected near as much as the Post Office managment would be.
You are correct that private businesses do all of the above things you mention. The difference is that private businesses go out of business when they are mismanaged. government agencys just keep going until there is a major problem. The fact that private businesses can go out of business is a plus for my argument not a negative because corrections will happen sooner and at less expence than with a government agency. Once again I am talking about managing not being the Post Office.
madscientist on September 07 at 10:54 a.m.
Orphan,
you mention the constitution without reading the whole thing.
you quoted “To establish Post Offices and post roads.”
What you did not read was the first part of that where it says “Congress has the right to…”
THE USPS is NOT required by the constitution. Congress has a right to establish a postal service. They also have the right to cancel the dern thing.
Bruce (aka thatoneguy) on September 07 at 11:03 a.m.
Orphan @10:49 AM — It might be interesting to see what a private business would be able to do with the USPS, if the same restrictions & requirement were kept in place.
Orphan on September 07 at 12:38 p.m.
Madscientist You are correct section 8 says “The Congress shall have the power to”. No where does it say they have to.
I was attempting to make the point that no where does constitution say we cant make cuts to service. Postal service is not a right like Speech, Religion, firearms etc.
BlondeSquawker on September 07 at 1:20 p.m.
Wow Orphan, you’re really smart! How did you get so smart?
-just sayin’
liberal_in_right_wing_land on September 07 at 2:36 p.m.
Orphan, want to answer the second part of my question? Please, name me one country that has everything privatized and being run by private business and the country is run by a small, hardly noticeable government. JUST ONE EXAMPLE, THATS ALL I ASK.
Any republican on here want to answer that?
Orphan on September 07 at 6:03 p.m.
Liberal sorry man I was out working. I dont know of any country that is ran by private business except for the USA, OH CRAP sorrry again.
Seriously I dont know of a country that is being ran by private business nor do understand why you asked the question since I never said or suggested we should have our government ran by private business. I do think there are some things like the Post Office that would be ran a heck of a lot more efficiently by private business on a low qualified bid basis.
Answer me one question how did you get from my suggestion that we try subcontracting the management of the Post Office to private companies to turning our government over to private companies. I cant see how you got there and I would love to know your thought process on this.
Just as an example of incompetance, what private business would sign a contract without a catastrophic no lay off clause, the goverment employees that we entrusted to run the Post Office did. The government managment employees also underestimated the retirement fund needs not by a bit but by a huge amount. I could accept the fact that they missed it by 25% but missing it by over 100% is unforgivable. Does this remind anyone else af the SS scam we expereancing now, sounds like the same old game plan to me.
BlondeSquawker on September 07 at 6:31 p.m.
“Does this remind anyone else af the SS scam we expereancing now, sounds like the same old game plan to me.”
I know, Orphy. That darned Ronald Reagan gutted SS and now we old folks are really scared and expereancing fear we’ve never had before. My shaking isn’t just from Parkinson’s. What to do….what to do….?
-just sayin’