Victoria Hartke is Managing Director for Planning and Real Estate at The Bureau of Overseas Buildings Operations (OBO), which is a division of the U.S. State Department. I met her in Washington D.C. because the United States is planning to build new embassies in Bratislava, Tallinn and Brussels. It turns out, she’s interested in working structures for cooperation with companies in the region. The OBO will have official representation at a stand this year at ExpoReal.
To start, perhaps you could provide a brief outline of OBO’s remit and give me an idea of its scope?
We are responsible for all of the overseas property for the Department of State, which includes 290 locations overseas and a notional replacement value of about $71 billion. That covers about 20,000 to 25,000 properties of all types, a majority of which are leased. The things we’re best known for are our embassies and consular buildings around the world. We’re normally looking to fulfill our mission of providing safe and secure buildings for our staff overseas.
How do you prioritize buildings that might not meet all of your security criteria?
When I think about prioritizing the work that we do (I’ll talk about Europe for just a second) we’re looking at those buildings that might not meet certain requirements with respect to, say, blast — distance, stand off distance, setback distances from cars or trucks and that kind of thing. When we look at all of these factors taken together, we then prioritize where we want to go out and build new buildings. In Europe, right now we’re looking at the construction of new facilities in Bratislava, Tallinn, and Brussels. We’re also handling the construction of a new consulate in Milan and a new annex building in Geneva.
What’s the scale of the work you’re doing?
We get on the order of about $2.2 billion a year in funding to satisfy both new construction and to upgrade existing facilities. That’s roughly on the order of about $1.8 billion towards new construction and $400,000 on maintenance. Because we don’t just buy new things, we also are looking at legacy buildings, looking at accessibility and some of the other challenges that we have to make sure that everyone that we are housing overseas is in the best possible, safest and most secure facility that they can be.
What sort of capital investment are you planning for embassies in central Europe? How often do you have to do technology upgrades and modernizations and how do you handle them?
We handle all of our own facility management and security management in-house, so we are constantly looking at the viability of systems. We use a lot of technology, including our generalized maintenance and management system and building information modeling systems to track the end of lifecycle. We’re really looking at this from a total cost of ownership perspective, continually looking at the viability of systems. We also have different funding streams that address different types of challenges, such as ongoing maintenance and repairs. As you can imagine, it’s difficult with buildings across 290 locations to do this prioritization but we’re constantly looking at these types of factors to decide when to do modernizations or repairs.
With advances in the world of proptech moving so quickly, how do you stay on the cutting edge? The private sector tends to think it’s way ahead of the public sector in this regard.
We really want to be where industry is. We want to leverage technology, BIM, digital design review, blue beam and integrated design. We try to make sure that we’re not just catching up but that we’re really on the leading edge. I think you’re right, though, that often we are reactive. We do look at the facility condition index; every one of our existing buildings has an FCI score. We generally score in the 75 to 85 range on a scale of 1 to 100 for the entire portfolio, which we feel is pretty good. However, we know that there are some legacy buildings, some historic buildings for example in Europe where those FCI scores are nowhere near that average. So, we know looking at these things where we need to put more attention on these types of buildings. This often drives a question, do you renovate, do you modernize, do you build new. These are incredibly challenging decisions we have to answer. On the other hand, our administration is saying we have to be open new facilities around in the world in places where we aren’t right now. How do you balance those things? These are difficult challenges for us right now.
You’ve said you’re open to doing business with companies in Europe through PPP projects or build-to-leases. What would that look like? What’s the best way for potential suppliers and partners to get involved?
I think the sky’s the limit. We’re not interested in dictating how things can or cannot be done. Really and truly, we want to understand what’s out there. Where is industry? How do they want to work with us? We want to know things like, is a PPP going to work in this market? For the acquisition of a site in Brussels, we’re contemplating the purchase of shares in a company rather than the outright acquisition of title, which is what we usually do. When we think of the traditional way to acquire land it’s usually through a straight sale. Working with these new sorts of frameworks, we just want to make sure we’ve got some legal strictures. We need to make sure we’re abiding with local law and we partner with local counsel to understand what these frameworks are in terms of local planning and zoning to ensure that we’re good neighbors and good partners. So, we’re looking for information from the communities we’re working and living in about how best to collaborate.
As I understand it, you’re going to have a team at ExpoReal this year.
For the very first time, the US Dept of State is going to have a presence in the American corner at ExpoReal. In the past, we went from stall to stall working with contacts. But this time we’re making more of a statement about our openness and willingness to be transparent, to work with folks. To communicate what we’re thinking about and what our needs are. We want to find out what companies are interested in, and if there are ways to work together. There are still procedures to go through but we’re really looking to be open minded and pushing the envelope.
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