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With us also is Mr. John B. Funk, Engineer and former Director of the Maryland Roads Commission. Mr. Funk will become Vice President and Administrative Engineer of the United States Visitor Center Founding Corporation, in which capacity he will have complete supervision and direction of all engineering and construction of the building complex which we propose as an addition to the National Visitor Center as conceived by Chairman Gray and expressed in his bill, H.R. 12603. Messrs. Funk, Loewer and Sargent are available to answer technical questions from members of the committee.

Concrete solutions to such problems as how to adequately provide for the huge numbers of visitors pouring into the nation's capital today and how to adequately provide for the staggering geometric increases of these visitors as each year passes, are solutions which are difficult to come by on a "nuts and bolts” basis.

The factors and interests involved are so diverse, complex and multitudinous that great intelligence, imagination, perseverance and compromise ability are required in order to finally formulate a practical and concrete solution which will satisfy all interests and at the same time provide for these large numbers of visitors not only the basic necessities and comforts but a truly memorable and meaningful visit to one of the world's greatest centers of government—their own.

He is faced with a problem of present urgency, a truly adequate solution to which would cost a huge sum of money, at a time when the costs of our government are already astronomical. Yet he has been able to formulate, activate and continue to forge a “nuts and bolts” plan whereby the costs to our government will be truly nominal yet the result of which will be an admirable and concrete first step toward coping in a meaningful way with the rapidly increasing numbers of visitors.

It is our opinion that the proper site has been chosen for the center with its already existing monumental structure designed as the “Gateway to the Capital” after the triumphal arches of Rome.

The American Foundation for World Trade Studies, Incorporated, comes here today with its subsidiary, the United States Visitor Center Founding Corporation to offer a plan which will supplement and complement the fine work of Chairman Gray and his Subcommittee and the Study Commission created by Public Law 89–790 to study possible visitor facilities.

The American Foundation for World Trade Studies, whose name is perhaps misleading in that its members quickly discovered at the outset, some nine years ago, that to study trade is to study in depth the social, economic, and political institutions of geographical areas, and more important is to study ways and means of improving and developing educational systems, and having become intrigued with the possibilities attendant upon the idea of a National Visitor Center, began a year and a half ago to work out a comprehensive plan whereby we could make a significant contribution to such a center and at the same time implement our plans of long standing for the creation of an Electronic Education and Information Center.

To carry out the administration of the activities designed to aid in the building of supplemental visitor center facilities for the use of the federal government, we formed a second non-profit corporation, the United States Visitor Center Founding Corporation.

With completely private capital, and without one penny of congressionally appropriated money the Founding Corporation would build an additional 7,000 parking spaces adjacent to and immediately behind the 3,000 to 4,000 parking spaces proposed to be built by the Washington Terminal Company, and beyond that the Founding Corporation would build a large building extending to “L” Street over the railroad tracks and on the vacant corner of "L" and First Streets.

The first floor of this large building would join the planned “esplanade”, be reached therefrom by a number of escalators and would consist of about 1,600,000 square feet of prime exhibit space with a twenty foot ceiling. [See Plate 1 herein.]

This floor would be the first level above the railroad tracks and would vastly extend the National Visitor Center as presently proposed, providing a continuous exhibit space from the front of the existing terminal building all the way back to "L" Street.

The immediate and complete use of this floor would be given to the National Visitor Center by the Founding Corporation, except possibly for a relatively small double-deck area of about 150,000 square feet on which would be built the new and modernized terminal facilities. [See Plate 3 herein.]

85-894–67

Our studies indicate, however, that the new railroad terminal facility could and perhaps should be constructed in the area shown on Plate 3 except one floor lower. This would be possible without infringing upon the Mail Handling Building area, since the roof of that building is at the same level as the floors of the concourse and Esplanade.

This would allow the entire first floor to be used by the Department of Interior for the purposes of the National Visitor Center as a natural extension from the Esplanade. It would also allow the omission of the "escalator tracks" shown in Plate 3, since train passengers would be able to reach their train platforms on the same level as that of the terminal offices where they would have bought their tickets.

This plan would also allow enlargement of the Esplanade area as indicated on Plate 3. Moreover, the "Ramp up” shown on Plate 3 would be practically level with California Street from which it originates. Egress from the terminal facility for automobiles and buses could be either via a second "flat ramp” back to California Street, lanes of the same ramp enlarged or via the first parking floor and the West Ramp.

However designed and engineered, this proposal would bring about a muchneeded redevelopment of this Mail Handling Building Corner (the very old and delapidated building would be razed and rebuilt) with perhaps more efficient and additional mail handling facilities for the Post Office Department, at no cost to the government.

The addition of this 1,600,000 square feet of prime exhibit space to the National Visitor Center and the additional 7,000 parking spaces would allow the present accomplishment of stated objectives which could not be accomplished by the center as presently conceived.

1. Public Law 89–790 calls for provision for "exhibits and displays by the individual States, territories, possessions and the District of Columbia with respect to their history, resources, scenic attractions, and other appropriate matters.” This large additional space would be ample for these individual displays and with a large amount of space remaining to provide for more thorough and instructive exhibits of the Federal Government and the Nation's Capital, as well as ample space for accommodating the large projected increases in numbers of visitors. Moreover, it is an understanding that the Smithsonian Institution has warehouses full of first class Americana exhibit material which it has no place to show. Some of this space could be used to great advantage for selected exhibits from this source.

2. The Study Commission Report recommendations state, “at the earliest date, consideration should be given to expanding the parking garage to its maximum capacity, as controlled by the access ramps from Union Station Plaza." The parking problem would be solved by our additional 7,000 spaces, especially in view of additional ramps which would be constructed in other sections of the new building in coordination with the D.C. and Federal road planners.

The 7,000 parking spaces would be arranged on eight floors, four floors of which would be directly behind the presently proposed four floors containing 3,000 to 4,000 spaces.

The new building beginning behind all parking and extending to "L" Street would have six floors in addition to the exhibit floor donated to the Visitor Center. Five of these would be leased out and the sixth would be occupied by the Electronic Education and Information Center. A brief statement of its functions is included herein, and without repeating it here, I will ask the Chairman that it be printed in the record of these hearings. Suffice it to say here that this center will have three functions: (1) the creation and dissemination of educational and vocational training courses throughout the United States utilizing the most modern and efficient techniques and methods, both electronic and otherwise; (2) the gathering, storing, retrieving, updating, and transmitting upon inquiry, information which will be useful to business and government relative to the social, economic, political, governmental and legal conditions and development existing in all countries of the world ; and (3) the conduct of research in both the hardware and software used in accomplishing the first two functions.

On the top floor of the new building we would establish an International Club with memberships available on a completely non-discriminatory basis and provide two large rooms of convention hall proportions, a facility badly needed in Washington. Memberships would be made available to Ambassadors and their staffs at no charge.

One of the large rental floors could be made available for chanceries of those foreign governments needing space, although we would be guided in this by the State Department's policy and wishes.

The American Foundation for World Trade Studies, Inc. would set up its outside information-gathering facilities immediately and begin its work for the Electronic Education and Information Center so that by the time the building is completed (in three years time), the education and information programs will be ready for immediate implementation.

This entire program will be primarily financed by the issue of the 5% bonds of the United States Visitor Center Founding Corporation pursuant to a negotiated underwriting agreement with a large underwriting firm in New York. The firm with which we have discussed this matter advises us that this project is feasible from an underwriting standpoint under certain conditions.

We must make these bonds as attractive to investors as any municipal bond by having the interest we would pay on them made tax exempt to the purchaser thereof. This can only be achieved by federal legislation, and we are asking that this bill be amended to include such a provision. Such an exemption is completely justified when the following is considered :

1. The donation of the large additional space (1,600,00 square feet) to the National Visitor Center, a fair rental value of $10,520,000 per year.

2. The provision of a critically-needed additional 7,000 parking spaces to make a total on site availability of 10,000 automobile spaces and parking for 116 busses. We will, however, have to make a nominal charge for parking in the 7,000 spaces area. We are anticipating a charge of $1.43 per car for all-day parking.

3. The principal activities in the new building will be a nonprofit education and information center and a non-profit International Club.

4. The Founding Corporation would pay real estate taxes to the District of Columbia government of $2,758,604 per year. This would amount to about $52,413,476 over the 23-year bond amortization period and should far more than pay for road, freeway, and street rearrangement for easy ingress and egress to the National Visitor Center, as well as modernizing the depressing underpasses on "H", "K" and "L" Streets.

5. The new building complex would place a sizeable wedge of redevelopment in an area in very urgent need of it embarrassingly close to the Capitol. This new building and its activities would undoubtedly cause a spate of further redevelopment in the surrounding area, including yet further additional parking, hotel facilities, etc.

6. Of the total number of square feet of building constructed, not counting parking, only about one-half would be devoted to the production of rental income. The other half would be utilized by the National Visitor Center and the Electronic Education and Information Center at no charge. [Total area : 10,539,400 square feet; total rental area : 5,800,500 square feet] A rental rate of $6.00 per square foot is anticipated.

7. The tax exemption of the bonds cannot be argued to cost the government money, because without the exemption there would be no bonds and no interest income at all, since this project cannot be done on this basis without the bonds being tax-exempt. Moreover, it cannot be argued that investors would invest in taxable income-producing securities if they did not invest in these bonds, because the money which will be invested in these bonds would

be put into other tax-exempt municipals if it were not invested here. I would like to give a brief visual presentation at this point after which I will give a final justification for our bonds being treated as municipals.

(Visual Presentation]

[1. Plates]

[2. Budgets] Mr. Chairman and gentlemen, the final reason I would give for making the interest on the bonds of the Founding Corporation tax-exempt is that we propose to give this entire building and parking spaces together with all fixtures and maintenance equipment to the United States Government when the bonds have been amortized, which should be 19 years from the completion date.

Along with the building we would also be giving to the United States Government a built-in annual net income of $22,633,063 plus whatever rent we would pay on the Electronic Education and Information Center and International Club floor. And within two years from that time the Government would have more than enough money from this new source alone to purchase the remaining Union Station property.

The benefits our proposal would bring to the Washington Terminal Company and the railroad companies would be as follows:

1. We would pay $5,000,000 to the Washington Terminal Company for the air rights and other rights necessary in order to accomplish the proposed construction.

2. We would pay $136,500 (at $15 per square foot) for the corner property at “K” Street presently occupied by a gasoline service station.

3. We would be willing to have our contractors build the new terminal to the Washington Terminal Company's specifications for the projected $3,500,000, as well as the spaces for 3,036 cars and 116 busses and ramps for the projected $11,000,000. This would virtually guarantee the ability to presently fix the rental rate at some figure between the projected $2,900,000 and $3,000,000. If these cost estimates turn out to be too low, the difference can easily be absorbed by us due to the size of our program.

4. We would completely rebuild the building presently leased to the Railway Express Company by the Washington Terminal Company at no charge, thereby substituting modernized facilities for a very outdated building.

5. In the process of incorporating the power plan in the new building, we would modernize that facility at no charge. If it would be feasible to convert the source of energy in that plant from coal to either natural gas or oil, the immense brick smoke stack could be eliminated.

6. If excavation is required for foundations, then we would elevate all of the track platforms when they were replaced. This work would be done in a

staggered manner so as not to seriously interfere with terminal operations. Mr. Chairman and gentlemen, I want to thank you for this opportunity to be heard, and, if there are no questions, this concludes my statement.

PROPOSED AMENDMENTS TO H.R. 12603 A BILL To supplement the purposes of the Public Building Act of 1959 (73 Stat. 479), by

authorizing agreements and leases with respect to certain properties in the District of Columbia, for the purpose of a national visitor center, and for other purposes Page 1, line 8. After the word, "with," insert, “(1)” Page 2, line 2. After the word, “Station," insert, “and (2) the United States Visitor Center Founding Corporation, a non-profit corporation organized under the laws of the State of Delaware, and, by a contract to purchase, the owner of certain air rights abore the Union Station property, * * *"

l'age 2 line 3 Strike the ori. properts." and insert the word, "properties” Page 2 line 4. After the word, "therewith," add, “and for other purposes."

Page 3. lines 1 and 2 Strike all after the word, "terminal," and add. "in an ares other than the existing terminal building, to be mutually agreed upon; and ****

Papp line i. After the word, "Aet," insert, "with the Washington Terminal Compaa nar"

Page between lines 9 and 10. Insert, "(c) The agreements authorized to be negotiated and entend inte br Section 2 of this Act with the United States Visitor Center Founding Corporation shall be subject to the following terms and conditions:

(1) The United States Visitor Center Founding Corporation shall agree to undertake at its own cost and expense the planning, financing, construe ting, awning, and managing of a building complex within the areas and suces for the purchase of which it has contracted with the Washington Terminal Company, as well as on the property on the corner of "L" and First Sireers Northeast, which the Federal Revierelopment Land Agans is hereby dinted to sell to the Uniti States Visitor Center Founding corporation at a price not to exc* $13.00 per square foot.

The Taited Nates Visitor Center Founding Corporation is authorized to extend its building across that part of "K" Sirer bordened be the rail.

road tracks on the east and the north-south building line on the east side of First Street, Northeast, at its own cost and expense.

(3) The United States Visitor Center Founding Corporation is authorized to issue bonds or other evidences of indebtedness, in such amounts, and with such provisions, and to be issued, redeemed, re-issued, used, donated, exchanged, or sold at private or public sales, and with such due dates or callable periods, and for such purposes, as the directors may, from time to time, determine to be in the best interests of the corporation and to be necessary or desirable to achieve the objectives and to carry out the purposes of such agreements and the purposes of the corporation,

(a) with total amounts outstanding at any one time of not to exceed Three Hundred Fifty Million Dollars, and

(b) with interest at the rate or rates of not to exceed five per centum per annum, tax exempt, payable annually ; provided that, during the first five years after the first issue of such bonds or other evidences of indebtedness, such interest may be deferred and accumulated, or may be paid currently out of principal and reimbursement to principal be made thereafter out of earnings; and

(c) such bonds or other evidences of indebtedness shall be registered. (4) The Secretary of the Treasury is authorized to purchase such bonds or other evidences of indebtedness of the corporation out of any trust funds or accounts or other moneys not appropriated, under his jurisdiction. In like manner, any trust funds, accounts or moneys, not appropriated, under the jurisdiction of any Federal Department or Agency may be used to purchase such bonds or other evidences of indebtedness of the United States Visitor Center Founding Corporation.

(5) The United States Visitor Center Founding Corporation shall make available to the United States Government the entire floor, which shall consist of at least 750,000 square feet, on the floor level next above the level of the railroad tracks, within its building complex, for exhibit purposes or other purposes, without cost or expense to the United States Government, except for cleaning maintenance and electrical power, for a period of thirty years from its completion within the building complex, and the United States Government shall administer this property in accordance with statutory authority available for the administration of the national park system.

(6) At the end of the thirty-year period from the completion and opening of the building complex, or at the time when all funded or bonded indebtedness is fully paid, whichever occurs first, the United States Visitor Center Founding Corporation shall convey in fee simple absolute to the United States Government all real property it then owns, consisting of land, buildings, fixtures, air rights, and improvements thereto, all of which will constitute the said building complex.

(7) The United States Visitor Center Founding Corporation shall provide within its building complex at least 7,000 parking spaces which shall be adjacent to the parking spaces constructed by the Washington Terminal Company.

(8) Although the income of the United States Visitor Center Founding Corporation, as a charitable non-profit corporation, is not taxed by the Federal Government under existing provisions of the law exempting such nonprofit corporations, should a question arise with regard to the taxability of any part of its income, it shall be determined to be exempt from such tax. The United States Visitor Center Founding Corporation shall also be exempt from all District of Columbia personal property tax and sales tax, but it shall pay all assessed real property taxes.

(9) The United States Visitor Center Founding Corporation shall transmit to the President and to the Congress annually and at such other times as it deems desirable a comprehensive and detailed report of its operations, activities and accomplishments under such agreements and the provisions of this Act.

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