The NATO Board of Directors unanimously passed the following resolution in support of a National Visitor Center in Washington, D.C. In part, the resolution reads:

Whereas it is a matter of national policy to encourage greater knowledge of the benefits of travel within the United States as expressed by the Congress and by the establishment of the Discover America program; and

Whereas it is in the national interest to provide services and information in the Nation's Capital about the fifty States;

Therefore, the Board of Directors of the National Association of Travel Organizations supports the concept of a National Visitor Center in Washington, D.C. as a vital service to the traveling public, and offers its assistance in the establishment of such a center, and counsel in its operation.

The degree to which a National Visitor Center could make a visit more meaningful to the Nation's Capital and to our States can be appreciated if we each let our mind go back to our first exposure to the visitor center maintained at colonial Williamsburg, Va. Viewing the film there sets the mood and meaning for us as we tour to witness history remade in this splendidly restored city.

NATO finds acceptable the proposals for the National Visitor Center to be located in Union Station as outlined in H.R. 12603. Both H.R. 14604 and S. 3031 of 1966 called for:

1. “* * * exhibits and displays by the individual states * * *” and

2. "*** specialized information and assistance to foreign visitors to facilitate and encourage their travel throughout the United States." We believe the Union Station site could provide the necessary space for States to present their stories, if not individually, then perhaps on a regional basis, such as NATO has delineated for the United States. Union Station could bring under one roof all methods of transportation. Since about 85 percent of the tourists come by car, the parking facility outlined in H.R. 12603 is vitally necessary.

H.R. 12603 has the strength in it which made America great. It proposes a working relationship between government and industry in creating a National Visitor Center. Such a center will not only benefit Americans, but foreign visitors as well.

NATO respectfully recommends, due to its members' vast experience in the U.S. travel business, that it be officially included in such a working coalition, at least in an advisory capacity. Further, NATO is prepared to discuss at the appropriate time the matter of staffing and operation of the National Visitor Center.

The National Association of Travel Organizations pledges its support to these goals.

Thank you.

Mr. GRAY. Thank you very much, Mr. Toohey. That is a very fine statement and I am sure if this legislation is enacted and the National Park Service is given the responsibility for operating the National Visitor Center, they will welcome advice from the National Association of Travel Organizations. Although the National Park Service has had years of experience in dealing with visitors, this is a unique. project so I am sure they will welcome your counsel and advice.

You touched on something I mentioned briefly in my opening statement, and that is that last year it was estimated the visitors to the District of Columbia spent $400 million, and much of that went to help the tax base of the District of Columbia. At the present time the Federal Government is paying to the District of Columbia in lieu

of taxes $107,599,000. I will ask you if it is not conceivable that when facilities are available for visitors to stay 4 or 5 days rather than the average stay of 2 days the annual payment of the Federal Government of $107 million could be cut down by allowing the District of Columbia to have more taxable income derived from business. Is this conceivable?

Mr. TOOHEY. Mr. Chairman, I would say with the expert operation of the District of Columbia Convention Bureau coupled with the Visitor Center there is no question it would be of great economic benefit to the District of Columbia.

Mr. GRAY. If the average stay of visitors was doubled the District could take in $800 million per year rather than $400 million and that would have a hearing on the amount of taxes collectible from the District of Columbia residents, which would more than pay the cost of maintaining this Center.

I appreciate your testimony.

Are there any questions of Mr. Toohey?

We thank you very much, Mr. Toohey, and would you pass on to your associates in the National Association of Travel Organizations our sincere thanks for this very informative testimony here this morning.

Mr. ToоHEY. Thank you.

Mr. GRAY. Our last witness this morning is Mr. M. C. Mulligan, the president of the Washington Terminal Co., a man who has been very, very cooperative with the 21-member Study Commission over the past several months and sincerely negotiated with us and his associates an agreement that we believe is in the best interest of the American people as well as the owners of Union Station.

I would like to call Mr. M. C. Mulligan, and I notice he has with him Mr. Shaw, the manager of the Union Station. Again let me thank you for coming and you may proceed in your own fashion.

STATEMENT OF M. C. MULLIGAN, PRESIDENT, WASHINGTON TERMINAL CO.

Mr. MULLIGAN. Thank you, Mr. Chairman. My statement is very brief.

My name, as you mentioned, is M. C. Mulligan. I am here today as president of the Washington Terminal Co. to testify regarding H.R. 12603 and its companion bills. Let me state as the outset that my company endorses the purpose of this legislation.

The Washington Terminal Co. is the owner of Washington Union Station and its related passenger terminal facilities. The company constructed these facilities pursuant to a mandate from Congress embodied in the acts of February 12, 1901, and February 28, 1903. The purpose of these statutes was generally to combine the then existing separate terminal facilities of the Baltimore & Ohio and the Pennsylvania Railroads, as well as to eliminate railroad operations at streetgrade level in the District of Columbia.

Congress provided that the Terminal Co. be owned equally by the Baltimore & Ohio and the Pennsylvania Railroads, but that the facilities be made available for the use of the other railroad lines reaching the District of Columbia, namely the Chesapeake & Ohio, the Rich

mond, Fredericksburg & Potomac, and the Southern Railway. The Union Station building, which is primarily the subject of the legislation now before this subcommittee, was constructed in its present form under the provisions of the 1903 statute which included the express requirement that the building be "monumental in character."

As has been brought out, the legislation now before this subcommittee is the result of a study authorized by Public Law 89-790, approved on November 7, 1966. This Public Law established a 21-member Study Commission to investigate plans and sites to provide increased service for visitors to Washington, D.C. Specifically, as I recall, the Study Commission was charged with presenting a report to the Congress which would recommend a site or sites, estimate the cost, and include preliminary plans and specifications. The report to which the Chairman has referred will, as I understand it, cover all three of those areas. Since four members of this subcommittee served on this Study Commission, which, I understand, has determined to recommend that Union Station be leased by the Government for use as a National Visitor Center, I am sure you know more about what you recommend than I do. As I understand it, it is to implement this recommendation that H.R. 12603 and related bills have been introduced in the present Congress.

The plan embodied in the proposed legislation contemplates that the Washington Terminal Co. or its nominee will raise the funds necessary: (1) for alteration of the present Union Station building into a National Visitor Center, (2) for construction of a large parking facility to the north of the present building with suitable access for vehicular and pedestrian traffic, and (3) for construction of a new station building for the use of the railroads.

The U.S. Government would undertake to lease the converted Union Station building for use as a National Visitor Center, and also to lease the parking facility, each for a term not to exceed 20 years, and it is contemplated that the leases with the Government would provide the basis for borrowing the money necessary to carry out the project. The leases would obligate the Government to operate and maintain the leased facilities and to pay an annual rental to the owners.

The plan further contemplates that the amount of the rentals paid to the owners would represent, in each case, only the sum of a percentage applied to value of the properties and the cost to the company of borrowing the necessary funds for remodeling the present station and construction of the parking facility. It is also my understanding that the lessor would be protected against any increase in real estate tax liability or increase in other financial liability which might arise as a consequence of the leases to the Government of the properties and improvements contemplated under this legislation. Such plan is acceptable to the Washington Terminal Co.

As the members of this subcommittee are aware, the report of the National Visitor Study Commission has not yet been released. Therefore, I respectfully request permission, Mr. Chairman, to file a further statement for the record, if appropriate, after there has been an opportunity to review the report.

Mr. GRAY. Without objection that request will be granted.

Mr. MULLIGAN. In June 1965, a joint committee of the National Capital Planning Commission listed Union Station as one of 20 historic landmarks which contribute significantly to the national cul

tural heritage and which "must be preserved." Also included in that group of 20 were the White House and the Capitol. Legislation of the nature proposed here would not only preserve this landmark but fulfill an important public need. Accordingly, the terminal company will use its best efforts to implement legislation, if passed by the Congress, along the lines of the plan now being considered.

In closing, Mr. Chairman, let me express my appreciation for the opportunity of appearing before this distinguished legislative body, and let me pledge my support of the efforts to formulate and carry out a plan to utilize Union Station in making the concept of a National Visitor Center a reality.

Thank you, Mr. Chairman.

Mr. GRAY. Thank you very much, Mr. Mulligan. Again I want to state for the record how cooperative you personally have been to the Study Commission, and also Mr. Shaw, the manager of Union Station. This has been a long and difficult task in trying to work out a solution to our problems, and I would like to ask you for the record whether or not Union Station per se has not served its usefulness as a railroad station because of changing modes of transportation, and if this station is not utilized for a visitor center there may be the real possibility in years to come that you will have to sell this station and build a smaller Union Station, thereby losing this national monument? Mr. MULLIGAN. That is correct. Basically, the station complex, embracing a total of 300 acres of land, represents a plant in total which far exceeds the requirements for railroad operating purposes. A smaller station and a contraction generally of the area is clearly indicated. As a business matter, we would raze the monument, but sometimes there are considerations which transcend business considerations. But this would be, from a business standpoint, our best course of action.

I heard Mr. Knott's testimony, and he stated quite accurately some of the techniques of real estate appraisal. He did not, however, allude to a fourth category which in the trade is known as "highest and best use." Now, the figures adding up in this bill to the $2.9 million were developed on what I consider a most conservative basis. The land value and I make this statement on the basis of outside qualified expert advice the land is worth $74 a square foot, the land alone. Now this is a matter upon which experts will disagree, having in mind that certain of the pertinent facilities such as the railroad terminal and some communications facilities in the basement would continue to be required and used in railroad operations, so I discounted that $74 a square foot to $60 a square foot, and multiplying that by 330,000 square feet I get $19.5 million, which is what could reasonably be expected as a realization from the sale of that land if there were no monument on it.

Mr. GRAY. It is my understanding that you have used a 5-percent figure as return on your investment for the land value. You heard the Administrator of the General Services Administration testify that in our average leasing arrangements around the country he uses from 9 to 15 percent. Is it not correct that you have used a 5-percent formula on the land value as the return on the leased property?

Mr. MULLIGAN. That is correct, and I want to make it clear we have ascribed no value-I repeat, no value-to the station itself. Mr. GRAY. To the so-called monument?

Mr. MULLIGAN. To the so-called monument or landmark.

Mr. GRAY. Or to the improvements?

Mr. MULLIGAN. That is right. We have ascribed no value to the improvements on the land.

Now, I say this because it is a fact, and I wrestled hard with the question of trying to place a value on the monument, and I consider it is incalculable. Therefore, the lease, as we visualize it, would not include in the valuation base any amount representing the present station. We would expect to include in the value base the $5 million or less that might be spent for new improvements, but nothing for the existing improvements.

Mr. GRAY. The new improvements would be in connection with the visitor center?

Mr. MULLIGAN. Yes.

Mr. GRAY. And you would provide up to $11 million for the parking facility and $5 million for remodeling the existing Union Station, and $3.5 million for a new railroad terminal, making a total investment of $19.5 million plus the existing investment plus the air rights over the tracks, and the aggregate cost to the United States for the leases would not exceed $2.9 million a year for a term of not more than 20 years?

Mr. MULLIGAN. That is right. Mr. Chairman, I think we should recognize that all of these figures are ceilings, they are maximum figures.

Mr. GRAY. You would have no objection to this committee writing in that the exact figures would be determined through negotiation but not to exceed $2.9 million?

Mr. MULLIGAN. I would prefer to go with Mr. Knott's figure of not to exceed $3 million.

Mr. GRAY. We are talking about less than a $100,000 a year differ

ence.

Mr. MULLIGAN. Yes, the point, sir, is this: I don't think any of us know now precisely what the $11 million will buy. Hopefully, it will buy 4,000 spaces. It might well prove that it would be a few more. My own guess is it will be less. So that if the $11 million will only buy 3,000 spaces, that is what it will buy.

I know you understand, Mr. Chairman, as do the other members who served on the Study Commission, there is ample additional area, up to 300 acres, but I think this should be clear, we get as the parking facility what the $11 million will buy. Still to be worked out as to design would be the new station facility. We continue to recognize that this is the Nation's Capital and that passengers arriving by train should have an adequate facility, and we intend to provide one, and the present thinking of ours and your consultants is that the new station facility would be incorporated in what you can imagine will have to be a very massive structure.

Mr. GRAY. For parking?

Mr. MULLIGAN. Yes.

Mr. GRAY. You contemplate that visitors arriving by automobile or by train or by subway or by helicopter would go through the Visitor Center. This would be a part of the overall complex.

Mr. MULLIGAN. Definitely.

Mr. GRAY. But not in the existing structure?