The cash-strapped Postal Service is spending $200 million a year renting empty buildings, including a massive, nearly empty warehouse complex in Springfield that's costing $2.6 million a year, a FOX Undercover investigation has found.
The Postal Service is stuck with a long-term lease for a 41,200-square-foot Brookdale Drive building that it's never used and another, bigger building next door that is used as a storage shed and for seasonal mail processing. Combined, the two buildings cost the Postal Service $216,000-a-month to rent thanks to a 2004 lease they signed which doesn't expire for another year.
"This is a waste," said US Rep. Stephen Lynch, D-South Boston, a member of the Congressional Committee on Oversight and Government Reform, which is monitoring the Postal Service's cash crunch. "When we're thinking about shutting down post offices around the country to save money because we can't meet the budget and then you see this outlay of cash -- I know they're trying to recoup the money but they cannot go out ten years and put a long term lease out there like that in the future. That cannot happen."
But it did happen, all over the country, and now the US Postal Service and its customers are paying a very steep price. Things are so bad the Postal Service is talking about closing post offices and stopping Saturday delivery as it deals with the need to cut billions to avoid bankruptcy.
The savings could be significant if the Postal Service unloaded the unused property it's locked into leasing.
"They tell me that there may be savings in the area of $200 million out there if they can offload some of these long term leases. So that gives you an idea of how much space is out there," Lynch said.
The Postal Service declined our request for an on-camera interview. But a spokesperson released a statement noting one of the Springfield buildings was used until 2011 and subleased the other one until 2009.
In a statement the spokesperson says, "...we entered into a long term lease for the properties...in anticipation of a need for additional workspace as mail volume continued to grow. At that time it was the policy of the Postal Service to lease property for the entire planned period of use, and avoid the risk of incurring higher costs in the competitive real estate market....Today, we employ different strategies and often renew leases for much shorter periods."
The Postal Service is still trying to rent out both properties as it continues to pay the $2.6 million in annual rent.
"It's almost a pattern isn't it?" said fiscal watchdog Barbara Anderson of Citizens for Limited Taxation. "You find a little scandal, a little local thing somewhere and you do a story about it, and then you suddenly realize it's all over the country."
"The key is to not get into the problem in the first place. Government tends in good economic times to just go crazy, spend money. Get itself in contracts and leases and not worry about where the money's coming from because at that time in history, that moment, there's plenty of money," she said.
Finding tenants to sublease the postal properties isn't easy, and even when tenants are found, they're not signing deals that allow the Postal Service to break even.
FOX Undercover told you about the long-term lease the Postal Service signed in 1999 for a building in Winthrop that it has never used, costing $3.7 million over 20 years. Finally in January, the Postal Service subleased the property for the last seven years of the of the lease. But the new tenant is only paying $19,200-a-year, less than one-tenth of the amount of money the Postal Service is still on the hook for until 2019.
The postal money pit goes even deeper when you look across the country at the $200 million spent for long term leases on properties not being used.
"Think of how many postal employees or post offices we could keep open with that type of revenue," Lynch said.
"I believe it was Ben Franklin who was the first postmaster general who said a penny saved is a penny earned. And he'd be rolling over in his grave today," said Anderson.