A top official in the District of Columbia’s troubled property management office has continued to serve as partner in a real estate development firm that does millions of dollars of business in the city.
Richard “Rick” Gersten, deputy director of the Office of Property Management, is responsible for managing the leases of more than 3 million square feet of city offices and buildings.
When he announced Gersten’s appointment in April, property office director Lars Etzkor said his new deputy “was the cofounder and managing partner of FreemanGersten Partners LLC, a 12-year-old District commercial real estate firm.”
FreemanGersten manages more than 4.5 million square feet of commercial real estate in and around the District, including Techworld, the Watergate, and the Shirlington Gateway office building.
Property department spokesman Bill Rice said Thursday that Gersten’s appointment isn’t a conflict because FreemanGersten “does no business with the city.”
“We needed somebody quickly, with a minimal learning curve, who could address our problems and bring in best practices,” Rice said of Gersten’s hiring. “And he answered the description. He’s laying the foundation to help us turn around and solve our leasing problems.”
Gersten was hired under a “Personnel Exchange Agreement,” which treats him as an outside consultant — allowing him to hold other jobs — but gives him the full authority of a city official.
More than half of D.C.’s office leases will expire within the next year, potentially giving Gersten enormous influence in shaping deals between the city and private developers.
District Council member Phil Mendelson, D-At Large, said he was worried that Gersten’s dual roles will affect progress on the city’s new crime laboratory. The city has been trying to negotiate a lease that will free up space for the $200 million-plus lab.
“If you’ve got somebody whose credibility is going to be questioned, it could jeopardize the ability to complete these key projects,” Mendelson said.
Mendelson said he has been trying to arrange a meeting with Gersten for weeks but has not yet received a response.
Gersten’s Personnel Exchange Agreement is “unusual, but not unique,” said Mike Rupert, spokesman for the D.C. Department of Human Resources. D.C. law specifies that exchange agreements should be used “sparingly.”
But a longtime monitor of city government said the property department shouldn’t be allowed to use the exchange agreements at all.
“It’s outrageous,” said Dorothy Brizill, publisher of D.C. Watch, a nonprofit newsletter. “There has to be a firewall between the Office of Property Management and the developers.”
Brizill said it was vital to avoid any appearance of a conflict given the history of the Office of Property Management. In 2004, then-deputy director Michael Lorusso pleaded guilty to taking bribes to steer city leases to developers.
Anyone with information on the Office of Property Management should call Bill Myers at 202-459-4956 or send an e-mail to [email protected].
