The recent disclosure of the Revive Program by the National Bank for Economic and Social Development (BNDES) is a good opportunity to revisit Law No. 14,011/20, which is highly important for the management of the Federal Government's real estate assets and which, promulgated almost a year ago, received little fanfare, despite its remarkable short-term results.

This law introduced, fundamentally, three axes of innovations to the framework of Law No. 9,636/98, today the main piece of legislation dedicated to the topic of federal real estate:

• facilitation for the removal of the annual rent (consolidation of useful and direct areas) of Federal Government buildings submitted to the emphyteutic rent system;
• The provision of an exemption from bidding for the hiring of BNDES to carry out studies and execute plans for the privatization of real estate assets of the Federal Government (which may involve any modalities of privatization admitted by law, such as the sale, exchange, assignment, granting of real right of use or even the creation of real estate investment funds); and
• The possibility of submitting, by any interested party, a proposal for the acquisition of Federal real estate (provided that they are not registered in an emphyteutic rent system or occupied), by means of a specific request to the Bureau of Federal Government Assets (SPU) – thus settling old debates as to the feasibility of boosting the process of disposal of public property on the initiative of the individual interested in its use.

Specifically as to the presentation of offers by interested parties, if the property does not have a valid appraisal, the applicant may provide, at his own expense, an evaluation prepared by an appraiser or specialized firm. Even if the SPU is not obliged to conduct or complete the bidding procedures for the sale of the property subject to the proposal, if the appraisal is duly approved and supports the holding of an effective bidding process, the individual who paid it may acquire the property on an equal basis with the winner of the bidding process – or be reimbursed for the cost of the appraisal if it decides not to exercise its right of preference.

The new legislation aimed to boost and expedite the divestiture of Federal real estate, in order to ensure greater liquidity to its assets and streamline the use of these assets as a public management strategy.

Measurements come at a convenient time. It is estimated that the Federal Government owns more than 750,000 properties – many of which are the result of executions of federal tax debts and seizure and confiscation of assets acquired with funds from criminal practices. Contingent size invariably constitutes a significant burden on the Federal Budget, demanding expenses with the maintenance, supervision, and safety of real estate – although they do not necessarily serve any specific purpose for the government or the public interest more broadly.

Legislative changes already have positive results. While, throughout 2020, about 60 Federal properties have been sold, since the enactment of Law No. 14,011/20, 192 properties have already been the subject of this new type of direct purchase proposal and should go to auction soon.

In this trend, BNDES is preparing to take an active role in increasing the efficiency of the management of the Federal Government's real estate assets. A few months ago, the bank announced the execution of a technical cooperation agreement with the Brazilian Air Force (FAB), with the objective of planning real estate structuring projects that can not only rationalize the real estate expenses of the Air Force Command, but also generate complementary revenues for the FAB, bringing about greater efficiency and economics to the administration of its assets.

The Revive Program, recently published, is a part of this movement. An initiative of the Ministry of Tourism in partnership with the Ministry of Economy of Portugal, the program developed by BNDES is intended for the recovery of federal historical heritage with the support of the private sector. For its viability, the bank intends to structure plans for the concession of cultural goods. A similar action has already transferred, in Lusitanian lands, approximately two dozen properties to private management, allowing the mobilization of at least 150 million euros in investments in the buildings granted. It is a stimulus, undoubtedly, that is very significant for the preservation of historical and cultural heritage, as well as for the tourism economy.

It is expected that, in the course of the current trend, Law No. 14,011/20 and the resulting series of initiatives will reduce the gigantic portfolio currently managed by the SPU, unlock the enormous socioeconomic and cultural potential contained in the real estate heritage of the federal government, and concretely enable the use of highly attractive properties and land for the use of new developments in the country, in the real estate, tourism, and even infrastructure areas – such as the construction of port terminals or other facilities with a multimodal logistics vocation – serving as a valuable tool to attract investments and boost national development.