The opinion of the court was delivered by: Colleen Kollar-kotelly United States District Judge
Plaintiff, New Life Evangelistic Center, Inc. ("New Life" or the "organization"), filed the above-captioned matter on July 13, 2009, naming as Defendants, Kathleen Sebelius, in her official capacity as Secretary of the U.S. Department of Health and Human Services ("HHS"), and Paul F. Prouty, in his official capacity as Administrator of the U.S. General Services Administration ("GSA") (collectively, "Defendants"). New Life challenges HHS' denial of the organization's application made pursuant to Title V of the McKinney-Vento Homeless Assistance Act ("McKinney Act" or the "Act") to use a particular piece of federal property located at 339 Broadway Street, Cape Girardeau, Missouri for a homeless assistance program.
On Tuesday, July 21, 2009, shortly after filing the Complaint in this matter, New Life filed a  Motion for Preliminary Injunction. In order to permit the parties a more generous (although expedited) schedule for briefing the merits of Plaintiff's Complaint, as well as to provide the Court with additional time to adequately consider the parties' arguments as set forth therein, the parties agreed that: (1) GSA would not sell the surplus property at issue prior to January 1, 2010 (and would provide the Court and New Life with 30 days notice of any such sale, if GSA decided to sell the property at any time after January 1, 2010); and (2) New Life's  Motion for Preliminary Injunction would be converted into and treated as its opening brief on the merits of Plaintiff's Complaint. Pursuant to that agreement, the Court deems New Life's now-pending  motion as its opening motion on the merits.
As set forth therein, New Life contends that HHS' decision denying its application for use of surplus federal property under the McKinney Act is arbitrary, capricious and contrary to the law. New Life therefore seeks an order vacating HHS' decision below and remanding this case back to HHS for further review and explanation. Upon thorough consideration of the parties' submissions, the administrative record, applicable case law, the relevant statutory and regulatory authority, as well as the record of this case as a whole, the Court concludes that HHS' decision below must be vacated and this case must be remanded to the agency for further action consistent with this Memorandum Opinion, for the reasons set forth below.
A. Statutory and Regulatory Background
Congress passed the McKinney Act in 1987, recognizing that "the federal government 'has a clear responsibility and existing capacity' to help meet an immediate and unprecedented crisis due to the lack of shelter for a growing number of individuals and families." Nat'l Law Ctr. on Homelessness & Poverty v. U.S. Veterans Admin., 98 F. Supp. 2d 25, 27 (D.D.C. 2000) (quoting 42 U.S.C. § 1130(a)(1) & (6)). In particular, Title V of the Act, 42 U.S.C. § 11411, and its implementing regulations, 45 C.F.R. § 12a et seq., provide a detailed regulatory framework for making "unutilized, underutilized, excess or surplus" federal real property available for use by representatives of the homeless. 45 C.F.R. § 12a.2(a); see also 42 U.S.C. § 14111(a)-(f). The Act appropriates and modifies, in part, the administrative procedures established by the Federal Property and Administrative Services Act of 1949 ("FPASA"), 40 U.S.C. § 541, et seq., which authorizes HHS to dispose of surplus property "as needed for use in the protection of public health," 40 U.S.C. § 550(d)(1), a congressional mandate interpreted to include use by organizations which provide "services (including shelter) to homeless individuals," 45 C.F.R. § 12.3(e). In order "to use public resources and programs in a more coordinated manner to meet the critically urgent needs of the homeless," 42 U.S.C. § 11301(b)(2), the Act instructs HHS, GSA, and the Secretary of Housing and Urban Development ("HUD"), to cooperate in identifying, publicizing, and reserving suitable surplus federal real property, id. § 11411(a)-(d). Of particular relevance to the case at hand, the Act charges HHS with soliciting and evaluating applications for use of designated properties submitted by representatives of the homeless. Id. § 11411(e).
The process starts with HUD, which is responsible for canvassing the landholding agencies - i.e., the federal department or agency with statutory authority to control the property, 45 C.F.R. § 12a.1. On a quarterly basis, HUD collects data on properties that are described as unutilized, underutilized, excess or surplus by the landholding agencies (or that are in GSA's current inventory of excess or surplus property).*fn1 Id. §§ 12a.3(a) & (c). Within 30 days of receipt of this information, HUD is required to make a determination as to the suitability of each property for use as a facility to assist the homeless and to notify the landholding agency of its conclusion. Id. §§ 12a.3(a)(1) & 12a.4; see also id. § 12a.5(c); 42 U.S.C. § 11411(a). Pursuant to the implementing regulations, all properties are determined suitable unless a property is affected by one or more of certain enumerated conditions.*fn2 See 42 C.F.R. § 12a.6.
Once a landholding agency is notified by HUD that a property has been determined to be suitable for use to assist the homeless, the agency must advise HUD within 45 days as follows:
(1) with respect to unutilized or underutilized property, the agency must indicate whether (a) it intends to declare the property excess or to make the property available for use to assist the homeless or (b) the reasons why the property cannot be declared excess or made available for use to assist the homeless; and (2) with respect to excess property previously reported to GSA, the agency must indicate whether (a) there is no compelling federal need for the property, such that it may be determined surplus or (b) an explanation as to why there is a further and compelling Federal need for the property, such that it is not presently available for use to assist the homeless. Id. § 12a.7; see also 42 U.S.C. § 11411(b).
HUD is then required to publish in the Federal Register a description of any available property that has been determined suitable for use as a facility to assist the homeless. See 45 C.F.R. § 12a.8(a); see also 42 U.S.C. § 1411(c). Once such information is published, GSA is authorized to notify certain entities - namely, state and local government units, any known homeless assistance providers that have expressed interest in the particular property, as well as any other appropriate organization - that suitable, excess property is available for use. 45 C.F.R. § 12.a5(g). Properties published as available for use to assist the homeless may not be used by landholding agencies for any other purpose for a period of 60 days from publication of the notice. Id. § 12a.9(a)(1); see also 42 U.S.C. § 11411(d). Any representatives of the homeless who are interested in such property must send HHS a written "expression of interest" within that 60-day time period. 45 C.F.R. §§ 12a.9(1)-(3), 12.3. Upon timely receipt of a representative's written expression of interest, the property may not be made available for any other purpose until the application has been resolved. Id. § 12a.9(a)(2).*fn3
Once HHS has received an expression of interest, it sends the interested entity an application packet, which requires the applicant to provide information including the following:
(1) Description of the applicant organization. The applicant must document that it satisfies the definition of a "representative of the homeless" . . . . The applicant must document its authority to hold real property. Private non-profit organizations applying for deeds must document that they are section 501(c)(3) tax-exempt.
(2) Description of the property desired. The applicant must describe the property desired and indicate that any modifications made to the property will conform to local use restrictions except for local zoning regulations.
(3) Description of the proposed program. The applicant must fully describe the proposed program and demonstrate how the program will address the needs of the homeless population to be assisted. The applicant must fully describe what modifications will be made to the property before the program becomes operational.
(4) Ability to finance and operate the proposed program. The applicant must specifically describe all anticipated costs and sources of funding for the proposed program. The applicant must indicate that it can assume care, custody, and maintenance of the property and that it has the necessary funds or the ability to obtain such funds to carry out the approved program of use for the property.
(5) Compliance with non-discrimination requirements. Each applicant and lessee under this part must certify in writing that it will comply with the requirements of [the relevant Federal non-discrimination laws]. The applicant must state that it will not discriminate on the basis of race, color, national origin, religion, sex, age, familial status, or handicap in the use of ...