Yesterday (January 17) GSA hosted an “industry day” conference to provide additional background relating to their Request For Information soliciting developer input on ideas to replace the existing J. Edgar Hoover (JEH) Building, FBI’s headquarters since 1975.
When the feds announce a two million square foot project, developers turn out. Such was the case yesterday when a few hundred members of the real estate community descended upon a lone, beleaguered desk guard at GSA headquarters. The response was overwhelming and perhaps no surprise since the federal construction spigot has tightened significantly over the past two years. This project would be special in its own right, but with little else to distract the development community it received acute attention yesterday.
Perhaps there was also some interest in seeing if this conference truly marks a new era in creative thinking regarding federal projects. Something is afoot at GSA. The real estate community wants to know if the JEH exchange signals a real shift in federal dealmaking or simply another chase down the rabbit hole.
Here are some facts about the JEH replacement project:
- The existing JEH building sits on 6.66 acres of prime real estate at 935 Pennsylvania Avenue, NW. It is zoned C-4, which allows for high density commercial development–subject, of course, to the District’s Height Act and oversight, review and compliance imposed by a variety of entities including the National Capital Planning Commission, the U.S. Commission of Fine Arts, the National Park Service, the District of Columbia and the development guidelines established by the now-disbanded Pennsylvania Avenue Development Corporation.
- The JEH building currently houses 52% of FBI headquarters staff. The rest are scattered through (reportedly) another 20 buildings, primarily downtown. In total, FBI occupies almost three million square feet of headquarters space. The planned consolidation would reduce that to nearly two million.
- The government is looking for a 40-55 acre site to accommodate about 2.1 million square feet of office space, housing more than 11,000 people. It is clear that the new headquarters will require excellent access to public transit and it must incorporate sustainable design. According to FBI, a very small proportion of its current staff commute to work solo and initial specs for the new facility substantially limit the number of parking spaces.
- GSA and FBI cite several key benefits to the new headquarters project including the ability to consolidate, the expectation that at least 800,000 fewer square feet will be required (as compared to the current footprint), anticipated cost savings of $44-$54 million annually and the ability for the government to be able to own the facility (FBI currently leases almost half of the headquarters space it occupies).
It’s an interesting project and a big one–even by government standards. It’s also likely to be difficult to make it pencil. The JEH building is tremendously valuable, yet it is functionally a land site. The City clearly wants to see it torn down and the L’Enfant Plan honored, including re-establishing D Street through what is now a single super-block. As valuable as it is, there will be a significant differential between the JEH site valuation and the cost of a new facility.
Much needs to be done within GSA, Congress and OMB to fund and execute a project of this scale and complexity, and the government is, wisely, soliciting concepts before determining its course. GSA initially positioned that it is looking for developers to execute an exchange but was careful yesterday not to discourage concepts that address only only a part of the overall intended relocation project.
Responses to the RFI are due March 4th and I imagine that day will feel a bit like Christmas at GSA headquarters. One must wonder, however, if the opening of proposals will reveal the gifts they had hoped for. The speed at which this project is ultimately executed will depend largely on the contents of those RFI packages and the degree to which GSA can harness private sector capital and resources.