Last week, the House Transportation and Infrastructure Committee held a hearing in the Cotton Annex, a vacant federal building just south of the National Mall. This hearing was the latest installment of the committee’s “Stop Sitting on Our Assets” campaign, the theme of which is to spur GSA into disposing of underutilized and unneeded properties. Much has been reported on the outcome of this hearing, both by Congress and the local press. We thought we’d focus on the building.
The Cotton Annex was built in 1937 as part of the U.S. Department of Agriculture’s three main headquarters facilities. It was built at a time when “stripped classicism” was all the rage among the in-house government architects who designed most federal buildings of the era. The building stands 7-1/2 floors tall (the half floor attributed to warehouse and related mezzanine space that were converted to office in the 1970s). The building is relatively small, reportedly just 89,000 square feet, but the site is 1.71 acres. The reason for this relatively low land utilization is that the Cotton Annex was planned to eventually be twice the size originally authorized. It was designed as roughly one-half of a building and that is evident today when you note that the building’s southern portion appears sheared off. In fact, in the photo above you’ll see that the “Department of Agriculture” inscription on the top of the building is placed so as to be in the center of the to-be-completed structure.
The Cotton Annex is located just southeast of USDA’s massive 2+ million gross square foot South Building. For seventy years the USDA occupied the building, even modernizing it in 1970. However, since 2007 the Annex has been vacant, though the Federal Protective Service has rented the parking area as an inspection point for vehicles serving the Ronald Reagan Building. And this gets to the heart of the issue because the FPS pays rent for the parking area sufficient to cover the annual operating costs of the entire property ($279,000 in FY 2011). GSA contends that the property does not lose money and it doesn’t want to sell because the Cotton Annex represents one of the few remaining developable parcels in DC in GSA’s inventory. The agency views the site as a critical asset for future federal development, meeting GSA’s goal of prioritizing Federally-owned space over leased space. The Cotton Annex is also proximate to GSA’s Central Heating and Refrigeration Plant and there is planning underway to determine if the site can be utilized as part of GSA’s plan to modernize the heating, cooling and transmission system used to serve 93 buildings in downtown Washington, DC.
Congress, however, wants the property sold and it has introduced various legislative proposals over the past several years to dispose of all or part of the property. Among these were efforts to establish a National Health Museum in the current building and a separate proposal to sell the parking area north of the existing building (along with portions of other federal parcels) for construction of a National Women’s History Museum.
In both instances, the property would be transferred at market value, much of which is in the land. The property is zoned C-3-C which also exists throughout much of the City’s CBD and East End submarkets. Though the current City assessed value is just shy of $50 million, the Congressional Budget Office (CBO) estimates that the entire Cotton Annex property is worth at least $150 million.
Whether this property is ultimately sold or not will probably hinge on whether GSA will control the proceeds. As GSA Public Buildings Commissioner Bob Peck noted in his testimony: “GSA has not objected to many of the legislative proposals, as the proposals required compensation of fair market value and protected the public’s interest in these properties. Recent proposals in the House, however, have unfortunately revised this legislation, subjecting the proceeds to future specific appropriations as well as including unrelated projects.”