GSA Pushes Back FBI HQ Decision Again

The General Services Administration has delayed the announcement of an award in the sweepstakes for the next FBI headquarters.

The GSA had scheduled Friday, March 10, as the date for its announcement of where the $2B FBI HQ will be and who will build it, according to documents obtained by Bisnow, but the agency has now pushed the announcement back further. 

"GSA and FBI have worked diligently since the Fall issuance of the revised schedule," a GSA spokeswoman said in an email. "We have met the milestones at this point. Appropriations are necessary in order for us to make an announcement and move forward with the next critical steps ... and ultimately make an award."

A total of $390M has been appropriated for the project in the FY16 budget. Former President Barack Obama included the remaining $1.4B appropriation, to come from both GSA and FBI funds, in his proposed 2017 budget, most of which was never passed. A House committee in December approved an $834M prospectus for the GSA project, but it remains to be seen how much will be set aside for the project in President Donald Trump's FY17 budget. 

Cushman & Wakefield vice chairman Darian LeBlanc, a former GSA employee who now brokers GSA deals for the firm, said the GSA would have known when they set the March announcement date that appropriations likely would not be made yet, and he thinks there is more to the delay.  

“I think appropriations is a convenient excuse for not saying anything,” LeBlanc said. “I think the administration is going to weigh in and wants to understand what’s going on, and I think there may be some changes in store.”  

The decision of where the 2.1M SF FBI HQ will be developed — which has been narrowed to sites in Greenbelt and Landover in Maryland, and Springfield, Va. — has been highly anticipated for months. The GSA had planned to announce it before the end of 2016, but then pushed the decision back to March. The announcement is likely to include a swap with a developer to build on the J. Edgar Hoover Building site on Pennsylvania Avenue.  

The decision to make the swap is not set in stone, and LeBlanc suggests the GSA may decide to instead ask for full appropriations for the new HQ. This would allow the GSA to offer the Hoover site separately, to a wider array of interested developers, and not limit the development of the Pennsylvania Avenue site to firms able to build a 2M SF suburban HQ.

The increasing influence of the Trump administration on this bid, which has been in the works since 2014, presents some potential issues. The Hoover Building sits almost across the street from the Trump International Hotel, which opened in September after the renovation of the Old Post Office building. The level of activity a development creates on the Hoover site will impact the future success of Trump’s property.

“Clearly this administration has a very personal feel for that block of Pennsylvania Avenue,” LeBlanc said. “I think there are outside unique motivations regarding the disposition of the Hoover Building.”

The official who has overseen this process, Public Buildings Commissioner Norman Dong, is leaving the agency. His replacement is already being vetted, according to a source, and may be announced in the coming days. Since stepping down, Dong has confirmed he will be speaking at Bisnow's Federal Markets & Real Properties event on April 27.

In addition to the proximity of the Hoover Building to Trump's property, those who work with the GSA are also concerned about the close relationship Trump has with some of the developers bidding on the project, including Vornado's Steven Roth and Silverstein Properties, owned by New York City developer Larry Silverstein. Both are longtime Trump associates, and Roth was asked to lead Trump's infrastructure advisory council.

“I think the odds are very high that somebody who has a relationship with Donald Trump will probably be selected as the developer,” LeBlanc said. “The issue is that Trump, through his real estate dealings over the last 30 or 40 years, likely has relationships with all of them, some maybe better than others.”

Prince George’s County Executive Rushern Baker said he was disappointed to learn about the delay but remains confident in the two sites the county has in contention. He said he spoke Thursday night with Maryland Sen. Ben Cardin, Sen. Chris Van Hollen and Rep. Steny Hoyer and they all indicated that the delay was not a cause for concern.  

“They felt confident the process would play out and this was not an indication that the project was not going to take place and that we’re still in a very good position,” Baker said.  

As the GSA awaits President Trump’s political appointees, Baker said he does not expect the new administration to alter plans for the FBI HQ in any way that would hurt Prince George’s County.  

“If the Trump administration doesn’t understand anything else it understands development,” Baker said. “There are very few developable properties along Pennsylvania Avenue so the opportunity to have the private sector develop that project and give the FBI a new campus outside the city would make them more secure.”