GSA Cancels Search For New $2B Suburban FBI HQ

The federal government is scrapping plans to move the FBI out of the crumbling J. Edgar Hoover Building into a new $2B campus in the D.C. suburbs.

The General Services Administration announced Tuesday morning it is canceling the search for a new FBI HQ site, after the Washington Post first reported the news Monday evening. A GSA spokesperson said the cancellation came because Congress had not appropriated the necessary funds. Of the $1.4B requested for the project, $523M had been set aside so far, and some members of Congress have recently shown an unwillingness to appropriate the full amount.

“Moving forward without full funding puts the government at risk for cost escalations and the potential reduction in value of the J. Edgar Hoover property that developers were to receive as part of this procurement,” a GSA spokesperson said in a statement. “The cancellation of the project does not lessen the need for a new FBI headquarters. GSA and FBI will continue to work together to address the space requirements of the FBI.”

The search for where to build the new 2.1M SF campus had been narrowed down to three sites in Greenbelt, Landover and Springfield. Companies had bid on the right to build the new HQ in exchange for the ability to redevelop the Hoover Building site on Pennsylvania Avenue, a prime mixed-use development opportunity that could transform the ceremonial street between the White House and the Capitol.

The decision between the three sites had been expected to come before the end of 2016, but was delayed more than six months as the GSA waited for Congress to appropriate funds. A House subcommittee voted on June 29 to rescind a $200M appropriation that already had been set aside, signaling the project was in jeopardy.

Selecting a site for the FBI HQ was the biggest decision on the board for the GSA, an agency that has been under temporary leadership since Trump took office. One former top GSA official had speculated the decision may be pushed to 2018, but most GSA watchers did not expect a full cancellation.

Local government officials blasted the decision to end the search, calling the need to move the FBI a major national security issue and infrastructure issue.  

“The Trump administration made a decision that would jeopardize and put in danger men and women that work in the FBI and it will cost the American taxpayers more dollars,” Prince George’s County Executive Rushern Baker said at a press conference on Capitol Hill Tuesday afternoon. Both the Greenbelt and Landover sites are in Prince George’s County, and Baker recently announced a run for Maryland governor in 2018.

Rep. Gerry Connolly (D-Va.), whose district includes the Springfield site, pointed to President Donald Trump’s potential conflicts of interest as a factor in the decision.  

“I put the blame largely on the conflicts of interest of Donald Trump himself,” Connolly said on WTOP Tuesday morning. “He’s failed to appoint a GSA administrator. He fired the FBI director and hasn’t gotten a replacement. He has business ties with one of the bidders from Vornado, a man named [Steven] Roth … Meanwhile across the street he’s got a GSA lease on the Trump hotel even though it says no elected official can participate."

But not all were critical of the GSA’s decision. Cushman & Wakefield Vice Chairman Darian LeBlanc, who was involved with one of the bids on the project, said that while the cancellation will anger bidders and local officials, it is the right decision in the long run. He said the GSA overcomplicated the deal by involving a swap of the Hoover Building site.  

“The whole notion of swapping Hoover to buy down the costs of developing the FBI headquarters was ill-conceived,” LeBlanc said. “It artificially constrained the value of Hoover, one of the most valuable pieces of property in the city, possibly in the country, and you were going to limit the buyer pool to companies that could build a federal building. It makes no sense.”  

LeBlanc said he believes the GSA will need some money to patch up the Hoover Building for the short term, but he believes the agency will restart the search for a new HQ soon. He said starting from scratch gives it the ability to do the two deals separately and consider other options for the new site. LeBlanc said he expects the three finalists to remain in contention, but he said each of those sites had problems and the GSA should look elsewhere in the District and the suburbs for more options.  

“The GSA owes it to themselves, to the FBI and to the city to take some time to try to find the Goldilocks,” LeBlanc said.