Former GSA Real Estate Chief Expects FBI Decision To Be Delayed Until 2018

Developers and local officials from Maryland to Virginia have been on the edge of their seats waiting for the General Services Administration to announce the site and developer for the FBI's new $2B suburban campus, a decision that was pushed from late 2016 to March and then delayed indefinitely.

Former GSA public buildings commissioner Bob Peck thinks they will have to keep waiting until 2018. 

The Trump administration has yet to appoint a permanent administrator to replace Denise Turner Roth or a public buildings commissioner to replace Norman Dong, who left the agency last month. Peck, who led the GSA's Public Buildings Service for eight years, said a decision as big as the FBI HQ is not one likely to be made by temporary acting officials. 

The decision of where the 2.1M SF FBI headquarters will be developed has been narrowed to sites in Greenbelt and Landover in Maryland and Springfield, Virginia. 

"The permanent appointees need to be there to make a decision like this," Peck said. "Whoever gets nominated to run the GSA and to be the head of PBS, they’re going to own this thing... You're going to have to testify in front of Congress and you’d hate to be in the position to say 'I was just a week in, I wouldn’t have done it this way.'

"[Congress is] going to say 'I don’t give a shit, just tell us how it’s going,'" he added.

The administration still has hundreds of appointed positions to fill, but Peck said it is not unusual for the GSA nominations to come in April or May, since it is not as high-profile as other agencies. Some expect Trump will nominate people from the commercial real estate industry for the GSA, but Peck said people who have leases with the GSA could have conflict-of-interest concerns, and most prefer to stay in the private sector to make more money. Peck said he expects the appointees will be people who have worked in the GSA before. 

"You assume they’ll reach back into previous administrations," Peck said. "I'm not hearing a lot of rumors yet. I think the acting people may be there for a while."  

Aside from filling its leadership positions, the main issue GSA has cited in delaying the FBI decision is getting Congress to approve funding for the project, something Peck expects will take months to solve. Congress had initially expected that swapping the suburban campus with the Pennsylvania Avenue site of the FBI's Hoover building would cover the cost of the project, but that estimate fell far short, and the GSA still needs a $1.4B appropriation from Congress.

President Barack Obama had included that funding in his FY17 budget proposal, but it was not approved. Peck said the Trump administration is focused on other priorities.

“The problem is the people in Congress didn’t see this coming," Peck said. "The budget for the year is pretty far down the line, the Obama administration was prepared to ask for the money and Trump is not. Congress doesn’t have the request in front of them."

"The bottom line is it doesn't happen until next year some time," Peck said. 

Peck said the solution to the funding issue for the FBI project is to allow public-private partnerships. Cities, states and universities do these types of partnerships, Peck said, but because of budget scoring rules the federal government has stayed away from them. 

"For the FBI, the government could buy the site, tell somebody to build on the site, a private developer finances and leases it back to the government for 25 years and at end of term the government owns the buildings," Peck said. "Everyone's happy." 

GSA appointees from Democratic and Republican administrations have all supported doing public-private partnerships, Peck said, but Office of Budget and Management officials have prevented it. The argument against public-private partnerships, Peck said, is that it could spiral out of control if other parts of government want to buy long-term assets with similar installment plans, like the Navy buying an aircraft carrier. But he said exemptions could be carved out to allow the partnerships for major government projects like the FBI HQ. 

"Maybe the fact that this is a major project that needs to get done and getting the big appropriation may be hard to do, maybe that will push this forward," Peck said.

The White House hardly ever played a role in GSA matters during Peck's eight years at the agency, but he said some are hoping that Trump could step in and help find efficient solutions, like public-private partnerships, given his real estate background. 

"There’s a hope Trump will have some interest and exercise it in an appropriate way to change the policy," Peck said. "He’s obviously busy and that may take a little longer to happen."

Peck will discuss the FBI HQ and other GSA-related topics at Bisnow's Federal Properties Summit on Thursday at National Square, 500 D St. SW.