Committee Allocates $834M to a P3 For New FBI Headquarters

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DALLAS -- The House Transportation and Infrastructure Committee allocated $834 million on Wednesday for construction of a new FBI headquarters that the government expects to finance as a public-private partnership through a swap of the current FBI building in downtown Washington.

The General Services Administration intends to pay for the new FBI building in part through the trade of the 6.7-acre J. Edgar Hoover Building site with a private partner who will build a larger and more secure facility on one of three sites outside the city.

The committee capped the total federal contribution to the project at $2.11 billion, which does not include the estimated $500 million value of the Hoover Building.

Congress approved $390 million for the project in the fiscal 2016 omnibus budget bill and the $834 million that is part of the General Service Administration's fiscal 2017 appropriations request. President Obama had requested $1.4 billion for the FBI project in his fiscal 2017 budget request.

When the new headquarters was first proposed in 2013, the sale of the downtown FBI site had been expected to provide most of the funding.

The new headquarters would provide 2.1 million square feet for all 11,000 FBI employees in the Washington area now based in 14 different facilities.

GSA said it would cost up to $1.1 billion to renovate and update the Hoover Building, but even then the updated structure would provide space for only 52% of FBI's Washington employees. The consolidation would cut the agency's spending on rented offices by $50 million a year.

The size and complexity of the project will require intense congressional scrutiny as it progresses, said Rep. Bill Shuster, R-Pa., chairman of the Transportation Committee.

"This will greatly improve the FBI's security posture and its operations, and save money," he said. "It will important to ensure there is strong congressional oversight to keep the project on time and on budget."

The GSA is unlikely to realize the full value of the FBI site in downtown Washington with the proposed swap, said Rep. Peter DeFazio, D-Ore., the senior Democrat on the panel.

"I am concerned that they've come up with this bizarre construct where they're going to try to get someone to bid on buying the old FBI headquarters and building the new one. I think pairing the two is stupid," he said.

"It's certainly going to limit the number of people who are interested in constructing and bidding on the new FBI headquarters," DeFazio said. "I'm concerned that we won't get full value for the downtown property."

The appropriations plus the value received for the Hoover Building will be enough to accomplish the headquarters swap, said GSA project manager Bill Dowd. Selection of the private partner and the site choice for the new FBI building had been slated for late 2016 but was delayed by the GSA in October.

"Due to a strong and overwhelmingly positive response from developers to the solicitation issued earlier this year, the GSA and the FBI now plan to announce the selected site and offer for the competition in early March 2017," said GSA spokeswoman Renee Kelly.

President-elect Donald Trump said in 2013 that the Trump Organization was interested in buying the FBI site, which is near the Old Post Office building that Trump turned into a luxury hotel, but it did not submit a bid.

Two Trump business associates are among the contenders: Steven Roth, founder and chief executive of Vornado Realty Trust, and Larry Silverstein, whose Silverstein Properties has extensive Manhattan real estate holdings.

Other bidders include Boston Properties, a Massachusetts-based real estate investment trust, and the Peterson Cos., a privately owned real estate developer in Fairfax, Va.

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