Virginia Making a Strong Play for New FBI Headquarters

(The Washington Post) -

Virginia’s top elected leaders huddled with real estate executives in a Senate conference room this spring to address a shared concern: that their chance to build a new FBI headquarters in Springfield was slipping away.

All three sites being considered for the project – Greenbelt and Landover in Maryland and Springfield in Virginia – involve costly obstacles to development. But Springfield’s were beginning to mount, particularly the difficulty of relocating a secure CIA facility from the grounds. “The developers were very frustrated,” said Fairfax County Supervisor Jeff C. McKay, D-Lee.

The General Services Administration, which oversees the project, was asking developers interested in building on the Springfield site to spend hundreds of millions of dollars to move the CIA facility, something McKay called “totally unreasonable and unfair.”

Although Springfield had been approved by the GSA as a site, the concern was that eligible developers would pass because of the costs, effectively handing the project to Maryland.

With Gov. Terry McAuliffe (D), Sens. Mark Warner (D) and Timothy M. Kaine (D), Northern Virginia officials and support staff, the group at the March 8 meeting in the Dirksen building swelled to more than 100.

Officials beseeched the firms not to give up on Springfield while they pushed back on the costs builders would pay for a CIA move that Virginia leaders argue should have been relocated anyway long ago.

“If you want to set Virginia up to fail, saddle them with all these relocation costs and you’ve done it, and that seems to be the direction GSA was going in to favor Maryland,” McKay said.

The purpose of sitting down with the developers “was to show that Virginia is ready to play ball,” said Commerce and Trade Secretary Maurice Jones. “We’re competing, we’re competitive – we’ve got federal officials, we’ve got state, we’ve got local.”

Since then, Virginia has been negotiating over the CIA costs, suggesting that the facility could be moved to state-owned land and saying that the state will pay to improve roads and other associated costs at the Springfield site.

The result: Virginians are now convinced that developers will at least bid to build on their site.

For more than a decade, the FBI has been pushing for a new headquarters to replace the dated and crumbling J. Edgar Hoover Building in downtown Washington. The GSA wants to trade the Hoover Building site and as much as $1.8 billion in cash to a developer in exchange for a 2.1 million-square-foot secure campus at one of the three potential sites outside the city. Final costs will not be known until the GSA reaches an agreement.

District of Columbia officials, meanwhile, are eager to see the hulking concrete Hoover Building, which sits on prime real estate along Pennsylvania Avenue, transformed into more than a block of new offices, housing or retail, once the agency moves on.

In Springfield, relocating the CIA facility would be costly to developers. In a May 13 notice to eligible bidders, the GSA disclosed that relocation would cost $210 million and that other site preparation would total $18 million.

That’s not to say the Maryland sites don’t have drawbacks.

Unlike Springfield, neither is owned by the federal government, and the GSA has agreed to pay an undisclosed amount of money to acquire them in the case that either is chosen. A partnership between Renard Development and the Washington Metropolitan Area Transit Authority controls the Greenbelt site, while Lerner Enterprises and Tower Cos. own the Landover site, formerly home to the Landover Mall.

Bids for the project are due June 22, and the government plans to select a winner by year’s end. The winning company and site will be chosen based on a combination of factors, including the cost of constructing the new headquarters and the amount developers are willing to pay for the Hoover Building in return.

All three sites will also require more than $100 million in transportation upgrades to accommodate 11,000 FBI headquarters employees, and officials from both states are determining how much money to dedicate to those improvements.

“Virginia and the localities will pick up the bulk of the mitigation costs of the site,” said McAuliffe spokesman Brian Coy, who declined to say what the price tag would be.

A spokeswoman for the Maryland Department of Commerce declined to comment.

Prince George’s County Executive Rushern L. Baker III (D) has also committed to paying for a garage at Greenbelt needed to replace Metro’s current parking lots there, estimated at between $90 million and $100 million, or county road improvements at Landover, estimated at between $30 and $40 million.

In addition to the FBI headquarters, the Greenbelt development would include mixed-use private development that would return more tax revenue to the county, said David S. Iannucci, a top economic development aide to Baker.

“We’re trying to treat the two sites as equitably as we can,” he said.

Sen. Barbara A. Mikulski (D) of Maryland, the ranking member on the powerful Senate Appropriations Committee, has already won $390 million to pay for the project – regardless of its location – and is pushing to add another $646 million.

Some Virginia leaders speculate that Mikulski’s forceful advocacy will result in Maryland getting the nod for the new headquarters.

GSA officials say the project will be decided on its merits. A spokesman did not return requests for comment on the costs of moving the CIA facility.

One developer with extensive land holdings around the Springfield site, Boston Properties, has decided not to bid at all, according to two executives familiar with the competition who spoke anonymously because of the confidential nature of the competition.

Boston Properties was an early advocate of Springfield as an FBI site and had been working closely with Virginia officials on their plans. Raymond Ritchey, senior executive vice president at the company, did not return a request for comment.

Jones said he did not view Springfield as an underdog. “We’re fighting to be the winner. . . All three sites have issues. What we’re doing is working hard to address the issues that we have with ours,” he said.