Defense Department Plans Could Lead to Empty Offices, Loss of Jobs
By Leef Smith
Washington Post Staff Writer
Thursday, May 19, 2005
Standing on the roof deck of the 16-story CACI building at Ballston Plaza last Thursday, Terry Holzheimer looked down at the buildings below and optimistically began to describe a plan to turn the surrounding landscape into a secure office park complete with one-way streets, blast-resistant glass and architectural reinforcements to protect the area's federal defense employees from terrorist attacks.
It was a plan hatched over many hours of discussions with the Department of Defense and consultants in the hope that Arlington County could find a way to make the office space it leases to the Pentagon conform to new federal anti-terrorism building standards, and stave off losing thousands of defense workers.
Holzheimer, Arlington County's economic development chief, believed the county could come to an agreement with the Defense Department. The standards would eventually be made more flexible, and rational people, he reasoned, would come to rational decisions.
Twenty-four hours later, Holzheimer was back atop the CACI building in his agency's office for a news conference, listening as U.S. Rep. James P. Moran Jr. (D-Va.) and Arlington County Board Chairman Jay Fisette (D) detailed the day's explosive news: A new round of recommendations for military base closings and realignments had been released, and Defense Secretary Donald H. Rumsfeld had recommended the government abandon virtually all of the Defense Department's leased office space in Arlington. As a result, the county would lose 20,000 jobs and be left with some 4 million square feet of vacant office space.
"We were surprised," said Holzheimer, trying not to look completely shell-shocked.
While local leaders and planners had warned that the Defense Department might use new anti-terrorism standards -- which officials say are virtually impossible to comply with in an urban setting such as Arlington -- as a vehicle to relocate its leased space to military bases, few were expecting the wholesale exodus that has been recommended.
Moran, whose district includes Arlington -- home to about 60 percent of the Pentagon-leased space in Northern Virginia -- had asked Rumsfeld to ease the rules and had been predicting economic gloom for weeks.
Despite the obvious disappointment Friday, officials tried to focus on the opportunities they said remain, stressing the high-priced leases that Arlington is known to attract. Jobs leaving the county, Moran said at the news conference, would be staying in the region, most of them shifting to Fort Belvoir in Fairfax County, suggesting that residents would be able to maintain their current homes. Children, would not be uprooted from local school systems, he said, and thousands of government contractors would not need to leave their county offices, he said. Others say it's too early to predict whether contractors will stay.
While Fisette tried to remain upbeat, his words rang with frustration. "We have been through these challenges before," he told those assembled. "We will survive it."
The last round of closures 10 years ago resulted in the loss of 1.2 million square feet of office space in Arlington previously leased by the Navy. Another 1 million square feet was lost in 2001 when the Naval Sea Systems Command moved from Crystal City to the Washington Navy Yard in Southeast D.C.
In December 2003, the U.S. Patent and Trademark Office in Crystal City began a phased move of 2.3 million square feet of office space to Alexandria. Crystal City has yet to recover that lost tenant base. Today, the county's vacancy rate for leased space is 9 percent, and Crystal City's is twice that amount.
Northern Virginia's vacancy rate for leased office buildings is 11.7 percent. It was roughly 15 percent a year ago, according to CoStar Group Inc., a Bethesda-based real estate research firm.
The Pentagon's plan now goes before the nine-member Base Realignment and Closure Commission, which will make its recommendation to President Bush on Sept. 8. The president must accept or reject the list in full and submit it to Congress by Sept. 23. Roughly 85 percent of the changes proposed in earlier rounds of base closings have stuck.
If the plan goes through, the changes would take effect over the next six years. Arlington leaders said the county would lose about 10 percent of its employee and commercial office base. Additionally, Virginia officials have warned that an additional 27,000 workers remain in leased space that does not meet the new security requirements but was not affected by Friday's announcement. Those jobs could be moved once those leases expire.
Under the plan, Fort Belvoir, already Fairfax County's largest employer, stands to gain more than 18,000 civilian and military employees. Congested roads already are a serious problem around the base, prompting officials Friday to talk of extending Metrorail to Fort Belvoir and petitioning the federal government to pay for it.
Analysts estimate Fairfax accounts for about 19 percent of the nonconforming Pentagon-leased space in Northern Virginia; Alexandria has 18 percent. The remainder is spread between Loudoun and Prince William, which also stand to gain from the relocations, along with Stafford County.
The anti-terrorism standards -- which require, among other things, that buildings not on military bases be set back at least 82 feet from traffic to protect against truck bombs -- were adopted two years ago, but they are not fully in effect except for new construction. They become mandatory for new leases in October. The requirements will be phased in for all lease renewals starting in 2009.
In addition to the setback requirement, the new Pentagon rules call for buildings to be more collapse-resistant; to eliminate uncontrolled below-ground or rooftop parking; and to have protective window glazing, mailroom ventilation and emergency shut-off switches for air distribution.
Legislators are quick to point out that even the Pentagon does not meet the new standards. Local planners believed them to be so costly and impossible to achieve that they found themselves hoping adjustments would be hammered out by lawmakers to allow more flexible performance-based standards.
"They've already applied flexibility to the Pentagon, and no building in the region meets the standard," Fisette said a day before the relocations were announced. "You have to think common sense will win out."
That hope was bolstered last week when a Pentagon spokeswoman suggested that the Defense Department might now indeed ease the setback rule at "existing buildings where the required level of protection can be mitigated and shown to be achieved."
In Arlington, the push was on to devise mitigation plans. County officials said they had spent countless hours working closely with Defense Department officials, discussing how they could use different techniques to bring the county's urban landscape into compliance.
One of those possibilities involved grouping buildings into secure clusters -- such as in Ballston Plaza and Crystal City -- the idea being that it would be easier to protect a group of buildings rather than just one. While developers can harden building exteriors, glaze windows and use creative landscaping to help shield a structure from a car-bomb blast, in many cases they knew they could not find solutions to effectively distance buildings from the urban streets they were built on.
Arlington officials conceded they were particularly wary of employing these mitigation techniques, which run counter to the county's history of "urban village" planning in places such as Crystal City, where work continues to make the landscape more open and inviting.
"We've just accomplished making Crystal City a more comfortable pedestrian environment," said James Van Zee, director of regional planning services for the Northern Virginia Regional Commission. "We could be turning around the next day and closing it off if we want to keep business here."
Restaurateur Rob Wilder, whose company recently opened Oyamel and Jaleo restaurants in Crystal City as part of the area's revitalization effort, said the news of relocations was not unexpected.
While defense employees are a healthy part of his customer base, there has been an expectation that Crystal City's tenant base would shift away from the government, he said.
"It seems like it's a matter of time before the whole nature of Crystal City becomes an extension of downtown D.C. rather than the Pentagon," Wilder said. "We're a tenant of the future."
While Gov. Mark R. Warner (D) is positive about the economic picture statewide, he has said he will fight the relocation of employees from Northern Virginia.
But Moran, who also represents Alexandria, Falls Church and parts of Fairfax -- including Fort Belvoir -- said he isn't so sure he should go to the mat for Arlington, reasoning that in the long run, the Defense Department's decision will "bode well" for the county. He said that he does not anticipate an economic downturn and that he is looking forward to new economic horizons for Arlington as a community less dependent on the government for its strength.
Hours after Friday's announcement, employees who work in Crystal City were still sizing up the news. For those who live near Fort Belvoir or Quantico, for example, the changes would mean, among other things, shorter commutes.
Jack Kantak and Bill Joransen, both former members of the military now employed by Vanguard Research, a Defense Department contractor, stood outside the Crystal City complex taking a coffee and smoke break.
Both said the Pentagon proposal made good sense -- both financially and from a security standpoint. Neither felt a particular sense of urgency.
"It's going to be three to five years before anything will really happen," Kantak said. "And then, there's going to be a lot of empty office space in Crystal City.
"This isn't the first time there's been one of these shuffles," he said. "This place is convenient and easy, but one pile of cement is just like another pile of cement."
As to where he may be in five years, he said, "heaven only knows."
In Alexandria, where planners were still trying to sort out how much of the city's nonconforming office space was being relocated, there was a concern about losing other tenants who might be attracted to vacancies caused by the Arlington relocations.
"That will play havoc with local economies," said Bernard Caton, Alexandria's legislative director.
This week, Arlington planners were busy trying to go through the relocation data and identify all the impacts, conducting economic analyses and formulating strategies to move forward. Already, planners are talking about how to backfill some of the potentially empty space and about renovating some of the buildings likely to be vacated. Fisette noted that many of the Defense Department employees leaving Arlington's Metro corridor will now have to drive instead of taking the Metro, thus adding to the region's traffic congestion and "undoing" many of the county's "smart growth" successes that have benefited the entire region.
"If you were to unravel some of the progress that's been made with development being coordinated with transportation networks and start to reinforce sprawl in a big way, you will see significant economic impacts on the region and quality-of-life implications," Fisette warned last Thursday. "Congestion is just the tip of the iceberg."
Holzheimer said that the space being vacated is among Arlington's finest and that there is a good possibility the General Services Administration, which holds most of the leases on behalf of the Department of Defense, may be interested in moving in other GSA tenants, those who have their own security criteria and do not have to conform to the Defense Department's building standards.
While Arlington officials said they will continue to make building security a high priority, Holzheimer said there is no longer a rush to make costly security changes to please the Pentagon.
"That pressure is somewhat relaxed," Holzheimer said with an incredulous smile.
Staff writer Brigid Schulte contributed to this report.