U.S. Plan to Keep Land Frustrates D.C. Officials

The Army has decided to sell the Walter Reed Army Medical Center campus to two federal agencies, disappointing District officials who had hoped to gain control of the 113-acre property in upper Northwest Washington and turn it into a mix of homes, shops and offices.

Instead of returning the historic site to the city's tax rolls, the Army intends to sell 34 acres to the General Services Administration for government office space and the rest of the land to the State Department, which would build a compound for chanceries.

D.C. officials said they received informal word of the decision last week at a conference in Atlanta on the military base closings approved last year. The confirmation came Tuesday, when the Army published a list of the bases deemed surplus federal government property, and Walter Reed was not among them.

Mayor Anthony A. Williams (D) issued a statement late yesterday saying that he was unhappy about the decision but that he still hoped the city could persuade the GSA or the State Department to sell off some of the property for commercial and residential development.

"In efforts that involved D.C. Councilmembers, Congresswoman [Eleanor Holmes] Norton and community members, we worked aggressively to communicate to the Army the District's interest in using this very valuable land for city purposes, as has been done in communities across the country," said Williams, who was traveling in Africa.

"I remain optimistic that the city can use at least a portion of the land," he said, adding that a redevelopment authority created by city officials to plan for Walter Reed's future would remain in place.

Under plans announced a year ago by the Base Realignment and Closure Commission and later approved by Congress, Walter Reed will close in 2011 and most of its jobs will move to an expanded National Naval Medical Center in Bethesda.

When Walter Reed made the base closings list, Williams and other city officials argued that the city should get the land, between 16th Street and Georgia Avenue, for mixed-use development, putting it back on the city's tax rolls. Federal agencies are tax exempt.

A GSA spokesman confirmed yesterday that the Army has accepted its application to occupy 34 acres in the northeastern section of the campus, though it is not clear what agencies would occupy the space. The GSA, which acts as the real estate agent for the federal government, projects a need for 9 million square feet of secure office space in the region over the next decade.

In its request for the remaining 79 acres, the State Department said it intended to use about 17 acres for an international chancery center, much like the compound of foreign embassies between Connecticut Avenue and Reno Road NW near the Van Ness Metro station. It said it would use the rest for office space, training facilities and residential buildings to house Foreign Service workers attending the Foreign Service Institute in Arlington.

State Department officials did not comment yesterday on the Army's decision.

District officials said that the two federal agencies' plans remain vague and that the federal government is holding on to the valuable land without a clear purpose.

"GSA has specified no particular use for this huge amount of property they've requested," said Michael Hodge, chief operating officer for the office of the deputy mayor for planning and economic development. "The State Department has a made a case for only a fraction of the land it has requested."

The Army has insisted that the federal agencies pay fair-market value for the land, denying their request for a waiver from payment.

"GSA and the State Department appear to be landbanking a site for which they have no specific plans to use, and absolutely no dollars to acquire and redevelop," D.C. Council Chairman Linda W. Cropp (D) said in a statement.

City officials said there may be a chance to negotiate with the two agencies.

Council member Adrian M. Fenty (D-Ward 4), who represents the neighborhoods around Walter Reed, said the State Department might not need all 79 acres and might be willing to let the city develop areas along the perimeter of the campus.

"To free up the land on the borders is a really big deal," Fenty said. "It abuts Georgia Avenue, which would be a great opportunity to do community retail."

Staff writer Dana Hedgpeth contributed to this report.