Government reopens search for Homeland Security office space

By Jonathan O'Connell
Monday, November 15, 2010; 6

The General Services Administration has reopened its search for 1.1 million square feet of office space for the Department of Homeland Security.

A previous solicitation drew complaints from developers who thought the search favored existing buildings over prospective ones, and seemed tailored to one specific building in Southwest Washington. But that building, the highly secure and newly renovated former Department of Transportation headquarters, owned by David Nassif Associates, has since been picked to be home to the Securities and Exchange Commission. On Oct. 29 the GSA broadened its search for homeland security space so that developers planning new buildings will have a shot.

The amended search allows for a move-in date as late as the end of 2015, giving companies planning new construction more time to plan. While the search originally required developers to complete the permitting process by the end of 2010, the new deadline is the end of 2012. The space is for three entities within the Department of Homeland Security: the Office of Science and Technology Policy, the Undersecretary for Management and Immigration and Customs Enforcement. Monday, Nov. 15, is the deadline for submissions.

The stakes are heightened over the DHS space because of speculation about how deeply Congress might cut back real estate when the House falls into Republican hands in 2011. The GSA approved 36 prospectus searches in fiscal year 2009, 20 for fiscal year 2010, and is considering 18 for 2011, according to William B. "Bart" Bush, GSA assistant commissioner for real property asset management, speaking at a Nov. 9 forum hosted by the real estate services firm Jones Lang LaSalle.

Ron Kendall, staff director for Democrats on a House subcommittee overseeing federal buildings, said at the forum that he expected to see agencies downsizing when Republicans come into power. "Will real estate be affected?" he said. "It will."

The new terms also reignite a fierce jurisdictional battle over the competition, with local governments eager to support their sites and attract jobs. The new offices must be located near the new DHS headquarters, currently under construction on the west campus of the former St. Elizabeths Hospital. Chris Smith, chief executive of the real estate firm William C. Smith & Co., said landing the 1.1 million square feet of additional DHS space will give one area or another a leg up in becoming a nexus for future contractors and private sector jobs.

Smith plans to propose a site in an area managed by the Capitol Riverfront Business Improvement District, near the Nationals Park, but he said either the community immediately around St. Elizabeths, on Martin Luther King Jr. Avenue Southeast, or the ballpark area could become major hubs. "Certainly the MLK corridor would be attractive to contractors, as well as sites in the Capitol Riverfront BID -- a proven submarket just one Metro stop away from the St. E's campus," he said in an e-mail message.

But a slew of developers in Prince George's County, including a partnership of the JBG Cos. on property in Temple Hills, have also proposed build-to-suit offices along Metro's Green Line, which runs by St. Elizabeths, and have the backing of congressional members including Rep. Donna F. Edwards (D-Md.) who want to see more federal office space in the county.

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