The Freedom Forum, the media foundation that runs the Newseum in Rosslyn, has offered the D.C. government $100 million for a prime Pennsylvania Avenue site for its headquarters and interactive media museum.
Freedom Forum officials said the offer includes $75 million for the property adjoining the Canadian Embassy at Pennsylvania Avenue and Sixth Street NW, where the D.C. Department of Employment Services is currently housed. The District would receive an additional $25 million to build affordable housing anywhere that city leaders choose.
In return, the Freedom Forum would be gaining the last developable site on Pennsylvania Avenue's presidential inaugural parade route--a prestigious location that the forum believes justifies a premium price.
The foundation said it would voluntarily pay D.C. property taxes on the site although it would not have to because of its nonprofit status. The taxes on the redeveloped site are estimated to be just under $1 million a year.
The $25 million add-on is contingent on the deal closing by the end of the year, said forum officials, whose current Newseum lease expires in 2003. Figured at $212 per square foot, the $100 million price would be the highest amount ever paid for land in the District, according to the commercial real estate firm Julien J. Studley Inc.
"This represents a major vote of confidence in the future of downtown D.C.," said Charles L. Overby, chairman and chief executive of the Newseum and the Freedom Forum, a $1 billion nonprofit foundation that sponsors media conferences, journalism training and free-press advocacy.
Overby said the Newseum, which has attracted more than 1.5 million visitors to its dome-crowned site since opening in April 1997, has outgrown the Rosslyn location. Freedom Forum officials chose the District as a future home over New York City.
D.C. Mayor Anthony A. Williams (D), who appeared yesterday at the Freedom Forum's news conference disclosing the proposal, called the offer "extraordinary" but stopped short of saying that the city was ready to accept it.
"We're taking this offer very, very seriously," he said. "We are going to move heaven and earth to get this done as quickly as possible."
While the announcement was hailed as a huge coup for the District, it was also a sharp blow to Rosslyn and Arlington County. The Newseum is the county's third most popular tourist draw, after Arlington National Cemetery and the Iwo Jima Memorial.
"We are not surprised, but you have to keep things in perspective," said Barbara A. Favola (D), chairman of the Arlington County Board.
"This is not the end of the world. We have enjoyed the Newseum, and they have certainly brought many benefits to Rosslyn."
The Freedom Forum has proposed to raze the Employment Services building and replace it with a $250 million mixed-use development, including more than 36,300 square feet of retail on the street level, 290,650 square feet of offices for its headquarters and the Newseum, which would double in size.
About 100 condominiums, priced at market rates and filling 145,350 square feet, would top the building. Admission at the relocated Newseum would continue to be free.
D.C. officials said they have plans for relocating the Employment Services staff but did not disclose potential locations.
The proposal was praised yesterday by two vocal civic leaders who had been pushing the city to redevelop the site.
The offer is of such size that it's "like the District is winning the lottery," said Terrance Lynch, executive director of the Downtown Cluster of Congregations.
Charles A. Doctor, chairman of the Downtown Housing Now Committee, said the project should act as a "magnet," pulling tourists from the Mall to the rest of downtown.
"The Freedom Forum has made the city an offer that is hard to refuse," he said. "D.C. should waste no time in snapping up this bargain."
By including funds for affordable housing in the bid, the forum has answered in advance objections that often confront downtown development plans.
Volunteering to pay property taxes heads off criticism that has been directed at some major D.C. nonprofits.
Williams said the city will review the offer and make a decision about how to proceed within the next 45 days.
Overby said the Freedom Forum is satisfied with that time schedule.
"The city wants to do due diligence, and it should," Overby said. "They have to make sure the price is adequate and the use is adequate. . . . We're comfortable with the process as it stands today. Now ask me that question in September."
One of the unresolved issues is whether the District can offer the building to the Freedom Forum without first going through a competitive bidding process.
The U.S. Department of Labor owns an interest in the property because of a land swap that occurred years ago. Deputy Mayor Eric Price said federal interest may require the District to put out an official request for proposals on the site, which it had been preparing to do.
Either way, the D.C. Council will have to approve the disposition of the site.
But even if the property has to be placed on the market, downtown developer Mitchell N. Schear, president of the Kaempfer Co., said it is not likely that a competing developer could match or beat the Freedom Forum's offer.
The property has been assessed for tax purposes at $44 million.
"Not only are they paying big, big numbers, but they also want to do it quickly," said Schear, whose company is developing a new office building in the District's West End, at 2099 Pennsylvania Ave. NW. "Nobody else could muster the money."
The Freedom Forum was established in 1991 by former Gannett Co. chairman Allen H. Neuharth as the successor to the Gannett Foundation.
It is supported by income from a $1 billion endowment.
The forum's planned relocation follows a decision by Gannett to move its own headquarters and its USA Today newspaper from their twin towers--another Rosslyn landmark--to Tysons Corner next year.
The foundation operates the Media Studies Center in New York City, the First Amendment Center at Vanderbilt University in Nashville and the Newseum in Rosslyn.
The Newseum features a 126-foot-long Video News Wall that carries breaking news over various TV channels. Another wall presents the front pages of 70 newspapers.
Visitors also can pretend to be TV news anchors or on-the-scene correspondents and take home a tape of their broadcasts. A garden and memorial outside the museum pays homage to journalists killed on assignment.
Dorn McGrath, director of the Institute for Urban Environmental Research at George Washington University, said the Newseum is "unquestionably a tourist attraction of high quality."
But McGrath said the offer should be handled with extreme caution, though he is not necessarily against the relocation of the museum.
"I think we should raise the question if this is the most appropriate use for one of the key sites along Pennsylvania Avenue, and the presidential parade route between the Capitol and the White House," he said. "This would be a testament to the dominant position of the media culture, right on Pennsylvania Avenue. Is that the message we want to send to the world?"
Peter S. Prichard, president of the Freedom Forum and the Newseum, said the prominent location on Pennsylvania Avenue is exactly what appealed to the foundation.
"If we are able to move to this site, we believe we would be able to make an indelible mark," he said.
Staff writers Ann O'Hanlon and David Montgomery contributed to this report.