A government-owned landmark with a choice Georgetown address is expected to be put up for sale in the next year as part of the Obama administration’s plans to sell excess federal property across the country.
The facility, a largely abandoned art deco-style heating plant owned by the General Services Administration, is situated on a two-acre site amid townhouses and the Four Seasons Hotel at the corner of 29th and K Streets NW. On Thursday, it will be added to a list of 12,000 properties the federal government says it no longer needs, as part of a review ordered by President Obama to save at least $3 billion in government building costs.
Jeffrey Zients, deputy director of the Office of Management and Budget, said the administration will save more than $3.5 billion in building costs by the end of fiscal 2012. The federal government owns 1.2 million properties costing taxpayers more than $20 billion to operate and maintain, Zients said. In addition to the 12,000 excess properties, he said another 50,000 are considered underused.
But the Government Accountability Office and private sector analysts have raised doubts about whether the government can quickly dispose of properties in time to meet Obama’s goal, noting that a lengthy review process and potentially costly and long-term environmental cleanup projects could complicate the process.
Built in the 1940s, the GSA plant once burned coal and natural gas, but has sat dormant and racked up $3.5 million in maintenance costs in the last decade, Zients said.
Washington-area real estate developers said Wednesday that the plant, near Georgetown’s M Street commercial corridor and beside the Chesapeake & Ohio Canal National Historical Park, is an ideal purchase.
“We’ve looked at it 15 different ways,” said Joseph Sternlieb, a developer with Georgetown-based EastBanc. He said the site’s historic nature would require a creative redevelopment plan.
“But I think that’s going to be the case with a lot of federal properties,” he added.
Another developer, Marc Dubick, is building town homes on nearby MacArthur Blvd. NW and said the plant was “a fantastic location in Georgetown.”
“I think what’s shown to work best in Georgetown is residential with some retail component and obviously historic issues are going to be paramount,” Dubick said.
GSA is also considering bids it has received from the private sector for the Old Post Office Pavilion, on Pennsylvania Avenue, after putting it up for development in March. The agency has declined to release information about the submissions, but among the contenders is Donald Trump’s Trump Hotel Collection, which proposed transforming the historic building into a nearly 300-room luxury hotel. Another proposal would bring The National Museum of the Jewish People to the site.
But beyond those sites, Darian A. LeBlanc, senior vice president at the real estate services firm Cassidy Pinkard, said agencies are looking at how to cut costs by using leased space more efficiently.
“The agencies are beginning to take a very, very hard look at what space they occupy and what the utilization of their space is. And ultimately they are going to be cramming more people into less space,” LeBlanc said.
Some agencies, including the departments of Homeland Security and Justice, are studying how best to consolidate workers. At Justice, dozens of career attorneys this week threatened to quit if the department goes through with plans to close four regional offices located in southern and midwestern cities.
In some cases, LeBlanc said, agencies may elect to hand leased space back to the GSA, which could be sublet to private tenants to generate revenues.
As part of Thursday’s announcement, the White House plans to publish an updated map listing sites already targeted for closure or consolidation. Reports also will be posted on Performance.gov, a site tracking the progress of several administration priorities.
Even though the White House is set to meet its goal, officials are pushing Congress to pass a bill that would establish a civilian buildings commission to review other sites for closure or consolidation. If the legislation passes, the panel would issue recommendations to Congress for an up or down vote and generate at least $15 billion in savings over there years, Zients said.
A House committee passed a bill last week that would do some of what the White House has proposed.
O’Connell is a staff writer with Capital Business.
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Further reading:
Federal property closing panel one step closer to reality
Obama orders cuts in federal building costs, could affect thousands of leases
Sale of federal buildings could be difficult
Tysons Corner: The building of an American city
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