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Metro board approves GSA development agreement

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The General Services Administration will push to locate large-scale federal agencies at rail stations in a deal with Metro to promote transit-oriented development in the region.

The transit authority’s board of directors approved the agreement at a meeting Thursday.

The GSA, which handles the federal government’s real estate, plans to pick sites at Metro stations for agencies that need at least 500,000 square feet of office space. GSA would lease the land from Metro under a five-year agreement.

Robert A. Peck, commissioner of Public Buildings Service at the GSA, called the agreement with Metro a “great step forward” because it will “bring mixed-use developments to underutilized Metro station areas.”

Metro officials would not disclose the specific sites that the transit authority would offer to the GSA. A source familiar with the negotiations said recently that the stations under consideration are Anacostia, Branch Avenue, Huntington and Naylor Road. The source spoke on the condition of anonymity because the negotiations are still confidential.

Building large federal office buildings at Metro locations would deliver thousands of jobs to those areas. Advocates for transit-oriented growth said they support the deal because it would help to keep workers off traffic-clogged streets and could reduce the costs of maintaining roads.

As the private leasing market has slowed with the weak economy, the competition for snaring a federal agency has intensified among developers and landowners hunting for deals.

Steve Goldin, director of Metro’s real estate, said the agency had “not seen private demand.”

Goldin compared having GSA as a tenant on a Metro site to having a grocery store chain as an anchor and then having other businesses locate around it.

“Having GSA as an anchor helps give [the sites] value,” he said. “This is a way for Metro to place its real estate in the path of opportunity.”

In Prince George’s County, which has struggled for years to entice development to many of its 15 Metro stations, attracting federal offices has been a principal concern of County Executive Rushern L. Baker III (D). In March, Metro’s board selected a team led by Forest City Enterprises and Urban Atlantic to develop 39 acres of Metro and state-owned land at the New Carrollton Metro station.

GSA leases about 56 million square feet of office space around the region. About 10 percent of it turns over each year, according to GSA spokesman Mike McGill.

Typically, the GSA conducts competitions between private landowners for government leases that become available. It picks winners based on a combination of price, construction quality, location and other factors.

The GSA recently opted to keep about 3,000 workers from the Department of Health and Human Services in Rockville rather than move them to competing sites in Montgomery and Prince George’s counties. In the future, the GSA may conduct a similar search for space for a new FBI headquarters.

Under the new agreement with Metro, GSA officials could select a Metro-owned site they consider a good fit for a federal agency needing a large space and then conduct a competition among developers to build offices on that site. Each deal would have to be approved by Metro, the GSA and local jurisdictions.

It is not known how much money the deals would generate for Metro under long-term leases, transit officials said.

At Thursday’s meeting, board member Muriel Bowser, also a member of the D.C. Council, suggested that Metro host a summit early next year with the region’s economic development directors to discuss how to better locate federal agencies.

“We’re fighting each other for these different sites, so wouldn’t it be nice if we could sit down and cooperatively come up with wins that would benefit every jurisdiction?” said Bowser, (D-Ward 4).

Developers attempting to lure the HHS offices from Rockville to Prince George’s filed multiple unsuccessful protests over a process they described as unfair.

Private landowners who have their eyes on attracting federal leases to their properties were wary about what the agreement might mean.

Brian C. Sullivan, who represents developers and commercial landowners as executive director of the federal practice group for Cushman & Wakefield, said the idea “makes sense for smart growth,” but he wasn’t convinced it would lead to transparency in selecting developers.

Jurisdictions could take exception to the agreement if it excludes their “potential private development sites,” he said.

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