The Transportation Security Administration will move its 3,800 headquarters employees from Arlington to Alexandria, making it the latest in a string of agencies the federal government is moving out of the county to save money.
The deal constitutes one of the largest commercial real-estate leases signed in the Washington area this year. It is comparable to a roughly 700,000-square-foot lease that Fannie Mae signed to move into a new building downtown that will replace the current offices of The Washington Post.
The TSA, now at South 12th Street in Pentagon City, agreed to move by spring 2018 into the Victory Center office complex, at 5001 Eisenhower Ave. near the Van Dorn Metro station.
The General Services Administration, which brokered the deal, expects to save $95 million over the course of the 15-year lease by paying $36 per square foot for 625,000 square feet — 25 percent below going rates in the area.
The owners of Victory Center, an entity of Prudential, will provide $50 million in building improvements before the agency arrives and will receive a $23 million tax abatement from Alexandria over the course of the 15-year lease.
Alexandria city officials said they expect to net about $25 millon in property-tax and sales-tax revenue from the agency’s move during that 15-year period.
The TSA relocation is the most recent instance of the government taking advantage of a flagging Northern Virginia office market to reduce costs and use less space.
And in 2005, the Patent and Trademark Office moved from Crystal City to Alexandria.
Alexandria Mayor William D. Euille (D) said that the TSA move will provide “a huge economic boost” for the city, not only filling the empty Victory Center with government employees but also prompting more residential and retail construction in a neighborhood dominated by office and industrial uses.
Alexandria has been planning street and infrastructure improvements in the Eisenhower Avenue area for the past 18 months, Euille said.
He dismissed concerns about whether the addition of nearly 4,000 workers would create traffic problems, noting that the TSA building will have on-site parking and is near the underused Van Dorn station.
Victor Hoskins, director of the Arlington Economic Development agency, said the county, which has an office vacancy rate of more than 20 percent, worked aggressively to try to retain the TSA. “Obviously, we’re very disappointed,” he said.
In negotiating the lease, the federal government’s position was likely bolstered by the fact that Victory Center has been empty for a number of years, missing out on other government leasing deals.
“This is yet another great GSA-negotiated deal for government and the American people,” said Darren Blue, GSA’s Public Buildings Service commissioner for the Washington area.
He said the lease “allows TSA to consolidate four locations into one at a rental rate and utilization rate that will ensure the agency is more efficient and effective in executing its mission.”