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GSA begins search for FBI builder with billion-dollar balance sheet

Dan Tangherlini, administrator of the General Services Administration (GSA). (Bloomberg)

Do you have a billion-dollar balance sheet? Are you interested in acquiring the J. Edgar Hoover Building in downtown Washington? Are you extremely patient?

If yes, this opportunity might be for you.

The General Services Administration is seeking a real estate developer capable of building a 2.1 million-square-foot new headquarters for the FBI at one of three sites, in Greenbelt, Landover or Springfield. It would be a big enough project if that was all that was required, but the GSA, which manages real estate for the federal government, is trying to pay for the new headquarters by trading away the Hoover building as compensation.

With the swap proposal, of which there are critics, GSA administrator Dan Tangherlini is asking potential developers to take a big up-front risk: pay out of your own pocket to build the entire new headquarters. Then receive the Hoover Building as compensation, tear it down and build something new there.

All of that could take five years or more, and the developer won’t see a dime until one of the new buildings is done.

Developers can propose building the new headquarters on any or all of the finalist locations, allowing the GSA to pick the best combination of cost, location and quality. The GSA owns the Springfield property and has signed agreements that would allow it to acquire the Greenbelt or Landover locations between now and July 29, 2016. The agency says the exchange would occur by the end of 2022.

“The J. Edgar Hoover building does not meet the FBI’s needs in the 21st century,” said Bill Dowd, project executive for GSA’s Public Building Service, in a press release. “GSA is planning to exchange this building for the construction of a new headquarters that would give the FBI a facility worthy of its mission; allow for valuable redevelopment in the Penn Quarter community of downtown Washington; drive cost savings; and deliver on GSA’s mission to shrink the federal footprint.”

There are some stiff experience requirements for interested companies, according to the request for proposals. Interested developers must have completed a minimum of three office projects of at least 500,000 square feet each in the past five years, and they must partner with a general contractor who has completed the same, including one project of at least 1 million square feet.

Not only that but any interested developer must demonstrate access to at least $1 billion in capital. Specifically, they “must include an entity or fund with a minimum of $1 billion in liquid assets not committed to other projects or have an in-place fund or credit facility with a minimum of $1 billion available.”

Interested companies are asked to submit detailed information about their design ideas, project budget, security plans and approach to completing and managing the risks of the project. The deadline is Feb. 10.

Follow Jonathan O’Connell: @oconnellpostbiz