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Metro considers a potential bonanza — selling its headquarters

Metro’s headquarters isn’t much to look at it but is located in one of the most popular parts of the city. (Courtesy WMATA)

Paul 

It wasn’t the first time someone proposed selling Metro’s headquarters building, a blocky building that hasn’t won any beauty contests lately. But rarely has there been a better moment to consider a sale than now.

The complex’s location at 600 5th St., NW, places it between the Verizon Center and the National Building Museum in the capital city’s bustling downtown business district. Property values in the area around the sports arena have skyrocketed in recent years, with law firms, boutique shops and high-end condos popping up along 7th and 9th streets nearby. The D.C. government assessed the headquarters at $116 million this year. A quick analysis of the Downtown Business Improvement District recently pegged the likely sales value at between $110 million and $140 million, a roughly 20 percent markup from the prices Metro thought it could fetch when it considered the idea once before in 2007.

At the same time, employers choosing to rent office space are in a strong position to secure favorable deals, as leasing rates have remained largely flat. If Metro wanted to sell its building and lease space it would be following in the footsteps of other major employers recently, including The Washington Post and Fannie Mae.

[Fannie Mae puts headquarters up for sale, could fetch more than $200 million]

Still, there are hurdles to moving out of the Jackson Graham Building, named after the Army Corps of Engineers general who oversaw the planning of Metro’s lines. , Completed in 1972, the building serves a number of functions beyond office space. Around the perimeter are air shafts that service a Red Line tunnel below and above, rooftop chilling equipment cools the Gallery Place, Judiciary Square and Archives-Navy Memorial stations. There are also fiber optic cables and rooftop radio antennae that support the entire system.

[Opinion: Here’s how we will start fixing Metro]

Replacing those systems isn’t easy, which is part of the reason Metro didn’t move eight years ago when D.C. Mayor Adrian M. Fenty proposed relocating the agency to Anacostia to drive economic development in Southeast D.C. Fenty planned to use proceeds from the sale to build a new Metro headquarters building and if there was money left over it would have gone to the transit agency.

Metro hired a consultant to look at selling the headquarters and relocating to either Anacostia or New Carrollton, in Prince George’s County. In an 11-page report, the consultants reviewed options to expand or demolish the building and determined that once all the support systems within the current building were replaced the sale would probably net between $5 million and $50 million. Nothing came of it.

“It didn’t happen because we couldn’t get consensus from the board members,” said Neil Albert, who led the effort as a Fenty aide and represented the District on Metro’s board.

At the time, Metro board members, who hail from D.C., Maryland and Virginia as well as the federal government, tended to be more concerned with the effect such a sale would have on the system than on the economy of one jurisdiction. But Albert remains optimistic the calculus would be different this time.

Now head of the Downtown BID, Albert thinks the current board, focused on turning around the agency’s operations, finances and perception, will be more amenable to a move, which could also provide new culture and energy. Metro’s concrete hulk would join others like it — the former Third Church of Christ, Scientist on 16th Street and the J. Edgar Hoover Building — in possibly being torn down, and with more people living downtown every year a new development there could include housing, a hotel or other project for one of the liveliest parts of the city, potentially bringing in new transit users.

“Frankly think that property could be activated for other uses,” Albert said. “So I think the general manager was wise to put the idea of the alternate use out there to start the conversation.”

Follow Jonathan O’Connell on Twitter: @oconnellpostbiz

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