For more than a decade now, the General Services Administration — the federal government’s real estate agency — has been looking to move the FBI from its current, outmoded headquarters location on Pennsylvania Avenue to a location that is bigger and easier to protect from a terrorist attack. And the thinking was that the current site was so valuable in terms of its potential for commercial development that by selling or swapping it, the government could generate enough money to pay most of the cost of a new building somewhere else. The spectacular revival of the east end of downtown Washington as a nightspot and a residential neighborhood in the last few years has only improved the financial viability of that strategy.
This week, however, the GSA, after a number of false starts, decided to scrap that plan and build a new FBI headquarters on its current site.
A GSA spokesman said that the decision to rebuild on the site was driven by “national security requirements.” That’s curious because if you were concerned about a terrorist attack, surely a better choice would be a secure campus like that at St. Elizabeths Hospital, rather than on one of the busiest thoroughfares in downtown Washington.
From an economic perspective, that means the FBI site will not be developed for what is surely its highest and best economic use.
In the current real estate market, that would be a mixed-use development that includes retail stores and restaurants, upscale housing, class A office space and, almost certainly, a luxury hotel that can take advantage of the prime Pennsylvania Avenue location, midway between the White House and the Capital within walking distance of both the Mall and the Washington Convention Center.
So what has happened since the GSA announced its original plan to prompt this change in strategy? Well, one thing that has certainly changed is that a new luxury hotel has opened its doors just a few blocks down Pennsylvania Avenue in the old Post Office Building — a hotel that happens to be operated by none other than the Trump Organization. It's not clear to what degree President Trump was personally involved, but whether intended or not, the GSA’s decision to keep the FBI on the site has now eliminated the possibility of that kind of direct competition to the Trump International Hotel. The Trump Organization did not respond to a request for comment.
The prospect of that competition is no small matter. Before awarding the rights to the Trump Organization to develop the Old Post Office Pavilion into a luxury hotel, the GSA received 10 bids for the project, from some of the world’s most prominent hoteliers, among them Hilton, Park Hyatt and Montage Hotels & Resorts. Hilton’s development partner was so upset after losing the opportunity to build a Waldorf there that it filed a protest criticizing the selection process.
This may not be exactly the kind of conflict-of-interest situation the framers of the Constitution had in mind when they included a clause in the nation’s founding document declaring that no officeholder shall, “without the Consent of the Congress, accept of any present, Emolument, Office, or Title, of any kind whatever, from any King, Prince, or foreign State.”
But it raises similar questions as an emoluments lawsuit brought last year by the District of Columbia and the state of Maryland on behalf of other hoteliers in the Washington area. The suit asks a federal judge to enforce the “emoluments clause” of the constitution by ordering the GSA to cancel its lease of the historic property to the Trump Organization, in which the president ultimately has a personal financial interest.
“The American people are entitled to know that their president did not reverse a long-standing decision of the federal government simply to avoid creating a competitor for his own hotel,” said Norm Eisen, an attorney representing the District and Maryland. The point of the “emoluments” clause, he said, is to prevent a situation in which a potential conflict of interest is created and the motives of the chief executive can be called into question.
The judge in the case, Peter Messitte of the U.S. District Court in Greenbelt, is considering whether to grant the government’s motion to dismiss the case, or to allow the case to proceed to discovery and eventual trial. If Messitte is looking for a neat, easy-to-understand reason to worry about the kinds of conflict of interest that arise when the president, in effect, is his own landlord, the GSA just gave him one.