GSA Pauses Relocation, Expansion Plans for D.C. FEMA Headquarters
By Nick Trombola July 26, 2024 12:41 pm
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Disaster relief from the federal emergency management agency (FEMA) is needed now more than ever as climate change worsens extreme weather, yet plans to expand the agency in Washington, D.C., have ground to a halt.
The General Services Administration (GSA), which manages the federal government’s non-military real estate portfolio, canceled a solicitation to design and commence a $188 million renovation of a GSA-owned office building at 301 Seventh Street SW, intended as the new home of FEMA and other agencies under the umbrella of the Department of Homeland Security, according to the Business Journal.
In an email provided to the House Transportation and Infrastructure Committee, and obtained by the Business Journal, the GSA blamed “current market conditions, and their anticipated impact on DHS’s housing strategy in the national capital region,” as reasoning for the cancellation.
Indeed, the office market in the District has fallen off a cliff in recent years. Vacancy rates hit an all-time high of 22.4 percent this past quarter, up 80 basis points from the previous quarter alone, according to a recent market report from CBRE (CBRE). The federal government is directly responsible for nearly half of that occupancy loss, in the wake of GSA’s directive to massively shrink its office footprint.
Yet the relocation of FEMA and other DHS agencies was one of the few examples of GSA attempting to increase a federal agency’s real estate rather than diminish it.
FEMA is currently headquartered at Federal Center Plaza, at 500 and 400 C Streets SW, taking some 465,000 square feet in a lease that runs through 2027. The seven-story building that GSA hoped to renovate, at 301 Seventh Street SW, just a few blocks away from Federal Center Plaza, totals 941,463 square feet, though it’s unclear exactly how much space the agencies would have taken there.
Originally built as a warehouse in the early 1930s, the building, dubbed the Regional Office Building, was at one time home to GSA’s national capital region base. The agency’s renovation would’ve opened up 100,000 square feet and new building amenities from the basement to the fourth floor of the complex, housing nearly 4,400 DHS employees, per the Business Journal.
If GSA had moved ahead with the plans, FEMA’s new home would’ve cost the government $880 million rather than $1.1 billion to lease a comparable footprint over a 30-year period, according to a renovation prospectus released in late 2021. Instead, it’s likely the agency will renew its lease at Federal Center Plaza, per the Business Journal.
Representatives for GSA and FEMA did not immediately respond to requests for comment.
GSA and the DHS are meanwhile in the midst of a separate renovation project for a new DHS headquarters at the St. Elizabeths West Campus, across the Anacostia River in Southeast D.C.
That project is using $288 million of Inflation Reduction Act funds to build out new homes for the Cybersecurity and Infrastructure Security Agency (CISA) and Immigration and Customs Enforcement (ICE), on top of the $3.2 billion already appropriated for the project by Congress. The campus is expected to house more than 12,000 workers once completed in 2027, though FEMA had never intended to move there.
Nick Trombola can be reached at NTrombola@commercialobserver.com.
