City for sale?: asset sales and intra-city sprawl
In today's Examiner, columnist Harry Jaffe waxes lasciviously about the potential for revenue from the sale of various city properties. See "Can Gray sell property to restore D.C. savings?"
From the article:
All Gray has to do is sell some valuable city property, bank the profits, and lock them away from grasping politicians. Can he pull it off? Does he have the gumption? The political will? Or the financial smarts?
Plans to sell off city property have been floating around for at least two years. D.C. Councilman Jack Evans, chairman of the finance and revenue committee, first suggested the city consider selling four buildings: One Judiciary Square; the Daly Building, police headquarters across the street on Indiana Avenue; the Recorder of Deeds facing the Daly Building, and the Reeves Center at 14th and U streets NW.
This is mostly a pipe dream, because at least two of the buildings, the Daly Building and the Recorder of Deeds building, are historic buildings that can't be expanded.
Plus, a third building, the Reeves Center, is a lot less valuable than Evans believes, because it has limited appeal as a commercial office building, because 14th and U Streets is an outlier location, distant from office centers downtown and along Connecticut Avenue in Golden Triangle and Dupont Circle.
I am not someone who can handicap the value of sites like this as mixed use residential. I do know that the Children's Museum site (a full city block) sold for about $23 million I think (the total number of developed units is between 450 and 500), back in 2003 to Abdo Residential. But a parking lot that the Washington Post sold (it's now an office building) went for more than $50 million.
Intra-city sprawl versus localization economies
Localization economies. Benefits derived from the agglomeration of a set of activities near a specific facility, let it be a transport terminal (logistics parks), a seat of government (lobbying, consulting, law) or a large university (technology parks).
For both employees and "customers" of the agencies, it is more efficient for the agencies to be located proximate to each other. Otherwise, more time is spent traveling to and from the agencies, and less time on productive activity.
It also induces more trips, and more trips by motor vehicles, rather than by foot or transit.
Unless government agencies are closed down, buildings still have to be found to house agencies displaced through the sale of government buildings
Besides the destruction of agglomeration economies, the other problem with the sale of certain government buildings and the relocation of government agencies is that new facilities still have to be acquired, outfitted, and/or constructed.