Hyperbole on the redevelopment of the FBI building site on Pennsylvania Avenue NW
Image from the On my Feet blog.
Yes the FBI building is really gross and takes up two city blocks. No, two city blocks even on Pennsylvania Avenue, aren't worth more than four city blocks at the City Center site (between H and New York Avenue and 9th and 11th Streets NW) because four city blocks provide more development opportunity and more economic value.
See "GSA proposes trading Hoover Building for new FBI campus" from the Washington Post. From the article:
In a solicitation to real estate developers Monday, GSA Acting Administrator Dan Tangherlini proposed swapping the Hoover building site — a valuable property on Pennsylvania Avenue — for the construction of a new, consolidated campus located in the Washington region. The solicitation, posted online here , asks for responses by March 4.
I don't think that's realistic.
While this calculation isn't exactly right (I need to read a textbook on real estate valuation) it would work out to be something like this:
1. A city block has about 60,000 square feet, although every square inch isn't developable.
2. Two city blocks is about 120,000 square feet.
3. At a 10.0 Floor to Area Ratio is not unreasonable, based on the various bonuses available in the Downtown Development Overlay Zone.
4. Say a range of 90,000 square feet of developable space X 10 = 900,000 square feet to 100,000 s.f. X 10 = one million square feet of development. Although the site is developed to almost 3 times that according to the GSA website, which must be close to 100% lot coverage.
5. At a value of $70/s.f. of developable space, the FBI land is worth from $63 to $70 million. (Or triple that if the site would retain the current development footprint, which is doubtful.)
6. The building needs full rehab and the cost is prohibitive so it would be torn down, meaning the building has negative value and would be subtracted from the sales price.
7. The new FBI campus would ideally house 11,000 workers. If each takes up 250 s.f. (which is the rule of thumb, although this is decreasing through telework and "hoteling") that's not quite 700,000 s.f. of new space required, although they should also include room for growth. But that's 1/4 of the space claimed to exist in the current building for fewer workers, so they could have significantly greater demands.
8. The cost of constructing new office space for the FBI would be around $130 to $150/s.f. according to Reed Construction Data. So the cost of the construction would be about $91 million minimum for 700,000 s.f., plus the cost of the land. If they need 4X the amount of space, as they have currently, then costs for construction would quadruple.
In any case, the land can't be worth as much as the Washington Post and the GSA believe.
Note that this has come up with the General Printing Office too. There they have a great historic building, but expensive to renovate. The cost of renovation and building a new site is greater than the value of the current site, which makes change any time soon unlikely.
The same might be the case for the FBI site.