The FBI building as another example of "I told you so"

Just as DC Government is often bollixed up because it doesn't have a distinct capital planning and budgeting system distinct from the annual budgeting and appropriations process ("Capital/civic asset planning, budgeting and management processes"), the Federal Government has the same problem.

This comes up with financing federal buildings, especially large and expensive projects. When Congress is controlled by representatives with an anti-government ideology, they are not predisposed to vote in favor of capital investments in buildings for government agencies--instead, they'd rather "starve the beast."

Locally, this has extranormal impact on real estate development programs in DC, Arlington, and Alexandria especially.  It's why redevelopment of the St. Elizabeths West campus as a home for the Department of Homeland Security has languished for years ("Will Congress Pull the Plug on Homeland Security's Move," Washington Post)) and why other agencies aren't getting improved spaces ("Consumer bureau headquarters renovation plan gets GOP flak" Los Angeles Times) and why some agencies are moving from better located but higher cost locations to worse located lower cost locations ("National Science Foundation headquarters to move to Alexandria" and "TSA moving headquarters from Arlington to Alexandria," Washington Post).

When it was proposed that the FBI could move, build a new facility, and consolidate all of its employees into one place from more than 20 different locations in the Washington Metropolitan area, it was suggested that the cost of land and the buildings, while even though expected to be at least $1 billion, wouldn't cost anything--that it could be paid for through the value in redeveloping the FBI's current headquarters site on Pennsylvania Avenue in Downtown Washington.

In 2012, doing a very rough calculation, I wrote ("Hyperbole on the redevelopment of the FBI building site on Pennsylvania Avenue NW") that was extremely unlikely, even though virtually all the other writing on the subject accepted that premise.

Now, three years later, it turns out I was right, according to a New York Times article, "Funding Dispute Over F.B.I. Headquarters Delays Next Step":

In August, the Office of Management and Budget notified the F.B.I. and the G.S.A. that there was no money in the budget to cover costs for the project, including what the government might pay up front to acquire the chosen site or to rent back the facility once it is built. How to make the developer whole if the value of the Hoover building is less than its cost to build the new headquarters is also at issue.

A congressional appropriation is an option, but it is considered unlikely. An alternative would be to have the developer include the cost of acquiring the new headquarters property in its formal bid, essentially an add-on that would be charged to the government.

The budget office has told the bureau it must fund the project’s costs from its annual operating budget, according to an official with direct knowledge of the discussions who was not authorized to speak on the record. Under another scenario, the government would own the land, lease it to the developer, who would build the headquarters, and lease it back to the government upon completion. But the budget agency would prefer a plan in which, as Mr. Tangherlini described it, “the full costs have to be reflected in the budget for the year in which the obligation is made.”

There is a widespread belief that the Hoover site, despite its prime location blocks from the Capitol and the White House, will be worth much less than the cost of constructing the new headquarters. How to compensate the developer for the difference has been a major part of the discussion.

The sad thing is the time that has been wasted in the interim, certainly Prince George's County isn't happy as their opportunity to capture the FBI headquarters could diminish, not to mention how this will significantly delay the ability to strengthen and redevelop the part of Pennsylvania Avenue where the FBI building hulks and sucks out and diminishes the vitality of the street.

See "Pennsylvania Avenue DC planning initiative" and "Could bringing premier regionally headquartered business enterprises to the Pennsylvania Avenue Corridor be key to its renewal and revitalization?."

There are many problems with how Congress deals with budgeting.  Besides the need to create a capital budgeting approval and appropriations process separate from the annual budget process, I've thought for a long time that the budget process should be moved to a two-year cycle--I think something like twelve different bills are required each year.  Split them in half, and approve six each year as part of a two-year cycle.