Will Old Post Office Deal Accelerate Hoover Building's Demise and FTC's Move From Apex?

The General Services Administration's controversial nod to billionaire Donald Trump's bid for underutilized Old Post Office has refocused attention on the eastern end of Pennsylvania Ave. where several key government buildings could be in play.

Top of the list is the J. Edgar Hoover Building between Ninth and Tenth Street.

In November 2011, the Government Accountability Office released a report detailing what to do with the tired and unpopular J. Edgar Hoover FBI building on Pennsylvania Avenue. The Hoover Building, a Brutalist piece of concrete completed in 1974, has few current fans, even among the District's vocal preservationist crowd.

"Nobody will shed a tear when it goes," said Steve Calcott of the District's Historic Preservation Review Board. It's also much maligned as a "block-killer" for Penn Quarter as security considerations nixed any plans for street level retail. "We're just waiting for the day when the bulldozers arrive," said Karyn LeBlanc of the Downtown DC Business Improvement District.

The structure is equally unloved by the G-men as well, apparently. According to the GAO report, leaks, lack of windows, and poor access make the Hoover Building despised by its inhabitants, many of whom are now farmed out to other buildings in the D.C. area post-9/11 for security reasons.

The FBI desperately needs to centralize those agents to streamline operations and react more swiftly to threats. That's compounded by the fact that since 9/11, the number of FBI personnel working in and around Washington has nearly doubled, from 9,600 in 2001 to more than 17,600 in 2010. Given too that the FBI building and its agents are a prime terrorist target, the GAO's report also references key security weaknesses in the building (the specifics of which are classified in this report) that make it a prime candidate for replacement outside of the aesthetics.

The GAO's recommendations should cheer anybody eagerly awaiting a wrecking ball for the old structure. The government watchdog agency noted that at 2007 prices, remodeling the existing Hoover Building to come into compliance with EnergyStar and LEED certification would top $1.9 billion and take nearly a decade and half of work to complete.

Conversely, demolishing the unloved building and replacing it with another at the same site would cost a relative pittance, just $850 million, completed over nine years. Meanwhile, building the FBI a new headquarters somewhere else in the Washington metro area would cost about $1.2 billion and take seven years.

The rapid appreciation of real estate prices on Pennsylvania Avenue could make selling the land to a private developer an incentive for the GSA to find a new home for the FBI. The land that was $41 a square foot in 1963, when the GSA purchased 233,000 s.f. to build the FBI building, is now worth more than one hundred times that, says Gerry Widdicombe, director of economic development at the Downtown DC BID.

That would mean a windfall for the GSA of $500 million to $800 million, (minus $20 million or so for demolition) -- half the cost of building a new FBI building on a new site, Widdicome said.

It would also create a prime spot for a developer to bring more retail, given that Donald Trump plans a luxury hotel and restaurant across the street. "You knock down the FBI building, you can have a serious conversation with a department store like Harrods, or Bloomingdales, or Selfridges, since you would have the necessary volume," he said. "There's no doubt that the Trump deal for the Old Post Office will move the conversation about the FBI building forward."

While a suburban campus location for the FBI might appear the ideal choice, if only to free up the

real estate beneath the building, Britain's FBI equivalent, MI5 has stayed in Central London as the agency has grown, moving into a rehabbed government building, Thames House (right) in 1994.

Towards the same end of Pennsylvania Avenue, the Art Deco Apex building, built in 1938 and currently occupied by the U.S. Federal Trade Commission is also being sought after as an expansion for the National Gallery of Art. Rep. John Mica, a Florida Republican who heads the House Transportation and Infrastructure Committee and oversees the GSA's plan of disposing federal buildings, has made it clear he wants the FTC out of the Apex Building and the National Gallery of Art in. "One way or another we are going to get that building," he told GSA head Robert Peck in a recent hearing on Capitol Hill.

Despite criticism of the Donald Trump deal for the Old Post Office Pavilion, the GSA has had recent success in transforming dormant federal

properties into vibrant spaces. In 2002, the GSA partnered with San Francisco-based Kimpton Hotels to open the Hotel Monaco in Penn Quarter in the former Tariff Building which had stood empty since 1987. The opening of the hotel was soon followed by the Spy Museum and Zola restaurant in the 800 block of F Street.

Widdicome said that demolishing the block-killing Hoover Building, as well as re-purposing the Federal Trade Commission building as a museum, together with the new 250-room Trump Hotel at the site of the Old Post Office Building would go a long way towards improving the Eastern end of Pennsylvania Avenue, which columnist Russell Baker called "a marble graveyard" after dark.

Next up, says Widdicome, will be repurposing the underused Pershing Park and Freedom Plaza, as well as relighting Pennsylvania Avenue to make it more amenable to pedestrians. "Things are finally falling into place for Pennsylvania Avenue," he said.

Washington D.C. real estate redevelopment news.