Photo by wallyg
Sooner or later, the Federal Bureau of Investigation is going to bid goodbye to the J. Edgar Hoover Building on Pennsylvania Avenue NW in favor of a new headquarters, perhaps one in a suburban community. But as eager as everyone is to see the the downtown eyesore demolished, there is the question of what the FBI’s relocation will mean to the District’s economy.
According to a report released today by the office of D.C. Chief Financial Officer Natwar Gandhi, the FBI moving to the suburbs could boost the city government’s tax revenue by $28 million. There’s one major catch, though. Losing the bureau would also result in D.C. having 4,800 fewer jobs. Still, the report should reassure the D.C. officials who want to see the 900 block of Pennsylvania Avenue redeveloped into a mixed-use property bolstering downtown D.C.’s portfolio of upscale office, retail, and residential space.
The FBI badly wants to consolidate its local workforce. Currently 5,750 employees work out of the Hoover Building; another 2,956 are spread around private office buildings throughout the city, with another 2,344 in Virginia. Several suburbs, including Prince George’s County and Fairfax County, are making plays to be the home of a centralized FBI mothership.
Gandhi’s report found the FBI’s District-based workers create about $27.3 million in revenue for the city. Were they to begin working across state lines, D.C. would see its revenue drop by $9.2 million.
But redeveloping the site currently occupied by the FBI could raise as much as $36.9 million in net revenue, according to the report. The report envisions the District gaining 438 new tax-paying residents, along with having a privately owned taxable property filled with other taxable tenants. Overall, the District envisions collecting $23.8 million in additional tax revenue from a redeveloped FBI site. The federal government, of course, does not pay a cent in property taxes.
Additionally, D.C. would get a one-time bump of $41 million and about 1,800 temporary construction jobs during the site’s redevelopment.
The report offers an even brighter projection—one that includes the potential of the FBI staying in the District by embracing Mayor Vince Gray’s proposal to move the agency to Poplar Point. The federal government wants any new FBI headquarters to be up to 2.1 million square feet and sit on a plot no larger than 55 acres. The Poplar Point suggested by the Gray administration calls for an 11-story headquarters sitting on 10 acres, though it would almost certainly have a larger footprint considering the security perimeter the FBI needs. If the Poplar Point proposal to pan out—however unlikely that seems—D.C. would have a net revenue increase of $62 million.
The report, which was prepared for Gandhi’s office by Bolan Smart Associates and the National Academy of Public Administration, predicts the General Services Administration, which oversees federal buildings, will issue a formal request for proposals sometime next year. And it might not be until 2025 that the FBI’s current home is demolished and rebuilt.
