Dive Brief:
- The General Services Administration has canceled plans to develop a new Deptartment of Labor headquarters using a swap of the DOL's current building, according to the Washington Business Journal.
- An audit by the GSA's Inspector General, which influenced the GSA's position change, determined that the agency did not factor adequate risk into its property exchange policies, resulting in overvaluation of at least four buildings. In addition, the IG found that the GSA did not include enough contingency allowances in these deals, leaving it vulnerable to shortages of cash necessary to execute a successful swap.
- The GSA canceled the environmental reviews underway for the three properties under consideration for the new DOL headquarters but said it would continue to explore other options to get the agency's employees into a modern space, as the current Frances Perkins Building is in need of expensive upgrades.
Dive Insight:
The three properties in the running had been offered up by four major DC-area real estate development companies as the best choices for the DOL's request for at least 1 million square feet of space.
Although the GSA has maintained that it only "put out feelers" about a new DOL headquarters, one of the companies thought to be a lead contender, Redbrick Partners, filed plans at the end of last year for an HOK-designed mixed-use complex that met the GSA's criteria for such a project. The details of the three-phase project includes office space of at least 1 million square feet, more than 45,000 square feet of retail and 700 new residences.
The GSA also has pulled back on its plans for a new $2 billion FBI headquarters. The agency was on the verge of issuing requests for proposals and making a final decision on one of three sites in Maryland and Virginia but needs a $1.4 billion commitment from Congress, which is currently parsing budget line items so that it can come to a spending consensus that will avoid an April 28 government shutdown.
