Federal Board Critiques 'Piecemeal' Approach To Selling D.C. Buildings

The board created by Congress to advise on federal property disposals has a warning for the process in a key corridor in the nation's capital.

The federal government is in the midst of offloading millions of square feet in Washington, D.C.'s southwest corridor as part of an effort to reduce its footprint. But without a larger coordinated effort to establish future uses for the area, it won’t reach its full potential for investment, members of the Public Buildings Reform Board said Thursday during a public meeting.

“The board believes proceeding with these additional disposal actions, absent an entity that can lead Southwest Disposal Planning and Development, will not maximize taxpayer returns as it stands,” board member Michael Capuano, who was appointed to the body by President Joe Biden in 2022, said at the Arena Stage at The Mead Center for American Theater.

The comments mark the first time the PBRB has publicly weighed in on the manner in which the properties are being sold. The members made the remarks during a meeting to inform the public of which properties they were considering for their fourth round of disposal recommendations. 

Over the past few months, the General Services Administration has sold two prominent properties in the corridor: the Liberty Loan building on the Tidal Basin for $17M and the nearly 1M SF Regional Office Building across from L’Enfant Plaza for $24.3M.

The GSA has also revealed plans to sell the 2.2M SF Agriculture South Building, the 1.8M SF James V. Forrestal complex, home to the Department of Energy, the 1M SF Wilbur J. Cohen building and the 1.1M SF Robert C. Weaver Federal Building, which houses the Department for Housing and Urban Development. 

So far, the agency has been putting each property individually to market and selling them to the highest bidder, without dictating their future use.

But that process won’t work in the long run, Capuano said. 

“Without a comprehensive District development plan, underwriters are not willing to assume the risk and the unknowns for these properties, which is why selling the properties piecemeal won't work,” he said. 

He also said the board’s analysis shows the need to bring in an anchor tenant to elicit demand for the amount of property that will become available and that a governing body could help secure that anchor. 

“The concept of looking at 230 [acres] and the various utilizations is very important.” PBRB board member David Winstead, who served as Public Buildings Service Commissioner under President George W. Bush, said onstage at the meeting.

The comments from the body come as concerns have been raised about the first two sales in the area. Market experts told Bisnow last month that an oversight body would be apt in order to harness the full potential of the neighborhood. 

At the meeting, Winstead said GSA Administrator Edward Forst “is working with the city and looking at what kind of master plan is appropriate.”

He and fellow PBRB colleague Dan Mathews, who served as PBS Commissioner during President Donald Trump’s first term, said they didn’t have a problem with the fact that Liberty Loan and the Regional Office Building were sold before an oversight body or plan were put in place. They said they appreciated the quick nature of the sales and commented that there turned out to be demand for the assets.

During an opportunity for audience questions, local urban planner Lu Hou said he and a group of urban planners have been working on a master plan for the area, under which the federal government would maintain ownership but execute ground leases for the properties.

After the meeting, James Snyder, a retired local urban planner and one of the three members of that group, told Bisnow that they have shared their proposal with the PBRB, the D.C. mayor’s office and the National Capital Planning Commission, which oversees how federal lands are used.

“It's unbelievable what exists there, and it's 230 acres,” Snyder said. “But they have no plan.” 

At the meeting, the board presented over 30 properties it's looking at for its next slate of recommendations, eight of which have already been approved by landholding agencies.

Those include the 713K SF Columbia Plaza in Foggy Bottom, a 308K SF warehouse in Springfield, Virginia, and a 154-acre site for the National Weather Service in Sterling, Virginia. 

The PBRB plans to unveil one more slate of recommendations before it sunsets at the end of 2026.

UPDATE, JUNE 25, 6 P.M. ET: This story was updated with more commentary from the meeting.