Still Without Permanent Leadership, GSA Has 5 Major Decisions On Its Plate
Five months into President Donald Trump's administration, the General Services Administration, the federal agency in charge of the government's real estate and procurement, is still awaiting a permanent administrator and public buildings commissioner.
Two of the more than 400 executive branch positions Trump has yet to appoint a nominee for, the top GSA roles are responsible for making the federal government's real estate decisions. Many of those choices, which have a major impact on the D.C.-area office market, appear to be on hold as the agency remains under temporary leadership.
The administration appointed the commissioner of the GSA's Federal Acquisition Service, Alan Thomas, on Wednesday. The FAS deals with information technology and services and is not involved in the GSA's real estate decisions, but the appointment could be a sign of things to come.
“If they’ve made a decision on the federal acquisition service commissioner, I would say they’re pretty close to making a decision on the public buildings commissioner,” said Holland & Knight partner Bob MacKichan, a former GSA counsel who led the agency’s pre-inauguration transition.
The appointment of the administrator, unlike the FAS and PBS commissioners, must be confirmed by the Senate, so MacKichan said he does not expect the top position to be filled until after Congress gets back from its August recess. As it awaits a permanent administrator, here are five of the biggest agency moves the GSA has been working on:
Federal Bureau of Investigation
The decision on where to locate the new 2.1M SF FBI HQ was supposed to be announced by the end of 2016. It then got pushed back to March, and then pushed back again indefinitely. Local officials in Prince George's County, Maryland, where two of the potential sites are located, and Fairfax County, Virginia, the site of the third, are awaiting the announcement that could have major economic development implications. So are the developers bidding to build the project, which could include a swap for the FBI's Hoover Building on Pennsylvania Avenue.
Former Public Buildings Commissioner Bob Peck said in April that he does not expect the decision to be made until 2018. The delay has more to do with congressional appropriations than agency leadership, but brokers who deal with the GSA do not expect a decision to be made without a permanent administrator.
"This is an example of a situation where the senior leadership at GSA is probably going to be necessary," Colliers Executive Vice President of Government Solutions Kurt Stout said of the FBI decision. "I think it’s a project that is going to require some scrutiny from the administration to sort of back check all the facts and assumptions that have gone into the decision before ultimately moving forward."
A GSA spokesperson said a permanent administrator would help speed the already-delayed process along.
“It’s just a wait and see because we don’t know when our person is coming and we do need the money,” the spokesperson said. “Maybe it will all come together at the same time.”
Department of Labor
One decision that has already been tabled since the new administration took over is the search for a new Department of Labor HQ. The GSA in November had narrowed the search for a site to build the new 1M SF campus down to three parcels in NoMa, Capitol Riverfront and Poplar Point in D.C. It had been looking to execute an exchange with a developer for Labor's current HQ, the Frances Perkins Building at 200 Constitution Ave. NW.
The GSA then pulled the solicitation in April and canceled the environmental studies it had planned for the three sites. Exchange deals like this are difficult for the GSA to make in normal circumstances, Stout said, but even harder with temporary leaders in place.
"Without permanent leadership at GSA, it’s unlikely that a project that high-profile using the exchange authorities would be able to move forward," Stout said.
The GSA, in a statement at the time, said it determined the exchange mechanism was not the best way to maximize return on the Frances Perkins Building, but it is continuing to work with the Labor Department to explore options for a HQ relocation.
Transportation Security Administration
Office landlords are also awaiting the selection of a new HQ for the TSA. The GSA had picked a 625K SF space at Prudential Real Estate Investors' Victory Center building in Alexandria, but a federal judge voided that lease in 2015 after Boston Properties protested the award. The GSA then accepted bids last summer for a new lease and has yet to make an announcement.
Victory Center is still in the running, along with Boston Properties' site in Springfield and JBG's Hoffman Town Center in Alexandria. Stout said the absence of permanent leadership has likely slowed the process, but he thinks this deal can get done without permanent heads in place.
Drug Enforcement Agency
Last April, the GSA kicked off its search for a new headquarters of at least 478K SF for the DEA. The agency wants a lease that begins in October 2018 after the DEA's current lease at 600 Army Navy Drive in Pentagon City expires.
Since the prospectus calls for a lease of roughly the same size as the TSA, Stout said the same three buildings — PREI's, Boston Properties' and JBG's — are in play. Unlike the TSA, Stout said the DEA could potentially stay put and renew its current lease. He also said this deal could likely be executed without permanent leadership in place at the GSA. He thinks announcements could be made this summer for either the TSA or DEA.
Securities and Exchange Commission
The GSA in January sent a prospectus to Congress for approval to lease 1.3M SF for the SEC after its final lease expires in 2021. The SEC then asked Congress to appropriate $245M in case it gets approved for the HQ move.
The search is still in its very early stages, and Stout said it is very likely the agency could renew its current leases in three adjacent buildings next to Union Station. He said the SEC wants assurance it would have the funding to move so it can explore alternative options.