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Trump Hush Money

Shortly after dump trucks began hauling dirt off, the political ground began to give way under the Department of Homeland Security headquarters project in Southeast Washington.

By the time the first building was completed, steep budget cuts from Capitol Hill had set the work back a decade and put it $1 billion over budget.

But with 14 months remaining in office, the Obama administration is pitching Congress on a strategy for finishing the project by squeezing federal employees into smaller spaces or telling them to work from home.

Employers of all stripes are reconfiguring offices to be more open and efficient, but the new DHS plan would constitute perhaps the most dramatic and expansive shrink job in Washington.

The original plans for the facility, which sits unfinished on the west campus of the former St. Elizabeths Hospital, called for 4.5 million square feet that would accommodate 14,000 employees.

The new one calls for 900,000 square feet less space but would accommodate 3,000 more employees. Gone is 35 percent of the space for the Federal Emergency Management Agency and a planned expansion of an underground operations center. A reference room, a tech resource center, a dry cleaner and a barber-and-beauty shop also have been dumped. Space dedicated to child care is sliced in half, and total cafeteria space would be cut from 60,000 square feet to 14,400, about the size of a Walgreens.

A large share of the space savings come from the amount allotted to each employee, which would drop from the original 230 square feet per person to 155. Although there would be 17,000 people working there, the facility would have only 12,800 desks.

The overall cost would drop from $4.5 billion to $3.7 billion, according to the General Services Administration.

That’s only if administration officials successfully convince Congress that further delaying the project would be more costly, both in taxpayer dollars and security operations.

During a tour of the 176-acre campus Monday afternoon to promote the new plan, Sens. Thomas R. Carper (D-Del.) and Tom Udall (D-N.M.) and D.C. Del. Eleanor Holmes Norton (D) saw the progress so far: a sparkling new Coast Guard headquarters amid boarded-up brick buildings of a former mental hospital dating to the 1850s.

Carper praised GSA officials for “sharpening their pencils” to find savings. He said not completing the project put money already spent there — nearly $1.8 billion, including most of the infrastructure for the entire campus — at risk.

“If we walk away from it, there’s a lot of sunken costs that we won’t get any value for,” he said. “It will be money thrown away.”

[Related: <a href="https://www.washingtonpost.com/news/digger/wp/2015/10/16/the-fbis-headquarters-is-falling-apart-why-is-it-so-hard-for-america-to-build-a-new-one/">The FBI’s headquarters is falling apart. Why is it so hard for America to build a new one?</a>]

The intelligence failures that allowed the Sept. 11 attacks prompted the creation of DHS by consolidating agencies with similar missions, and the merger sparked the need for a unified headquarters. On the grass behind one vacant building lies evidence that department leaders have not forgotten the precipitating tragedy: steel beams from the World Trade Center and broken pieces of the Pentagon. The relics are to be incorporated into a statue on campus.

The department headquarters’ operations remain spread at more than 50 locations across the region. With St. Elizabeths completed, that would be reduced to between six and nine. DHS is far from the only employer downsizing its real estate. Obama has repeatedly required federal agencies to cut real estate costs, including a March directive that they aggressively dispose of surplus properties and reduce space.

Law firms, consulting firms and media companies are <a href="https://www.washingtonpost.com/news/capital-business/wp/2014/03/11/shrinking-law-firms-leave-gap-in-d-c-real-estate-market/">doing the same</a>, moving into newly designed buildings that allow more employees in smaller spaces and abandoning older ones with less efficient designs. As a result, from 2008 to 2014, local employers added 18.6 million square feet net space in newer, high-end buildings while vacating 13.8 million square feet in Class B or C buildings, according to Newmark Grubb Knight Frank.

via Senate Democrats DHS report

Jim Stader, DHS deputy chief for facilities, said the department’s consolidation would “absolutely” improve operational preparedness despite the close quarters.

He said department leaders are identifying staff focused on research or writing reports who don’t require daily face-to-face connections or a desk. “These are employees who may not have to be at work in the traditional sense,” he said.

The project was also pledged as <a href="http://www.washingtonpost.com/wp-dyn/content/article/2010/04/23/AR2010042303747.html">an economic savior for Ward 8</a>, the poorest area of the District. GSA says that 1,780 D.C. residents (including 300 from Ward 8) have been hired by contractors on the project and the agency operates a jobs center on site for applicants.

The D.C. government owns the east campus across the street and opened a <a href="https://www.washingtonpost.com/blogs/mike-debonis/wp/2012/10/13/st-elizabeths-gateway-pavilion-plans-are-unveiled/">public events pavilion</a> there to coincide with the new Coast Guard headquarters. But with the rest of the DHS campus stalled, building a calendar of events has been difficult.

Catherine Buell, executive director of St. Elizabeths East for D.C. Mayor Muriel E. Bowser (D), said the District has hosted food trucks there occasionally but with the Coast Guard so far away found that only worked about once a week. She said no contractors have opened offices nearby and that plans to put FEMA on the east campus have been scrapped.

“We’re working with the GSA on finding a replacement user,” she said. D.C. is handing management of the pavilion over to Events DC, the city’s sports and events arm, to attract a broader array of entertainment and music there.

Erik Moses, director of sports and entertainment for Events DC, said because he manages multiple venues across the city he could field interest from an array of concert and entertainment promoters that could work at the pavilion. “We really have expertise in this and this. It’s what we do all the time,” he said.

To generate activity without DHS, D.C. is <a href="https://www.washingtonpost.com/news/digger/wp/2015/09/15/bowser-outlines-details-of-st-elizabeths-deal/">building an entertainment venue and practice facility</a> for the Washington Wizards and plans to break ground with private developers on 250 new apartments in 2017, which could serve as housing for DHS employees once they arrive.

Turning St. Elizabeths, a historic landmark, into highly efficient offices will require the preservation of 52 historic buildings, including one from 1901 that may have to be moved. When trees are taken down new ones must be planted. Seven new bridges over Interstate 295 are needed to accommodate traffic.

At the hospital’s center building, the last for which there is funding, workers are tagging and removing windows for restoration while the walls are braced against cracking.

An advantage of St. Elizabeths is the government owns it. The GSA has endured criticism for reliance on expensive leased space; about 70 percent of DHS space is leased now. The new plan would drop that to 20 percent. Most of the leases expire in the next five years.

Congress has stymied Obama’s previous funding requests. After starting with more than $600 million in recovery act dollars, the project received no money in 2010 and a quarter or less of what he requested the next two years.

After six months peddling the streamlined plan, administration officials are increasingly optimistic that St. Elizabeths will get over the hump, particularly with a two-year budget agreement and Secretary Jeh Johnson’s scheduled move into his new office as early as next year.

This fiscal year the administration requested $216 million in DHS funds and $380 million in GSA funds for the project. Norton said spending now would save $1.2 billion later. “Now that’s a savings,” she said. “But of course you have to invest a little in order to do it because you have to get the buildings up to get us out of these expensive leases all around the region.”

GSA Administrator Denise Turner Roth said she had found “a good sense of the importance of the project” among Capitol Hill leaders.

But skepticism remains. The Senate Appropriations Committee passed $212 million in DHS money for the project in June, but the House approved just $43.9 million. The GSA’s requests have fared far worse, getting nothing new for the project from either branch (though $32 million may be reprogrammed for it).

The House Appropriations Committee, chaired by Rep. Harold Rogers (R-Ky.), reported that the committee “appreciates changes to the DHS consolidation plan that have reduced requirements and costs,” but noted that “given the constraints of the current budget environment” only a portion of the funds were available.

Aides for Rogers and Sen. Thad Cochran (R-Miss.), chair of the Senate Appropriations Committee, said the project was one of many being discussed in budget negotiations.

Udall said the failure to “connect the dots” on Sept. 11 intelligence was a motivating factor. “The way you get them to work together is to get them, as much as possible, all consolidated in one location,” he said.

Follow Jonathan O’Connell on Twitter: <a href="https://twitter.com/OConnellPostbiz">@oconnellpostbiz</a>

University of Wisconsin-Madison

Jonathan O'Connell is a reporter focused on investigations. He has covered economic development, commercial real estate and President Donald Trump's business. He joined The Post in 2010.

Jonathan O'Connell

The Washington Post

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