Local
D.C. pays $10M and counting for vacant building
By: Michael Neibauer
Examiner Staff Writer
January 1, 2008
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| A jogger passes the former Washington Star printing plant at 225 Virginia Ave., SE. The District’s economy is flagging and revenues are coming up short, yet the city continues to pay more than a half-million dollars every month for a massive, empty building in Southeast that it has no plans to occupy. (Andrew Harnik/Examiner) |
When D.C. pays its January rent for the former Washington Star printing plant at 225 Virginia Ave. SE, it will have spent more than $10 million over 18 months for a cavernous property within walking distance of Nationals Park that still sits vacant. That milestone was reached earlier if one counts the $1 million spent on architectural renderings that the city no longer has any use for.
The District spends $546,000 a month to lease the 421,000-square-foot property, including the facility and its surface parking. The 20-year deal, signed in the waning days of 2006 just before Mayor Anthony Williams left office, gave the city six months of rent free to get the building in order — and an option to buy within five years for $85 million.
The initial plan was to move various public safety functions, including the police First District headquarters and evidence warehouse, into the building. But Mayor Adrian Fenty ditched that strategy in August 2007, citing the estimated $100 million it would take to renovate the building.
“I’ve said from the beginning that they had no plans since they jettisoned the project in August 2007 after defending it, after mishandling it,” said at-large D.C. Councilman Phil Mendelson, chairman of the public safety committee. “There’s nothing that justifies the money out the window month after month.”
The Fenty administration waited a year, until August, before seeking formal interest from the private sector to take over the lease. The winning bidder was to be notified Oct. 27, but nothing happened.
“Right now we are still fielding proposals,” Fenty spokeswoman Leslie Kershaw said in a recent e-mail. “We haven’t received a tremendous amount, though we hope to have more at the beginning of the year.”
The Virginia Avenue building served as the Washington Star printing plant until the early 1980s, when it was purchased by the Washington Post. The Post sold it in December 1999 to a limited liability corporation controlled by William C. Smith & Co. for $1.75 million, according to tax records and D.C. Council testimony provided by the District’s Office of Property Management in 2007.
The LLC quickly entered into a 60-year lease with Washington Telecom Associates, which had plans, at the height of the dot-com boom, to transform the property into a secure data center. But the bubble burst and the building remained vacant. The city subleased the facility in late 2006 from Washington Telecom Associates for $6.5 million a year.
The property has a 2009 taxable assessment of $75.7 million.
This fiscal year, the District faces a $127 million budget gap, having already closed a $131 million shortfall in November. To make matters worse, official forecasts have D.C. collecting $304 million less revenue in 2010, $330 million less in 2011 and $328 million less in 2012 than was estimated in September.
The last thing Fenty should do, Mendelson said, is “dump the building below cost” just to escape the lease.
“It makes sense to me to use it,” he said.
