May 11, 2006

Fed agencies to get Walter Reed complex land

By David Lawder

WASHINGTON (Reuters) - The U.S. Army intends to sell the
Walter Reed Army Medical Center to other federal agencies when
it closes in 2011, officials said on Thursday, denying the
District of Columbia the opportunity to redevelop the complex.

This week, the Army granted requests to split the 113-acre
campus in northwest Washington between the State Department and
the General Services Administration.

Walter Reed, the Army's premier hospital, which continues
to take in new casualties from the war in Iraq, was one of
dozens of domestic military facilities marked for closure last
year by the Defense Base Realignment and Closure Commission.

Located in a prime residential corridor of Washington, city
officials saw the property as a prime opportunity for
residential and commercial development that would produce
millions of dollars of new property and sales tax revenues.

But the State Department and the GSA saw the property as
one of the last opportunities to obtain land for future
expansion in the District of Columbia, particularly for offices
that meet new federal security standards enacted since the
September 11 attacks in 2001. Federal agencies had the right of
first refusal to acquire the land.

"These campuses provide a rare opportunity for us to find
developable space to accommodate the setbacks necessary," said
a spokesman for the GSA, which intends to use 34 acres.

"We've identified that we will need up to 9 million square
feet of secure federal office space in future years," he said,
adding that the Army will require the agency to pay fair market
value for the site.


The State Department intends to use part of its 79-acre
grant for a chancery center that would house 14 to 16 foreign
embassies, department spokesman Noel Clay said. It also would
consolidate some operations at the site that are now scattered
in leased offices throughout the Washington area.

Washington Mayor Anthony Williams expressed disappointment
that the city will not be able to redevelop the property.

"I remain optimistic that the city can use at least a
portion of the land and our local redevelopment authority
committee will remain intact in case this is a possibility," he
said in a statement.

The Army published a list of base closure properties that
were officially considered surplus by the federal government
and would be made available to local communities. Among them
were Fort Monmouth in New Jersey, Fort Monroe in Virginia and
Forts McPherson and Gillem in Georgia.

The Navy this week said it would make available its naval
stations at Pascagoula, Mississippi, and Ingleside, near Corpus
Christi, Texas, along with its naval support center in New
Orleans. Ingleside will close in September 2010, while New
Orleans closes in March 2010 and Pascagoula in September 2011,
the Navy said in published documents.