A federal consumer protection agency is spending more money per square foot to renovate its Washington D.C. headquarters than it cost to build the Trump World Tower or Las Vegas’s Bellagio Hotel — and the project’s budget continues to grow.
That’s the House Financial Services Committee interpretation of a Federal Reserve’s Office of the Inspector General report that found that the cost to renovate the headquarters for the Consumer Financial Protection Bureau (CFPB) is now estimated to be $215.8 million.
That is a significant increase from 2010’s initial cost estimate of $55 million and double last year’s upwardly revised estimate of $95 million. Among the reasons for the increased project cost are the inclusion of an extra floor of office space and an upgrade in the project’s class from a B+ rating to an A rating.
Besides the escalating project costs, the inspector general noted that the CFPB’s documentation for the renovation project was incomplete.
“The CFPB did not follow all internal [Internal Review Board] guidance when completing the business case for the building renovation,” reads the report, which was provided to Rep. Patrick McHenry, chairman of the Financial Services Oversight and Investigations Subcommittee.
Because of that failure “a sound business case is not available to support the funding of the renovation,” the inspector general claimed.
The inspector general also reported that the CFPB was “unable to locate any documentation of the decision to fully renovate the building.”
The report notes that CFPB officials said that they did not submit all of the estimates because they considered it to be just a “formality” in the budget approval process.
For the House Financial Services Committee, the spiraling project cost is indicative of a larger problem at the CFPB, which was created in 2010 as part of the Dodd-Frank financial reform bill.
“When they passed the Dodd-Frank Act, Democrats in Congress and the White House made the CFPB unaccountable to taxpayers and to Congress,” said House Financial Services Committee chairman Jeb Hensarling in a statement following the inspector general’s report.
Since its creation, some lawmakers have complained the the CFPB has too little congressional oversight and too much leeway in investigating banks and other financial institutions for alleged unfair business practices.
“We’re seeing the results of this dangerous unaccountability today in a Washington bureaucracy that is running amok, spending as much as it wants on whatever it wants. It’s outrageous,” said Hensarling, a Republican.
The House committee has prodded the CFPB over why it is spending so much to renovate a building that it doesn’t even own. More, the building being renovated was appraised at only $153.7 million in 2011. The value of the building will likely increase though, as the CFPB’s project includes plans for a four-story glass staircase, a two-story waterfall and a sunken garden.
“The continuously growing price tag is a tremendous waste of funds and, amazingly, there is still no assurance the $216 million price tag won’t grow higher,” said McHenry in a statement.
The $590 per square foot to renovate the CFPB’s offices outpaces the $334 per square foot it cost to build the Trump World Tower in New York City or the $330 per square foot it cost to build the lavish Bellagio Hotel and Casino in Las Vegas, the House Financial Services Committee noted in its statement. The tallest building in the world, the Burj Khalifa in Dubai, cost $450 per square foot.