Eye-popping new costs were revealed for the renovation of the Consumer Financial Protection Bureau headquarters, now putting that government office in the highest luxury class of buildings throughout the country.
Melissa Heist, the associate Inspector General of the Federal Reserve System, reported on July 31 that the CFPB renovation will officially cost taxpayers $285.32 per square foot, a price tag the reserved for only the most luxurious “Class A” commercial office buildings.
It’s the first time any government agency has provided an actual per foot cost for the 300,000 square foot building that sits across the street from the White House.
The CFPB was created by President Obama and congressional Democrats in 2010 primarily to represent poor and working class consumers.
The IG warned that the price could go higher if a new $4.1 million day care center was built and other costs were factored in. If all renovation options were implemented, the final cost could total $207 million.
Still, the IG found the dollar figures “reasonable” based on two unidentified federal buildings selected by the General Services Administration.
Rep. Sean Duffy, R-WI, the chairman of the House Financial Services oversight subcommittee said that spending for $200 million for a building previously assessed at $150 million makes little sense.
“DC may be the only place on Earth where it is considered ‘reasonable’ for a federal bureaucracy to spend over $200 million to renovate a building it doesn’t own — a full $50 million more than the building is worth,” Duffy said. “I doubt that my constituents back home, who are ultimately on the hook for this boondoggle, hold the same view.”
Charlie Schwieger, a real estate economist for CoStar Portfolio Strategy, a part of the nation’s leading real estate research firm, said he was astonished by the price tag.
“That’s a lot,” he told the Daily Caller News Foundation in an interview. “As you’re getting closer to 300 bucks a foot, that’s really high end finishes.”
“That’s a core ‘Class A’ building, core being the ‘nicest of the nice,'” he said.
CoStar officially defines a “Class A” building as “the highest quality/expensive finish and trim, (with) abundant amenities.”
Richard Groh, an architect of 35 years who owns an architectural firm in Minneappolis, told TheDCNF he agreed with Schwieger.
“It’s not a typical office space,” he told TheDCNF. “It’s probably two-to-three times the cost of typical office space.”
Groh said that the CFPB building could exceed a Class A category and could possibly enter the rarified world of so-called “trophy” buildings.
“I’m not sure what the definition of Class A or trophy would be. Common sense would tell me you’re in the right ballpark for that,” he said.
Clark Manus, CEO of Manus Heller and a past president of the American Institute of Architects, said the $285 per foot figure was a “decent number.”
“When you’re investing that kind of money, you’re basically looking for Class A tenancy,” he said.
To design its headquarters, CFPB retained the Chicago-based firm of Skidmore, Owens & Merrill. The IG said CFPB has paid Skidmore $12 million to date.
Skidmore is a legendary architectural firm that counts among its buildings the famed John Hancock Building and the Sears Tower.
More recently, it was the designer of luxurious buildings throughout the world, including Dubai’s Burj Khalifa, the world’s tallest building, the Haj Terminal in Jeddah, Saudi Arabia, and the Bank of Beijing.
In a July 2014 report, the IG charged that CFPB’s original renovation cost estimates were not based on a “sound basis” because it had not prepared any cost analysis or competing plans to its own Investment Review Board, which must review all major capital expenditures.
In its latest report, the IG added that the bureau had yet to give its latest figures to the IRB and recommended that it do so.
“The IRB should review and approve these investments to provide the CFPB with assurance that these investments are sound business decisions,” Heist said in her latest report.
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