- The Washington Times - Thursday, May 31, 2001

A New York developer will build a new headquarters for the federal Securities and Exchange Commission next to Union Station, the agency said yesterday.

Louis Dreyfus Properties LLC will develop the 650,000-square-foot building at the corner of F and Second streets NE. The federal agency will be the sole tenant in the building to be called Station Place although Dreyfus could build another 750,000 square feet on the site.

The federal agency has signed a 14-year lease, and will pay about $40 a square foot for the space through the life of the lease. The new headquarters will be built over the next three years.

The average rental rate for premium office space in the District is about $42 a square foot, according to Delta Associates, an Alexandria, Va.-based real estate research service.

The commission which has about 1,800 employees is now based at 450 Fifth St. NW, where it leases about 450,000 square feet. It also leases space at 901 E St. NW.

The agency began searching for a new headquarters last year because it wants to have all of its employees in one location.

"This is a big coup for the city," said Audrey Z. Cramer, executive vice president of Cushman and Wakefield, the D.C. brokerage that helped arrange the deal.

The commission considered moving to Silver Spring, Md., in 1995 before bowing to political pressure and choosing to stay at its current building downtown. That search ignited a battle between the District and Montgomery County, with each jurisdiction offering incentives to entice the agency.

The commission will be located near NoMa, the area north of Massachusetts Avenue that the city has designated as an arts, housing and technology-business district.

Most of the new office tenants moving to NoMa are government agencies. The federal Bureau of Alcohol, Tobacco and Firearms is planning a new headquarters at the corner of New York and Florida avenues NE, and the D.C. Department of Employment Services is scheduled to move to 77 P St. NE.

Casey W. Masters, market analyst for D.C. brokerage Cassidy & Pinkard, said the government agencies moving to NoMa does not mean tech businesses won't move to the area, too.

"The pattern of development in the city shows that government comes to an area first, and then everybody else comes later," Mr. Masters said.

Marc A. Weiss, a former D.C. economic-development official who created the concept for NoMa, said the commission is the "perfect fit" for the Union Station area.

The NoMa development plan calls for offices around Union Station, housing in the Mount Vernon Square area and arts space and technology businesses north of K Street NE, Mr. Weiss said.

The commission's decision leaves the federal Department of Transportation as the only government agency still scouting for a big chunk of office space.

The Transportation Department, now based at L'Enfant Plaza in Southwest, needs about 1.35 million square feet for a new headquarters. The department is seeking a 20-year lease expected to cost at least $55 million annually.

A decision was expected last year, but federal budget analysts have taken longer to review the potential cost of the massive relocation, according to officials involved in the site-selection process.


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