The first portion of the sale closed on Jan. 18 with $85.6 million in revenue to be recorded for the current fiscal year, which ends June 30, according to Mindy Mizell, a spokeswoman for the American Red Cross. The remainder of the building will be sold in sections over time, she said. Some of the revenue will be used to offset pension liability and some will go to support nationwide humanitarian services.
The General Services Administration (GSA) budgeted $315.5 million in Fiscal Year 2016 to acquire the 12-story building. The cost would be split between GSA and the Department of State (DOS), according to a construction prospectus completed in February 2015.
As early as 2014, the Red Cross had been approached by the federal government about a possible sale of the E Street building. “We agreed to pursue the sale as part of our ongoing commitment to looking at every possible alternative to cutting costs without harming our humanitarian mission,” Mizell said.
GSA had leased nine floors, about 347,000 of the 808,500 square feet, of the building on behalf of DOS under a lease that expires in June 2020. The building includes 400 parking spaces on two below-grade levels. It was erected in 2002 and sits on about two acres of federal land in Foggy Bottom.
Purchasing the property was the least expensive alternative over 30 years, according to the GSA prospectus, which estimated that leasing would cost $607 million and new construction $653 million, compared with $485 million to purchase.
Staff from the 2025 E St. facility have all been accommodated at one of the three buildings at the Red Cross Square campus between 17th and 18th and D streets, in an existing facility in Fairfax, Va., or teleworking or similar arrangements. The last employees were scheduled to transition out of the E Street building in December but a majority had moved in phases during the past year or so, she said.
“The logistics of moving entire departments from different floors of one building to new floors in new buildings requires careful planning and ongoing employee communication,” Mizell said. “We opted for a strategy centered around transparency with our staff, and it seemed effective, with minimal bumps along the way,” she said.
“The number of staff working out of either location varies constantly as volunteers ebb and flow, staff visit for meetings and projects from our field locations, and D.C.-based staff telework on various schedules,” Mizell said. The organization has planned for a total seating capacity of 414 at Red Cross Square and 162 in the Fairfax, Va., facility.
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