The Real Deal New York

Vornado, Silverstein won’t be developing FBI’s new $2B headquarters anytime soon

Federal officials have canceled their search for a developer
July 11, 2017 08:03AM

From left: FBI headquarters, Larry Silverstein and Steven Roth

It looks like Vornado Realty Trust and Silverstein Properties won’t be redeveloping the Federal Bureau of Investigation’s new headquarters anytime soon.

The General Services Administration, the agency that manages federal real estate, is calling off a competition to build a new $2 billion headquarters, the Washington Post reported. Vornado and Silverstein were among the four final bidders on the project. The winners would’ve received roughly $1 billion in federal funds to develop the project, and also would’ve won control over the FBI’s current headquarters in Washington, D.C., the crumbling J. Edgar Hoover Building.

President Trump’s ties to Vornado’s CEO Steve Roth and Larry Silverstein raised some concerns over potential conflicts of interest in selecting a winning bidder. Roth owns a controlling stake in 1290 Sixth Avenue, a Midtown office building that Trump has a non-controlling stake in. Roth also owns a 49.5 percent stake in Kushner Companies’ 666 Fifth Avenue. Silverstein has described Trump as a friend.

The project has also dragged on for several years, draining millions of dollars from real estate developers and the federal government. The GSA is paying rent at dozen locations for many of the FBI’s employees, who outgrew the bureau’s headquarters. [WaPo] — Kathryn Brenzel