A trio of federal office buildings in downtown Boston, encompassing approximately 2.7 million square feet, are becoming a significant financial burden on taxpayers.
The buildings in question are the John F. Kennedy Federal Building, the John W. McCormack Building, and the Thomas P. O’Neill, Jr. Federal Building.
This situation has prompted the Public Buildings Reform Board (PBRB) to contemplate their disposal, as they held a meeting in Boston to deliberate the future of these properties.
The JFK Federal Building, located at 15 Sudbury St., has drawn particular scrutiny.
According to PBRB member Nick Rahall, these buildings represent substantial opportunities for cost savings and align with the city’s ambitions for housing development and downtown revitalization.
With many federal employees opting to work remotely, the buildings are left largely underutilized, resulting in a disproportionate financial burden on the already strained taxpayer dollars.
“The lights are on, but nobody’s home,” Rahahl remarked during the meeting held at JLL’s office at One Post Office Square.
The PBRB, established by Congress in 2016, comprises a bipartisan team of appointed members, including former General Services Administration officials and real estate developers.
As they prepare their next set of recommendations regarding federal property dispositions, the board is evaluating potential consolidations of federal agencies currently occupying the buildings.
Former Congressman Mike Capuano and board member David Winstead discussed various scenarios, including consolidating three buildings into two or even converting them into leased spaces.
They indicated that exploring lease options is a viable consideration.
The board has cited several factors contributing to the high operational costs of these buildings, including millions in deferred maintenance and low occupancy rates that promote inefficiencies.
The JFK Federal Building specifically incurs an average operating cost of $309,212 per employee during periods of low attendance; if the overdue maintenance were addressed, this figure could decrease dramatically to around $55,477.
Mathews emphasized that the low occupancy means that federal employees currently utilize only about one-quarter of the space for which the government is financially responsible.
However, renovations necessary to bring these buildings up to standard could require hundreds of millions in congressional appropriations, a prospect that Mathews deemed unlikely.
The future options surrounding these buildings are varied, with the possibility of redevelopment into housing being a primary consideration.
The McCormack Building stands out as a prime candidate for redevelopment due to its advantageous location in the Financial District and better overall condition compared to the others.
Furthermore, mixed-use redevelopment could be a favorable option for the Thomas P. O’Neill Jr. Federal Building, which is strategically located near TD Garden and is part of an area undergoing substantial economic activity and redevelopment.
Besides the aforementioned buildings, the PBRB is also assessing other federal properties throughout Massachusetts for possible disposition.
Potential candidates for disposal include the 11 Channel St. Warehouse and Parking Lot, the Philip J. Philbin Federal Office Building in Fitchburg, and the U.S. Customs and Border Protection Building in New Bedford.
Earlier in May, the PBRB released a list identifying ten federally owned properties nationwide for potential disposition, which received approval from President Donald Trump.
Among these was the Captain John Foster Williams Coast Guard Building in Boston, suggesting a trend towards consolidating federal office space in more modern settings.
This 63,000-square-foot building, which has been home to the U.S. Coast Guard’s New England headquarters since its establishment in 1918, also suffered from significant deferred maintenance.
The Coast Guard plans to relocate following the disposition of the building, a move necessitated by the need for more contemporary office space.
The May report from PBRB highlighted that alongside the JFK, O’Neill, and McCormack buildings, it is also evaluating a lease for the SEC Regional Office located at 33 Arch St.
Concerns surrounding Boston’s office market were raised by Capuano, who pointed out that it may be nearing its lowest point, which could adversely affect sale prices for the federal properties in question.
“We can sell the building, but if we only get $1 for it, is it worth selling at this point?” Capuano queried, expressing skepticism about the likelihood of selling all three buildings.
He emphasized that if a deal proceeded, it could have significant implications on the local real estate market.
image source from：bisnow
