As reported in the Washington Business Journal, the auction for the West Heating Plant began last Friday but has yet to receive a single bid.
The auction runs until February 19th, so there’s still plenty of time until the gavel comes down. But the lack of initial interest may be telling of significant challenges GSA will have finding eager buyers willing to pay a high value for the property.
The problem is that the winning bidder almost certainly will not be permitted to knock the building down. While most developers would love to keep the sweeping views the unusually tall building will provide, the fact is that the costs to retrofit the building will be so high that they will quickly outstrip the value of that view.
Added to the uncertainty is the fact that the staff of the CFA have given strong indications that they will not look favorably on requests to alter the window openings. Given the hulking size of the building, without more windows it will be a gloomy interior (and GM is told that large beams block a lot of the light that does come through the current windows).
That same staff is still holding out hope that a non-residential use for the building can be found. In other words, they’d rather see a twenty screen movie theater instead of a twenty condo apartment building.
Perhaps likely bidders like the Levy Group and Eastbanc are waiting until the auction gets closer to the end to bid (GM employs this strategy in his equally important EBay auctions). But GM wouldn’t be terribly surprised to see the building ending up sold for a shockingly low price.