The Social Security Administration's national headquarters in Woodlawn is about to undergo a $32 million renovation as part of a lease renewal, a shift away from a policy of housing major agencies in government-owned projects.
The three-year renovation of the Security West Building, slated to begin next month, will affect roughly one-quarter of the administration's local employees, most of whom will be temporarily relocated to nearby offices.
"One of our primary goals is to create a nurturing environment for SSA employees," said SSA Commissioner Shirley Chater, through a spokesman. "The renovations at Security West will go a long way toward achieving that goal."
The renovation was negotiated as part of a 10-year lease renewal the U.S. General Services Administration (GSA) -- the federal agency that oversees most government facilities -- committed to late last month with the Washington-based Cafritz Group Inc., which owns the 850,000-square-foot building.
But the primary factor behind the renovation of SSA's 25-year-old building was a U.S. Office of Management and Budget (OMB) decision in February 1992 to postpone plans for a $130 million replacement facility for the administration. The OMB cited excessive cost.
Without the new headquarters to accommodate Security West's 3,500 workers, the seven-story building represents the only office structure in the metropolitan area capable of meeting the administration's requirements.
The OMB decision marks a shift away from policy developed during the Reagan administration, when the GSA typically purchased or constructed its own projects in the belief that control over property saved money over the long term. In the Baltimore area, the government's new $122.6 million headquarters for the Health Care Financing Administration, nearing completion in Woodlawn, resulted from that policy.
The renovations also occur as the Clinton administration has ordered the agency, which allocates $350 billion annually, to cut more than 7 percent of its work force by the end of the decade, despite increasing applications for assistance. SSA, which employs nearly 15,000 locally, administers benefits to 45 million Americans, said Tom Margenau, an SSA spokesman.
Despite the perceived savings, the lease extension for the 1500 Woodlawn Drive project will cost taxpayers nearly as much over the next 10 years as the postponed replacement headquarters.
Under terms of the new lease, which will include the renovation costs, the GSA will pay $122 million to occupy Security West through 2004, a 157 percent increase over its existing rental rate, according to GSA figures. The Security West lease also excludes a cancellation clause normally contained in GSA transactions.
Even excluding the renovation costs, the GSA will pay 89 percent more for its space.
Cafritz, which plans to sell bonds for the renovation early next month, declined to comment until the financing has been completed.
The $32 million renovations, set to include a full-scale reworking of the building's heating and air conditioning systems, lighting, fire safety and asbestos removal, is intended to improve the efficiency of both personnel and the building, said John C. Thompson, a GSA spokesman in Philadelphia.
As part of the process, the GSA intends early next year to commit to a series of short-term leases in Woodlawn for up to 115,000 square feet to house its employees while the renovations are done.