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A Palace on Pennsylvania Ave.

With room for 7,000 workers in 3.1 million square feet, everything about the new Ronald Reagan Building is big--including the price.


WASHINGTON — In an era of government downsizing, the new Ronald Reagan Building and International Trade Center stands out. Not only is it gigantic, it also comes with a huge price tag: $738 million.

The structure on Pennsylvania Avenue, between the White House and the Capitol, is the first federal building built here in 20 years. The L-shaped complex is the biggest federal edifice after the Pentagon, boasting 3.1 million square feet.

Eighty-five elevators serve its 14 floors (nine above ground and five below.) Aside from office space--a small portion will be rented to commercial users--the complex includes a 650-seat auditorium, a 980-seat food court, ballrooms and a 125-foot-high atrium.

Its construction is the last touch in more than three decades of effort to restore vitality to Pennsylvania Avenue--a project launched by President Kennedy, who, after his inaugural ride from the Capitol to the White House in 1961, was chagrined by the number of rundown shops on Washington's most famous boulevard.

"This is something to be celebrated," said Sen. Daniel Patrick Moynihan (D-N.Y.), a key figure in pushing the Reagan building.

But critics are fuming. "This is the biggest boondoggle to come down the pike in a long time," said Rep. John J. Duncan Jr. (R-Tenn.). "We're ending up with a beautifully constructed building, but the cost is ridiculous. It's lavish."

Duncan is especially perturbed that in the mid-1980s, when Congress was debating whether to approve the building, the cost was put at $362 million.

But Robert A. Peck, an official at the General Services Administration who oversaw the construction, said the lower estimate was provided before Congress passed provisions that caused costs to skyrocket. For instance, legislation required the building to resemble other nearby federal buildings, which meant slabs of limestone were needed from a particular quarry in Indiana. Lawmakers also voted to add the trade center to the initial design.

"Even though this is a high-quality building, it will save taxpayer money in the long run," Peck said. That's because most of the federal employees it ultimately will house will be leaving leased office space. According to government estimates, the new building will save the government $600 million in rent over 30 years.

Since mid-July, about 1,100 employees of the Environmental Protection Agency and the Agency for International Development have moved into the building.

For now, they share the space with an army of construction workers. Once it is finished next summer, the building will house up to 7,000 federal employees, including many who work for trade agencies. Private firms specializing in trade also will be sought as tenants, bringing in 600 more people.


A Los Angeles-based investment bank, Quarterdeck Investment Partners Inc., so far is the only firm to have signed a lease. But Brian Dacey, who will manage the trade center, said he anticipates no problem renting the 160,000 square feet of private space, noting that nine letters of intent have been signed by prospective tenants.

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