Children’s National makes big play for Walter Reed site, could reopen campus by 2015

By Michael Neibauer  – Washington Business Journal

A significant chunk of the shuttered Walter Reed Army Medical Center campus could reopen as soon as next year in the form of a major move by the Children’s National Health System. Language in the U.S. House version of the fiscal 2015 National Defense Authorization Act would authorize, though not require, the transfer of 13.2 acres “without consideration” from the Army to Children’s National for use as the Walter Reed Children’s Research Institute.

The Children’s site is carved out of 43.5 acres designated for a future State Department Foreign Missions Center, not the District’s 66.57-acre slice of the Walter Reed pie.

The proposed institute would initially house as many as 400 scientists, pediatricians and support staff, in addition to a “first of its kind center” for rare pediatric disease research and care, Dr. Marshall Summar, Children’s chief of genetics and metabolism, told the Walter Reed Local Redevelopment Authority on Monday.

The House approved its version of the Defense Reauthorization Act in June. If the Senate does not remove the Children’s language from a compromise bill, likely to be dealt with in conference later this year, Children’s could obtain the site by 2015. Walter Reed closed in the summer of 2011, its operations shifted to a new hospital in Bethesda.

The Children’s parcels, bounded by Fern Street and Alaska Avenue, would include Building 54, the Armed Forces Institute of Pathology Building and former Military Medical Museum; Building 53, the former post theater; Building 52, a warehouse and outpatient clinic; and a parking garage.

The prize of the deal is Building 54, which was constructed in 1955 as the world’s first atomic blast-proof building, and expanded in 1972. It is eight floors, totals 375,000 square feet, and includes 180 research laboratories, 25 high-end BL3+ labs, 43 conference and classrooms, 450 offices and cubicles and 13 walk-in refrigeration units. Children’s has taken to calling its bid for the site the “Area 54 Project.” Per Summar, Children’s would use the building as its primary biomedical research facility, to replace its current (much smaller) space on the fifth and sixth floors of Children’s Hospital on Michigan Avenue Northwest. While the chiller plant must be upgraded, carpet and drywall repaired and some asbestos-containing tiles removed, the building is, for the most part, ready to occupy.

“This is top-end laboratory space,” Summar said. “There’s really nothing else you could do with that building. This would keep it intact.”

The hospital’s board has already approved $1.2 million a year for building operations and $14 million up front to upgrade the facility, Summar said.

The proposed Children’s land comprises nearly 30 percent of the State Department’s planned Foreign Missions Center. State’s website for its project makes no mention of the Children’s proposal. A review of redevelopment options for the Foreign Mission Center, released in February, suggested razing Building 54 in favor of new chancery space. According to Summar, knocking the building down would cost upward of $25 million.

A State spokesman was not immediately available for comment.

To the east and the south of the Children’s site is the District’s portion of Walter Reed, which it hopes to purchase from the Army by late 2015. D.C. selected a joint venture led by Hines, Urban Atlantic and Triden Development Group LLC last November to redevelop the campus into the 3 million-square-foot, mixed-use “Parks at Walter Reed.”

Children’s officials first approached the Department of Defense and the Base Realignment and Closure Commission about Walter Reed last fall, shortly after the District selected the Hines/Urban Atlantic venture over Roadside Development, with whom Children’s had a partnership. With Roadside, Children’s sought to redevelop Walter Reed’s Building 1 as clinical and research space, which could have cost as much as $150 million.

The hospital system worked with the House Armed Services Committee and the office of D.C. Del. Eleanor Holmes Norton to have the language introduced into the House defense spending bill, Summar said. If the Defense and State departments agree to the transfer, he said, Children’s could occupy the buildings as soon as four to six months after conveyance.

“This is transformational for Children’s,” he said, noting the hospital system currently employs nearly 6,000 staff in 30 facilities.

“We want to stay in the District,” he told the local redevelopment authority. “We are D.C. Children’s Hospital.”

Following Summar’s presentation, the Walter Reed community advisory committee voted unanimously to support Children’s plans for the site. The Office of the Deputy Mayor for Planning and Economic Development, represented by LRA Director Martine Combal, abstained.