Federal Reserve Office Renovations Cost $600 Million More
As the Federal Reserve grapples with inflation and unemployment concerns, there is another economic issue that needs its attention: its renovation costs. Originally estimated at $1.9 billion, the project is now estimated to cost $2.5 billion, and it’s still in its early stages, according to The Wall Street Journal.
The U.S. central bank is gutting and renovating two of its three adjacent office buildings just off the National Mall in Washington, D.C. to consolidate office space. Their iconic headquarters and the recently acquired “FRB-East” building both began renovations last year, and are expected to be under renovation until 2027.
In the meantime, officials are utilizing the third building for office space, which was recently renovated to include plush amenities like sensors for touchless bathroom doors, and even boasts Italian beehives on the roof.
Unfortunately, just a year into the project, its original $1.9 billion cost estimate already seems unreasonable. According to The Wall Street Journal, “the cost of the overall project has inflated due to ‘significant increases’ in the cost of steel, cement, wood and other materials that ‘far exceed standard cost escalations.’”
Battles with both D.C. and federal regulators have also complicated plans and increased costs. Initially, the Fed wanted to add a “five story brightly glowing glass box” to the “FRB-East” building, but that plan was nixed by regulators for being too gaudy and clashing with neighboring architecture. This caused the Fed to seek more office space underground, which increased costs.
While older government buildings are certainly entitled to practical refurbishments when necessary, cost overruns of over $600 million in year two of a five-year project are always bad news for taxpayers.
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