Dwight Evans calls on IRS to recommit to University City as feds consider downsizing office space
The federal government's lease at the enormous office building doesn't terminate until 2030, but the Philadelphia-area Congressional delegation wants renewal negotiations to begin now.
U.S. Rep. Dwight Evans and much of the Philadelphia-area congressional delegation want the federal government to recommit the IRS — and up to 5,000 of its employees — to University City.
In a Dec. 19 letter, which the Democrat shared with reporters earlier this week, they urged the General Services Administration (GSA) to begin negotiations for a new lease at Cira Square at 2970 Market St. Located next to 30th Street Station, the 863,000-square-foot former post office is slated to house local IRS workers until 2030.
“Repurposing the building for alternative purposes subsequent to a departure by the IRS could only be done at a considerable expense and would introduce employment instability in a neighborhood crucial for greater regional economic revitalization,” the letter reads.
The plea comes as the federal government reevaluates the need for its current volume of office space in the era of remote and hybrid work. As of last April, the GSA leases 180 million square feet of office space across the country, and the federal government owns 500 million square feet.
While Evans hasn’t heard that the GSA is considering leaving 2970 Market, he said wanted to begin negotiations sooner rather than later.
The letter is also signed by Reps. Madeleine Dean, Mary Gay Scanlon, Brendan Boyle, Brian Fitzpatrick, Susan Wild, and Chrissy Houlahan.
“I’m trying to just send a message that is about jobs and opportunity,” Evans said in an interview. “That’s the message I sent along with my colleagues.”
Brandywine Realty Trust began redeveloping the former U.S. Postal Service building into office space in 2007, then leased it with an accompanying parking garage to the GSA in 2010. The IRS was the intended tenant from early on and insisted on a number of defensive installations that made the building inaccessible to the public.
Brandywine sold the building in 2015 for $354 million before joining with two other investors to buy it back again in 2022 with $28.6 million toward a $383 million purchase. As part of the deal, they have a 20% equity stake and are responsible for managing the property, according to a 2022 story in the Philadelphia Business Journal.
Brandywine is heavily invested in that area of the city. The company is currently developing the multibillion Schuylkill Yards mixed-use project in the area and owns the nearby FMC Tower.
Brandywine declined to comment for this story. A GSA spokesperson said only that they are working with the IRS to determine their future office needs in Philadelphia.
The federal government’s return-to-work policies have proven to be a divisive subject, with Republicans in Congress arguing that workers need to return in-person. The District of Columbia’s government also has called for a federal return to office, as remote work has contributed to the hollowing out of its downtown since 2020.
A recent report from the Government Accountability Office (GAO), which surveyed 24 federal headquarters in the D.C.-Baltimore area, found that only 25% of available office space was being used on average across the study area. At the highest range, only 39-to-49% of office space was being used.
The federal government is considering downsizing office space “everywhere, and for good reasons,” said Daniel Schuman, governance director at the Washington-based POPVOX Foundation, which focuses on modernizing American government. “It costs taxpayers millions and millions of dollars to maintain these facilities, particularly when they’re mostly empty.”
The GAO found that the federal government spent $5 billion a year to lease office buildings, and that half of its leases were due to expire between 2023 and 2027.
In the letter, the Philadelphia-area congressional delegation acknowledges that the GSA doesn’t usually begin reviewing future options until four years out from the end of lease — 2026 in this case. But they encouraged the agency to consider negotiations anyway.
“We urge you to consider authorizing the beginning of discussions with IRS, as well as relevant stakeholders and property owners,” the letter reads, “to explore whether the magnitude, timing, efficiencies, and long-term interests of the federal government might be best served by an out-of-cycle negotiation for a future lease at Cira Square.”