Freedom Forum makes $100 million offer to move Newseum to D.C.

By Cheryl Arvidson
The Freedom Forum Online

07.11.00

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From left, D.C. Mayor Anthony Williams, Deputy Mayor Eric Price, Charles L. Overby, chairman and chief executive officer of The Freedom Forum and Newseum, and Peter S. Prichard, president of The Freedom Forum and Newseum, discuss The Freedom Forum's $100 million proposal to move the Newseum from Arlington, Va., to Sixth Street and Pennsylvania Avenue N.W. in D.C.

WASHINGTON — The Freedom Forum today announced it has made a $100 million all-cash offer to the District of Columbia for a prime piece of real estate in downtown Washington to be the new location of the Newseum and The Freedom Forum's headquarters and conference center.

At a news conference on the site of the proposed Newseum development at Sixth Street and Pennsylvania Avenue N.W., Charles Overby, chairman and chief executive officer of the foundation, said the new location would enable the Newseum to double its exhibit space and greatly increase the number of visitors who come to the facility, the world's only interactive museum of news.

Overby said relocating the Newseum and Freedom Forum headquarters from Arlington, Va., to a prime spot on Pennsylvania Avenue in the shadow of the U.S. Capitol and directly across the street from the National Gallery of Art, represents "a major vote of confidence in the future of downtown D.C." In addition to the Newseum and other Freedom Forum facilities, the foundation's plans for the site include a street level restaurant, a Newseum retail store and 100 high-end condominiums.

"This plan gives the District both the best use and a premium price, with a major museum and new downtown housing. We can bring the Newseum to D.C. to join the spectacular array of museums on the Mall, and we can serve as a bridge between the Mall and the growing downtown area," he said.

The Freedom Forum offer includes $75 million for the land, plus a grant of $25 million to the District government to use as it sees fit for the development of low- and moderate- income housing, provided the deal can be closed by the end of the calendar year. District Mayor Anthony Williams, who took part in the news conference, called the offer "extraordinary" and vowed to do everything within his power to meet the end-of-year deadline.

"We're going to move heaven and earth to get this done ... as quickly as possible," Williams said, adding that he hoped to complete a review of all regulatory and legal issues – both local and federal – relating to the property transfer within the next 45 days.

"This is a magical, major moment for the city," Williams said.

Also enthusiastically responding to The Freedom Forum's offer were Sen. Daniel Patrick Moynihan, D-N.Y., who has been an instrumental force in the redevelopment of Pennsylvania Avenue between the Capitol and the White House, and D.C. Delegate Eleanor Holmes Norton, who serves as the city's non-voting representative in Congress.

"The Newseum's proposal for Sixth Street and Pennsylvania Avenue is exactly what the location calls for – outstanding architecture and a public purpose," Moynihan said in a statement. "The city and the Avenue will be much the better for it."

"This is a long-awaited and very happy day for the District," Norton said, adding that the end result will be "a world-class museum for the world-class museum city in the United States.

"You made a mistake once," Norton said to Overby and Peter S. Prichard, president of The Freedom Forum, in reference to the initial decision to build the Newseum in Arlington, across the Potomac River from the District. "You have remedied it this morning. Welcome to the District where you belong."

Several neighborhood development leaders also attended the news conference to voice their support for the project.

Charles Docter, chairman of Downtown Housing Now, called it a "win-win offer" that will create housing and retail business in the downtown area while adding to the city's tax revenues. Although The Freedom Forum is a nonprofit foundation that would not be required to pay real estate and retail taxes, the foundation waived that exemption as part of the offer.

Terry Lynch, executive director of Downtown Cluster of Congregations, estimated that The Freedom Forum's proposal was $40 million higher than the assessed value for the property and the office building that now stands on the site. The Freedom Forum plans to raze the building and work with a prominent architect to design the building and team up with a developer to build the condominiums.

"Freedom of speech on Main Street. That's great," said Kingdon Gould of the Pennsylvania Quarter Neighborhood Association.

Prichard, who also is president of the Newseum, said the foundation anticipates doubling the size of the Newseum from its present 72,000 square feet to make more room for exhibits and special programs.

"The new facility will give us the latest technology and the room to make our visitors' experiences even better," Prichard said. "The Newseum has welcomed more than 1.5 million visitors since it opened three years ago, and we want to be able to offer an even better educational experience to a broader range of visitors and local residents."

Overby said he gave the formal proposal to Mayor Williams on July 6 and has asked the city to make a decision this summer as to whether it will accept the offer.

"They have not only the right but the responsibility to make sure that this is an adequate offer," Overby said. "I realize this takes a little time. We are comfortable with the process."

However, he said, The Freedom Forum needs to have the transaction closed by the end of the year. The offer of a $25 million grant to the city to be used for low- and moderate-income housing is only good if the deal is closed by Dec. 31, Overby said.

Although The Freedom Forum could pull its additional $75 million offer off the table at that time if things were not progressing in an acceptable manner, Overby said he did not expect that to happen.

"The city leaders are here. We expect and hope that this offer will be accepted," Overby said. "We didn't try to come up with the lowest offer. We tried to come up with the best offer."

The current lease on the Newseum and Freedom Forum facility in Arlington expires in 2003, and Overby estimated that construction of the new facility could take from three to five years once the transfer is complete. He said it is unclear whether the lease for the current offices could be extended if the new building is not done.

Williams, who campaigned for office on a platform of fiscal responsibility, said he appreciates the "performance incentive" included in the offer and urged the City Council and the citizens of the District to work with his office "to see that this thing can happen."

The mayor complimented The Freedom Forum for putting together a package that meets all four objectives the administration has specified for the site: to attract an institution of national and international stature that would benefit Pennsylvania Avenue; to expand the city's commitment to building more downtown housing; to bring additional resources to help revitalize the city's neighborhoods; and to design a world-class structure that will link the downtown to the Mall area, which is the prime attraction for an estimated 25 million tourists who visit Washington every year.

"This offer, in short, addresses each of these major objectives," Williams said.

The Freedom Forum said it has opened a $100 million cash account with Northern Trust Co., the custodian of The Freedom Forum's investments, to handle the transaction, and there will be no financing contingencies placed on the offer. The foundation estimated that the total project, including building the Newseum and the condominiums, will cost more than $250 million.

Overby said in seeking to put an offer together for the property, the foundation considered comparable prices for real estate in the area, the amount of rent per square foot that office buildings charge and numerous other financial factors. In the end, he said, The Freedom Forum's offer of $75 million for the land was determined to be as much as $15 million higher than any developer would offer, and the extra $25 million for low- and moderate-income housing made the offer even more attractive.

He said he had informed Arlington officials of the impending announcement earlier in the day and "that was a sad call."

"There's nothing wrong with Arlington except that the tourists are here. We have to fish where the fish are," Overby said.

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Freedom Forum makes $100 million offer to move Newseum to D.C.
Foundation's offer for site at Pennsylvania Avenue and 6th Street, N.W., includes $25 million grant for low- and moderate-income housing in District.  07.11.00