Federal Emergency Management Agency (FEMA) officials say they cannot move the agency into its new multi-million dollar digs on the Potomac River because the location does not stand up to post-Sept. 11 security standards.

Expansion of the Washington D.C. office complex for FEMA, the agency responsible for coordinating first-response efforts for states in times of disaster, was already in full swing when Director Joe M. Allbaugh confirmed his decision this week to halt the project.

Allbaugh's decision amounts to at least a $94 million loss for the government, which contracted a 10-year lease and tenant improvements with local developer J.E. Robert and J.B.G. Cos. The General Services Administration, which negotiated the deal last spring, agreed to pay $31 per square foot for the 40-year-old building that covers a city block on the corner of Maryland Avenue and 12th Street in the southwest section of the city.

The agency had planned to move approximately 1,000 employees into the building next year. Construction workers had already poured the concrete and erected steel for an expansion to the building. 

But work at the site remains idle after Allbaugh decided it is not safe to move the federal emergency response team to a building so close to Reagan Washington National Airport, Interstate 395, and the Potomac River, all major transportation thoroughfares that could serve as entry points for terrorist attacks.

"The director feels very strongly that we are not going to move into that space," said FEMA Spokesman Doug Czwartacki. "In the post-Sept. 11 environment … we learned some hard lessons and given FEMA's role in times of crisis, the building would be better suited for another agency that doesn't have the same mission as we have."

"FEMA is in charge of the big picture. It's the lynchpin for all federal response to a disaster and that was designed that way to save time and money and help support state and local needs in times of crisis," said Mike Armstrong, associate director to former Clinton FEMA director James Lee Witt, who started the process of moving FEMA to a bigger building.

Armstrong said FEMA, which currently works out of cramped quarters in downtown Washington, needed extra space to fulfill its mission and to provide room for disaster teams to coordinate recovery operations.

Brian Coulter, a partner with JER/JBG, said some security measures were included in the project's specifications, but none so large as those FEMA now says it needs to continue to conduct its operations safely.

Since those types of security concerns can not be met in an existing structure, GSA will have to make alternative plans for the buildings.

"We have not received any official directive from GSA," Coulter said. "The lease is with GSA and it's their obligation. I would expect them to respect their obligation."

A GSA spokesman would not say how much money has been spent on the project thus far or what plans are in store for the building, but Coulter said the government will not face any additional penalties for halting construction while GSA decides what to do with its lease.

Meanwhile, FEMA officials are still interested in finding another Washington location since it still needs larger quarters, a task assigned to GSA.

"That's Allbaugh's decision," said GSA spokesman Bill Bearden. "They're our customer.  We're going to do what we can to assist our customers following Sept. 11."