The General Services Administration, which oversees federal office space, said it does not have enough money to move forward on a new location.
The agency had sought USD 1.4 billion for the project, but Congress left it underfunded by about USD 882 million.
"Moving forward without full funding puts the government at risk for cost escalations" and could reduce the value of the existing building, the GSA said in a statement.
The hulking J. Edgar Hoover building overlooking Pennsylvania Avenue has long been the government building everyone loves to hate.
The FBI has complained that the blocky, concrete behemoth -- named for the agency's first and longest-serving director -- is obsolete, inefficient and no longer meets the needs of an organization that has grown dramatically in the last 40 years.
Those concerns were confirmed by a 2011 Government Accountability Office report that agreed the building didn't meet the agency's long-term security needs.
Three finalist sites in Maryland and Virginia were announced in 2014, but the General Services Administration delayed its choice multiple times. One of the finalists for the USD 1.7 billion contract was Vornado Realty Trust, which owns buildings with Donald Trump and the family of Jared Kushner. A Vornado spokeswoman did not immediately return a call for comment.
Some lawmakers decried the decision to scrap the move. "The Hoover building is crumbling around the FBI," Maryland's Democratic Sens. Ben Cardin, Chris Van Hollen, and Reps. Steny Hoyer, and Antony Brown said in a statement.
"Our national security mandates that we move forward with building a secure, fully consolidated FBI headquarters."
"All these delays, all these years really have had a chilling effect," he said. Jordan said Greenbelt could have moved on to other options had the city known sooner. "How's local government supposed to function when the federal government can't follow through on its commitment?"
In Virginia, local officials had hoped to lure the FBI to redevelop an antiquated GSA warehouse that now sits on a prime piece of real estate near the Springfield Metro station.
Brian Coy, spokesman for Virginia Gov. Terry McAuliffe said, "it's a shame that the dysfunction of the Trump administration killed this project and will likely make it harder for the FBI to do its job."
"I applaud the fact that somebody pulled the plug," Evans said in a telephone conversation last evening.
Evans said the city has other locations that could work.
"I see no reason to ship it out to the outer regions," Evans said of plans to move to Virginia or Maryland. "Nobody wants to go out there."
Hardly praised as architecture, the iconic Hoover building has become part of American culture, serving as the backdrop for news broadcasts, novels, television dramas and movies. Agents moved into it in 1974 from cramped quarters in the Justice Department across the street.
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