Washington D.C. – A years-long project to overhaul the Federal Reserve's historic buildings in Washington D.C. has faced numerous challenges, including higher-than-expected groundwater at the site, contributing to a ballooning cost now estimated at $2.5 billion. The extensive renovation of the Marriner S. Eccles Building and the adjacent 1951 Constitution Avenue Building, originally projected at $1.9 billion in 2021, aims to modernize the structures, which have not been comprehensively renovated since their construction in the 1930s. The Wall Street Journal stated in a recent tweet, > "The yearslong project to overhaul the Federal Reserve buildings in D.C. has run into multiple hurdles, including higher-than-expected groundwater at the site."
The significant cost increase is partly attributed to the complex nature of building in Washington D.C., an area historically characterized as a swamp. Excavation efforts encountered groundwater between 8 and 10 feet from the existing site grade, posing challenges due to the proximity to the Potomac River and concerns over potential contamination. This difficult underground work even earned the foundation company a 2025 award for "excellence in the face of adversity."
Beyond the subterranean issues, the project has drawn considerable political scrutiny, particularly from the White House and former President Donald Trump, who has criticized the escalating price tag. Trump has linked the renovation costs to his broader tensions with Federal Reserve Chairman Jerome Powell over interest rate policies. White House officials have pushed for an investigation into the project, with some critics labeling it an "ostentatious overhaul."
Other contributing factors to the rising expenses include design oversight board stipulations that mandate specific aesthetic requirements, such as the use of white marble to align with neoclassical architectural styles. Additionally, unforeseen construction challenges and rising material costs, particularly for steel, have been cited by Chairman Powell as key drivers behind the increased budget. The Federal Reserve has brought in its inspector general to review the project amidst the ongoing controversy.