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WASHINGTON - For the first time, Southeast Washington will be home to a major federal agency, which could have a major impact on future development for the community.

The government broke ground Wednesday on the renovation of the Saint Elizabeth's campus - a national historic landmark. It was the first large-scale, federally-run psychiatric hospital in the U.S.

In its prime, Saint Elizabeth's housed several thousand patients. Now, after renovations, it will house the Department of Homeland Security.

Homeland Security Secretary Janet Napolitano, Delegate Eleanor Holmes Norton (web | news | bio) and Senator Joe Lieberman break ground on the renovation. It's one of the largest projects in the Washington metro area since the construction of the Pentagon.

"For the last five years, we've been looking at these buildings, stabilizing them and trying to understand their history and use it for a modern mission," said Tony Costa, deputy commissioner of U.S. General Services Administration public building service.

Some buildings must come down, including some abandoned green houses and a structure located near the future Coast Guard headquarters.

Still, GSA officials say they will preserve much of the campus, renovating and reusing 52 out of 62 buildings. By doing so, they'll appease many critics.

"And it really is a physical manifestation of how we as a country dealt with mental illness many, many years ago," said Costa.

For now, DHS operates in more than 35 offices around the region. By moving to a consolidated headquarters, it expects to save taxpayers $163 million over the next 30 years.

The $3.4 billion project will receive more than $600 million in stimulus funds. The feds say all of this will create employment opportunities for thousands of Washingtonians and spur development in Southeast. But nearby residents remain skeptical.

"Maybe for the workers it's a good thing, but I don't see how any new development will come to pass," said resident John Doughty.

In the end, Costa thinks residents will be happy with their new neighbors and other federal agencies will be jealous of the new digs.
"We sure hope so. That's our goal is to make our customers say we want that too," said Costa.

Some parts of the still-functioning psychiatric facility will remain on the campus. Current famous patients include John Hinckley, who attempted to assassinate President Ronald Reagan in March 1981. He and others are still housed at Saint Elizabeth's in a separate section of the facility.

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