Giving Land Instead of Money

I am once again baffled by this rule that prevents the Walter Reed space being vacated by the federal government from being put to optimal use:

The federal government will soon vacate most of Water Reed hospital in northern DC, and DC officials are currently pondering potential uses and getting community input. Metro’s proposal to build a new bus garage should be part of the final plan.

Federal base closure rules restrict the uses to government and non-profit, so DC can’t simply let developers build some condos and grocery stores on the site. It can be used for public health, prison, homeless assistance, seaports, and more. A seaport is probably not in the cards, but a bus garage would be a great use of some of the space.

Dave Alpert makes a persuasive case for his bus garage plan, but what on earth is the purpose of rules of this sort? Why not sell the land and earmark the money for these worthy purposes? That would seem to make everyone better off. You don’t see that many examples of truly pareto optimal policy changes out there, but this is one. No nefarious interest I can think of benefits from this arrangement, it’s just wasteful for no reason. And it comes up in DC all the time because a similar rule applies to a bunch of long-vacant school buildings we have.