Why didn’t we demo the old building and rebuild at the same location?
Lack of set back from the street at that location. They moved, partly, for security reasons.
https://overseasbuildings.state.gov/sites/admin-overseasbuildings.state.gov/files/pdfs/security.pdf
In 2009 the Embassy Chancery Building was declared a Grade II Listed Historical Site. As such the building cannot be demolished, expanded, or altered significantly without advanced approval from the local planning commission.