Covering your bases

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In November 2005, the Base Realignment and Closure (BRAC) commission approved 22 closures, recommended realignment for seven and left five bases open. What does this mean for builders? Those 22 closed bases will eventually appear on the market for sale. In a time of decreasing availability of developable real estate, bases closings can provide some of the largest expanses of undeveloped and valuable land in the country.

March 01, 2006

Sidebars:
Ten Principles for Base Redevelopment
Lessons From Tustin Field
Other Available Resources
Major Closures

In November 2005, the Base Realignment and Closure (BRAC) commission approved 22 closures, recommended realignment for seven and left five bases open. What does this mean for builders? Those 22 closed bases will eventually appear on the market for sale. In a time of decreasing availability of developable real estate, bases closings — which often are near large metropolitan areas — can provide some of the largest expanses of undeveloped and valuable land in the country.

Researching & purchasing

In February 2005, Lennar Corporation came in with the highest bid for Marine Air Station, El Toro, Calif., in an online auction. Lennar's purchase of the four-parcel property totals 3,718 acres, for $649.5 million. The El Toro base closed as a result of the 1993 BRAC list. Thirteen years later, the real estate was purchased.

 
This ariel shot shows the amount of land
available when Naval Air Station Alameda, closed during the 1993 closures.

The Navy — who handled the sale — asked for $525 million as the minimum bid and required all bidders to put up cash or letters of credit to enter the auction. Lennar's purchase price exceeded the Navy's minimum bid by $124.5 million.

Although El Toro sold in an online auction, that may not occur for all future sales. Each base will be dealt with on a case-by-case basis, depending on land availability and approval of environmental safety. In addition, whole bases may not sell in single auctions. "More likely what will happen is different parts of the base will be bid at various times," according to Richard Dorrier. He is principal and vice president in EDAW Inc.'s Alexandria, Va. Office. EDAW Inc. works with the government and developers to redevelop base closings from a land and community planning prospective.

Waiting for possession

Builders and developers purchasing bases must work with the local as well as federal government officials. The local government must establish a Local Redevelopment Authority (LRA) to initiate and guide the reuse process. To assist communities, Congress enacted the Base Communities Assistance Act (BCAA) in 1994. The BCAA helps overcome job loss due to base closings by supporting economic development and helping workers learn new job skills.

In addition, it provides assistance resolving environmental issues and delivers planning grants.

Relocating current Military personnel takes place before process planning begins. "The government has to have new buildings and homes already constructed or available at another base to move those people," Dorrier says.

After relocation, the government prepares and cleans the land. Some bases contain environmental contamination, inadequate infrastructure, buildings not up to code, and, occasionally, unexploded weaponry. The BCAA expedites clean up, but the developer/builder must stay in the loop.

Working together

Possession of the land passes to the developer/builder after clean up. As part of possession, builders must negotiate building new utility systems, roads, parks, schools, and public service facilities.

Once everyone agrees to a final plan, building starts. In all, the process of purchasing and redeveloping a military base closure can take up to ten years. "They are and can be very rewarding to certain developers if you're willing to work in the kind of environment that has more regulatory and government oversight," Dorrier says.

 

Ten Principles for Base Redevelopment

  1. Join the Army (Navy or Air Force). Early partnerships with the military can make the sale and transition operate more smoothly.
  2. Think Big. The success of redeveloped land requires planners to have a large, overall vision of its possibility.
  3. Partner for Success. The local community must buy into the redevelopment, which requires strong partnerships with both public and private interests.
  4. Know the Market. The property end use must be supported by the local community's market realities.
  5. Know the Politics. To move the redevelopment process along, builders must be aware of the local political process and how to make things happen.
  6. Understand Potential Hurdles and How to Overcome Them. Every community has different obstacles, legal or physical, which will create unique obstacles.
  7. Knit the Installation Back into the Community. Successful reuse requires integrating the property and the community.
  8. Create a New Image. To help win local support welcome centers and open buildings create excitement and interest.
  9. Take It One Step at a Time. It often takes more than a decade to complete redevelopment and involves multiple simultaneous deals and land transfer negotiations.
  10. Be Flexible. The original plan will probably not be accepted due to obstacles such as changing trends, political realities and market forces. Be prepared to adapt.
  • Provided by: Richard Dorrier, AICP, principal and vice president in EDAW Inc.'s Alexandria, Va. office.

  • Lessons From Tustin Field

    The Marine Corps Air Base in Tustin, Calif. was among 26 major bases closed from the 1991 BRAC list. John Laing Homes purchased 55 acres of the approximately 1600 acres and bought an additional 5 adjoining acres from a private land owner. During an online auction, 210 acres of the 700-acre package were sold to William Lyon Company and Lennar. Much of the property will be divided for commercial building parks, and the remainder remains unsold with Centex Homes and Shea Homes in negotiation.

    John Laing Homes did not get involved directly with the military during the purchase. "The city of Tustin had already negotiated the conveyance of title from the U.S. Government to the City prior to JLH getting involved," Steve Kabel, president for the south coast division of John Laing Homes says. Instead, the John Laing Homes' involvement began with a response to the city's Request for Proposal. "The response included our qualifications as a residential builder and land developer, our concept of a land plan and product, and our economic proposal including price and terms," says Kabel.

    Laying the foundation for this project required working with the public agency staff, policy makers and neighborhood advocacy groups. "In the instance of Tustin Field, we recognized early on that the policy makers [City Council] had a very definite vision for what they wanted to accomplish," Kabel says. "The City Council also empowered a very capable staff to implement the vision."

    It's also common for the U.S. Government to convey former military bases to public agencies with the caveat that a portion of the former base be set aside to assist the needs of local faith-based entities. "We worked with the Salvation Army to provide transitional living/housing both onsite and offsite in accordance with the conditions imposed by the military as a predicate to the conveyance of the base property to the City of Tustin," Kabel says.

    Overall, John Laing Homes found it important to collaborate with all the groups involved. "Initially, we listened a lot to the policy makers and their designated military base conversion staff," Kabel says. "Then we began to settle in on a strategic planning process that would permit the project to evolve through an understanding of the community's needs.

    "This is traditional land use design process on steroids," Kabel says. "It is a process that moves you from pure, traditional zoning to place making. We relied heavily on city staff, planning commission, and city council meetings."

    Other Available Resources

    U.S. Department of Defense (DOD) - www.defenselink.mil/brac

    Air Force Real Property Agency - www.afrpa.hq.af.mil

    U.S. Navy (USN) - www.navy.mil

    Environmental Protection Agency - www.epa.gov

    Office of Economic Adjustment - www.oea.gov

    U.S. General Accounting Office - www.gao.gov

    National Association of Installation Developers - www.naid.org

    Taxpayers for Common Sense - www.taxpayer.net

    International City/County Management Association - www.icma.org/basereuse

    Major Closures

    Army (12)

    Riverbank Army Ammunition Plant, Calif.

    Fort Gillem, Ga.

    Fort McPherson, Ga.

    Newport Chemical Deport, Ind.

    Kansas Army Ammunition Plant, Kan.

    Selfridge Army Activity, Mich.

    Mississippi Army Ammunition Plant, Miss.

    Fort Monmouth, N.J.

    Umatilla Chemical Deport, Ore.

    Lone Star Army Ammunition Plant, Texas

    Deseret Chemical Deport, Utah

    Fort Monroe, Va.

    Navy (5)

    Naval Air Station Atlanta, Ga.

    Naval Station Pascagoula, Miss.

    Naval Air Station Willow Grove, Pa.

    Naval Station Ingleside, Texas

    Naval Air Station Brunswick, Maine

    Air Force (5)

    Kulis Air Guard Station, Ark.

    Onizuka Air Force Station, Calif.

    Brooks City Base, Texas

    General Mitchell ARS, Wis.

    Cannon Air Force Base, N.M.*

    *Closure recommendation goes into effect if the Secretary of the Air Force does not designate a new mission for the installation by December 31, 2009.

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