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JULY 2006

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MILITARY BASE REDEVELOPMENT


Key Elements of Successful Strategy

   Experience shows that developers, corporate real estate officials, communities and states which act now, following a three-pronged strategy, can expeditiously jump start economic redevelopment and reuse of these closing and downsizing facilities, as well as gain economic development advantages at growing military installations:
   • Public-Private Partnership: Form and operate the planning, negotiation and reuse as a public-private partnership between local and state government and the key private sector entity, usually the developer of the site.
   • Independent, Comprehensive Reuse Planning: Plan thoroughly for reuse, utilizing broad community outreach and realistic forecasts for economic growth potential, as well as the independent conduct of comprehensive due diligence on the conditions and previous use. In conducting such due diligence with an underlying view of "hope for the best but plan for the worst," successful base conversions have shown that it is critical to not rely simply on what any one governmental body provides as its final report. Inevitably, there is additional material information that could affect property reuse which, buried in often remote, dated government bureaucracy files, is overlooked or inadvertently left out. As a result, government and private sector representatives and offices are unaware of this, almost always to the detriment and major expense of the local government and private sector at a later date, long after negotiations have been concluded. Accordingly, up-front investment in independent due diligence adds a layer of insurance from the very costly surprises that have frustrated and crippled many redevelopments in previous rounds.
   • Comprehensive, surgical strategy for dealing with DoD and the civilian federal government: As a foundation for discussions with DoD (as well as other federal government entities), military facilities have typically been the locus of decades of industrial use by a legitimately non-public (and many times, secret) governmental agency. Thus, negotiations with DoD and other governmental agencies over the potential acquisition or development of such valuable real estate must be entered into with very serious preparation. In particular, such preparation should include documentation of the challenges (e.g., environmental, endangered species, land use, etc.) that could encumber reasonable reuses following military closure or downsizing, as well as a detailed understanding of what measures and demands DoD legitimately has the discretion to offer and meet, respectively, operating within its departmental constraints. As background to the negotiations, it should be noted that since DoD in this 2005 round is required to seek fair market value for its closing installations, one of the most critical parts of that strategy will be securing incentives from a variety of government sources targeted at returning closed installations to productive economic and public benefit use, and onto state and local tax rolls.
   Among the related issues to be addressed in such a comprehensive reuse plan and surgical strategy are:
  • Military real estate uses over time
  • DoD real property policies
  • GSA real property rules
  • Civilian federal agency preferences
  • State and local government preferences
  • State and community reuse plans
  • Public use benefits
  • Public participation
  • Environmental impact analyses
  • Environmental cleanup
  • Environmental insurance
  • Employment and labor issues
  • City and community planning
  • Infrastructural changes
  • Zoning and land use, including building restrictions imposed by the Clean Air and Clean Water Acts, etc.
  • Historical impacts on reuse
  • Affordable housing and housing for the homeless
  • Transportation issues
  • Endangered species
  • Redevelopment issues, including developer experience, depth and financing
  • DoD budgets and available appropriations
  • Civilian federal agencies' programs
  • Municipal financing/bonds
  • Economic development studies to determine highest and best use
  • Tax and related revenues and incentives
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