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MILITARY REAL ESTATE PRIMER

Potential Advantages

  • Significant Price Discounts
  • Environmental Liability Protection
  • Favorable Government Permitting Processes
  • Government Incentives/Funds for Redevelopment

Types of Military Real Estate

  • Airports & Manufacturing/Repair Facilities
  • Ports: Shipyards, Loading Facilities, Warehouses
  • Energy Facilities
  • Manufacturing/Heavy Construction Facilities
  • Small and Large Multi-use Parcels
  • Utilities
  • Depots
  • Hospitals and Medical Centers
  • Office Buildings
  • Research Labs and Technology Facilities

CATEGORIES OF CLOSING MILITARY REAL ESTATE

  • Base Closures (BRAC)
  • Non-BRAC Closure Sites
  • Formerly Used Defense Sites (FUDS)
  • Utilities Privatization

Bases Closures, a/k/a "BRACs". The central vehicle by which to implement the post-1988 Bush/Clinton/Bush policy, championed by every Defense Secretary since 1988, is to "downsize" the Department of Defense's industrial infrastructure and their corresponding, heavy costs through the shedding of unproductive or unneeded real estate, e.g., "base closures." Programmatically, this latest era of base closure efforts was initiated by then-Reagan Defense Secretary Frank Carlucci in 1988. In the decade of the 1990s, the Department "closed" roughly 21% -- approximately 100 -- of its existing installations through four "rounds" of decisions by the Base Realignment and Closure Commission (BRAC), in 1988, 1991, 1993, and 1995. These real estate properties are handled under special rules unique to the BRAC process. Under current law, there will be another "round" of base closures in 2005. Defense Secretary Donald Rumsfeld, echoing then-Clinton Defense Secretary William Cohen, stated that the 2005 round will close 25% of the current infrastructure; i.e., more military real estate in 2005 than in the four base closure rounds in the 1980s and 1990s, combined.

Non-BRAC Sites. In the 1990s, a number of military sites were closed on the decision of individual military services which "owned" them, for a variety of economic and programmatic reasons. However, those sites did not make it into DoD's recommended list of BRAC closures, and thus are handled under different federal government real estate rules, some Congressionally prescribed.

Formerly Used Defense Sites (FUDS). The formal "base closure" effort of the 1990s and the "non-BRAC" properties came on top of a previous 20th Century history of closing military installations, in which thousands of installations, including military industrial plants, labs, ranges and bases, were shuttered virtually on the decision of the then-serving Secretary of Defense (or his equivalent prior to 1947), with little formal process. These were conveyed to other federal government agencies, state and local governments, private entities, and some were retained by the Department of Defense. There are approximately 9200 of these, whose cleanup is the exclusive responsibility of the Army Corps of Engineers, a "wholly owned subsidiary" of the Army.

Utilities Privatization. As an illustration of the DoD Industrial Transformation policy (to become an end user rather than an industrial operator), the Department commenced a process in the late 1990s under the Defense Reform Act by which to privatize as many of its 2700 utility systems (1700 domestically) as possible. This effort has emerged slowly, in large measure because of the concerns expressed by interested private utility companies after discovering the extensive state of disrepair of these systems, due often to a long-term lack of operational funding.

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