Being All They Can Be

The mood in Vent Hill, Va., was decidedly glum in 1993, when the Pentagon announced that the local army installation was slated to close. This affluent hamlet 40 miles west of Washington, D.C., prized for its green, rolling landscape and rural atmosphere, faced an economic crisis.

“There was tremendous concern about loss of jobs,” recalls former county employee Dennis Hunsberger. With 2,656 people employed at the Vint Hill Farm Station, an intelligence-gathering post of the U.S. Army, Fauquier County stood to lose 14% of its jobs to the Pentagon's fiscal axe.

Those fears worsened when officials learned that Fauquier County's bond rating was likely to fall as a result of the base closure, according to Hunsberger, now deputy director of the Vint Hill Economic Development Agency. It was a hard slap for the community that had just joined scores of others across the U.S. hit by the Base Realignment and Closure (BRAC) program since the process began in 1988.

Distress, even panic, is not unusual when base closures are announced, according to Kevin Wayer, managing director of Jones Lang LaSalle's Public Institutions Group in Washington. “For many of the communities, their lifeblood will be drained away when their military bases close,” he says.

Toxic white elephants

To be sure, the complexity of converting a military base into a 21st century airport, harbor or mixed-use development can still knock the wind out of a community development director. Taking over a former base, in fact, is much like “taking over a little town,” according to attorney James Lewis, a partner in the McLean, Va. office of Holland & Knight, which consults on closures. Vint Hill, he adds, “has its own water system, road system, theater and library.”

All those buildings and infrastructure, says Lewis, “had to be turned around for redevelopment purposes or replaced.” The remnants of military infrastructure — roads, sewers, water mains and electricity — are usually outdated and often must be entirely replaced.

Environmental problems alone can be formidable. Essentially, military bases are giant brownfields. Nearly all are contaminated to some degree. Although the Pentagon has the responsibility of cleaning up its toxic mess, the schedule is slow moving and can take years. Many developers choose to do the clean-up work themselves, and get reimbursed on the back end by the Defense Department.

The good news for cities like Vint Hill and other ex-military communities across the nation is that base reuse is no longer the bureaucratic morass that it was when the process first started. Part of the credit goes to private enterprise, including the consultants and developers who have been determined to unlock the value of properties that sometimes looked like white elephants.

“When it comes to the development side,” says Wayer of Jones Lang LaSalle, “local authorities are much better in the role of approving than executing.” After dabbling in development on a piecemeal basis, many communities learned it was often wiser to hand over land development to a professional developer.

Rural bases challenged

Although Vint Hill had no toxic issues and still relies on its 1940s-era electrical lines, it had other problems. The local area was too thinly populated for large-scale retail development. The town's location on D.C.'s suburban fringe, however, ultimately worked in its favor.

With the increasing willingness of employers to set up offices in places close to employees' homes, Vint Hill is well on its way to becoming a “reverse commute” office alternative. To date, Vint Hill has attracted 60 new businesses employing nearly 1,200 people.

The Federal Aviation Administration employs 280 high-salaried air-traffic controllers on the former military base site. The controllers handle incoming and outgoing flights — via satellite — of five regional airports, including Dulles, Reagan National and Andrews Air Force Base. Another big employer is Athena Technologies, which designs and builds navigational-control systems for unmanned vehicles. To serve the growing population and businesses, town redevelopment officials are now seeking approval for a new concept to create a 43-acre Main Street-style town center and a 100-acre park.

Progress at former base towns like Vint Hill suggests the development community has clearly reached a comfort level with base reuse, according to Wayer. “The people who gained experience in the last couple rounds [of base closures] are now migrating to this current round,” he says. “There is a class of professional planners and consultants who have worked through these issues before.”

In addition, the real estate industry has become increasingly comfortable with base closures as a development niche. “The financial markets are bullish on this round,” says Lewis, referring to the BRAC 2005 list announced last October. At the same time, he adds, “a lot of developers have learned how to interact with DOD [U.S. Department of Defense], which can be an art in itself.”

Pentagon wants its piece

The Pentagon, for its part, has also shown more flexibility. One notable sign of its ability to bend has been the military's willingness to convey former bases at discounted land prices — or sometimes free of charge — in the form of “economic development conveyances.” Of the 311 military facilities that closed or were scheduled to close between 1988 and 1995, at least 67 changed hands in the form of economic development conveyances or other cost-saving arrangements.

Ironically, the DOD has changed its position on the best method of land disposition. Increasingly, the Pentagon prefers to sell the land in public auctions to developers, rather than give it away.

“You can't really blame the Pentagon,” says one consultant philosophically. “It costs money to close a military base.”

(Editor's Note: Three case studies on base closures appear on pages 45-47)

Morris Newman is based in Los Angeles.

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