Waddill

Report
Recent Developments in
Federal Facility Privatization
Marc Waddill
Senior Vice President, Public Institutions
JLL
NCPPP
P3 Connect July 2014
Introduction
• Federal Government owns or leases approximately 360,000
buildings and 3.3 billion square feet of space
• Major Real Estate Holding Agencies:
− Department of Defense (Army, Air Force, Navy)
− General Services Administration (GSA)
− Department of Veterans Affairs (VA)
− Department of Energy (DOE)
• Privatization Tools:
− Fee Simple Disposal
− Long-term Ground Lease (EUL, Section 111)
− Exchange
2
Fee Simple Disposal
• GSA Success Stories
Georgetown West Heating Plant
Bethesda Federal Building
• Approximately 2 acres
• 10-story building
• Approximately 110’ tall
• Approximately 130K SF
3
Fee Simple Disposal
• Pipeline:
− Primarily residential single family houses
− Non residential includes mainly USPS sites, small tracts of
land, SSA buildings, and small border patrol buildings
− Unique Opportunities: Alan Bible Federal Building (Las Vegas)
Plum Island (NY)
• Issues to Consider:
− Private Sector Market
− As-is / Where-is
− Entitlements
− Other Environmental Constraints
4
Enhanced Use Lease (EUL)
• Agencies with EUL Authority:
− Department of Defense (Army, Air Force, Navy)
− Department of Veterans Affairs (VA)
− National Aeronautics and Space Administration (NASA)
• Issues to Consider & Recent Trends:
− Asset versus Market
− Acquisition versus Disposition
− Development of Single Asset versus Multi-Phase Development
− Cash Consideration versus In-Kind Consideration
5
EUL: VA Affordable Housing
• Asset: Individual Building or Parcel for Specific Purpose
• Financing: Primarily Low Income Housing Tax Credits (LIHTC)
• Veteran Preference as Primary Consideration
EUL Project Name
Date Closed
Total Number of Units
1
Canandaigua, NY
9/17/2012
33
2
Dayton, OH
11/7/2013
55
3
Hines, IL
12/13/2013
122
4
Lyons, NJ
8/9/2012
61
5
Minneapolis, MN
5/12/2014
58
6
Newington, CT
9/7/2012
74
7
Roseburg, OR
10/5/2012
55
8
Tuscaloosa, AL
8/13/2013
50
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EUL: VA Fort Howard Existing
Site Summary: Approximately
100 acres and 44 historic
improvements (305k GSF) on
the entire campus
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EUL: VA Fort Howard Future State (Conceptual)
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EUL: Army EUL Projects
Project
Project Description
Aberdeen Proving Ground Maryland Boulevard
2M square foot class A office development on 250 acres; includes
supporting retail
Fort Detrick Central Utilities
Plant, MD
Central Utility Plant providing steam, chilled water and conditioned
electric supply to National Medical Biological Defense Interagency
Campus
Fort Leonard Wood, MO
32-acre business and technology park
Picatinny Arsenal, NJ
Potential development of 1M square feet on 120 acres; R&D, office and
flex space
Redstone Arsenal, AL
Mixed use development of 3-4M square feet on 400+ acre site. R&D,
labs, hotel, academic space and retail
Yuma Proving Ground, AZ
Automotive Test Facility on 2500+/- acres; Army has use of the GM
facility, and GM has constructed an automotive test track for Army's use
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EUL: Air Force EUL Projects
Project
Project Description
leased 3 abandoned buildings and 10 acres of vacant land on Fort
Joint Base San Antonio (Fort Developer
Sam
Houston.
Developer will develop additional office building on vacant
Sam Houston)
land.
256 acres for maintaining an existing sewage effluent disposal field and
of a 10M gallon per day wastewater treatment plant and a rapid
Eglin AFB Water Reclamation construction
infiltration basin effluent disposal system. Leased parcels are located outside
gate.
Eglin AFB Airport
108 acres to operate an existing airport terminal and construction, operation,
and maintaining a fuel farm along with facilities for rental car agencies on an
additional 23 acres. Leased parcels located outside gate.
Nellis AFB Wastewater
Treatment Facility
City of North Las Vegas developed wastewater treatment facility on 41 acres.
Hill AFB Office Park
Mixed‐use commercial development on approximately 550 acres. The
purpose of the project is to develop an aerospace research and technology
park to benefit both the community and the AF. Potential to build up to 26
commercial buildings, 2 hotels, and 4 retail.
Eglin AFB Hotel
17-acre parcel with 600 linear feet of beachfront. 152-room hotel to be
constructed with development of retail pad. Provisions for second hotel if
financial metrics met. Parcel located outside gate.
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EUL: Navy EUL Projects
Project
Project Description

Moanalua Shopping Center, HI

Lessee constructed a 55,000-square-foot support services center
for the Navy as in-kind consideration. The Navy pays no rent on
the building, which was built for about $17 million
Lessee developed 30,000 square feet of commercial space for
private-sector tenants
Port Hueneme, CA – GAPS
Industrial (Global Auto Processing 
Services)
Use limited to storage & processing of motor vehicles
NB Point Loma, CA - ULA
Industrial Lease (United Launch
Alliance)

Leased for Production, Research and Development of Atlas
Launch Vehicles and related components
NB San Diego, CA – NASSCO
Industrial Lease

Industrial space to aid in ship construction
NAS Key West, FL – Mole Pier
Commercial Lease

Outer Mole Pier is currently outleased to the City of Key West and
utilized for cruise ship berthing
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EUL: NASA Ames Research Center (ARC)
• ARC has over 50 EUL agreements
• Tenants include Planetary Ventures (a subsidiary of Google, Inc.) and the
University of California
• Received the 2003 GSA Achievement Award for Real Property Innovation
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Exchange for Services
• Issues to Consider:
− Timeline
− Services (level of detail, timing, change orders…)
− Ownership Risks (As-is / Where-is, Entitlement Risk, etc.
Year 1
Year
Project Timeline
.
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Services Period:
Construction, Renovation, and
Other Services
Equity Investment ($608M)
Capital Investment
of Forrestal to
Conveyance toConveyance
Private Sector
Private Sector
Value of Asset is Realized by Private
Sector
Private Sector Ownership
Private Sector Ownership
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