X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-The US Department of Defense has released its list of military installations that are being recommended for closure or restructuring. Secretary of Defense Donald H. Rumsfeld presented the list to the presidential-appointed independent Defense Base Realignment and Closure Commission today.

The department’s BRAC recommendations, if adopted, would close 33 major bases and realign 29 more, and, Rumsfeld noted during a news conference at the Pentagon yesterday, save the military an estimated net sum of $48 billion over the next two decades. When combined with the anticipated savings from overseas basing realignments around the world, the projected net savings increases to $64.2 billion. Those on the list include Fort Monroe, VA; a naval station in Pascagoula, MS; Fort Monmouth, NJ; and Cannon Air Force Base in New Mexico. “Our current arrangements, designed for the Cold War, must give way to the new demands of the war against extremism and other evolving 21st Century challenges,” Rumsfeld said today.

Next week, GlobeSt.com will follow-up with articles on local market industry reaction to the closings and realignments.

For many communities, particularly those that are centered on military bases, the consequences of closures will extend beyond job loss. A shuttered base will also affect the local real estate market by adding to office space vacancy rates; increasing multifamily property vacancies with the disappearance of civilian and military employees; adding to the stable of unused property; and potentially discouraging new commercial construction and leases. While the Defense Department previously offered no hints as to which installations were vulnerable, many local economic development leaders began mulling over potential redevelopment plans in advance, just in case.

“When it first comes out, they might find it a bit of a shock and they will be shocked over the next few months,” Barry Scribner, co-president of the government practice at Jones Lang LaSalle, tells GlobeSt.com with regard to installation-dependent communities. “That’s why BRAC focuses on reuse. The goal is to minimize the long-term effects on real estate.”

The Defense Department’s Office of Economic Adjustment will assist communities with the transition. As outlined in its stated mission with regard to BRAC, the OEA emphasizes an optimistic view, noting that closures provide “new opportunities for the local economic development utilization of surplus property as part of a community’s economic adjustment strategy.” The Department of the Interior may play a role in land transference, the FAA has participated in advising on the reuse of air force bases in the past, and the US Department of Housing and Urban Development will serve as a resource as well.

While the impact of base closures on local real estate cannot be ignored, it is the plan of the government and many community leaders to reinvent the market through military base property reuse projects. “There will be a transition period that will overlap with planning to reuse those facilities; it will take some time for the real estate value to adjust,” Scribner explains. “The government is trying to ensure that the impact on the long-term value of real estate will be as low as possible.”

BRAC, which allows the government to shutter bases and/or relocate installation activities to eliminate excess and promote efficiency, has been employed on four previous occasions, in 1988, 1991, 1993 and 1995. Scribner points to the former Pease Air Force Base in Portsmouth, NH as an example of how base reuse following closure can ultimately result in a positive impact on the local real estate market. Pease made BRAC’s 1988 list and officially closed in 1991. Fourteen years later, Pease is the site of approximately 3.8 million sf of commercial space and is home to the likes of microbrewery and public ale house Redhook Ale Brewery, software firm Aprisma, the US Department of State’s National Visa Center and National Passport Information Center, and Lonza Biologics, which recently expanded to 350,000 sf.

Austin, TX’s Bergstrom Air Force Base, slated for closure during BRAC 1991, is now the site of the Bergstrom-Austin International Airport. Tapped for closure in 1993, Charleston, SC’s former Charleston Naval Complex is now home base for the 1,700-employee Charleston Marine Manufacturing Corp., as well as a host of other manufacturers.

The BRAC commission will hand over its assessment of the recommendations to President George W. Bush by Sept. 8. The president will have until Sept. 23 to accept or reject the recommendations in their entirety. If the president gives the go-ahead, Congress will then have its chance to disallow the recommendations. If Congress signs off, the list becomes binding.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

Dig Deeper

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.