Both the Department of State and General Services Administration have expressed interest in it, according to Bill Wilcox Jr., real estate attorney with Pillsbury Winthrop Shaw Pittman and former counsel in the environmental division of the Department of Defense's BRAC office. "The Army has until May 9 to make its final determination." He says the Army may decide it is not in its best interest to pass the building to another agency. It may also decide, he adds, to bestow some or all of the facilities to the city, although DC is further down in the screening order's hierarchy.
Changes are ahead for the Washington/Baltimore region as a result of BRAC, some of which--like the Walter Reed decision--are still unfolding. Citing security concerns, the Pentagon announced it would not renew a number of leases in Northern Virginia.
Arlington County, for example, was originally slated to lose some four million of office space, but it successfully negotiated to retain the Defense Advanced Research Projects Agency, Office of Naval Research and Office of Scientific Research office leases, according to a spokeswoman for Arlington County's economic development department. "Crystal City [in Arlington County] was the most affected."
Conversely, Baltimore's Aberdeen Proving Ground and Fort Mead bases are counting themselves among the beneficiaries of realignment. In March, the Army selected APG Development Partners to build a $350-million simulated city training facility for urban warfare at APG. The contract is part of the Army's enhanced use lease pilot program in which it enters into a long-term land lease with a private sector development team to build new facilities on military bases. The APG proposal encompasses several million sf of office and training facilities. APG Development Partners is a joint venture of LCOR and Weston Solutions, which was awarded a similar contract for Fort Sam Houston.
The Army's growing experiments with enhanced use leasing offers "significant potential for capital region developers to help the Army develop the massive infrastructure it needs," Wilcox says. "They will need office space, hospital bed space, research lab space at installations around the region."
Altogether, there are projects at both bases being contemplated that will add between three million sf to six million sf of new development, according to J. Thomas Sadowski, executive vice president of the Economic Alliance of Greater Baltimore. The biggest impact on the Washington, DC area, though, has been the determination that the Pentagon's use of set-back standards, which mandate that government facilities be situated a certain number of feet away from the street, does not necessarily apply to all government buildings.
"In DC there are few buildings that would meet any kind of set-back criteria," says Ron Descheneaux, senior director of government programs at developer the Opus Group. New buildings must meet the standards depending on the result of a risk and needs assessment that each building must undergo, he says.Also, government agencies that take on new missions must reevaluate their site selection decision in accordance with this assessment. The same holds true for lease renewal decisions, he adds. "Those stay as they are unless the mission changes or space requirements change."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
