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Base looks at privatizing housing
Dozens of people representing construction firms across the United States gathered at Mountain Home Air Force Base on Feb. 4 for a first-hand look at a plan to transfer ownership of its military housing to a private company.
The briefing was the fifth in a six-city tour planned by officials overseeing the Defense Department's ongoing housing privatization program.
The Air Force base here is one of six military installations in four states scheduled to enter a regional privatization agreement by March 2012 involving a total of 4,549 military housing units.
Development cost for Mountain Home alone could reach more than $106.4 million with the total privatization effort for all six bases expected to reach nearly $470 million.
Congress established this privatization initiative in 1996 "to attract private sector financing, expertise and innovation to provide necessary housing faster and more efficiently than traditional military construction processes would allow," the Pentagon said.
In addition to the family housing area at the nearby Air Force base, the regional privatization plan involves the transfer of units at Minot Air Force Base, Grand Forks Air Force Base and Cavalier Air Force Station, N.D.; Ellsworth Air Force Base, S.D.; and Cannon Air Force Base, N.M.
"It's one of the best things the Air Force and Department of Defense have done," Col. Ron Buckley, 366th Fighter Wing commander. "We're really looking forward to bringing the privatization plan to Mountain Home."
Buckley, who saw this process unfold at a previous assignment, said this initiative represents good news for military families based here. It includes replacing the last of the base's older multi-family dwellings with what he called "Disney style" townhouses.
The privatization effort represents a "real paradigm shift" -- a new way of looking at managing and maintaining military housing, said Lt. Col. Michal Holliday, 366th Civil Engineer Squadron commander. The colonel's agency manages the base's infrastructure, which for now includes its military housing.
"Privatization is part of the Air Force's commitment to taking care of the Gunfighters," added Myrl Brigg, contract project manager for the local Air Force base.
Under this agreement, the base would turn over, or convey, 1,155 existing homes on base to the project owner -- the company responsible for the contract. Negotiations between the company and Air Force would then determine how long it would take to demolish or remove 359 existing on-base dwellings and replace them with 263 single- and dual-family units, Brigg said.
The homes slated for demolition include nearly 200 units in the Desert Vista area on the base's east side. Built in the early 1960s, the modular homes were transported to Mountain Home in 1969.
Other dwellings scheduled to come down include 108 Capehart-style homes built in 1959 in the Old Gunfighter Manor neighborhood. Negotiations with the project owner would then determine "the right number of homes needed to support our Gunfighters" after these aging homes come down, Holliday said.
The Defense Department currently owns 257,000 family housing units on- and off-base. Of those, about 60 percent need to be renovated or replaced "because they have not been sufficiently maintained or modernized over the last 30 years," the Pentagon said.
It would cost taxpayers nearly $16 billion and take 20 years to solve this problem using a traditional military construction approach, the Pentagon reported. Mandatory military specifications included with these projects also makes them more expensive than civilian market standards.
Col. Scott Moser, 366th Mission Support Group commander, saw firsthand the successes associated with the privatization effort at Fort Belvoir, Va. Contractors converted the Army post's World War II-era quarters into townhouses that would easily compare to places outside of the installation that easily run in the half million dollar range, Moser said. In addition to modern amenities, these new neighborhoods include coffee shops and other retail businesses.
"The DoD has already shown that privatization is very beneficial," Moser said. "This agreement will provide better quality homes and amenities than the government can provide."
"We're entrusting the project owner to make great things happen for our military community," Holliday added.
In addition to the homes on base, the company would assume responsibility for maintaining other infrastructure, including street lights, sidewalks and the utility lines connected to these dwellings.
Homes built once the privatization plan takes affect locally must conform to local building codes and current market standards. They would also look similar to existing homes on base with similar amenities, Moser added. However, any retail businesses added to these housing areas couldn't directly compete with the military exchange, commissary or recreation facilities on base.
Along with turning a section of the Old Gunfighter Manor neighborhood into a multi-season, multi-purpose park, the property owner would also agree to pay property taxes on each housing unit here.
Private companies at last week's meeting along with others across the United States have until April 5 to submit their proposals to Defense Department officials for this six-base contract. While this privatization deal is open to any commercial competitor, including ones in southern Idaho, it's possibly suited more for a national company due to the its magnitude, according to Moser.
However, even if the contract goes to a national company, the size of this project and number of bases involved could mean bringing in companies from southern Idaho to serve as suppliers or in other capacities, according Binks Franklin, a representative with MWH Americas, Inc.
Air Force officials expect to select the project owner in August and start a five-month negotiation process to iron out the details associated with taking ownership of the base's military housing area. Franklin expects the project owner to assume control of the base's housing area by March 2012 but believes this could happen two months earlier if the negotiations remain on schedule.
The company selected to own, maintain and operate the base's housing area would likely enter into a 50-year lease with the base. As part of this deal, the project owner would receive a "rent check" of sorts from each military family living there. Instead of receiving basic allowance for housing that airmen living off base collect, those living on base would have that money go directly to the contractor.
In addition, on-base families would draw a utility allowance that would fully cover these expenses if they remain energy conscious, Air Force officials said.