Mr' Bobby Roberts AFRPA

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Mr. Bobby RobertsAFRPA
Air Force Real Property Agency and Enhanced Use
Leasing

• 18 October 2006

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Overview

• AFRPA Mission
• AFRPA Portfolio
• Real Estate Summary
• Enhanced Use Leasing Overview
• EUL Process
• EUL Projects
• AFRPA EUL Team
• Summary

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AFRPA Mission
Mission StatementAir Force Real Property
Agency To acquire, dispose, and manage all Air
Force-controlled real property worldwide Vision To
be the preeminent DoD real property manager
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Real Property Management Transforming from the
Top

• Real Property is the focus of numerous
  initiatives to improve financial performance of
  government
• Requirements and regulations have converged
• Focus on full accounting of assets
• Clarified role of real property holdings in cost
  of implementing organizational missions
• Success in real property asset management means
• Examining business and mission requirements
• Creating auditable cost and investment management
  strategies
• Optimizing facilities and infrastructure
  portfolios

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AFRPAs Portfolio
Legacy BRAC

• 87,380 acres - 81 done
• Dispose of property
• Associated environmental programs

BRAC 2005

• 2 major closures
• Other assigned BRAC 2005 real estate actions
• Dispose of property
• Associated environmental programs

Real Estate Conducting real estate actions for
the Air Force

• 166 active Air Force installations
• Deeds, leases, easements and licenses
• Enhanced Use Leasing

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Legacy BRACReal Estate
87,380 total acres
Disposal Methods
1,896 2 Not in reuse
1,137 1 Interim Lease
Public Benefit Conveyance Federal Transfer
Economic Development
Conveyance Negotiated Sale Public Sale
Reversion Special
Legislation Termination of Lease
Conservation
31 21 29 2 2 5 3 6 New
13,714 16
Long Term Lease
Deed/Transfer
81 Complete 54,000 jobs created
70,633 81
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BRAC Master Plan BMP In Action
Priorities
Executable Path Forward
Performance Based Contract (PBC)
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BRAC Master Plan BRAC Master Plan Strategy
An Executable Path Forward The BMP integrates
BRAC property transfer authorities,
private-sector real estate opportunities, and
aggressive environmental remediation into one,
executable road map.

• The BRAC Master Plan Strategy
• Integrates installation plans into a
  comprehensive Air Force planning and programming
  strategy
• Synchronizes property disposal and environmental
  programs
• Provides an executable path forward

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BRAC 2005

• Fewer Installations than previous BRAC rounds
• Air Force closures with disposal actions
• Total Acres 265
• Air Force Research Lab Mesa City, AZ
• Buckley Annex, CO
• Four Lakes Communication Site, WA
• General Mitchell Air Reserve Station, WI
• Onizuka AFS, CA
• 11 Major Realignments
• Joint Use Decisions of BRAC

Smaller Scale, but still Challenging
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Active Air Force Real Estate

• Even after BRAC 2005 Excess Capacity Remains
• Enhanced Use Leasing
• Potential for community economic growth
• Reorganizing the real estate footprint
• Saves money - Makes money
• Value Based Transactions
• Competitive sale results in range of risk
  management tools
• Market forces establish best use and value of
  property
• Multiple proposals allow AF to select best
  value deal

Market can drive value
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Executive Order (E.O.) 13327

• It is the policy of the United States to
  promote the efficient and economical use of
  Americas real property assets and to assure
  management accountability for implementing
  Federal real property management reforms. Based
  on this policy, executive branch departments and
  agencies shall recognize the importance of real
  property resources through increased management
  attention, the establishment of clear goals and
  objectives, improved policies and levels of
  accountability, and other appropriate action.
• February 4, 2004

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10 USC 2667 Enhanced Authority

• Original Authority
• Consideration in cash or in-kind
• In-kind consideration limited to maintenance,
  protection, repair and restoration
• In-kind consideration may be used only at
  installation where leased property is located
• Only 50 of cash proceeds available for
  installation use, remainder to military department

• Enhanced Authority
• Consideration in cash or in-kind
• In-kind consideration expanded to include
• Maintenance, protection, alteration, repair,
  improvement and restoration (including
  environmental restoration)
• Construction of new facilities
• Provision of facilities
• Operation support
• Other appropriate services
• In-kind consideration may be used at any
  installation
• Not less than 50 (and up to 100) of cash
  proceeds available for installation use

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EUL Overview

• A lease of underutilized land, natural
  infrastructure, equipment and/or buildings for
  consideration equal to the assets fair market
  value
• Authority 10 USC 2667, Under PL 106-398,
  National Defense Authorization Act for FY2001
• Corporate Program to support the Base and their
  Mission
• Proceeds used to sustain, restore and modernize
  Air Force (AF) infrastructure
• Primary categories of consideration
• Consideration may be cash or in-kind
• In-kind consideration - may be allocated
  corporately
• Cash consideration - a minimum of 50 of must be
  allocated to installation providing the asset
• In-Kind consideration preferred

Unlocking Returning the Value
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Enhanced Use LeasingAsset Management Tool

• Implements Federal policies requiring efficient,
  business-like management of Federal real property
  assets (Executive Order 13327 - Federal Real
  Property Management)
• Powerful capability
• Increases ability to respond to mission shifts
  and realignments (i.e. Base Realignment and
  Closure (BRAC))
• Allows use of underutilized assets to support
  unfunded Air Force requirements
• Provides greater flexibility in application of
  lease proceeds

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EUL Use of Proceeds

• Proceeds used to sustain, restore, and modernize
  Air Force (AF) infrastructure
• Primary categories of consideration
• Construct new AF facilities
• Alteration, repair, and restoration of AF-owned
  facilities
• Address natural infrastructure needs
• Pay for base operating support, e.g., supplies
  services
• Challenge Apply corporate process find
  incentives for installations to bring EULs
  forward for consideration

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EUL Today

• EUL Myths
• Severable land
• Consideration can only be used at host base
• EULs are only land deals
• EUL Asset Management
• Shrinking bases create EUL opportunities
• Demolition
• Growing bases create EUL opportunities
• Construction
• Natural infrastructure and Energy management EULs
• Strategically leverage assets to maximize returns

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EUL Timeline
LEAN
A7C Validates Use of In-Kind Consideration
ESG Murder Board SAF/IEI OMB/Congressional
Notification
Base MAJCOM A7C CC Concur on Potential EUL
AFRPA/DR SAF/IEI Updated through Weekly Staff
Meetings
SAF/IEI Signs Lease
A7C Approves Use of In-Kind Consideration
PHASE II Project Definition Business Case
Analysis Developer Selection DEAL TEAM
PHASE III Project Acquisition Negotiate Deal
Terms Draft and Sign Lease
DEAL TEAM
PHASE I Concept Opportunity Study AFRPA/COO-BL
5 Days
6 Months
6 Months
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1st EUL Kirtland AFB

• The Air Force signed its 1st EUL at Kirtland AFB
  with the New Mexico Institute of Mining and
  Technology on the 7th of January 2006
• The Institute will utilize approximately 8 acres
  and will offer students' access to scientists
  working at Kirtlands Air Force Research Lab
• The new facility may become the centerpiece of a
  300 acre research and technology park that will
  serve the Air Force, the University and the Local
  Community
• The park could provide as many as 15,000 jobs,
  and would foster both professional and
  educational relationships between students,
  academics and scientists at the Air Force lab

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Technology Park Kirtland AFB, NM
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2nd EUL Eglin Energy EUL

• The Air Force signed its second EUL at Eglin AFB
  on the 3rd of October 2006
• Okaloosa County will lease 225 acres at Eglin and
  construct a new wastewater treatment plant with
  10 MGD capacity
• The lease is structured to provide that the
  proceeds will be realized as in-kind
  consideration on Eglin AFB
• The 30 year lease will commence upon construction
  of the plant
• The lease will yield 325,000 ( escalation), or
  NPV of 8.2M
• This is a major win for the Air Force since the
  value-based enhanced use lease replaces a no-cost
  license which had been in effect since 1973

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Status of Current EUL Projects

• Acquisition (PHASE III)
• Patrick, FL 100 Acres - Deepwater port (lease
  expected 2/07)
• Hill AFB, UT 600 Acres - Mixed use development
  West Side Development (lease expected 4/07)
• Project Definition (Phase II)
• Kirtland (2), NM 100 Acres - Technology Park
• Andrews, MD 64 Acres - TBD
• Eglin (2), FL 100 Acres - Technology Park
• Lynn Haven, FL 200 Acres Mixed Use
• Concept Approval (Phase I)
• Hanscom - TBD
• Energy - TBD

• Pending Projects
• Nellis
• Travis
• MacDill
• Scott
• Lackland
• Beale

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EUL Handbook is available at http//www.afrpa.hq.
af.mil/enhanced_use_leasing/eul_handbook.shtml
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Desired End State!!!
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AFRPA EUL Team

• Paul Macpherson, AFRPA/EUL Chief
• [phone], DSN 426-5246
• paul.macpherson_at_afrpa.pentagon.af.mil
• Vincent Mokrzycki, AFRPA/EUL
• [phone], DSN 426-5238
• vincent.mokrzycki_at_afrpa.pentagon.af.mil
• James Lee, Contractor, AFRPA/EUL
• [phone], DSN 426-5580
• lee_james_at_bah.com

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Summary

• Focus on Transformational Initiatives
• Realize Equity Value for all Air Force Assets
• Complete Legacy BRAC Mission
• Execute BRAC 2005 Mission
• Apply Innovative Approaches for Managing Air
  Force Installations
• Air Force Vision Maximize the military value of
  infrastructure assets while optimizing
  ecological, economic, and community value
• All in support of the mission!

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Backup Slides
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Value Based Transaction Case Study NIMA St.
Louis, MO

• AF maximized value of contaminated property
• GSA worked with AF outside the box
• Third party to provide response actions
• Regulators stepped away from federal facility
  approach

Bottom line a win win for all parties