The heart of the SAMMC complex including the 760,000 Consolidated Tower project funded through the 2005 BRAC.
Located in the heart of San Antonio, Fort Sam Houston is one of the nation’s oldest Army bases. It was established in 1845—in rented buildings and a quartermaster supply depot in the Alamo—as the Post at San Antonio, and was renamed for the first president of the Republic of Texas in 1890. Construction of the Quadrangle, on 92 acres of land donated by the city of San Antonio began in 1876. The the base has been expanded many times to reach its current size of about 3,000 acres. Today, its more than 800 historic buildings—the largest collection of historic structures in the U.S. Department of Defense (DoD)—form the Fort Sam Houston National Historic Landmark.
The most recent round of BRAC resulted in six major moves/consolidations at Fort Sam Houston, all of which have had huge impacts on the base and are expected to result in significant long-term cost savings for the military. They included $3.4 billion in construction and an estimated $8.3 billion in economic impacts to the city of San Antonio.
The first of these is the combination of installation support services at Fort Sam Houston with those at Randolph and Lackland Air Force bases (as well as eight other smaller operating locations) into a single organization, known as Joint Base San Antonio (JBSA), that is now DoD’s largest joint base. The Air Force—the lead agency for JBSA—established the 502nd Air Base Wing to provide installation support across all JBSA locations, and its commander also serves as the JBSA commander. Today, JBSA covers 40,000 acres, supports a workforce of more than 73,000, and has more active runways and more students than any other U.S. military installation. Its total plant replacement value is about $10.3 billion and its annual budget is $800 million.
The second consolidation has transformed Fort Sam Houston—already known as the “Home of Army Medicine” and the “Home of the Combat Medic”—into the world’s largest enlisted military medical education and training center. This transformation, which consolidated five major training centers from across the country, concluded with the opening of the 1.2 million-square-foot, $800 million Military Education and Training Campus (METC) in 2010. The tri-service facility—which trains about 24,000 Army, Navy and Air Force personnel each year—reached full operating capacity in September 2011. It consists of five new instructional buildings, six existing ones, three new dormitories, a new dining facility and a headquarters building.
BRAC 2005 also directed the realignment of the inpatient medical function of the 59th Medical Wing (Wilford Hall Medical Center) to Brooke Army Medical Center (BAMC) at Fort Sam Houston, creating the San Antonio Military Medical Center (SAMMC). SAMMC construction projects included a new 760,000-square-foot tower, renovations to BAMC, a 5,000-space parking structure, a central energy plant and a primary care clinic, all of which were completed by September 2011 at a total cost of about $802.3 million. SAMCC is now DoD’s largest inpatient health care facility and its only level-one trauma center.
The final three big BRAC-directed events at Fort Sam Houston were the move and consolidation of the U.S. Army’s Installation Management Command (IMCOM) and two laboratory construction projects, the Joint Center for Excellence for Battlefield Health and Trauma Research (BHT) and the Tri-Service Research Laboratory (TRSL). The creation of the IMCOM campus involved the renovation of four buildings, an addition to one, the construction of two new buildings and the transfer of about 2,400 personnel into new offices there between 2009 and 2011. The 133,100-square foot BHT, which was completed in August 2010 at a cost of $111 million, integrates all three services’ combat casualty care research missions. The TSRL, a $66.9 million, 181,000-square-foot laboratory that consolidates biomedical research from all three services, opened in May 2011.
Overall, 48 BRAC-related construction projects (most certified LEED-Silver) have been completed at Fort Sam Houston and the rest of JBSA, resulting in the construction or renovation of almost 11 million square feet of space and the creation of the largest and most important military medical training facility in the world.
Expatriat British novelist and travel writer Lawrence Durrell, writing in Reflections on a Marine Venus, described a “rare but by no means unknown affliction of spirit” that he dubbed “islomania.” “These are people,” he stated, “who find islands somehow irresistible.” In that spirit, we continue our series on federally owned islands, the first of which profiled Washington State’s McNeil Island. Today, we examine Plum Island, an 840-acre island located 1.5 miles off the eastern tip of Long Island, New York, that the federal government has owned since 1826—and that GSA has proposed selling in the near future.
Originally named Manittuwond by the Native American Pequot Nation, the island got its current name from the beach plums that grow along its shores. During the Spanish-American War, the federal government built Fort Terry there. In 1954—in response to animal disease outbreaks in Mexico and Canada—the U.S. Department of Agriculture (USDA) established the Plum Island Animal Disease Center (PIADC) to study foot-and-mouth disease in cattle. (The government also conducted secret biological warfare research there, until President Richard Nixon ended the program in 1969.) The USDA’s $7.7 million, 164,000-square-foot Building 101 laboratory facility was dedicated on September 26, 1956. The center now comprises 70 buildings, some of which have been renovated multiple times and many of which have become dilapidated. The island has its own fire department, power plant, and water treatment plant. Additional assets on the island include undeveloped land, a lighthouse constructed in 1869, and other buildings and facilities associated with the former Fort Terry.
In 2003, Plum Island was transferred to the U.S. Department of Homeland Security (DHS). Today, PIADC remains the nation’s only laboratory that studies infectious animal diseases that could affect the livestock industry. PIADC scientists continue to study more than 40 foreign animal diseases and several domestic ones, educate veterinarians about foreign animal diseases, and test animals and animal products being imported into the United States. In addition to PIADC, DHS owns and operates a 9.5-acre support facility at Orient Point, N.Y., that contains buildings, utilities, and ferry docks.
The Consolidated Security, Disaster Assistance, and Continuing Appropriations Act of 2009 mandated the sale of Plum Island as a result of DHS’s decision to replace PIADC with a new federal facility, the National Bio and Agro-Defense Facility (NBAF), to be built in Manhattan, Kansas, at an estimated cost of $1.14 billion. (DHS had proposed selling Plum Island to raise funds to build the new facility.) The development of NBAF has been put on hold, however, as funding for it has been eliminated from the federal budget in recent years; the sale of Plum Island also has been on hold, as declining land values made it extremely unlikely that it would generate a profit for the government. In addition, local environmental groups—including Save the Sound (a program of the Connecticut Fund for the Environment) and the Citizens Campaign for the Environment—oppose the sale of the island, which is home to more than 100 bird species and the area’s largest seal colony.
In July, GSA released the Plum Island Draft Environmental Impact Statement (DEIS), which states that “subject to the availability of funds,” the construction of the Kansas facility is estimated to be completed in 2019, after which work on Plum Island would transition to NBAF by 2021. It also states that DHS will maintain PIADC during the interim period. Most significantly, after exploring a “no-action scenario” as well as four “action alternative” scenarios, the DEIS recommends that the island be auctioned off to the highest bidder. The “action alternatives” studied included low-density development (with about 90 residential units), a high-density option (with up to 750 units), adaptive reuse of the laboratory buildings, and a conservation/preservation option. However, as the DEIS states, “the future reuse of the property once it leaves federal ownership will be subject to local zoning, permitting requirements of state regulatory authorities, and review pursuant to the New York State Environmental Quality Review Act.” The Town of Southold already has announced that it plans to re-zone the island, and 24 remaining Superfund contaminated waste sites on it still need to be remediated, making any sale problematic, to say the least. The next steps in the process may become clearer later this month: GSA has scheduled public hearings on October 17 and 18 in Old Saybrook, Conn., and Greenport, N.Y., respectively.
The relationship between the 112th Congress and GSA is not particularly cozy. The House of Representatives, under the leadership of Transportation and Infrastructure Committee Chairman, John Mica (R-FL), has sparred with GSA over efforts to relocate the FTC from its current headquarters, over lavish conferences, over bonuses for GSA Senior Executives, over space utilization, over the 1 World Trade Center lease and over the slow pace of property dispositions. And that’s just since the beginning of this year.
Now, Mica, along with Economic Development, Public Buildings and Emergency Management Subcommittee Chairman Rep. Jeff Denham (R-CA), is pushing forward with a bill that rolls many of these skirmishes into comprehensive legislation that would add the weight of law to Congress’ efforts to curb GSA. This new bill, H.R. 6430, is entitled the “Public Buildings Reform Act of 2012’’ and on September 20th it was approved in subcommittee. The bill addresses a laundry list of items that are best summarized in a press release issued by the House Transportation and Infrastructure Committee.
There is an awful lot that begs for comment in this bill but here are three items we think are most notable, especially for lessors:
No Net Growth
H.R. 6430 excerpt: “Any prospectus that proposes new space, whether leased or owned,… for fiscal years 2014, 2015, and 2016 shall contain information outlining the details of the elimination of at least a corresponding amount of space.”
The concept of “no net growth” is largely bi-partisan. In May the President issued a memorandum through the Office of Management and Budget meant to freeze the size of the civilian federal leased and owned inventory, stating that approval for acquisition of net new space will only be granted where the total square footage is offset through consolidation, co-location or disposition of space from that same agency.
The innovation in H.R. 6430, however, is that GSA must demonstrate to Congress that its prospectus requests do not grow the inventory. That opens the door for further scrutiny, which is probably Mica’s intent. Yet, the House committee’s track record for approvals of recent prospectuses has been abysmal. The House places the blame squarely on GSA, for its slow response to their inquiries regarding prospectus details. Whatever the reason, there is dysfunction in the Congress-GSA working relationship.
Space Reduction
H.R. 6430 excerpt: “Each calendar year through 2016, the Administrator of General Services shall reduce by a minimum of 1,000,000 square feet of the leased and owned property in the inventory of the General Services Administration…”
While the concept of a cap on the federal inventory size has bi-partisan support, it is primarily the Republicans who seek deep cuts to the overall size of the inventory. In fact, numerous legislative proposals have been issued that seek to reduce the federal inventory, workforce and payroll. The provisions of H.R. 6430 simply quantify those goals more specifically.
For lessors, the concern is obvious. On the one hand, we note that a three million square foot reduction is only about 1.5% of the GSA leased portfolio. Yet, if you are a lessor with a major lease expiration in the next three fiscal years, your odds of being stung are probably a lot higher. Further, GSA has termination rights in most of its leases. The provisions of this bill would likely force them to be exercised far more often.
Rental Rate Restriction
H.R. 6430 excerpt: “The Administrator may not lease space at an amount below the average annual rental rate established pursuant to [the provisions of 40 U.S.C. Section 3307] that exceeds the maximum rental rate established by the Administrator for the respective geographical location…”
This one confuses us. Title 40 of the United States Code includes a provision requiring GSA to seek congressional authorization to enter into lease transactions expected to have an annual full service rent higher than a specified amount. That “prospectus threshold”, as we often call it, is $2.79 million this year. Also, unique to the National Capital region, a maximum per-square-foot rent cap is applied generally to all prospectus-level leases in a particular jurisdiction. So, for example, if a lease in the District of Columbia will have an average annual rent above the prospectus threshold, GSA is not authorized to pay any more than $49.00 per rentable square foot, full service. We call that the “prospectus cap”. Geography-based maximum rent caps are also established for the Northern Virginia and Suburban Maryland markets but (to our knowledge) nowhere else in the United States. H.R. 6430 suggests that the GSA Administrator will need to establish similar geography-based caps in all regions of the country. Further—and this is the kicker—these maximum rent caps will apply to all lease transactions, regardless of whether they exceed the prospectus threshold. The mayhem that will stem from this one clause is beyond contemplation. We assume there is more to learn here.
Less than 4% of bills are signed into law, but H.R. 6430 has the support of a senior Congressman and committee chair in Rep. Mica. It is also indicative of other bills generated in the last 2-3 years. Many of the concepts outlined here have broad support in the House and they should be followed closely.
Rural post office slated for closure in Slayden, Tennessee (photo: WKRN-TV Nashville)
A plan to close hundreds of postal facilities and eliminate overnight delivery of first-class mail would not save as much as the U.S. Postal Service (USPS) has projected—according, at least, to the Postal Regulatory Commission (PRC), which came to this conclusion in an advisory opinion released last Friday (September 28, 2012). The PRC’s analysis of the USPS Mail Processing Network Rationalization (MPNR) initiative, which initially aimed to save $2.1 billion (a figure later adjusted to $1.6 billion) by closing and consolidating 229 of its 461 processing plants, actually may save as little as $46 million annually. The PRC also determined that the Postal Service could “significantly reduce its network and realize significant cost savings while preserving most current service levels.”
The analysis focused on network modeling, cost savings estimates and estimates of potential volume loss. It concluded that in order to capture the anticipated $1.6 billion in cost savings upon full implementation of MPNR, USPS would have to improve average systemwide productivity by more than 20% and noted that “improvements of this magnitude are ambitious and involve some risk.”
As we reported back in June, USPS has been shrinking and planning for further downsizing—including the closing of retail facilities and processing plants, as well as the reduction of service standards—for years. In July, USPS began a two-phase implementation of MPNR with interim service standards that would preserve overnight first-class mail service (with the exception of mail that is handled by more than one processing plant) until January 31, 2014, and consolidate 140 plants.
The first phase is being implemented in two stages, the first of which was scheduled to include the consolidation of 48 facilities this past summer (though we don’t know if that was fully implemented). The Postal Service then suspended consolidations from September through December, during the busy election and winter holiday mail periods; consolidations will resume in January 2013 with the second stage of Phase I, in which about 92 additional facilities will be consolidated. Phase II will begin implementation in January 2014 with another 89 or more facility consolidations, bringing the total number of consolidated facilities to about 229.
“The Commission believes that the phased implementation of MPNR provides an excellent opportunity for the Postal Service to study the effects of service standard changes; to inform its decisions on how to preserve as much of the current services as possible; and to make adjustments before full implementation,” added PRC Chairman Ruth Y. Goldway.