ODASA Privatization and Partnerships Overview
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1 Office of the Assistant Secretary of the Army Installations and Environment American Engineering Association Seminar ODASA Privatization and Partnerships Overview Bill Armbruster Deputy Assistant Secretary of the Army (Privatization and Partnerships)
2 Privatization & Partnerships INSTALLATIONS AS FLAGSHIPS Enhance installation ability to project power and support Soldiers, families and civilians Residential Communities Initiative (RCI) Privatization of Army Lodging (PAL) UPH RCI Privatization Initiative Utilities Privatization Historic Properties Business Initiatives 2
3 RCI Overview VISION Quality residential communities for military families GOAL Eliminate inadequate Army Family Housing in the U.S. in conjunction with Military Construction and Basic Allowance for Housing increases while Providing Superior Customer Service and Amenities OBJECTIVES Eliminate revitalization backlog Reduce deficits Sustain adequate housing Foster sense of community Establish collaborative partnerships Leverage private sector expertise, creativity, innovation, capital Presidio of Monterey Establish incentive based fees Utilitize local businesses Protect Army / Soldier interests with a Portfolio & Asset Management program 3
4 RCI Scope / Installations RCI PROGRAM 45 INSTALLATIONS Installations Installations (25 (25 Projects) Projects) Transferred Transferred (72,825 (72,825 Houses) Houses) Carson, Carson, CO CO Nov Nov Hood, Hood, TX TX Oct Oct ,348 86,348 Houses; Houses; 92% 92% of of Army Army Family Family Housing Housing in in U.S. U.S. Lewis, Lewis, WA WA Apr Apr Meade, Meade, MD MD May May 2002 st 33 Installations $986M Govt Equity = $9.8B Initial 2002 Bragg, Bragg, NC NC Aug Aug 2003 Development 2003 Development (10 (10 to to 1 leverage; leverage; OSD OSD goal goal is is >3 >3 to to 1) 1) Pres Pres of of MontNPS, MontNPS, CA CA Oct Oct StewartHunter StewartHunter AAF, AAF, GA GA Nov Nov Campbell, Campbell, KY KY Dec Dec Belvoir, Belvoir, VA VA Dec Dec Installations Installations (2 (2 Projects) Projects) Awarded Awarded (2,757) (2,757) Est Est Transfer Transfer IrwinMoffett IrwinMoffett FAFParks FAFParks RFTA, RFTA, CA CA Mar Mar Redstone Redstone Arsenal, Arsenal, AL AL Oct Oct Hamilton, Hamilton, NY NY Jun Jun Knox, Knox, KY KY Jan Jan Walter Walter Reed Reed AMC, AMC, DC DC / / Detrick, Detrick, MD MD Jul Jul Polk, Polk, LA LA Sep Sep Shafter Shafter / / Schofield Schofield Brks, Brks, HI HI Oct Oct s s EustisStory, EustisStory, VA VA Dec Dec Leonard Leonard Wood, Wood, MO MO Mar Mar Installations Installations (8 (8 Projects) Projects) In In Solicitation Solicitation or or 2005 Under Sam Sam Houston, Houston, TX TX Mar Mar 2005 Under Development Development Est Est Transfer Transfer (10,766) (10,766) 2005 Drum, Drum, NY NY May May 2005 Lee, Lee, VA VA Sep Sep Bliss, Bliss, TXWhite TXWhite Sands Sands MR, MR, NM NM Jul Jul 2005 West West Point, Point, NY NY Mar Mar Benning, Benning, GA GA Jan Jan Jackson, Jackson, SC SC Sep Sep Leavenworth, Leavenworth, KS KS Mar Mar Sill, Sill, OK OK Nov Nov Rucker, Rucker, AL AL Apr Apr s s WainwrightGreely, WainwrightGreely, AK AK Jan Jan Carlisle Carlisle Brks, Brks, PAPicatinny PAPicatinny Ars, Ars, NJ NJ May May HuachucaYuma HuachucaYuma PG, PG, AZ AZ Apr Apr Gordon, Gordon, GA GA May May Aberdeen Aberdeen PG, PG, MD MD Aug Aug Riley, Riley, KS KS Jul Jul Richardson, Richardson, AK AK Mar Mar st 33 Installations $986M Govt Equity = $9.8B Initial 4
5 RCI Program RCI IS NOT BUSINESS AS USUAL Privatization is "unique business relationship" between Army and private sector and it directly supports the Army Strategic Plan RCI DOES NOT follow TRADITIONAL decision making process Army involvement is NOW Oversight, NOT Execution Garrison Commander is Secretary of the Army's Representative in the management of the project ASA(I&E) centrally controls MAJOR business management decisions and oversight through a Portfolio & Asset Management process 5
6 RCI Portfolio & Asset Management (PAM) HOW 50YEAR OVERSIGHT IS PROVIDED 86,348house portfolio: Is comparable to largest publicly traded residential companies RCI Includes $10B in development 1 st 10 years; annual portfolio income of $1.4B Program designed to: Monitor health of RCI Portfolio; solve problems before they occur or grow Report to all stakeholders on program / projects for next 50+ years PAM includes: Asset Management Project oversight Installation Level Portfolio Management Oversight / protection HQDA Level Portfolio Performance Metrics: Corresponds to the 3 major components of the project s business plan and legal agreements Finance, Development and Operations / Property Mgt 6
7 RCI Results at Fort Carson BEFORE / AFTER Senior NCOs Junior Enlisted Town Homes 7
8 RCI Results at Fort Hood BEFORE / AFTER Senior NCOs Junior NCO Duplex 8
9 RCI Results at Fort Lewis BEFORE / AFTER Enlisted Duplex Company Grade Officers 9
10 RCI Results at Fort Bragg BEFORE / AFTER Junior Enlisted 10
11 RCI at PoM / Naval PS BEFORE / AFTER Junior NCO Housing 11
12 RCI Results at Fort Campbell BEFORE / AFTER Junior Enlisted Duplexes Community Center Boundless Playground 12
13 RCI Results at Fort Belvoir URBAN COMMUNITY Connecting Connecting Homes Homes with with Retail Retail Starbucks Starbucks / / Convenience Convenience Store Store Day Day Spa Spa / / Nail Nail & & Beauty Beauty Shops Shops Barber Barber Shop Shop Sports Sports Memorabilia Memorabilia Cigar Cigar Shop Shop Watch Watch Repair Repair & & Engraving Engraving Home Home Decor Decor 13
14 RCI Results at Fort Hamilton Apartment Modular Construction From foundation to infactory work to onsite installation Faster, at less expense, and with better quality work / control 14
15 RCI Results in Hawaii RIBBONCUTTING CEREMONY JUNIOR ENLISTED DUPLEXES 15
16 Why RCI is Successful RCI PROGRAM HIGHLIGHTS Strong Army leadership support Streamlined organization and decision making Organization located in the Army Secretariat Direct access to Congress, OMB, OSD, Secretariat, other Federal Agencies, financial / real estate markets, local / state governments Designing Sustainable Communities (not just building housing) As of Jun 06, 62% of subcontracts to small / disadvantaged businesses Partnerships, not Contracts Outstanding government and consultant team Extensive Soldier and family involvement 16
17 Privatization of Army Lodging (PAL) PAL OVERVIEW The Army operates over 17,000 lodging rooms in the Continental United States, Alaska and Hawaii Installation lodging facilities suffer from chronic underfunding PAL seeks to revitalize installation transient lodging through partnerships with the private sector PAL is consistent with Leadership direction to transfer noncore functions to the private sector 17
18 Privatization of Army Lodging (PAL) PAL PROGRAM STATUS PAL Phase I Group A (4,112 rooms currently in operation) Group A includes lodging operations at 13 locations Redstone Arsenal and Fort Rucker, Alabama Yuma Proving Ground, Arizona Tripler Army Medical Center / Fort Shafter, Hawaii Forts Leavenworth and Riley, Kansas Fort Polk, Louisiana Fort Sill, Oklahoma Forts Hood and Sam Houston, Texas Forts Myer / McNair, Virginia / Washington D.C. Selection of developer for Group A is expected late September and transfer of operations estimated in late 2007 PAL Phases II and III Transfers of Phases II & III are estimated for late 2008 and 2009, respectively 18
19 UPH Privatization Initiative UNACCOMPANIED PERSONNEL HOUSING (UPH) PRIVATIZATION PROJECTS 1 EXECUTED; 1 APPROVED; 3 IN DEVELOPMENT 2004, Irwin RCI project included 200 SFCabove apartments for single Soldiers construction started May, SSGsabove single Soldier apartment complex at Drum approved by Army / OSD / OMB / Congress, 3 projects for SSGsabove at s Bragg (408 apartments), Bliss (290) and Stewart (262) in development 19
20 UP PROGRAM UPDATE Utilities Privatization (UP) United States: Systems Completed Privatized Exempted Underway Japan and Korea: Systems All All Exempted Europe: Systems Privatized 20
21 Historic Properties and Partnerships OFFICE OF HISTORIC PROPERTIES Historic Properties 14,000 properties listed on or eligible; 20,000 more coming of age Seeking available facilities to offer to the private sector Reuse Opportunities Fort Bliss, TX: William Beaumont Historic Hospital District; 93 Acres / 39 Buildings Fort Sam Houston, TX: Brooke AMC; 500,000 S.F. Walter Reed AMC, DC: 200,000 S.F. ArmyCommunity Heritage Partnerships Promote heritage tourism potential and improve downtown historic district vitality to provide desirable services to Army active duty, civilians, dependents, retirees and visitors Locations: USMA & Highland Falls, NY Leavenworth & Leavenworth, KS Benning & Columbus, GA Huachuca & Sierra Vista, AZ Carlisle Barracks & Carlisle, PA Riley & Junction City, KS Bragg & Fayetteville, NC Lee & Petersburg, VA 21
22 Municipal Services Partnerships MUNICIPAL SERVICES OVERVIEW FY 05 National Defense Authorization ACT (P.L , Sec. 325), authorizes the Army to contract municipal services to a municipality or county Government at two pilot sites Authorized Services: Refuse collection Refuse disposal Library services Recreation services Facility maintenance and repair Utilities Pilot Sites Fort Gordon, GA and Fort Huachuca, AZ 22
23 The Installations Environment PostBRAC 23
24 Privatization & Partnerships Summary SUMMARY Program mission and objectives remain steadfast Evolving approaches to maintain exceptional performance realized to date CONTACTS Mr. Bill A. Armbruster, DASA(P&P) OASA(I&E), Don Spigelmyer, OASA(I&E) RCI , Allison Sands, OASA(I&E) PAL, Gary Robinson, OASA(I&E) Business Initiatives ; Mr. Richard Dubicki, OASA(I&E), Utilities Privatization,
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