Air Force holds Industry and Financial Forums on Group II Housing Privatization
/ Published October 17, 2006
RANDOLPH AIR FORCE BASE, Texas (AETCNS) -- The Air Force's largest single housing privatization project drew strong interest from potential developers and investors during an industry and financial forum Aug. 23-25 in New York City.
The forum provided information on Air Education and Training Command's Group II Housing Privatization Project to nearly 250 real estate, property management and financial professionals.
"We are extremely pleased with the interest shown in the Group II project," said Col. Leonard Patrick, AETC civil engineer.
AETC's Group II Housing Privatization project includes approximately 4,000 housing units at seven bases: Maxwell Air Force Base, Ala.; Columbus AFB and Keesler AFB, Miss.; Vance AFB, Okla.; and Goodfellow AFB, Laughlin AFB and Randolph AFB, Texas.
The housing privatization program was initiated by the Department of Defense in 1996 to speed up the revitalization of family housing. The Air Force estimates nearly 40,000 of its existing military family housing units are considered inadequate by today's standards. Housing officials say it would cost more than $7 billion and take over 12 years to revitalize substandard housing through traditional military housing programs.
"While the Air Force has worked hard to maintain and revitalize our aging family housing, the quality of many of our units is just not where it should be," Colonel Patrick said. "This project is going to enable AETC to get there much faster and at a much lower cost."
The command civil engineer told forum attendees the need to provide Air Force families with access to quality, affordable housing is an important element in military readiness.
"Abraham Maslow's well-known 'hierarchy of needs' includes shelter as one of our most important needs," Colonel Patrick said. "We can't afford to have our deployed warfighters worrying about whether or not the plumbing and air conditioning are working at home."
Unlike traditional military construction projects or government acquisition programs, housing privatization is a real estate transaction. While the government may loan the developer a certain portion of the money required for the project, the developer must also arrange for other necessary loans from financial institutions to fund the development. For example, while development costs for AETC's Group II project could be close to $500 million, the maximum amount the government can directly loan is capped at about $200 million.
"For every dollar the Air Force commits, in housing and privatization, the private sector will invest much more," Colonel Patrick said.
Having received the program overview at the industry and financial forums, prospective developers are now participating in individual site visits to each installation. Site visits planned for Columbus, Keesler and Maxwell have been postponed because of Hurricane Katrina. The current Group II schedule is:
- Randolph, Aug. 31
- Vance, Sept. 14
- Goodfellow, Sept. 20
- Laughlin, Sept. 21
- Columbus, (To be determined)
- Maxwell, (To be determined)
- Keesler, (To be determined)
This is the second grouped housing privatization project for the Air Force and AETC. Source selection for AETC's Group I Housing Privatization Project is underway with award of the four-installation lease anticipated later this year. The Group I project includes nearly 3,000 housing units at Altus AFB, Okla.; Luke AFB, Ariz.; Sheppard AFB, Texas; and Tyndall AFB, Fla.
For additional information about the Group II Housing Privatization project go to visit the Jones Lang LaSalle Privatization Support Contractor website at www.jllpsc.com.