San Antonio showing the way on remaking bases

Web Posted: 10/20/2005 12:00 AM CDT

L.A. Lorek
Express-News Business Writer

San Antonio's military bases have created innovative joint ventures to privatize land and buildings, saving the government money and earning a profit for the partners.

There's more to come.

To help spur further development, the city formed the Defense Transformation Institute about a year ago as a nonprofit organization focused on creating public and private partnerships, said Ed Davis, interim assistant director.

"From a city standpoint, our interest is in economic development," Davis said.

Under the latest recommendations from the Defense Base Closure and Realignment Commission, commonly called BRAC, San Antonio is set to gain 3,600 military jobs and several projects that it hopes get either federal funding or private partnerships to develop, Davis said.

The Defense Transformation Institute held a workshop with about 40 leaders from the military, government agencies and private businesses Tuesday and Wednesday at the Crowne Plaza Riverwalk to discuss how to leverage military assets through community and private partnerships.

San Antonio has led the nation in privatization at its military bases, and the Defense Transformation Institute wants that to continue, Davis said. The city has three active military bases, a privatized base known as Brooks City-Base, and KellyUSA, now a business park with 70 tenants.

The city's active military bases have pioneered private development onsite. In the first project of its kind in the country, Randolph AFB has 420 privately developed homes.

Now the Air Force has 16 projects on 15 bases nationwide with 14,615 privately built homes, said Ian Smith with the Air Force housing privatization program. Its goal is to have 45,600 private homes within two years, he said.

At Fort Sam Houston, Orion Partners won a contract to re-develop 430,000 square feet at the old Brooke Army Medical Center and two other buildings known as the North and South Beach Pavilions. It was also one of the first projects of its kind in the country.

Orion and its partner, Weston Solutions, invested $40 million in the venture. The project was a big risk because of the buildings' condition and no guaranteed tenants, but it has worked out well, said Thomas H. Chandler, president of Orion. It has leased the North Beach Pavilion and the old hospital back primarily to the military and Department of Defense contractors, and Orion has begun work rehabilitating the South Beach Pavilion, he said.

"Everybody wins," Chandler said. "That is a rare thing."

With the latest round of BRAC, the Air Force is making a big push to work with developers and other partners to privatize land and buildings on bases while retaining ownership of the assets, said George Davies. He's a management consultant with Northrop Grumman's Air Force Real Property Agency.

That's a big shift from when San Antonio struck a deal to privatize Brooks AFB to take over infrastructure needs for the Air Force and reduce the base's costs. Despite the city's efforts, the base made the BRAC hit list and the Air Force is scheduled to move out. But the city created Brooks Development Authority, which will continue to operate Brooks City-Base as a technology research park.