Closed Military Bases Provide New Location Opportunities.

In the pursuit of grand opportunities presented by military base closures, developers and municipalities across the country are fervently turning to the possibility of reusing closed military bases for commercial airport and real estate use. It makes sense. The only problem is that many of the former bases are unable to easily make the transition... and for many good reasons.

The Challenges

One of the major powers at play in this type of redevelopment is the expertise of the development company itself, and whether it has tapped into strategic alliances to gain experience in major land repositioning, the aviation industry, logistics, and the like. Of course, even if you have a very experienced team with the talent to handle all the new issues affecting real estate today, there is still the issue of government bureaucracy -- both local and state -- that can potentially delay progress. There is also the issue of military transference, which can present a sizeable lag time, sometimes lasting as long as four years. The danger in lag time, besides the fact that development is put on hold for so long, is the possibility of the site deteriorating and developing potentially dangerous environmental contaminants that might have otherwise been averted. Another large concern is the reaction of the community and whether it is supportive of the redevelopment.

In addition, a developer must take into account the military base itself. How does it rate compared to other military bases for conversion? And how do you go about rating the features that compose the ultimate airport for a particular region and marketplace?

The Ultimate All-Cargo Airport

When Stirling Airports International was faced with this question, its aviation expert looked at all of the factors that would make the perfect site for reuse.

Searching for some of the largest pieces of land left in Southern California for the development of a cargo airport, Stirling began exploring closed military bases, particularly Norton Air Force Base in San Bernardino, March Air Force Base in Riverside, and George Air Force Base in Victorville. Stirling rated each military base on 20 factors. (See Graph A for a comprehensive view of determining factors.)

Stirling determined that global access, cargo priority and customs were crucial qualities in developing an all-cargo airport. Southern California Logistics Airport (SCLA) secured international U.S. Customs Service and related agency services for scheduled flights that now allows SCLA to provide global access to air freight forwarders throughout the world.

A tactical location was also a critical factor. Being strategically located as a gateway to serve all of California, Nevada, Arizona, Utah, and the western United States gave George AFB a major advantage. Among other things, Stirling rated the weather, operational costs, multi-modal capability and traffic. Weather conditions turned out to be a large plus in George AFB's favor. Looking throughout the military base's history and year-round conditions, Stirling determined a mild climate and a history that showed the airport had never been closed due to inclement weather. Costs were another determining factor. Through market research, Stirling determined the region could offer lower prices for jet fuel and land, the latter benefiting large warehouse users. Victor Valley also experiences minimal traffic as opposed to the congestion affiliated with nearby Los Angeles.

Another major distinction benefiting George AFB was that it was situated a few short miles from two major interstates and a railway. Multi-modal capability that is already built into the infrastructure is nearly impossible to find and significantly increases the value and flexibility of the land.

Two additional benefits George offered were the lack of a curfew and uncluttered airspace. When most other regional airports are forced to close down operations at 10 p.m. or severely limit their flights, SCLA has the capability to provide 24-hour service. This can be especially attractive overseas in view of the time differences throughout the world.

Other key determining factors included government support, on-site services, available facilities, room to grow, emergency services, security, agility and no constraints.

After reviewing the pros and cons of each prospective military base it was evident George Air Force Base was the ideal candidate for conversion. Strategically located adjacent to Interstate 15 and Highway 395 with access to the shared rail line of Burlington Northern and Santa Fe Railway Company (BNSF) and Union Pacific, as well as access to Alameda Corridor (Port of Los Angeles) line, SCLA brings true multi-modal capabilities to the Southern California global access marketplace. Additionally, SCLA benefits from an exclusive air conduit while other locations share airspace. The 5,000-acre military base's airspace is virtually traffic-free and does not experience the congestion associated with neighboring Southern California airports.

Working With The City

Once Stirling Airports International set its vision on redeveloping George Air Force Base, it continued to cultivate its relationship with the city of Victorville and handled the conversion like it would any other real estate project: reposition, master-plan and market.

The first item on the agenda was pulling in alliances and consultants to aid in its development. Working in unison with the support of the city through a "joint participation agreement," Southern California Logistics Airport developed alliances with ProLogis, Burlington Northern Santa Fe Railway, Union Pacific Railroad, CB Richard Ellis, Redwood Systems and Consolidated Freightways.

One primary element that significantly impacted the speed of the redevelopment was the city of Victorville itself. With virtually full support from every segment of the locale, the city committed itself to expedite what are sometimes considered lengthy and time-consuming processes, such as permits, entitlement, street repairs and maintenance.

Even with the overwhelming support, there were still many challenges and obstacles along the way. By far, one of the largest challenges was the educational process -- educating the public at large, the city of Victorville, and prospective alliances on an all-cargo airport and its place in the market. Typically when people contemplate airports, they automatically think about the transportation of passengers, not cargo. The challenge was to interrupt that thought process and get people to think about and accept an all-cargo airport as a counterpart to the region's overall airport system.

Public/Private Financial Commitment

The financial obligation of the redevelopment was at so challenging -- the federal government established an initial asking price of $28 million -- although the contributions from Victorville went above and beyond what could be expected from an investor in the private sector. Victorville Mayor Terry Caldwell, San Bernardino County Supervisor Kathy Davis and former Victorville City Manager James Cox, with the help of Rep. Jerry Lewis, R -- Redlands, went to Washington and negotiated the note down to $1.67 million.

As a joint participation agreement -- or "public/private partnership" -- between Stirling Airports International and the city of Victorville, Southern California Logistics Airport qualifies for many grants that help expedite development of new roads, demolition and infrastructure. Federal grants from the FAA have also contributed to financial obligations by repaving the two 10,000-foot runways at SCLA.

The redevelopment is also financed through tax dollars from governmental zoning laws. Being on the land of a closed military base, SCLA benefits from its designation as a LAMBRA zone. As such, all tax dollars that are charged to the land are put back into the project for its development and preservation.

The city has also contributed in other ways. A redevelopment district was established to provide assistance and incentives including site and infrastructure improvements. The district provided that taxable and tax-exempt airport development bond financing is available with a taxable bond pool of more than $100 million available. Additionally, tax credits for hiring, equipment purchase and operations are available for businesses located at SCLA.

California state has also significantly assisted SCLA through the California Department of Transportation's (Caltrans) commitment to major programs and funding to enhance infrastructure beneficial to the airport Caltrans will be widening and lengthening Interstate 18 so that it connects from 1-15 in Victorville through SCLA to the 1.5 State Route 895 (SR 395) will be widened to accommodate increased activity at SCLA. Additionally, "D" Street/Route 66 ramp on 1-15, the primary access road to SCLA, is presently under construction to improve traffic flow and allow multi-axle trucks easier access to the com plate multi-modal business complex.

The federal government is also providing significant support for SCLA's development through LAMBRA Business Enterprise Zone tax credits for businesses relocating to the former Air Force base, establishment of an 1 800-acre Foreign Trade Zone, and Federal Aviation Administration program support.

Successful Vision

The partnership between Stirling and Victorville is extraordinary primarily because they share the same vision. The two entities work together so well that fast tracking has become the norm. Nevertheless, they each have their own individual obligations to the redevelopment. On the private side of the equation, Stirling Airports International is the master-developer and airport manager/operator. On the other side, the city of Victorville acts as the Southern California Logistics Airport Authority, advising, reviewing and approving all activities in the best interest of the community. The shared objective is to create 15,000 jobs in 15 years.

So why have SCLA, the city of Victorville and Stir ling Airports International managed to rise about and successfully convert? Stirling offers that it's the commitment and experience of the team and alliances that distinguishes SCLA. From marketing professionals to architects to the city, it takes a team attitude and team commitment where everyone involved in the quotient is committed to a singular goal.

Stirling believes that above all it's important to measure demand and supply, and create your own niche in the marketplace. Stirling has done just that. SCLA provides global access and, with the capacity to handle more than four million tons of air cargo per year -- a major portion of the region's forecasted growth -- will serve the cargo needs of the entire western United States.

A 15-year veteran of pioneering master-planned communities, Dougall Agan serves as partner with Stir ling, a strategic, full-service, value-added development company specializing in master-planned communities and major land renovations.