Defense Infrastructure

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The Defense Infrastructure Group has represented more than 100 communities in base closure and reuse matters at more than 150 military installations and 15 non-Department of Defense (“DOD”) defense facilities (laboratories, weapons facilities, etc.) and has represented clients to complete more than $20 billion of privatization projects at active military bases and defense facilities.

We counsel states, local governments, local redevelopment authorities (“LRAs”) and other similar organizations, as well as lenders, developers and utility providers, on matters involving federal real estate acquisition and disposal, housing, utility and facility privatization, military base closure, realignment, and reuse and environmental concerns.

Our areas of focus, which are each described below, include:

  • Privatization on Active Military Bases and Defense Facilities
  • Community Advocates in the BRAC Process
  • Redeveloping Closed Military Bases and Other Former Defense Facilities

Privatization on Active Military Bases and Defense Facilities

The Defense Infrastructure Group assists clients interacting with active installations to negotiate and implement enhanced use leases or outleases, public-private partnership (P3) and public-public-private partnership (P4) agreements, land exchanges, water exchanges, joint use agreements, housing privatization, Energy Savings Performance Contracts (ESPCs), Utility Energy Service Contracts (UESCs), Section 2922a agreements, FAR Part 41 utility agreements, utility privatization and other collaborative projects. Our team has participated in more than 125 public-private transactions at military facilities since 2000, with a capital investment of more than $20 billion. Clients for these types of transactions include state and local governments, developers, lenders, investors and credit enhancers. For a further discussion about Kutak Rock’s privatization experience, please see the Government Services Group.

Community Advocates in the BRAC Process

For over 25 years we have served as community advocates in advance of and during the base realignment and closure (“BRAC”) process. The Defense Infrastructure Group assists clients to identify and implement plans to expand their strengths and mitigate any weaknesses that may make them vulnerable to closure. Once a BRAC round is announced, the Defense Infrastructure Group mobilizes to assist our clients to achieve a favorable outcome from the BRAC Commission.

The modern BRAC process has become a highly legalistic and politically charged administrative process. We believe coming BRAC round(s) will include independent, bipartisan Base Closure Commissions similar to those that were instrumental to the selection process in 1991, 1993, 1995 and 2005 to evaluate DOD closure nominations and make final recommendations to the president for approval by Congress. Saving a base from closure during the BRAC process requires a concerted community effort to build a strong technical case with political support. Because Commissions typically approve the great majority of DOD closure nominations, it is critical for a community defending its base to understand DOD’s selection process. Our team regularly briefs both the House Armed Services Committee and the Senate Armed Services Committee on base closure laws and procedures.

The hallmark of the base closure selection process is the establishment by DOD of a target Force Structure Plan (Plan) and Base Closure Criteria (Criteria) (military value, cost, return on investment, etc.). The starting point for any base closure defense must be an examination of DOD closure nominations in light of the Plan and Criteria. Of the closure criteria used in previous base closure rounds, those dealing with the “Military Value” of the installation are given considerably more weight by DOD decision makers. While there may be some changes in the process for future base closure rounds, Military Value criteria are likely to remain the focus of the DOD’s selection process. The Defense Infrastructure Group can help communities understand these elements and how they might be applied to a base in their community. Unlike others, Kutak Rock will not represent a community that is adverse to another client in the BRAC round.

Redeveloping Closed Military Bases and Other Former Defense Facilities

Our team helps clients understand the applicable federal property disposal process, develop the appropriate transfer strategy, and negotiate with the applicable military service over terms, price, schedule and condition. We are experienced counseling on the acquisition of former military property, including former Army, Navy, Air Force and Marine Corps bases, and assisting clients in the review of property conveyance mechanisms.

Kutak Rock’s familiarity with the myriad federal statutes, executive orders, rules, regulations and policies that govern federal real property disposal and our understanding of the dynamics of the complex military base reuse process are essential elements of the successful development and implementation of a community’s base reuse plan. The intimate knowledge of these governing provisions that the Defense Infrastructure Group brings to the process, in addition to its knowledge of the federal government’s latitude in the negotiation process, will prove invaluable to any community throughout the planning and acquisition process.

We help clients understand the applicable federal property disposal process, develop the appropriate transfer strategy, and negotiate with the applicable military service over terms, price, schedule and condition. Our team counsels local governments, states and LRAs acquiring former military property through leases, economic development conveyances (transfer at a discounted price for use of the property for economic development), public benefit conveyances (transfer to public entities to enable the community to put the property to public use with little or no outlay of community resources for parks, roads, airports, ports, utilities, hospitals, etc.), negotiated sales, and public bids. The Defense Infrastructure Group assists clients to review and discuss the pros and cons of the various property conveyance mechanisms and select the best process to move forward with the acquisition of the property. Having assisted various LRAs in negotiating and obtaining former Army, Navy, Air Force and Marine Corps base property, the firm has accrued intimate knowledge of the various acquisition authorities at military bases and each military service’s individual processes, personnel and negotiating tactics.

With regard to the complex issues that surround the economic development conveyance process, we help communities understand the applicable DOD rules, regulations and guidance, develop the appropriate engagement strategy, and negotiate with the military service over terms, price, schedule and condition. Following the successful completion of such negotiations, we draft the appropriate agreements, oversee the execution of the agreements by the LRA and the military service, and supervise the jurisdictional transfer process and the real estate closing. In addition, if a master developer or another party will acquire the property from the LRA, the Defense Infrastructure Group will assist the LRA to select, negotiate with, and convey or lease the property to a master developer and any other third parties.

The environmental components that go into the acquisition and reuse of base and other federal property can be complex. The military service or disposing federal agency is responsible for the collection and evaluation of environmental data in order to meet its statutory and regulatory responsibilities. The ultimate objective of these statutory and regulatory requirements is the protection of human health and the environment. Our team will evaluate the data, cleanup schedule and level of cleanup required for the reuse in order to evaluate and integrate the information provided by the military service. The accuracy of the data relating to historic contamination, constraints on future use, and the allocation of risk associated with past military practices is critical in developing reuse plans, future development activities, and evaluating the liability risks associated with the acquisition and lease of such properties. Kutak Rock’s experience in these matters is extensive, not only with respect to the technical aspects of environmental risk, but also in providing counsel and guidance to its client on environmental risk allocation and mitigation.

Kutak Rock has negotiated significant pollution liability insurance policies, with coverage that has included traditional environmental contaminants as well as unexploded ordnance and other forms of munitions and explosives of concern. These policies address personal injury and property damage liability, defense costs, and remediation obligations. We have pursued claims against the United States pursuant to the warranty of remediation that the United States provides, as well as claims arising from the indemnity that is statutorily mandated for base closure property. Our negotiations with state and federal environmental regulators have resulted in agreements limiting the purview of land use controls as components of environmental remedies and early transfer of contaminated property.