PRINT THIS STORY:

CHANGE TEXT SIZE:

Retail developers eye military bases

By Jon Springer

It sounds like a real estate developer's fantasy: Just when it seems all the best locations are taken and there's nowhere left to build, suddenly hundreds of acres become available just outside a major city. New homes, businesses, roads and infrastructure are going up at the same time. Environmental clean-up? Taken care of by the former owner. And the community? They want you there badly.

But this is no dream; it's happening in communities such as Lawrence, Ind., Glendale, Ill., and, potentially, any of the hundreds of areas across the United States looking to rebound from a military base closure.

Some 250 military bases throughout the country have been closed and/or realigned since 1988 as a result of Base Closure and Realignment Commission (BRAC) recommendations. An independent commission created by Congress, BRAC works with the Department of Defense to study and make recommendations for military bases to be closed or realigned in cost-saving measures. BRAC closings occurred in 1988, 1991, 1993 and 1995, with additional rounds recommended (but not yet approved) for 2001 and 2005 (see story, page 26).

Redeveloped military base uses have ranged from the mundane (airfields reopened as civilian airports) to the exotic (college campuses and drag strips). Though each closed base presents its own circumstances and issues, some, such as the Glenview Naval Air Station and Lawrence's Fort Benjamin Harrison, are providing lucrative opportunities for retail. In these projects, developers can assist in the creation of "new" cities that can replace a reliance on the military and revive communities in the process.

"The closing of the [Fort Benjamin Harrison] base had some substantial negative impact on the community. Statistics show that retail dropped considerably, residential dropped 50% and service businesses were hurt," said Bruce A. Nelson of Skinner & Broadbent, an Indianapolis-based consultant to the Fort Harrison Reuse Authority, an agency created by state and federal government that controls the real estate of the 2,200-acre former U.S. Army Training Center outside Indianapolis.

"The flip side is that it created an opportunity to create a whole new city," Mr. Nelson added. "To take that amount of real estate and create a new central business district is what we consider to be a historic opportunity."

Fort Harrison -- with 8,200 employees, the largest employer in the metropolitan Indianapolis area -- was deemed for closure in the 1991 BRAC recommendations, and the site closed permanently in July 1997.

The area will regain some 4,000 jobs when a 1.5 million-square-foot Department of Defense Financial Center, now under construction, opens at the site.

The remaining land is earmarked for a mix of residential, municipal, office and retail that will meet a master plan created by the Reuse Authority. The plan's objectives include creating 10,000 jobs, capturing the regional trade market, and creating a "new" city that will provide municipal services while retaining the 1908 ambience of the area's architecture, according to Mr. Nelson.

"One of the most unique things about this project is that the Reuse Authority is less interested in maximizing the dollars of the property, than in seeing that their objectives are met," he said. "From that perspective, it's one of the most rewarding projects I've ever worked on."

The retail component of the project will total around 600,000 square feet on 60 acres. Most of the development is projected to take place along 56th Street, the major east-west corridor though the project and a major cross-county road. A mix of retail and residential development should "dominate" 56th Street, said Mr. Nelson. According to studies cited by the Reuse Authority, a successful redevelopment project gets people to change their shopping habits, leading to the development of jobs.

"The base closure was devastating for the service economy that served the Fort," said Mr. Nelson. "A lot of those companies weren't viable in a true market; they were feeding off the Fort, which was an anomaly. Now that they are forced to compete with the general retail trade, a lot of them haven't adjusted and will become victims."

Mr. Nelson envisions that a mix of big box retailers and a destination-based retail-entertainment complex will take their places. The area has been designated an Enterprise Zone by the state of Indiana, which provides incentives on state taxes for businesses that locate there. "We hope to have a movie theater, some big box users like an Old Navy or a Stein Mart, department stores, restaurants and nightclubs," he said.

New housing -- 250 homes are under construction, and 500 more are planned -- will help support the new businesses. Also attracting the critical mass of people needed to make the project work will be the existing Army-built golf course, which will be run by the state, new parks and 1.5 million square feet of proposed Class A office space, he added.

"We view this area as having good demographics, and they're trending upward with the influx of new residential development and mid-priced homes," said Mr. Nelson. "The profile will be improving tremendously."

The new development will establish Fort Harrison as the economic heart of Marion County.

"We've argued that the reason the trade dollars are being spent on the periphery of the region is because we don't have the goods and services and the entertainment options they desire," Mr. Nelson said. "If we can get them here, they will."

The Reuse Authority is in Phase 2 of its Site Specific Urban Plan, which will determine the need to repair, reroute or build new streets, the demolition or renovation of buildings, and an ongoing assessment of the highest and best uses for the property, Mr. Nelson said. The overall project will be "significantly developed," by May 2000, he added.

In Glenview, meanwhile, officials of the Glenview Redevelopment Project are fielding proposals for a variety of uses for the 1,100-acre former Navy Reserve Training Center, which appeared on the BRAC '93 list and closed in 1995.

The Department of Defense handed over responsibility for the base's redevelopment to the local municipality, called The Village of Glenview, which in turn has decided to develop the property as a mixed-use facility including retail, residential, business, municipal and sports/entertainment. As with Fort Harrison, community input weighed heavily in the reuse decision, said Don Owen, economic redevelopment director for the Village of Glenview.

"In most bases, you have to make a decision whether you're going to reuse the base in place, reuse a part of it or don't use any," Mr. Owen said. In this instance, the community decided to completely redevelop the base.

The Village of Glenview is seeking developers for retail, residential, business park and sports/entertainment uses for the land, which is located in Chicago's northern suburbs.

There are four parcels available for retail: a 42-acre site that can accommodate 350,000 square feet to 400,000 square feet which developers envision as a power center; a 45-acre site for retail and entertainment; a 13-acre site for a neighborhood grocery-anchored center; and a 2.5-acre site suitable for a convenience-oriented center.

The power center site sits along Willow Road on the northern boundary of the property and offers significant traffic and good visibility, said Dan Walsh, vice president of Meisrow Stein Real Estate Inc., Chicago, which is serving as development advisor for the project. Willow Road is the major east-west artery through the property and connects Interstate-284 and Edens Expressway. Around 40,000 cars pass the site per day, and that number is expected to rise to 60,000 in 12 years, Mr. Owen said.

The mixed-use retail and entertainment complex will occupy 200,000 square feet to 300,000 square feet. The focal point of the project will be Hangar One, an airplane hangar built in 1929 that will be restored, said Mr. Walsh, who envisions a mix of restaurants, retail, a multiplex theater and residential units in the historic building.

"We've gotten a lot of interest from developers who are looking at the nonmall, Main Street type of retail execution here," he said.

The 13-acre retail site at Lake Road and a proposed new north-south artery at the southern end of the project can accommodate 110,000 square feet to 125,000 square feet of retail. Next to a moderate density senior housing project, the site will be appropriate for a grocery-anchored neighborhood center, Mr. Walsh said.

Finally, the 2.5 acre site on the east side of the property will go up next to a new commuter rail station. Mr. Walsh said convenience retail such as a dry cleaner and a coffee shop could occupy the space.

In all, retail uses are projected to occupy 102 of the 725 acres for sale. The rest of the property will be retained by the Village for a 140-acre park, including a boating and fishing lake, and 14 acres for a prairie preserve, said Mr. Walsh. Other proposed uses for the property include 115 acres of office/industrial; 224 acres for single-family housing; 49 acres for multifamily housing; 26 acres for senior housing; 20 acres for a regional police and fire department training center; and 220 acres for sports, entertainment and leisure, including a tournament-quality golf course and an indoor sportsplex for skating, volleyball and indoor team sports.

"What we see happening is a destination-based family-oriented concept," said Mr. Walsh. "From eight in the morning until eight at night, families will come to the spot. Kids will be playing in leagues, parents will be playing golf, going to the cinemas and eating. From eight till whenever, the focus will change, and it can be more adult-oriented with restaurants and nightclubs."

The Glenview area boasts strong demographics (256,000 people with an average household income of $83,000 live in a five-mile radius), and is a 30-minute commute from Chicago.

"I think the main concern of developers is going to be the competition," said Mr. Walsh. "This is a once-in-a-lifetime opportunity," he said, noting that developers in the Chicago area might find a five-acre tract here or a 20-acre tract there, but nothing that comes close to the opportunities offered by Glenview.

A competitive bid process for the sites began in March, said Mr. Walsh. The Request for Proposal (RFP) identifies the available parcels, and asks that developers state their objectives and criteria. Based on the responses, the Board of Trustees for the Village of Glenview will create a shortlist and eventually select developers. Mr. Walsh expects some deals to close by the end of this year.

Since community input was an important factor in determining uses for the site, developers "won't have to fight an uphill battle," said Mr. Owen. "Since the Village is both the seller and the regulator, developers will know this is what the community wants."

The fact that Glenview did not have overlapping jurisdictions -- unlike many other bases, Glenview NAS was located entirely in one incorporated municipality -- helped speed along the reuse process, he added.

Infrastructure work on the site, funded by bonds, began in March. Work includes the removal of runways, road improvements and installations, and utilities. Glenview officials anticipate a 10-year to 15-year buildout, Mr. Owen said. "By the end of the buildout we expect a $900 million investment from private and public sector."

Glendale and Fort Harrison are just two cases in which retail is helping former bases redevelop. But the phenomenon of base closings has and will continue to offer creative developers opportunities in industrial, office and residential as well, said Paul Kalomiris, editor of NAID News, the newsletter of the trade group the National Association of Installation Developers.

"Every base," he said, "has its own story to tell."