Lease questions hang over defense sitePublished 9:02pm Thursday, August 2, 2012
A U.S. House of Representatives committee has approved a lease renewal option on North Suffolk’s Joint and Coalition Warfighting building for up to five years, but some of the deal’s fine print raises questions over the Defense Department’s longer-term plans for the former U.S. Joint Forces Command site.
Last week, the House Committee on Transportation and Infrastructure voted to approve an appropriations authorization for up to 320,825 square feet of rentable space, including 990 parking spaces, at 116 Lakeview Parkway, at an anticipated total annual cost of $5 million.
Though this is seemingly good news for Suffolk, details contained in a lease prospectus suggest the possibility of a less-rosy scenario.
After JFCOM was shuttered in August 2011, Joint and Coalition Warfighting was established in its largest former building, assuming many of its previous functions and employing many of its former workers, mitigating fears of a defense jobs exodus from the area.
The lease prospectus compares the current usable square feet of space per person to the proposed usable square feet of space per person, indicating that the site’s workforce of 1,585 will decrease to 1,402.
While the 20-year lease is due to end on May 9, 2013, “The execution of the five-year renewal option will support the agency’s immediate housing needs until its long-term requirements based on the reassignment of its functions can be developed,” the prospectus states.
However, a manager of the property said on the condition of anonymity that the government is planning infrastructure upgrades.
“I will say that the government, the agency there, has made it clear there is a lot of infrastructure there — computers and servers, all that stuff — that’s very expensive technology, and they have requested to do more upgrades — that’s in their plans,” said the manager with UrbanAmerica, a New York-based real estate investment trust.
“It’s my assumption that if you are willing to put in enough capital — dollars — then you probably do have the intention of staying longer-term.
“It takes a lot of money and manpower, so if you are willing to spend over $1 million on something, I think you would tend to want to stay.”
While the prospectus also says that the renewal option rate is “approximately 15 percent below the average market rental value,” the manager gets updates on the property bi-weekly, and “I haven’t heard on my own side” that the rate was discounted to retain the tenant.
The city has described an extensive lobbying campaign in response to JFCOM’s closure. It sent a delegation to Washington and enlisted legislators to sell North Suffolk as a defense precinct.
“A lot of the discussions we have had with them related to disestablishment and trying to keep a presence,” Economic Development Director Kevin Hughes said.
“We are going to be working with them to make sure they stay there longer than that five years. That’s going to be our goal, to work with them and learn what are the things we can assist with to make them stay and grow in this area.”
Because the total annual cost exceeds a certain threshold, the Public Buildings Act
requires approval of the renewal option from both the House committee and the Senate Committee on Environment and Public Works. The Senate committee is yet to take up the issue.
Under its proposal, the General Services Administration could choose to negotiate a lease for any period up to five years, said a House committee staffer also on the condition of anonymity. “It just can’t exceed five years,” the staffer said.
One factor which could affect the final decision are deep defense budget cuts — called sequestration — which would take effect if federal lawmakers don’t reach a deal to reduce the deficit by January.
Sequestration would rip $500 billion more from defense budgets for 2013-2021 than the minimum $487 billion — a nine-percent cut — already agreed to.