The Army wants you--if you're a real estate developer interested in rebuilding and managing the military's aging housing stock.
That's the message in brochures and presentations about the Army's new Residential Communities Initiative (RCI), a program run by Assistant Secretary of the Army Mahlon "Sandy" Apgar.
Apgar, a former real estate and management consultant, wants to draw in developers. He uses materials that stress the "powerful incentives" for the private sector. These include guaranteed mortgage financing, direct investments and loans, and electronic rent collection through the Army's own payroll program.
The materials also promote the "stable, long-term cash flow" and "pent-up demand" for the Army's program. Splashed across the brochures are pictures of military families with lots of kids and of generally attractive existing housing.
Apgar, who took his job in June 1998 amid congressional criticism that the Defense Department's privatization plans were lagging, routinely hands out the brochures to visitors. To promote the program, he notes, the Army has ventured into traditional real estate circles, such as recent Washington conferences of the Urban Land Institute and the National Trust for Historic Preservation.
The onetime military intelligence officer, who started in real estate with the Rouse Co. when Columbia was in the birthing stage, even visited Wall Street not long ago to acquaint the investment crowd with RCI.
In response to industry complaints about previous privatization proposals, he said, the military has even streamlined the application proposal.
Past critics hope Apgar's approach will bring progress.
"Our organization's main complaint is that there's been precious little activity [in turning base housing over to the private sector] even though the congressional authorization's been in existence since '96," said Paul Taibl, a senior official with Business Executives for National Security, a nonpartisan policy think tank in Washington. "That's because the Defense Department insisted on reinventing the wheel, in designing new real estate contract vehicles and financial instruments."
The delays may have created a "hesitancy on the part of the housing industry," Taibl said. Other experts say developers worry that military housing won't be as profitable as civilian housing.
With the advent of RCI and other pilot programs for the Navy and the Air Force in the past nine months, Taibl is more reassured that progress might be made. "Now, we're turning the corner," Taibl said. "There should be a good number of projects at the end of the year."