Travis AFB plans major housing redevelopment

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Back Article published - Nov 12, 2007

RESIDENTIAL REAL ESTATE: Travis AFB plans major housing redevelopment
Private developers hasten upgrade process; could mean work for local subs
BY WILLIAM JASON
STAFF REPORTER

FAIRFIELD – The Department of the Air Force is negotiating with an East Coast real estate company over a $500 million development project involving thousands of rental homes for service members at Fairfield’s Travis Air Force Base and two other bases.

Pennsylvania-based GMH Communities Trust (NYSE: GCT) has been selected to demolish 1,022 aging homes, build 358 new ones and renovate 106 units at Travis as well as carry out smaller projects at two other bases.

“It’s a total transformation of the communities here on Travis,” said Mark DuPree, housing manager for the base.

GMH will own and manage the 1,134 homes that will remain at Travis after the redevelopment as part of a 50-year contract, which also includes Fairchild Air Force Base in Washington and Tinker Air Force Base in Oklahoma. GMH will lease the land from Travis for $1 per year and will be required to rent the homes to service members at special rates pegged to tenants’ military housing allowances.

The redevelopment at Travis is part of a nationwide initiative launched in 1996 by the Department of Defense to improve the quality of military housing by contracting with private developers. The companies acquire control of land for virtually no cost and pay for the construction costs with rental income, which is their sole revenue source.

“It’s been successful throughout the Department of Defense,” Mr. DuPree said. “[Private developers] can craft very large construction loans and use the basic housing allowance to pay the debt service.”

GMH declined to provide details on its plans for the project because the deal will not become official until the spring of 2008.

The general contractor for the Travis project will be Balfour Beatty Infrastructure Inc., an Atlanta-based subsidiary of a British construction firm, according to Mr. DuPree. The companies that redevelop base housing typically hire local construction companies to do much of the work, Mr. DuPree said.

“They sub out a lot of their work on the construction and renovation side,” he said.

Travis started upgrading its on-base housing through government-sponsored projects in 1999 and has built 541 new homes since then, according to Mr. DuPree. There is always a high demand for the new homes because many of the older ones are small and lack air conditioning, grounded electricity and other features, he said. The privatization program has allowed military bases to accelerate improvements.

“We are now getting military members coming from other bases that have privatized, and they come in with very high praise for the process,” Mr. DuPree said.

Travis is Solano County’s largest employer, with more than 14,000 military and civilian employees at its 6,383-acre facility.