Military Continues to Look to P3s to Carry out Installation Support Missions

With the squeeze on budgets for installation support, the Army Reserve is looking for ways to further leverage the resources of the commercial real estate industry to help it manage and maintain its massive portfolio. The effort to identify new opportunities for public-private partnerships (P3s) would build on the Army Reserve’s successful real property exchange program.

Next month’s National Summit will feature a session on the future of P3s throughout DOD, focusing on the next generation of projects as well as the challenges associated with ongoing ones. The session will look at opportunities in real estate and housing, energy generation and conservation, and other installation support services.

James Balocki, the Army Reserve’s CEO and director of services and installations, believes developers are best suited to come up with creative solutions to the Army Reserve’s real estate needs.  

“We’re inviting you to come to us with any concepts, theories, solutions, even revolutionary thinking, across all operational areas — policy, contracting, private sector investments, property use, energy security and renewable energy — that will help us reduce costs while also becoming more effective in the capabilities we need to achieve our mission,” Balocki said at a recent forum in Los Angeles.

Balocki pointed to the Army Reserve’s real property exchange program as an example of a successful public-private partnership, reported Commercial Property Executive. The program allows the Army Reserve to supplement military construction funding by swapping existing Reserve facilities with local governments or developers for construction services.

For example, funds from three exchanges were used to construct a new Army Reserve Center and maintenance facility at the Parks Reserve Forces Training Area in northern California. “We’ve accomplished 33 exchanges valued at $241 million since 1999,” he said.

Balocki said the Army Reserve faces challenges to keep its facilities in a ready state in case troops are needed to mobilize. It also finds that some of its properties are oversubscribed. “In those places, we need to find creative ways to retrofit the buildings without a large capital investment. That might be an opportunity for some private capital,” he said.

Balocki oversees 12,000 civilian employees, manages $1 billion of acquisition, information technology, installation operations and services that support 1,100 facilities, according to the story.

“The Army Reserve is in a unique position,” Balocki said. “The Reserve makes up around 20 percent of the Army’s organized units, but accounts for only about 5 to 6 percent of the Army’s total budget. While we are a model of cost-efficiency and effectiveness, we are challenged right now, as many are, to find new and better ways to be more cost-efficient and effective.”

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