Pax River and the Enhanced Use Lease (EUL) Process

Last month over 100 people, including representatives from the Naval Air Station Patuxent River Naval Facilities Engineering Command, the St. Mary’s County community, and local, regional and national developers, assembled to learn about the Enhanced Use Lease (EUL) being pursued by the Navy for the Naval Air Station Patuxent River. This event -- known as an Industry Forum -- is only one of series of critical steps in the EUL process by which underutilized military land and/or facilities are improved cooperatively with a non-federal entity to develop a project meeting the requirements of the military, its contractors, and the local community. This article will outline the steps in the EUL process with the NAS Patuxent River as an example.

The first step in the EUL process is the identification of the military installation as “underutilized”, meaning that all or a portion of the land or the buildings at the base are not functioning at the highest level. This is in contrast to “excess” property which is not required by the military and may be targeted for disposal. Following identification of a base as containing underutilized property, an analysis is conducted to determine how to obtain the best use and highest value from the facility. In the case of NAS Patuxent River, the study found that EUL would allow for a modern work campus to meet the future expected growth of its work force which is currently housed in substandard space.

After issuance of the preliminary RFQ (Request for Qualifications) describing the required level of experience of the private developer and the general goals of the EUL project, an Industry Forum is scheduled to gauge the extent of interest by private developers. The Industry Forum involves a tour of the site under consideration for the EUL which in the case of NAS Patuxent River includes more than 45 acres on seven parcels throughout the 6,000 acre base. EUL projects may encounter opposition by the local community if the proposed facilities could compete with existing office space in the surrounding community that may be experiencing high vacancy rates. This has become an issue at NAS Patuxent River where local investors, who constructed office space the past 15 years in response to BRAC, could suffer financially as a result of competition from the availability of new office space on-base. Should the local investors decide to mount a challenge to the EUL, they will likely be unsuccessful. Courts have held that, because the EUL statute (10 U.S.C. 2667) grants authority to the military to lease property to private developers, any action taken pursuant to the EUL statute is entirely committed to military discretion. Judicial review of a EUL project based on a challenge to the judgment of the military is, therefore, precluded; although challenges premised upon a violation of the EUL statute or other regulatory law would be subject to review.

Following the Industry Forum, a deadline is set for the submission of developer proposals followed by evaluation and selection. For NAS Patuxent River the deadline for developer proposals is August 30, 2010, and it is anticipated that a selection could occur by year-end. Negotiation of a business and leasing plan with the developer selected ensues concluding with the execution of a lease agreement. Throughout the process, the EUL project undergoes strict review for environmental impact and compliance with the National Environmental Policy Act as well as review by the Office of Management and Budget for budgetary implications. A strict timeline for any EUL project is difficult to ascertain given the unknown factors of the time needed to negotiate with the private developer, assess environmental impact, and provide opportunities for the public to weigh in.

-- Tami Daniel