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Release No: 618-94
November 02, 1994


The Department of Defense has announced a series of actions to change the way local communities receive and reuse property from closing military bases. These changes should speed the property transfer process substantially. They mark a dramatic shift to encourage job creation and economic development by local initiative.

"This is a real example of reinventing government," said Assistant Secretary of Defense for Economic Security Joshua Gotbaum. "We are changing the way the federal government handles one of its most important processes. The new process will give greater responsibility and flexibility to the local community for addressing local concerns--both homelessness and job creation. The result should be greater service to both."

The first change was made possible by a new law proposed by the Administration and signed by President Clinton on October 25, 1994. The Base Closure Community Redevelopment and Homeless Assistance Act of 1994 puts the responsibility for screening and examining the local needs of the homeless with local communities as part of its local base reuse plan. Previously, under the McKinney Act, homeless providers had a priority right to acquire base closure property from the federal government without regard to community reuse plans. Providers were able to directly ask for property before any community and economic development opportunities could be explored. This old process caused major problems, delays, and conflicts between economic development and homeless needs at closing bases.

The new law, which was passed unanimously by Congress, exempts base closure property from the McKinney Act and establishes a new process that requires a balancing of homeless assistance needs with those of economic development. In the future, local homeless providers will submit their needs and proposals to the local reuse planning group, not to the federal government. The local community may address those needs either on or off base.

The federal role is reduced to a limited review conducted by the Department of Housing and Urban Development to ensure homeless needs are balanced with local economic development needs. The Department of Health and Human Services, which previously approved specific base closure property for transfer to the homeless, is no longer involved in the process. The local community is now responsible for screening to meet the needs of the homeless, not the federal government.

The DoD also has amended regulations implementing the Base Closure Community Assistance Act of 1994. The amendment both speeds the process and shifts responsibility for economic development to local communities. The previous regulation called for DoD to conduct a private sector "market test" survey before considering community proposals to acquire property to promote economic development. Communities and real estate developers alike told DoD that such a process was impractical because developers would be unlikely to bid for base real estate until a community had created a reuse plan that provides for the necessary infrastructure and zoning.

Under the amended regulation published in the Federal Register on October 25, 1994, DoD has dropped the market test requirement for a federal government market survey. The new rules allow every base closure community the opportunity to justify the need for a conveyance of real property through an application. A critical element of the community application will be a job creation strategy and a financial feasibility analysis. The rule also clarifies the criteria by which an application for property will be evaluated. In order to receive a discounted transfer, the community must show that it is needed to spur economic development and create jobs.

"Our new process puts the responsibility for job creation and economic development where it belongs: at the local level, not in Washington," said Gotbaum.

In addition, the military services have more flexibility to negotiate property conveyance terms with local communities. The new rules allow more leeway in the negotiations to reflect individual circumstances and market conditions within a local area.

Gotbaum made his remarks at a DoD conference for communities with closing Navy bases held in Long Beach, Calif., November 2, 1994.

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