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Fort Monroe on Old Point Comfortis a barrier spit at Hampton Roads and

Chesapeake Bay

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Fort Monroe FADAPlanning and Budget

OverviewHouse Appropriations

CommitteeJanuary 23, 2008

L. Preston Bryant, Jr.Chair, Fort Monroe Federal Area

Development Authority

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Fort Monroe’s Special History

1608: fortification at Point Comfort 1609: Fort Algernourne - protect Jamestown 1819-1834: Fort Monroe built in response to

War of 1812 (2nd Lt. Robert E. Lee, engineer) Free slaves 1861: Gen. Butler’s “contraband” Post-Civil War: Artillery Corps Since WWII: mission to train soldiers Since 1973: headquarters for Training and

Doctrine Command (TRADOC)

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Why the Commonwealth is Obtaining Fort Monroe

BRAC closure – decision made in 2005

Army vacates in September 2011

Commonwealth receives property immediately upon Army leaving – 962 days away

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Fort Monroe Federal Area Development Authority

Established by the General Assembly in 2007 (§ 15.2-6304.1)

Will hold and manage the property

Professional staff of 4 (Bill Armbruster, Executive Director)

18-member board

5 Gubernatorial appointees (cabinet members)

4 General Assembly members (Dels. Hamilton and Gear; Sens. Locke and J. Miller)

9 Citizen appointees (7 appointed by and from City of Hampton; 2 appointed by the Governor with expertise in historic preservation and heritage tourism)

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Historic Preservation Advisory Group

Created by the FMFADA board 9 members (4 appointed by Governor; State

Historic Preservation Office rep; National Trust for Historic Preservation rep; 3 FMFADA appointees)

Mission: Advisory to the FMFADA board Develop Design Guidelines for the treatment and maintenance standards for historic resources. Design guidelines for new construction Business Plan and Management Plan for publicly

accessible buildings.

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Fort MonroeProperty Characteristics

570 total acres (108 acres submerged; 85 acres of wetlands)

Almost entire property listed as a National Historic Landmark, since 1966

130 acres of open space; 13 acres of beach (3 miles of Bay shoreline)

Nearly 200 buildings – vast majority to be reused

332-slip marina

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Fort Monroe Infrastructure Significant road network – McNair Drive

(main entry road) sees ~ 3,000 vehicle trips per day

Other infrastructure – water and wastewater; stormwater; landfills; electrical and gas system

Chamberlin Hotel – now privately owned, high-end senior independent living facility

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Governor Kaine’s 5-point charge

for Creating Re-use Plan

Respect Fort Monroe’s history

Large-scale open space seashore park

Keep it fully open to the public

Limited new development within strict limits

Economic sustainability

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Re-Use Planning – Process Hampton and Hampton FADA led early efforts (2005-2006) – lots

of citizen involvement; community design charrettes (~ 600 participated)

State and new FMFADA given planning responsibility in 2007

Since 2007, have been guided by the Governor’s 5-point charge

Must follow National Historic Preservation Act Section 106 process (federal law)

Determining appropriate level of adaptive re-use, open space preservation, and new development 30+ consulting parties involved (allowed by federal law)

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Re-Use Planning Programmatic Agreement

Programmatic Agreement – the guide to how property is re-used

Army-led process

PA Signatories: Army, State Historic Preservation officer (Virginia), Commonwealth, Advisory Council on Historic Preservation, FMFADA, National Park Service

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Re-Use PlanningFive Management Zones

Historic Village Inner Fort Entry/North Gate Wherry Quarter Seashore Park

Re-use activity in each zone is supported by a Technical Manual

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National Park Service Involvement

NPS Reconnaissance Study

A very historic property May warrant further study, but only after Re-use Plan is

completed Further study depends on identifying sustainable revenue

stream

FMFADA has asked NPS to provide technical planning assistance

Currently exploring additional possible NPS roles

Current NPS revenues make it unlikely that NPS can accept property into system

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Economics—Current Fiscal Impact

May 2008 Analysis

Current Fort Monroe employment level 1,705 people in uniform 2,405 civilian and contract employees

Current Fort Monroe residents – 804 residing on the post

Current economic impact to City of Hampton – $32.04 million

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Economics –Short-term transition

May 2008 analysis* Projected annual operations/maintenance

costs -- $4.0 to $4.7 million Projected net loss to Hampton (service costs

v. revenues) 2011-2014 Should see a net positive in 2015* FMFADA may offset some net losses during

2011-2014 NOTE: FMFADA and City of Hampton

continue to refine all projections

* Updated November 2008 (following slide)

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Economics – The Path to Long-term Economic

Sustainability

The cost of public services (utilities and public safety) and of property Operations and Maintenance (O&M) is projected to exceed revenues (rental income, local property taxes and others) for the first five years. Revenue is projected to cover costs in FY 2017, moving Fort Monroe toward long-term economic sustainability. Source: BAE, November, 2008.

FY 2012 $6.7 million

FY 2013 $5.9 million

FY 2014 $5.3 million

FY 2015 $2.1 million

FY 2016 $1.65 million

FY 2017 Anticipate Fort Monroe will cover expenses.

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Economics – 20-year Financial Model

(2011-2031) FMFADA consultants – Bay Area Economics

(have BRAC expertise) Development program Operating budget analysis Fiscal impact analysis Interim property leasing program (leasing

some buildings “as is”) Pre-paid residential leasehold program

(potential revenues from ground leases) Capital budget Cash flow estimate

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Environmental Clean-up Primary Stakeholders: US Army, DEQ, FMFADA

US Army required to fund investigation and clean-up under BRAC law

Planned future uses identified in Reuse Plan will be considered by DEQ when developing clean-up requirements

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Environmental Clean-up A state responsibility, not FMFADA’s DEQ negotiating with Army Focusing on unexploded ordnance and

conventional pollutants Army is responsible for all environmental

clean-up costs Estimated clean-up costs – still to be

determined

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National Environmental Policy Act

Primary Stakeholders: US Army, DEQ, VDOT, FMFADA

Army will lead NEPA effort; has committed to completing an Environmental Impact Statement (EIS) for the closure of Fort Monroe (12-18 months); draft EIS due in April, final by end of 2009

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FMFADA Budget (FY09) --$2,005,258

Budget (FY2009) Federal appropriation $ 1,096,601 State appropriation $ 828,657 VNDIA grants $ 80,000 Total operating revenues $ 2,005,258

Expenditures Salaries (4 FTEs) $ 520,159 Planning Services $ 1,465,001 Supplies, Insurance, Utilities $ 20,098 Total expenditures $ 2,005,258 FY2010 Estimate: $3,100,000

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Cost to Operate Fort Monroe The U.S. Army budgets approximately $15 million to operate Fort Monroe

annually.

Fort Monroe FADA anticipates individual residents will maintain property and pay for city services, utilities, etc. – reducing the operating cost by two-thirds to approximately $4.7 million.

The City of Hampton, Newport News Waterworks and Old Dominion Power will

provide services, pursuant to agreements.

Fort Monroe FADA estimates a reimbursement to Hampton until tax revenue covers the cost of providing service.

After property reverts from the Army to the Commonwealth in 2011, the Fort Monroe FADA estimates six years of short falls between revenue and expenses.

Today, FMFADA is funded via the federal and state appropriations, and VNDIA grants.

After 2011 FMFADA will operate by issuing revenue bonds to cover cost until revenue covers expenses. Therefore, FMFADA should not require funding from the state’s operating budget after 2012.

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Potential FMFADA Cash Flow

FMFADA will identify buildings “ready to go” to generate immediate cash flow

A master development partner may be solicited and engaged to handle marketing, development, and management of Fort Monroe’s real property assets

Preliminary financial forecasts indicate that FMFADA’s long-term financial position will be strong

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Real Estate planning and budget impacts

Establish Virginia’s long-term plan for governance of Fort Monroe (workshop to explore strategy with State Departments). Plan for phased implementation.

Anticipate need for Fort Monroe line item in state budget to fund interim seed money to develop, manage and market the property beginning in July, 2009.

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Ultimate Vision for Fort Monroe –

What will it look like? Lease the remarkable

collection of historic homes and buildings

Select buildings for visitor's services inside moated fort

Short-term leases and vacation rental of Wherry housing units

Change North gate from industrial to mixed use

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Land Use Concepts

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Old Point Comfort Seashore Park

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Fort Monroe: A future for freedom’s legacy