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Regional Breakfast Meeting “ALL ABOUT BRAC” SEPTEMBER 13, 2005

Regional Breakfast Meeting “ALL ABOUT BRAC” SEPTEMBER 13, 2005. What is BRAC?.

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Regional Breakfast Meeting “ALL ABOUT BRAC” SEPTEMBER 13, 2005

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  1. Regional Breakfast Meeting “ALL ABOUT BRAC”SEPTEMBER 13, 2005

  2. What is BRAC? “BRAC” (Base Realignment and Closure) is the process the Department of Defense has previously used to reorganize its installation infrastructure to more efficiently and effectively support its forces, increase operational readiness and facilitate new ways of doing business.

  3. BRAC Report – Key Findings • BAD NEWS • Approximately 85% of previous BRAC efforts have been enacted • Uncertain how much space leased by DOD contractors will be affected • Northern VA may lose 25,000 jobs • In the long-term, Ft. Belvoir can receive the anticipated transfer of jobs • GOOD NEWS • On average, the 125 MSF Northern VA market absorbs 3-4 MSF per year. BRAC’s effect of 5.5 MSF over 5 years is much less than it appears. • It will take time for Ft. Belvoir (and its neighboring areas) to construct the amount of space planned, as well as all the accompanying infrastructure. • Market has withstood similar challenges in past.

  4. Regional Breakfast Meeting “ALL ABOUT BRAC”SEPTEMBER 13, 2005

  5. “We’ve been BRAC’d…”…what it really means for Arlington September 13, 2005

  6. BRAC Update • We have saved the brains!! Retention of Extramural Research Agencies was a major success. • This round is not like the others…leased space is a different animal. • Lease expirations are fixed, but before they can leave, agencies need somewhere to go – buildings will need to be built. • Contractor issues are complex, unclear and downright confusing.

  7. Office Space Impacts • 4.2 Million SF office space across 39 buildings • 11 percent of the total leased office space in Arlington • Vacancy rates for leased office space in Arlington averaged 11.3% in August 2005. • The impact will be spread over a substantial period of time.

  8. BRAC Lease Expirations SF Office Space

  9. BRAC Space by Submarket SF Office Space

  10. BRAC Space as Percent of Total Percent of Total Office SF

  11. Buildings Affected by BRAC in the Jefferson Davis Corridor

  12. Principal Buildings of the Jefferson Davis Corridor with DOD Lease Expiration Dates

  13. Principal Buildings of the Jefferson Davis Corridor with Percent of Building RBA in DOD Lease

  14. Age of Buildings with DOD Leases in the Jefferson Davis Corridor

  15. Employment Impacts • Loss of approximately 17,000 jobs in Arlington over a 10-year period. • Approximately 55 percent (9,350 jobs) will be relocated to areas within the Washington metropolitan region. • Jobs in Arlington unaffected by BRAC: • 24,000 Department of Defense jobs, • 25,000 other federal jobs • 139,000 jobs from private sector and non-federal government agencies

  16. Fiscal Impacts • Near term: • Minimal loss of some tax revenue during DoD transition (2007-2012). • Long term: • Positive impact on building assessments and taxable personal property due to renovation/new construction and economic restructuring.

  17. Economic Impacts • Countywide economic impacts are likely to be minimal. • Sectors of concern… • Hospitality industry in Crystal City: • Impacts are uncertain. Possibility that during periods of DoD transition, occupancy may increase for rooms and meeting space. • Retail sector in Crystal City: • Negatively impacted during periods of DoD transition and while building renovations in process. However, there are significant opportunities for an enhanced retail sector in long term.

  18. Opportunities • Alternative future scenarios: • Economic restructuring and diversification • Fewer government tenants • More private sector tenants • Potential for significant redesign of physical environment • More exciting urban village environments

  19. What we plan to do next…. • Focus on working with building owners to recruit new tenants for the affected buildings. Continue to promote Arlington as a prime place to live, work and do business. • Work with prospects in the public, private and non-profit sectors to build Arlington’s business community. • Continue to advocate for performance-based security standards. • Arlington County Board may consider incentive programs.

  20. Regional Breakfast Meeting “ALL ABOUT BRAC”SEPTEMBER 13, 2005

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