The Air Force has commissioned a feasibility study to expand housing at Andersen Air Force Base by 900 new houses and to renovate 600 houses.
Lt. Gen. Thomas C. Waskow commander of the U.S. Air Force in Japan and senior U.S. military official there reportedly denied on Aug. 11 that the 374th Airlift Wing will move from Yokota Air Base to Guam. Speculation continues as to whether B-52 bombers and Global Hawk aerial reconnaissance aircraft will be stationed in Guam.
But with the news of the study it would seem the Air Force has plans for additional personnel at Andersen now a combat wing previously an air base wing.
Tech Sgt. Allison Day of the public affairs office of the 36th Expeditionary Wing at Andersen confirmed the study is ongoing. She said “It is yet to be determined if new housing units will be constructed or renovated.” Day said “As the study is still in the determination phase there is no date [of when the houses are needed].”
The Washington D.C. office of Jones Lang LaSalle an international real estate services company has begun studying base housing needs.
Muhammad Soneyet a D.C.-based financial analyst with Jones Lang has been contacting businesses on Guam including those in the real estate and construction industries to put the Andersen study together.
Andersen has 1 388 housing units — two- three- and four-bedroom houses. Housing is being renovated in 12 phases. Phases 1 to 10 are complete; Phase 11 is ongoing; and Phase 12 is waiting award. About 933 personnel live on-base and 293 off-base.
The Andersen study has two concerns: “The construction of about 900 units and the renovation of 600 units measuring about 1 400 square feet each;” and “privatizing … military housing inventory.”
John M. McSweeney chief estimator with Black Construction Corp. said “I’m somewhat in awe of what they are trying to achieve. The timing could dictate the benefit that might accrue to the island of Guam. If they are looking for 1 600 in one year — which is an impossible task — the only people capable of doing it would be some of the larger off-island companies. If we bring an off-island company here they will be forced to import labor; most of the money will leave the island.”
McSweeney said with 900 new units “It would be nice to speculate that they are designed to accommodate an increase in military presence here in Guam rather than instead of outsourcing housing they want it all to be military housing which would kill our rental market.”
Christopher Felix president and principal broker for Century 21 Realty Management Co. said the military had assured the Guam Chamber of Commerce and members of the real estate community it had every intention of continuing to allow personnel to live in the community if they desired to do so.
Jones Lang approached Felix. He said he was told the Air Force is considering privatizing management of its on-base housing. “They would get a private company to come in and rehabilitate it and run it. You have existing homes abandoned destroyed or in bad condition. It’s far from a done deal at this stage but it would be cost-effective for the military.”
The military in fact has been moving towards privatization of its housing both in the U.S. mainland and Hawaii under a design-build-manage contract.
In Hawaii Chaney Brooks & Co. Inc. which has commercial and residential property management brokerage and leasing business holds a subcontract from Fluor Hawaii LLC for property management rental operations and maintenance for 2 011 Navy housing units at Barber’s Point and Iroquois Point on Ford Island. The developer was leased land for 60 years and is paid under a formula that includes military housing allowances and also allows for funds to go to redevelopment. An award for Hickham Air Force Base has also been announced.
David Jurbala senior vice president of corporate operations for Chaney Brooks told the Journal “It could take up to a year to develop and agree upon a master development plan depending on what the government stipulates in the solicitation.” He said privatization of military housing should be viewed as a “win-win for the government and the private side.” He was aware of plans to privatize housing in Guam. “We were anticipating it. We hope to be involved ourselves.”
On Guam Navy housing was administered as part of the Base Operating Services support contract except for a change-of-occupancy contract. Those services are presently being performed by Chugach Support Services an Alaskan Native American corporation under a sole-source procurement. Under the new Base Operating Support services contract for Naval Forces Marianas Morale Welfare and Recreation services and housing services were to be separated out. As the Journal went to press a request for proposal was expected to be issued on Aug. 20 with award by the end of the year to manage and maintain all Navy Housing. The award is worth between $5 million and $7 million. The Navy has about 1 000 personnel in family housing 1 500 personnel in bachelor housing and about 1 300 personnel living off-base. The MWR request for proposal has Aug. 26 deadline.
Monty A. McDowell president of Advance Management Inc. told the Journal his company would be bidding on the housing work. Advance Management has applied for 8(a) [minority-owned] status. He said the company was awaiting confirmation of its status. “I look forward to bidding on this as a prime or as a subcontractor to a qualified 8(a) firm.”
McDowell vice chairman of the Guam Chamber of Commerce was a member of the chamber’s delegation to Washington D.C. in March and April to visit military officials. He said he was told “that the Air Force was considering outsourcing many of its services on Air Force bases around the world including Guam.”
Felix said the survey was likely being done out of D.C. because of Jones Lang’s connections there. “We don’t have our foot in the door for these kind of jobs.” However he saw no reason why management would not go to a local company. “I think there’s a possibility a Guam company could get part of that contract.” Felix said he would not be applying for that or other military housing management contracts because of a conflict with Century 21 management contracts in the private housing market. “My hopes are that they look to private housing first and foremost. I think we can fill their needs very happily off-base.”
Soneyet has some knowledge of housing on Guam and is aware that most housing units are constructed of concrete. However his understanding of the supply stream to the island is limited. He asked “Can you describe the availability of construction materials?” Virtually all supplies for the industry are shipped to Guam.
Additional questions showed that he was also not familiar with Andersen Air Force Base. He asked “Where is the nearest landfill?” The Air Force has its own landfill. Soneyet also asked about fees for construction debris disposal.
However questions relative to construction and renovation of the Andersen housing inventory are to the point asking “Given the existing labor supply how many units could be constructed on an annual basis?”
Of concern to Jones Lang is energy efficiency. Jones Lang asked “How much more energy efficient are newly constructed units in comparison to older units?”
Soneyet has little familiarity at this stage with labor legislation in Guam. He asked “How powerful are the local unions in enforcing Davis-Bacon wages?” That legislation does not apply in Guam.
Jones Lang has a slew of questions concerning property maintenance. Soneyet wanted to know a per unit cost for routine maintenance grounds maintenance refuse disposal a management fee property liability insurance administration and salaries and personnel.
Of concern to Jones Lang was whether there was a labor shortage in the market.
The questions he asked would take considerable time to research and answer and Soneyet also sought referrals. “Are there any local construction companies that I could call that build residential units on a large-scale that we could talk to?”
That question brought him to Black Construction Corp. Black is presently renovating 60 houses at Lockwood and 140 at Apra housing areas.
McSweeney told the Journal the timing would be critical in terms of what the industry could cope with.
“If they want 900 units in two years there would be a severe labor shortage. If they want 900 units in eight years there would be less of a shortage.” He said whether construction of the 900 new houses and renovation of the 700 houses will be concurrent “will have a direct bearing on the answers to some of these questions.”
With regard to a labor shortage McSweeney said “We haven’t had a typhoon for two years. If a typhoon blows through there’s an immediate labor shortage because everyone wants to be whole again. After the last typhoon our market was overheated for eight to 12 months while we worked through it and cleaned up the mess.”
Work that the construction industry is aware of he said was enough to keep the Black busy for the next four to six years. “If they were to top that up with 1 600 residential homes — that in itself would add to a labor shortage.”
As to construction of the houses McSweeney said “Black is more than capable of building them as are other companies in our industry here on Guam — we’re doing it as we speak — but if the military wants 1 600 units in the same fiscal year it’s clearly a fanciful expectation.”
He said Black could revitalize anywhere between 21 and 24 housing units in a 60-day period. “At best you’d be looking at 120 units per annum from our company. Maybe you have three or four companies with similar capability when it comes to revitalization — maybe 400 units per year with the whole industry going flat out.”
Even if Black would win such an award if the houses were needed in the short term “We would be relying upon subcontractors ” he said. “We would be dipping into a subcontracting market which doesn’t have the strength or depth of Hawaii or the mainland. We have good subs here but we have few good subs here. We’re not as spoiled for choice as they are in the mainland.”
McSweeney said the new project could be phased through six to eight years. Andersen is revitalizing its housing industry he said and such work was planned in phases. “There is a bid pending an award for 142 units to be revitalized.” That project which he described as “multiple millions ” was included in the fiscal 2005 and fiscal 2006 budgets for Andersen. “It’s a sequential release of existing buildings to the contractor as some are currently occupied.”
Land for new housing would not be an issue. The base has 22 000 acres of which about 30% is in use.
Maeda Pacific Corp. was awarded the contract in September 2003 to replace on the Northwest Field the off-base water supply system due to break ground in September valued at $13. 01 million. Black is “hardening” power lines between Andersen and the Dededo transfer station placing the lines underground (See “Finally power lines go underground” in the Aug. 25 2003 issue of the Journal.). McSweeney said “In development of their utility program for the next five to 10 years did they consider this significant increase in personnel implicit in the construction of another 900 units?”
New Department of Defense schools bids expected to be awarded in the middle of August are for an elementary/middle school and a high school as design-build or modified design-build projects. The high school is a $26.9 million project.
A fitness center is currently under construction by Black at a cost of $12 million. An initial project for an exchange at the base was withdrawn so that a larger exchange could be planned.
Black is also completing an aircraft hangar at Andersen at a cost of $32 million. “There’s talk of additional hangers ” McSweeney said “To accommodate the ramping up of Andersen’s presence here.” MBJ
