Politics & Government

HLRA Moves Closer to Owning Air Base

The Horsham Land Redevelopment Authority on Wednesday reviewed an application that, once finalized, will be the driving force in negotiations for the sale of Willow Grove air base.

The Horsham Land Redevelopment Authority on Wednesday reviewed documents that could prove instrumental in negotiating the sale of 862 acres of Willow Grove air base with the federal government. 

HLRA consultant, Dan Schnepf, CEO of Matrix Design Group, presented his firm's 20-page economic development application, a document that will go hand-in-hand with a business plan and pro forma and will be used to start land acquisition negotiations. Matrix has been researching and compiling data for these items since being hired in January.

The point of a so-called economic development conveyance, in a nutshell, is to "create new jobs" and offset the "devastating effects" of the base's closure, Schnepf said. The documents, as compiled by Matrix, are designed to prove that both of those goals will be accomplished during the more than 20-year buildout of the land. 

"The two things in unison will act as a document that you can negotiate with the Navy," he said.

Findings

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Through its market research, Schnepf said his firm determined that residential developments are "hot" right now and should be considered in the first development phase. 

"The projected home values are coming in much higher than recent sales activity in the region," he said, adding that that points to the fact that it is a "high-quality development." 

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"It would be bought today," Schnepf said of the prospect of new residences. "There's a market for it."

On average, single family small lots are estimated to range in price from $325,000 to $350,000, while single family large lots are projected to cost $625,000 to $675,000. 

In all, the HLRA's locally approved plan calls for 1,416 mixed-use residential units. 

The market projections, Schnepf said, are valid for a roughly six-month to eight-month window. 

"We need to be in a position to execute a deal and come to terms with the Navy as soon as possible and take advantage of the market in each of those categories," HLRA Executive Director Mike McGee said.   

McGee said the first parcel deemed most suitable for transfer is the area where housing is envisioned. Click here for more on which parcels are planned for transfer. 

Besides the anticipated demand for residential, retail is also "fairly hot," according to Schnepf. 

Office developments, in comparison, are expected to be "absorbed over a much longer period of time," as much as 28 years, he said. The HLRA's plan calls for a 133-acre office park, which officials said would create more than 7,000 jobs.

Next steps

Submission of an economic development conveyance application and supporting documents hinges on the HLRA's ability to review the Navy's Environmental Impact Statement for the property. McGee said the document, which is in draft form, could be available for review as early as next week. Public meetings are tentatively set for Jan. 13 and Jan. 14 at the Horsham Township Community Center.

If release of the EIS goes as planned, McGee said the HLRA will have ample time to review it prior to the next HLRA meeting on Jan. 15. At that time, the board is expected to take action on the supporting documents needed to begin property negotiations, McGee said. 

But, McGee pointed out, none of the land can be transferred out of federal hands until the Navy finalizes a record of decision. According to a timetable presented on Wednesday, that's anticipated in spring 2014. From there, land acquisition negotiations are tentatively set to begin in June. 

"That process will take a relatively long period of time," McGee said. He told Patch previously that some of the land could be transferred by the end of 2014 or early 2015.

Paying for the property

Before the federal government can sign over the property, the HLRA needs to determine who will pay for it.

"You will be asked to present an offer to the Navy," Schnepf said. "Nobody’s going to give this to you for free."

According to the Office of Economic Adjustment, there are five main types of private/public development roles related to purchase and redevelopment of former military installations. 

McGee suggested that the HLRA proceed with a master developer to limit the local financial "risk." 

"It reduces the municipal risk and LRA risk and brings on a partner that will have expertise in development," McGee said, suggesting that the HLRA, at its January meeting, solicit requests for developer qualifications nationwide. "I doubt that there’ll be too many responders. There probably will be teams of responders."

McGee said the HLRA would consider prior development experience, familiarity with the Base Realignment and Closure process, and, perhaps most importantly, "what kind of capitalization do they have?"

In February, McGee said the HLRA could whittle down its lists of potential master developers and solicit request for proposals, which could be in hand by late March or early April. 

"When it comes time to writing the check, it's the developer's check and we know we already have a buyer in place because of all the homework that was done in advance," McGee said. 

When asked after the meeting how much the township or the HLRA could potentially spend to acquire the property, McGee said specifics would need to be worked out.

HLRA Board President W. William Whiteside asked if the use of a master developer would mean that the HLRA would "lose control of the project."

McGee said that would not happen. 

"LRA will still be responding to the Navy and the federal government," McGee said. "We will always be the entity that the federal government deals with. LRA as the owner of the property will be able to work into agreement ... all of the conditions."


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