On December 30, 2004, Naval Facilities Engineering Command (NAVFAC) Pacific signed an “Enhanced Use Lease” (EUL) with a Hawaii-based private development firm. Utilizing recent expansion in Defense Department Non-Excess Leasing Authority (10 USC 2667), the Moanalua Center EUL is a dramatic application for effectively leveraging underutilized assets and property entitlements into direct facility benefits for the Navy without the need for appropriated funding.
The long-term lease creates over $17 million in value to the Navy and will enable the development of a 55,000 square foot unified Navy Consolidated Administrative Services Complex and provide for critically needed utility, site work, and infrastructure improvements. Additionally, it will allow for the demolition of over 65,000 square feet of substandard and inefficient Navy structures that have outlived their useful life. The resulting development will improve the Quality of Service for Navy personnel significantly.
Using bold business innovation and transformational infrastructure methodologies, the Moanalua Center EUL exceeded baseline goals for performance execution and return to the Navy. Moreover, the innovative policy allowed NAVFAC Pacific to maximize value created without divestiture of Navy real property assets. The resulting project uses real property assets both effectively and efficiently.
Using the Moanalua Center EUL as a blueprint, this practice provides an excellent opportunity for Department of Defense agencies to leverage high value real property assets to achieve mission goals at a time when resources to acquire, build and/or maintain facilities are extremely scarce.
The project was successfully executed without acquiring additional real property assets or overcommitting government resources, it used private industry instruments to frame the development agreements, and the project terms maximized reinvestment and retained cash flow for the benefit of the government.
For more information, contact Joseph Calcara on 808-472-1504 or by email at joseph.calcara@navy.mil.
