Kutak Rock is the most experienced military base realignment and reuse law firm in the country. The Federal Practice and National Security team members have worked with over 40 bases, assisting communities in protecting their base from closure; and over 20 communities to design, develop, and implement base reuse planning, acquisition, and development. The FPNS team attorneys have over 30 years of experience working in the base realignment and reuse arena.

The firm has served as counsel in all aspects of the base realignment and reuse process. The FPNS team has the knowledge and know-how to assist a community or state to keep its military base(s) open and to advise communities through the military base reuse process. The FPNS team lawyers have been hired by municipalities, Local Reuse Authorities (LRAs), States and even federal agencies to assist them in navigating through the base realignment and reuse process.

A. Keeping a Military Base Open

Keeping a base open can be a difficult task. The military Base Realignment and Closure (BRAC) process requires a community to develop a strong technical case with political support for keeping the community's base open. The presentation of the community's case must be consistent with the nation's security needs. Kutak Rock has extensive experience counseling communities through the Defense Base Closure and Realignment Commission (BRAC) Process (the "Base Realignment Process").

The Kutak Rock team is intimately familiar with the processes and the key people involved in making the base closure decisions. The base realignment and closure process begins with the military services reviewing their current force structure plan. Based on the ratio of current forces to existing infrastructure, the military must identify the bases that should be closed to ensure a balanced force to structure ratio. The military services predicate their decisions on the most recent force structure plan submitted to Congress and on selection criteria developed by the Secretary of Defense and approved by Congress. The selection criteria relate to military value, infrastructure, environmental, and economic impacts. Kutak Rock can assist a community to ensure it develops and highlights the appropriate data and present its case effectively.

Having successfully assisted numerous communities through the base realignment process, Kutak Rock has developed an extensive Base Realignment and Closure Commission library. Further, the firm maintains the only 1995 Base Closure and Realignment Commission Archives in its Washington D.C. office. The archives include transcripts and presentations from the 1995 Base Realignment and Closure Commission hearings from around the country. This information is a valuable resource for any community which is attempting to keep its military base open.

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B. Reusing a Military Base

The Kutak Rock team is composed of federal real property, environmental law, finance and government affairs experts who, collectively, have more base closure and base reuse experience than any other private organization addressing these areas of concern. They provide the legal and environmental expertise necessary to assure that issues of conveyancing, interim leasing, lease back provisions, environmental indemnity, environmental risk allocation, potential liability, and financing are integrated and fully addressed as the reuse and acquisition plans are implemented. The objective of this integration is the avoidance of unanticipated legal and environmental impediments, to the extent that available data allows such avoidance. Where the data is inadequate, deficiencies can be identified, risks evaluated and negotiation strategies developed to achieve acceptable risk allocation. This can be accomplished by review and coordination of all documents, plans, proposals and considerations as they become available, and advising the community about the legal and environmental implications of these factors, with a view toward anticipating and addressing real and potential issues that may arise.

The Kutak Rock team has worked with numerous elected officials, planners, engineers, utility officials, financial managers and redevelopment experts associated with military base reuse and other redevelopment projects. The development of a close working relationship between the legal team, elected and appointed officials and contractors is quickly forged and maintained throughout the project. In addition, the Kutak Rock team is uniquely qualified to provide advice and representation based on its intimate knowledge of and experience with the processes and procedures needed to ensure acquisition of the base property at little or no cost. The Kutak Rock team has successfully negotiated on behalf of local government with each of the military services to acquire former bases.

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1. Reuse Planning

The various phases of the base reuse process are marked by specific stages. Each phase impacts the other phases. A community's initial decisions can impact the reuse of the base, such as the time until the property is available for reuse, the price paid by the community for the property, the level of environmental cleanup undertaken by the military service, the type of reuse of the property, etc. Kutak Rock assists its clients with advice throughout the reuse planning and implementation phases of the base reuse process. This advice assists a community in streamlining the process and reusing the base in a manner which best fits the community's needs.

Kutak Rock counsels municipalities, states and reuse authorities acquiring former military property through leases, economic development conveyances (transfer at a discounted price for use of the property for economic development), public benefit conveyances (transfer to enable the community to put the property to public uses with little or no outlay of community resources for parks, roads, airports, ports, utilities, hospitals, etc.), negotiated sales and public bids. Kutak Rock has worked with numerous communities to assist them to obtain the military base property through these various mechanisms.

Kutak Rock Attorneys developed and annually teach the seminal federal course on the disposal of former federal property. This one-day course immediately precedes the annual NAID conference and has been attended by members of local redevelopment authorities, senior federal officials involved in the disposal of property at the national level, and federal officials from all three of the disposal agents (military departments) and the Office of the Secretary of Defense. George Schlossberg, as the former senior real estate attorney in the Department of Defense and the General Counsel of the Office of Economic Adjustment (OEA), designed and created this course. Other instructors of this course include Barry Steinberg.

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2. Reuse Implementation

Kutak Rock's familiarity with the myriad of federal statutes, executive orders, rules, regulations and policies that govern federal real property disposal and understanding of the dynamics of the complex military base reuse process are essential elements of the successful development and implementation of a community's base reuse plan. The intimate knowledge of these governing provisions which the Kutak Rock team brings to the process, in addition to their knowledge of the federal government's latitude in the negotiation process, will prove invaluable to any community throughout the planning and acquisition process.

Moreover, having assisted various authorities in negotiating and obtaining former Army, Navy, Air Force and Marine Corps base property, the firm has accrued intimate knowledge of environmental issues at military bases and each military service's processes, personnel and negotiating tactics.

One of the most troubling aspects of the base closure / conversion / reuse process has been the acquisition of personal property necessary to reuse the underlying real property, particularly the industrial and airport properties available for reuse. Absent the installed equipment (i.e., runway lights, air conditioning units, overhead cranes, etc.), much of the available real property cannot be put to productive use without significant capital investment. Recognizing this problem, the Congress, as part of the 1994 Defense Authorization Act, enacted the "Pryor Amendment," language that balanced the appropriate reuse needs of the community with the needs of the military to undertake their mission at their new locations.

Members of the team have worked extensively in negotiating personal property agreements with the military services at various closing military installations. This experience has resulted in complex negotiations with the Department of Defense and military departments as to the classes of property to be retained as well as individual items of particular value. During the course of these negotiations, we fashioned personal property agreements that are in keeping with the constrained language of the statute, DoD Implementation Rules and DoD Base Reuse Implementation Manual. In addition, George Schlossberg, on behalf of the National Association of Installation Developers (NAID), and Seth Kirshenberg, on behalf of the International City/County Management (ICMA) Base Reuse Consortium, have worked extensively with the Department of Defense to streamline the Department's personal property disposal process in order to enhance the value to the community of the closing military installation.

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3. Environmental Components

of Military Base Closure

As the former Chief of the Army's Environmental Law Division in the Pentagon and a retired Judge Advocate colonel, Mr. Steinberg brings unequaled knowledge and experience to the team; his familiarity with the requisite statutes and military implementing policies enable his clients to best take advantage of opportunities and avoid pitfalls inherent in this troublesome area. Mr. Steinberg's expertise extends to issues involving environmental litigation, environmental insurance, permitting and licensing. He frequently lectures on base reuse environmental issues, including the National Environmental Policy Act (NEPA) process, risk allocation and EPA policy. He has testified before Congress on Superfund Reauthorization.

Mr. Kirshenberg has litigated and worked on environmental [issues] and reuse of contaminated property issues for most of his professional career. He is intimately familiar with the various intricacies of environmental laws, policies and personnel responsible for enforcing the laws within the U.S. EPA and DoD. Further, Mr. Steinberg and Mr. Kirshenberg participated in the Congressionally mandated Task Force which advises DoD on environmental policies affecting base closures as well as the Department of Defense Environmental Response Task Force, and both regularly speak at national conferences on environmental issues.

The environmental components that go into the acquisition of base property can be complex. The military service is responsible for the collection and evaluation of environmental data in order to meet its statutory and regulatory responsibilities. The ultimate objective of these statutory and regulatory requirements is the protection of human health and the environment. The Kutak Rock legal team will not replicate the effort of the military service in this regard. Rather, the function of the Kutak Rock team is to evaluate the data, cleanup schedule and level of cleanup required for the reuse in order to evaluate and integrate the information provided by the Military service. This data will influence which parcels will be available at what time and in what condition. Armed with the Kutak Rock team's advice on these issues, the community will be in a position to time phase its development program with full understanding of:

• interim lease potential for certain parcels
• the recently modified NEPA implications of such interim leases
• the impact of residual contamination on institutional controls, which can limit reuse
• the impact of subsequent state environmental regulatory enforcement at former Federal property.

The allocation of funds in the cleanup process is not necessarily a smooth and predictable event; it is dependent upon the appropriation of funds for a specific purpose and the priority set for the use of such funds. Thus, the allocation of environmental cleanup funds between the military services, each base community and the local municipality may become a contentious negotiating point. Negotiations for the funding, timing and priority of cleanup are critical.

With respect to any reuse by third parties, the allocation of future risk is an essential issue to be resolved. Although environmental base-line studies are valuable, they do not always quantify and qualify the risks for future users. While the United States is statutorily responsible for whatever it leaves behind, the transaction costs to establish such responsibility may be onerous. In addition, if a subsequent owner/occupant contributes to existing but undiscovered contamination, the difficulties of apportionment can be overwhelming. For instance, even though the Military service will provide a community with indemnification for all contamination caused by the military service, thanks to §330, FY93 Defense Authorization Act, the Military service will not provide indemnification for a release contributed to by activities of the subsequent owner or one of its tenants for contaminants that the Military service left on site. Only through careful and thorough investigation, negotiation and documentation can such pitfalls be avoided. Lenders and insurers will be particularly sensitive to such matters.

Future owners/occupants may seek indemnity agreements to protect themselves from joint, several and strict liability for environmental contamination which they did not create or cause. The policy considerations inherent in such agreements, as well as the content of such agreements (should a decision be made to enter into them) is a sensitive matter, requiring careful negotiation and strategy development.

The standards of remediation which will be met by the military service should not be unilaterally established by the military service. Encapsulation of friable asbestos may not be an acceptable remedy, although it is usually cheaper. Demolition of undesirable buildings, particularly if they impede or interfere with Reuse Plans, should be an objective. Review of CERFA documentation and coordination with state environmental personnel are matters to be closely monitored, in order to ensure that there is agreement at each stage of the transfer process. Bases on the NPL require particular coordination with the EPA region.

Pursuant to the National Environmental Policy Act (NEPA), the military service will perform an environmental analysis of the disposal and reuse of a former base. The local community's reuse plan will, in most circumstances, be the preferred alternative when the service issues its Record of Decision. Mr. Steinberg has extensive experience in the NEPA process and the implications of that process for reuse.

The relationship of environmental issues and the requirements of historic preservation are very close. Typically, lead-based paint and asbestos are problems in older buildings. The cost of maintenance, repair, and remediation is higher in such buildings, and the issue of who will bear such long-term costs for historic buildings should be addressed. The State Historical Preservation Officer (SHPO) is the principal player in this process and the terms and conditions of historic preservation should be reduced to a written document wherever possible, so as to avoid unexpected costs and requirements. If at all possible, it is desirable to obtain agreement by federal authorities for the funding of historic preservation costs incurred as a result of Military service environmental practices.In some cases, recognition of such costs can influence the sales price.

Possible solutions include discussions with military service officials on the priority and scheduling of remediation activities, as well as review of budget allocations to achieve that cleanup. The community will be well-served by engaging in careful review and monitoring of all Installation Restoration Project (IRP) documents, the Base Line Survey, the final Environmental Impact Statement (EIS) and all remediation projects. This will ensure full integration of environmental information in the reuse implementation process.

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For information about Kutak Rock's Military Personnel Practice, Please Contact: Barry Steinberg at 202-828-2316 barry.steinberg@kutakrock.com or: bps@bpsrss.net

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