Leader Blues

Wednesday, November 21, 2007

TOP STORY >>Housing on base has two finalists

By HEATHER HARTSELL AND
JOHN HOFHEIMER
Leader staff writers

Two development companies are left in the running to take over failed military housing-privatization contracts at four air bases including Little Rock Air Force Base, Brig. Gen. Rowayne Schatz said Tuesday.

American Eagle Communities LLC, a partnership between Carabetta Enterprises and Shaw Infrastructures, was to have remodeled or razed and built about 1,200 homes at the base by 2011, but three years into the project, with only about 25 homes completed, construction at LRAFB ground to a halt in May, with local suppliers and contractors owed at least hundreds of thousands of dollars.

Following a Monday teleconference with other interested parties, Schatz, who is the base commander, said that apparently a new developer will be chosen as early as mid January to take over the failed contracts at his base and at Patrick AFB in Florida, Hanscom AFB in Massachusetts and Moody AFB in Georgia.

Two experienced military housing-privatization companies left in the negotiations with the insurance bond holders, the Air Force and American Eagle, are Hunt and Pinnacle and also Forest City Enterprises.

Schatz said that in addition to the various bond holders, the Air Force Center for Engineering and Environment will join American Eagle representatives to look at a more detailed proposal on bundling the four projects together or dealing with them separately, with a target completion date of mid-December.

Following more negotiations, the Air Force hopes to have selected a proposal by mid-January and to begin negotiations to finalize details of the agreement and the financing.

“We’re still looking at summer of next year before Little Rock will really get moving again,” the general said. “In the meantime, we’ll continue to work with American Eagle on maintenance and aspects of managing current property to ensure that they maintain the high standard our airmen and their families deserve.”

Schatz has said the new project would likely be less ambitious than the original, aiming at 659 new and remodeled homes instead of the 1,200 new and remodeled homes specified in the contract won by Carabetta Enterprises and Shaw Infrastructure in August 2004.

American Eagle Communities LLC—a Carabetta-Shaw company managed by Carabetta—should have completed 125 new homes by now, according to the general, but only 25 were finished when the bondholders on the $127 million project shut the job down in May.

They refused to release any more funds on a project behind schedule with cost overruns of perhaps 50 percent, Schatz said.
Schatz has said that although American Eagle Communities owns the development, and maintenance and management contract for the next 50 years, it is the bondholders who are driving the new negotiations.

A partnership of Hunt Building Corporation of El Paso, Texas, and Pinnacle AMS Development Company, LLC of Irvine, California, was selected in February for the largest privatization award in Air Force history, including homes at Barksdale AFB in Louisiana, Langley AFB in Virginia and Bolling AFB in Washington, D.C.

The project includes 3,189 homes for Air Force families, including 1,753 new homes and renovation of 362 historically significant homes.

Forest City Enterprises, Inc., of Cleveland, Ohio, closed Tuesday on its acquisition of the 2,985-unit Navy privatization contract from Carabetta in the Puget Sound, Washington, area.

Forest City also has privatization contracts with the Air Force Academy at Colorado Springs, the Marines in Hawaii and the Navy in the Midwest.

GMH Communities Trust of Newtown Square, Pa., no longer being considered for the American Eagle contracts, has 12 military privatization contracts, including the 867-unit contract at Vandenberg AFB announced November 1.