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Chapter 3 Enhanced Use Leasing

3.1 Description of the Program that to the Military Department. The department share
Generates the Funds. Enhanced Use Leasing is used for high priority projects as outlined in
(EUL) (authorized under Title 10 United States paragraph 3.1 or returned to the installation.
code, section 2667) allows the Army to out lease Examples of projects are security fencing and
available non-excess real property (land and modular structures. Installations retain 100 percent
facilities) to the private sector in return for cash and of in-kind consideration.
in-kind consideration. Such leases can be used to
fund a wide range of projects such as maintenance, 3.4 Magnitude of Dollars. Many Army
protection, repair and improvement of existing garrisons are already aggressively leveraging EUL.
government facilities; construction or acquisition of For example: Fort Sam Houston completed an
new facilities; and restoration of land or facilities to EUL project to renovate historic property that
include environmental restoration. Utilizing this resulted in over 240,000 square feet of office and
EUL authority can result in projects such as new or special purpose space. Rent is based on a
renovated offices, warehouses, test tracks, hangars, percentage of the cash flow generated from sub-
and child care facilities. The leveraging of private leases in the renovated buildings. Fort Leonard
capital for Army purposes can be used to provide Wood leased 62 acres to the University of Missouri
facility related requirements. In addition, EULs for 33 years for development as a technology park.
may improve utilization of property; stimulate the The installation receives a percent of net revenues
local job market; foster cooperation between the from sub lease agreements. Walter Reed Army
installation and the private sector; and introduce Medical Center (WRAMC) has a successful 50-year
valuable federal property into the local economy. EUL project for the renovation of a historic
building. The contractor will finance, renovate,
3.2 Pertinent Laws and Regulations. Under operate, maintain, and manage the renovated
Title 10 United States Code, section 2667 the building. At the end of the lease, the property will
Secretary of a military department is authorized to revert to government ownership. The contractor
out-lease available non-excess real property under will provide $62M in capital for the renovation.
his control. The term “enhanced” was added as WRAMC will receive over $20M as in-kind services
part of a 2001 amendment from Section 2812 of and have an estimated cost avoidance of $75M over
H.R. 5408, the National Defense Authorization Act the course of the lease. Fort Bliss is seeking a
for 2001 and enacted into Public Law 106-398. private contractor to develop the under-utilized
This amendment expands the categories of William Beaumont General Hospital Historic
consideration received in exchange for a lease as District comprised of 92.75 acres and 39 historic
well as expanding the potential properties for which structures located outside the installation. Fort
consideration can be used. AR 405-80, Monmouth is competitively leasing three vacant
Management of Title and Granting Use of Real buildings in the main post area for adaptive use, as
Estate, governs outgrants of real property. DFAS- well as 80 acres of land and an 85,000 square foot
IN Reg 37-1, Finance and Accounting Policy facility for development of a Research and
Implementation, prescribes accounting and Development campus for mission-related functions.
reporting procedures.
3.5 Functional Proponent. The Garrison
3.3 Illustration of Money Flow. Cash or “in Commander and Director of Public Works are the
kind” consideration equal to fair market value must local proponents for real property leases on the
be received for the leasing of real property. Cash installation. The HQDA POCs are from
received must be deposited in a Special Treasury OASA(FM&C) at (703) 692-4993; from OACSIM
Account 97R5189 and appropriated to the Army. at (703) 601-2546; and from the Baltimore District
By law, 50 percent of the cash must go to the (USACE) at (410) 962-3000
installation that generated the proceeds; 50 percent