RICS, Army Reserve Point to Need for More Public-Private Partnerships

The U.S. Army Reserve is calling on the CRE industry for help.
James Balocki

James Balocki, U.S. Army Reserve

The man who oversees the U.S. Army Reserve installations is reaching out to the commercial real estate industry for creative and cost-effective ways to help it manage and maintain its considerable physical assets across the country through more public-private partnerships.

“We’re calling on that sector to once again unlock its creativity and bring a proposal, and our door is wide open,” said James Balocki, CEO & director, services and installations for the U.S. Army Reserve. Balocki oversees 12,000 civilian employees nationwide, manages $1 billion of acquisition, information technology, installation operations and services that support 1,100 facilities for the 205,000-strong organization.

“We’re inviting you to come to us with any concepts, theories, solutions, even revolutionary thinking, across all operational areas – policy, contracting, private sector investments, property use, energy security and renewable energy – that will help us reduce costs while also becoming more effective in the capabilities we need to achieve our mission,” he said.

Balocki initially made his request during the recent RICS’ Annual Summit of the Americas, an international forum organized by the Royal Institution of Chartered Surveyors that brings industry leaders together to network and discuss best practices. This year’s summit was held in Los Angeles, where Balocki appeared on a panel moderated by Neil Shah, RICS Americas managing director.

“The public-private partnership in all aspects is very important,” Shah told Commercial Property Executive. “The need for infrastructure, the need for investments in infrastructure and the ability to pay for it, we can design those solutions.”

“The public sector and the private sector need to work together to take on different opportunities,” Shah added.

“The Army Reserve is in a unique position,” Balocki added. “The Reserve makes up around 20 percent of the Army’s organized units, but accounts for only about 5 to 6 percent of the Army’s total budget. While we are a model of cost-efficiency and effectiveness, we are challenged right now, as many are, to find new and better ways to be more cost-efficient and effective.”

Balocki said the Army Reserve faces challenges to keep its facilities in a ready state in case troops are needed to mobilize. It also finds that some of its properties are oversubscribed.

“In those places, we need to find creative ways to retrofit the buildings without a large capital investment. That might be an opportunity for some private capital,” he said.

Balocki said the privatization of military housing, which was approved in 1996 by Congress as a way to improve housing for military families and provide more affordable housing by teaming with private developers, has been a successful public-private partnership. In a similar manner, the Army Reserve has been able to utilize the Real Property Exchange (RPX) program, an option to supplement military construction by exchanging existing Army Reserve facilities with state or local governments, local authorities or private companies.

One successful RPX example Balocki pointed to is located in northern California, where funds from three exchanges were used to construct a new Army Reserve Center and maintenance facility at the Parks Reserve Forces Training Area in Dublin, Calif.

“We’ve accomplished 33 exchanges valued at $241 million since 1999,” he concluded.