HAMPTON, Va. (AP) - At some point in the next few days - the timing depends on some real estate lawyers - the Fort Monroe Authority is going to be adding to its multimillion-dollar headache of maintaining empty buildings and common areas as well as paying for all water, sewer and gas utilities at the historic Army base.
The long-awaited transfer from the Army to the authority of the marina and adjacent land on the western shore of the old base as well as a half-moon-shaped piece of land between the fortress itself and Mill Creek will add 31 buildings and nearly 74 acres to the property the authority must maintain. Most of the buildings require extensive modification if they are to be used again, and many are historic buildings the authority cannot tear down.
Laying out a strategy for that financial challenge is what the Fort Monroe Authority board of trustees has on its plate when it gathers for a day-and-a-half-long retreat starting Wednesday.
“We’ll be coming up with a game plan,” said authority executive director Glenn Oder.
Briefing papers the authority’s staff has prepared for the board argue for bringing in private sector investors to redevelop parts of the authority’s land and suggest new ways of defining the status of the last two big parcels - the marina and the half-moon-shaped North Gate tract - that the Army is transferring to the state.
The reason: Few tenants want to put big money into property rented year to year, and banks won’t lend money to tenants for major renovation work on the basis of a short-term lease, said John Hutcheson, deputy executive director and director of real estate operations.
One model for an alternative status for land on the newly acquired parcels is a ground lease - a long-term, usually 50-year, commitment that a tenant can stay on a piece of property. That approach is what cleared the way for investors to put $55 million into renovating what was a derelict Chamberlin Hotel a decade ago.
Another alternative could be to sell parts of the two new parcels, Hutcheson said. That would probably be required for any single-family home development and may be what would be needed to bring major improvements to the marina.
Commercial reuse is less likely, in part because many of the empty buildings at the fort can’t be easily refitted to meet Americans with Disabilities Act standards and in part because of the type and scale of investment needed to qualify for historic preservation tax credits, a key driver of most renovation of historic buildings, Hutcheson said.
Anyway, he said: “What the market is telling us is that there’s demand for residential here. We’re 90 percent leased … what people want to do on Fort Monroe is live here.”
What ends up happening will depend on what private investors eventually propose. Hutcheson envisions a competition, with the authority selecting the approaches that fit best with the historic district and that generate enough funds to maintain it, Hutcheson said.
But the basic idea behind whatever happens “is transferring expense and transferring responsibility for the renovation,” Oder said.
Development and the status of land at the fort have been flashpoints for years.
Citizens for a Fort Monroe National Park and others have expressed concern that large-scale development could get in the way of their goal of a single unified national park at Fort Monroe.
The authority expects to transfer to the National Park Service a three-quarters-of-a-mile-long stretch of beach and adjacent land running between the fortress itself and the northern portion of the federal agency’s holding to create a continuous National Monument block of land. But that is more modest than what advocates for a unified national park have urged.
“We’re working with the park service and the city to try to create a One Fort Monroe … so when people drive on, they won’t be aware of utility lines or property lines or who owns what - just One Fort Monroe,” Oder said, when asked about park advocates’ concerns. The reams of legal documents setting up the authority and governing land use set strict standards for maintaining historic buildings, while the city of Hampton’s master plan for the fort calls for extensive, connected open spaces and public access, he said.
In the meantime, the financial challenge of preserving the fort is huge, he said.
The authority, a state agency, gets about $5 million a year from the state - an amount that’s declined in recent years as state revenue is squeezed - to cover its running costs. Those include everything from mowing the grass on common areas to dealing with last year’s four water main breaks on the mile-long line that connects the fort to the Newport News Waterworks system. Eventually, the state expects the authority to become self-sustaining. That $5 million a year isn’t supposed to last forever.
Part of what the board will discuss is whether special surtaxes on real estate or sales or meals at the fort could help wean the authority off dependence on state funding.
They’ll look at parking fees and homeowner association dues, too.
The board will explore the possibility of transferring utility operations - water, sewer, gas and street lighting - to the agencies and companies that handle them everywhere else on the Peninsula. Doing that could lop $1.3 million off the authority’s running costs.
But cost-saving alone isn’t the answer to the authority’s financial challenges, the briefing papers suggest.
The authority’s $62,000-a-year budget for general maintenance doesn’t go far toward its projections for a continuing $388,000-a-year cost of replacing aging asphalt and shingle roofs in the years to come or the $4.2 million tab to replace aging slate, tile and metal roofs, the briefing papers show.
The budget sets aside $200,000 for inspections and testing of its mostly vacant commercial buildings, and in recent years, the additional bill for repairs has ranged from about $250,000 to $265,000 a year.
Roofs need to keep out water, wind and snow, and heating systems need to warm buildings enough to keep plaster walls from falling apart, regardless of whether anyone uses the buildings, Hutcheson said. The U.S. Department of the Interior sets standards for that, which the authority is required to meet.
Moving beyond repairs to modernizing the heating and air conditioning equipment in vacant commercial buildings would likely cost more than $5.5 million, while replacing aging equipment in the 177 residential units the authority now rents will likely total $1.4 million over the next 20 years.
“We’re not catching up. We’re not treading water. We’re falling behind,” Oder said.
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Information from: Daily Press, https://www.dailypress.com/
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