The U.S. Navy is looking to create public-private partnerships, collaborations, and other agreements in order to meet its growing real estate demands in the San Diego market. So said Rear Admiral Yancy B. Lindsey, veteran local government advisor David Graham, CBRE’s Christopher Pascale, and Philip Rizzo, national VP of operations for Lincoln Military Housing, during a “Breakfast with the BMC” presentation Tuesday.
The presentation, titled “The Military and Its Impact on Real Estate in San Diego,” was hosted by the Burnham-Moores Center for Real Estate at the University of San Diego’s School of Business and explored the many ways that the military is a vital economic and national-security presence in the San Diego market.
Lindsey said the Navy owns over 1 million acres of real estate in San Diego, spread out among many submarkets. One of the training centers near the ocean is hugely valuable to the Navy, he said, because the division is able to train under conditions that simulate those in Afghanistan and other regions.
With its real estate, the Navy does R&D, testing, acquisitions, and evaluation, Lindsey said. It also performs environmental stewardship and conservation; employs specialists, appraisers, and surveys; has land that it allows the community to use, such as Coronado’s Dog Beach and YMCA Surf Camp; houses its headquarters on Broadway, which is undergoing a renovation more than 15 years in the making due to excess legislation and NIMBYism; and is building out its coastal campus near Imperial Beach for training purposes, including an indoor shooting range.
Ultimately, the military’s total economic impact on San Diego is $6.4 billion, demonstrating the importance of this sector to the market, Lindsey said.
One of the biggest problems the military faces here, however, is housing. Just as there is a general market shortage of affordable housing in San Diego, so is there a shortage of military housing. Lindsey said because of budgetary constraints and the huge need for housing to accommodate a growing military (which is crucial to our national security), the military is seeking partnerships and collaborations with private developers and landowners to make it all happen. One area of opportunity for this growth is the military’s Old Town complex, where it owns 70 acres that will open up to developers on Industry Day on Nov. 5.
Lindsey said threats to our national security include Russia and China, and the latter’s military is now becoming larger than that of the U.S. “They’re closing the technology gap, and we can’t let that happen.” The way to combat this and keep our country safe is to allow the military to grow into the force that the country needs, he said.
A panel that included Lindsey, Pascale, and Rizzo, moderated by Graham, tackled the problems with getting military real estate development done in San Diego. Graham said there is no single economic driver in San Diego that’s greater than the military, so we must help as a community to provide it with the tools to grow.
Pascale said the military is extremely important to the San Diego economy and has a direct correlation to the region’s GDP. A positive sign is that Department of Defense contractors used to seek out short leases and be reluctant to spend money on military real estate, “but now they are saying the military is here to stay” and they can now invest in long-term leases and TI expenditures, Pascale said.
Graham asked Pascale if there are more opportunities to do deals now that San Diego’s Base Realignment and Closure office is less prominent, and Pascale said, “Yes,” because the current administration is more business focused than administrations in the past have been.
The panel said some of the issues the military needs to address in the San Diego market include evaluating opportunities for infill, redevelopment, bare land, and land swaps; partnerships with the community and other owners/developers; combating NIMBYism; educating the community on the importance of the military to this market — including protection of our homes and way of life; attracting the best and the brightest to the military in this market; and providing affordable housing for military members and their families so that they don’t have to live so far out from base.