Property Sales Revenue Is Significantly Below DOD’s $1.2 Billion Estimate

The Army is credited for almost all of the $69.4 million in property sales revenue and for $5.3 million of the $22.2 million in pending sales. About $19 million of the $92 million in sales and pending sales was merely a transfer of funds from one federal agency to another—not a revenue gain for the federal government. Planned sales of 9,400 acres of property will result in additional revenue once final property disposition decisions are made and cleanup or remediation is in place. As we reported earlier, DOD has been reducing the estimates for land sales revenue as it receives better information on property values and sales data. Most Property Is Transferred to Other Federal Agencies and States and Localities at No Cost

The primary reason for the low property sales revenues is that 88 percent of the property at the bases we reviewed will be retained by DOD or transferred at no cost to other federal agencies and state and local jurisdictions. The results of our analysis show that while communities at these 16 bases are developing and implementing reuse plans for 28 percent of the total acres of the 37 bases, they have received 78 percent of the $66 million in planning and infrastructure grants. Communities Ask DOD and Other Federal Agencies for Additional Assistance

Communities are asking the federal government to provide (1) cash grants; (2) marketable revenue-producing properties, such as golf courses and housing units, to help pay for reuse activities; and (3) funds for upgrading buildings and infrastructure. DOD responsibility for environmental cleanup further delays disposal of base property. Disputes between communities and homeless providers over the extent of base property to be conveyed for the homeless have led to delays at some bases. Changing Laws and Regulations

In 1993, Congress passed legislation to expedite the base conversion process and support economic development in communities facing base closures. Military Bases: Information on Air Logistics Centers (GAO/NSIAD-90-287FS, Sept. 10, 1990).
Why GAO Did This Study

GAO provided information on the Department of Defense's (DOD) projected revenues from property sales from closed military bases, focusing on the: (1) revenues the government has received and expects to receive from military base property sales; (2) amount of additional resources the government has given to support communities' reuse plans; and (3) factors which delay the transfer of property to communities.

What GAO Found

GAO found that: (1) revenues from military base property sales are expected to be far less than DOD anticipated; (2) the majority of the disposed property will be retained by DOD or transferred to other federal agencies, states, and localities at no cost; (3) where Congress has not specifically authorized a property transfer without reimbursement, it has specified that agencies receiving transferred property should reimburse DOD for 100 percent of the property's estimated fair-market value or acquire a reimbursement waiver; (4) $69.4 million of the projected $92 million in revenues from military base property sales has been realized and an additional $22.2 million is expected from pending property sales; (5) about $19 million in property sales has been the result of interagency transfers; (6) DOD could increase its revenues by selling an additional 9,400 acres of military property; (7) DOD continues to reduce its property sales revenue estimates as it obtains better property value and property availability information; (8) in addition to transfers of large portions of land at no cost, many communities have asked the government for cash grants, marketable revenue-producing properties, and building and infrastructure upgrades; (9) as of May 1994, 37 communities have received $107 million in cash grants; (10) additional funding requirements will increase as the base closure process continues; and (11) reasons for the delays in property transfers include disagreements over reuse plans between competing interests, changing laws and regulations, and unresolved environmental cleanup efforts at some bases.