2012 ADC WINTER FORUM | PAGE 1 Enhanced Use Leasing: Update & Opportunities Dr. Craig College, February 29, 2012

2012 ADC WINTER FORUM | PAGE 2 Current Army Status  GAO recommended that the Army & Air Force review all EULs for terms, conditions and ensure that the EULs are in compliance with applicable statutes.  Based on GAO Audit the Army took a Strategic Pause (November 2010-July 2011)  Army began comparing notes with other Services to identify Best Practices  Aggressively working on Consistent Practices within DOD for EUL

2012 ADC WINTER FORUM | PAGE 3 Army Way Ahead  Management of HQDA EUL has transferred to COE Real Estate Department  Army EUL focus is on Energy Renewal projects, especially Large Scale Renewable Energy Projects (10MW +)  Will not allow “contaminated” dirt to be used  Will require EA -vs- EIS for EUL  Will require detailed timeline, project concept, financial and planned start  Will treat this like Lessee -vs- Lessor (not a partnership relationship)

Fort Detrick – Central Utility Plant Facility to provide uninterrupted power in support of National Inter- Agency Bio Defense Campus and National Institute of Health $103 million fast tracked design-build-operate project delivery EUL Developer: Keenan Development Chevron Energy Solutions 10 acre site Phase 1 completed 2009 and Phase 2 underway 2012 ADC WINTER FORUM PAGE 4

Yuma Proving Ground State-of-the-art hot weather test track complex on 2,400 acres EUL Developer: General Motors Corp. In-kind consideration to the Army: construction of a $11 million Hot Weather Test Track Complex On-going joint use operations featuring YPG’s use of GM tracks and GM’s use of YPG tracks 2012 ADC WINTER FORUM PAGE 5

Aberdeen Proving Ground – The GATE Projected to be a 2-3 million SF commercial office and technology park Development includes: 72,605 SF office building yielding $103,462/yr over 50 years, with rents increasing 10% every 5 years Tenants include CACI, L3, Raytheon, Boeing, SAIC and Telford Aviation Since 2007, approximately 600,000 SF leased resulting in $850,000/yr rent to Army 2012 ADC WINTER FORUM PAGE 6

USAG - Redstone 3-4 Million Square feet of Office, Hotel and Flex Space In-Kind Value of million dollars of offset of O&M dollars Improved access for support contractors relocated per BRAC. Over 1 Million Square Feet to be completed by ADC WINTER FORUM PA7E 7

Fort Irwin Technology: Ground mounted photovoltaic (PV) Size: MW AC (large scale renewable energy project) Location: Approximately 200 acre parcel of land in vicinity of front gate Off -Take: Army to consume all electricity Purpose: To enhance energy security at Fort Irwin Fort Irwin Cantonment Area Main Gate Site 2012 ADC WINTER FORUM PAGE 8

2012 ADC WINTER FORUM | PAGE 9 BACKUP SLIDES

2012 ADC WINTER FORUM | PAGE 10 GAO Report 2011 Recommendations  #1: That the Secretaries of the Army and the Air Force take action to review all EULs for terms and conditions similar to those that our legal opinion concluded were inconsistent with applicable statutes; determine whether steps are needed to help ensure that the EULs are in compliance with applicable statutes; and, if so, then implement these steps.  #2: That the Secretaries of the Army and the Air Force take action to take steps to ensure that all EULs provide that if and to the extent that the leased property is later made taxable by state or local governments under an Act of Congress, the lease shall be renegotiated, as required by subsection 2667(f) of Title 10, U.S. Code.  #3: That the Secretaries of the Army and the Air Force take action to review and clarify guidance describing how the FMV of the lease interest should be determined and how the receipt of FMV can be best ensured.

2012 ADC WINTER FORUM | PAGE 11  #4: That the Secretaries of the Army, the Navy, and the Air Force take action to issue guidance on how to determine and document that section 2667 provisions were met prior to entering into an EUL, including the required secretarial determinations and the basis for the determinations.  #5: That the Secretaries of the Army, the Navy, and the Air Force take action to issue guidance on the analyses or documentation needed to show that future leases executed under section 2667 do not include property needed for public use, as is now required by section  #6: That the Secretaries of the Army, the Navy, and the Air Force take action to develop procedures to regularly monitor and analyze EUL program administrations costs to help ensure that costs are in line with program benefits. GAO Report 2011 Recommendations