Letter to Army Secretary McHugh

Letter

Today, U.S. Senator Charles E. Schumer wrote a letter to Army Secretary McHugh, urging him to expedite the project approval and lease negotiations necessary to clear the way for the most recent high-tech development plan at the 60-acre Watervliet Arsenal campus. Arsenal Partnership, the local development corporation, has recently submitted its fourth iteration of the development and financing plan for an Enhanced Use Lease (EUL) on the campus.

An EUL would achieve the goal of freeing up unused or underused space on the Watervliet Arsenal campus for further development and job growth. After the Army grants project and lease approval, the Partnership will be ready to begin the financing, design and construction of the initial projects of a multimillion dollar development plan that will invest more than $350 million in the site, and create more than 350 permanent and 1,700 temporary jobs. Schumer notes that this development can serve to benefit and strengthen the Army's mission as well.

"As the economy builds to recovery, it is essential that we make winning investments that will spur hundreds of new, good-paying jobs," said Schumer. "This development plan at Watervliet Arsenal is just what the doctor ordered for the Capital Region, and I urge Secretary McHugh to expedite project approval and lease negotiations so that high-tech growth at Watervliet can proceed."

The execution of a commercial development plan at Watervliet Arsenal has been one of Schumer's highest priorities as a senator. Along with Schumer, the Arsenal Partnership has lead that effort, with great success. The Partnership has raised more than $100 million in private, state and federal funds, and has created more than 350 new jobs for Upstate New York. With this, the Partnership pays more than $10 million in fees to the Watervliet Arsenal -- money that helps underwrite the Army's annual operating expenses for their core mission: making our nation's cannon.

Schumer now writes to Secretary McHugh urging his support in the Arsenal Partnership's most recent endeavor to obtain an Enhanced Use Lease (EUL) at Watervliet Arsenal. On June 3rd, the Partnership submitted its fourth iteration of the development and financing plan, for the EUL. The Partnership is now ready to begin the financing, design and construction of the initial projects of a multimillion dollar development plan that will invest more than $350 million in the site, create more than 350 permanent and 1,700 temporary jobs, and strengthen the Army missions as well. Schumer strongly urges Secretary McHugh to grant the necessary project approval so that this development can move forward as quickly as possible.

In addition to the economic benefits to the Capital Region, Schumer noted a variety of major benefits to the Army in expediting the project approval and lease negotiations at Watervliet Arsenal. Some of the most notable include: the payment of more than $24 million to the Army's in-kind project fund; the realization of the Army's national energy security goal, and the construction of a new biomass steam and electric cogeneration facility to replace the existing steam heating system at the Arsenal which operates for seven months of each year. Also, the project will bring additional operation, maintenance and overhead savings to the Arsenal as essential site infrastructure improvements are executed for the new development projects. Energy, parking and road improvements, site amenities and historic elements will be enhanced throughout the project development.

Constructed in 1813, the Watervliet Arsenal has played a vital role in America's defense throughout its long history producing large bore cannon and a wide variety of other products for military needs. The Arsenal is also home to the Army's Benét Laboratories, a Malcolm Baldrige Award recipient, whose mission includes the development of Arsenal products and technology for future combat systems. This arrangement of research, development and manufacturing at a single site facilitates concurrent design and manufacturing. But more than land, equipment, and buildings, the Arsenal represents thousands of great Americans who have proudly served their country since 1813 by supporting our nation's war fighters in every conflict for nearly 200 years.

A copy of Senator Schumer's Letter to Army Secretary McHugh appears below:

Dear Secretary McHugh,

As you know, execution of the commercial development plan at Watervliet Arsenal has been one of my highest priorities since I came to the Senate in 1999. The local development corporation leading our effort, the Arsenal Partnership, has had a long record of success at Watervliet: raising more than $100 million in private, state and federal funds, creating more than 350 new jobs for Upstate New York, and paying more than $10 million in fees to the Arsenal -- money that helps underwrite the Army's annual operating expenses. Your office and the Corps of Engineers have been very supportive of these efforts in the past and I'm writing to request your personal support.

In March, 2008 your predecessor Secretary Pete Geren toured the Watervliet Arsenal at the request of former Congressman Mike McNulty and I. We discussed the 2005 BRAC Commission's recommendation that acreage at the Arsenal be turned over to local control so that it could be developed. The Secretary and his staff informed us that no legal mechanism existed to carry out the Commission's recommendation, but that an Enhanced Use Lease (EUL) would achieve the goal of freeing up unused or underused space on the campus for further development. In December, 2008, Geren, McNulty and I jointly announced that the Arsenal Partnership had won the competitive process to establish an EUL, and the Secretary's office pledged to help expedite what we knew would be a long process.

On June 3rd the Partnership submitted its fourth iteration of the development and financing plan, for the EUL. I understand the partnership is now ready to begin the financing, design and construction of the initial projects of a multimillion dollar development plan that will invest more than $350 million in the site, create more than 350 permanent and 1,700 temporary jobs, and strengthen the Army missions as well.

The proposed new development projects at Watervliet could provide enormous benefits to the Army and to New York:

The potential benefits to the Army are extraordinary:

Payments of more than $24 million to the Army's in-kind project fund;

Realization of the Army's national energy security goal, including creation of redundant energy supplies; reduction of fossil fuel consumption; independence of the regional power grid; and production of reliable "green" electricity through the use of renewable biomass fuel sources;

Contractually guaranteed annual energy cost savings to Watervliet Arsenal;

Construction of a new biomass steam and electric cogeneration facility to replace the existing steam heating system at the Arsenal which operates for seven months of each year. This will be a privately financed, state of the art cogeneration facility operated by a subsidiary of the Arsenal Business & Technology Partnership -- and, at no cost to the US Army;

Additional operation, maintenance and other overhead savings will accrue to the Arsenal as essential site infrastructure improvements are executed for the new development projects. Energy, parking and road improvements, site amenities and historic elements will be enhanced throughout the project development;

And, Payment of additional fees for services provided to tenants by the Arsenal.The Partnership has established a separate, for-profit Limited Liability Company to manage the development plans at the Arsenal. It has issued an RFQ for the initial $20 million financing for the first phase of the cogeneration project, and several national and regional lenders are competing to finance this initial -- and essential -- project.

This week, the Arsenal and the Partnership celebrated the decision by the Italian gunmaker, Ota Melara, to begin production of their new Navy gun at the Arsenal. In a few weeks, the partnership will open the new 40,000 sf national headquarters of the M&W Group in Building 125. They have moved their headquarters from Dallas to the Arsenal, adding another 190 jobs to the Capital Region, as they complete the construction of GlobalFoundries new 300mm "chipfab" at Malta and continue the extraordinary expansions at the UAlbany Nano Campus.

M&W -- with IBM, Emerson Liebert, the Siemens Corp., CB Richard Ellis, the Galesi Group and Columbia Development Corp. -- is committed with the Arsenal Partnership to execute the cogeneration, data center and other projects within the EUL plan. We are now at the juncture that I urge you to give this important advancement for the Arsenal your personal attention. We need you to help us move through the project approval and lease negotiation stages over the next few months in order to begin the actual work of assuring a continuing great future for the Watervliet Arsenal, and to bring more good paying jobs to the Capital Region. We'd love to have you at the Arsenal later this year to put the first shovel in the ground! Please feel free to contact me office if I can be of any assistance.

Sincerely,

U.S. Senator Charles E. Schumer

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