Redevelopment of Historic Hospital Facilities – Fort Sam Houston, San Antonio, TX

• WESTON spearheaded the first Enhanced Use Leasing agreement between the U.S. Army and a private developer.

• WESTON led the remediation and redevelopment of historic hospital facilities, including the famous former Brooke Army Medical Center.

• The Fort Sam Houston redevelopment stands as the Army’s most successful Enhanced Use Lease project and serves as a model for future military and private sector partnerships.

Three abandoned buildings, including the famous former Brooke Army Medical Center (BAMC), were in disrepair and contaminated with lead, asbestos, PCBs, and mercury, leaving underutilized assets and high maintenance costs. Eyeing the potential rewards of preserving a historic site in a great location and thriving market, WESTON^® harnessed the required skills— planning, development, design, finance, construction, operations, and management—and assembled the partners necessary to redevelop more than 450,000 square feet of space in three buildings.

Historic Preservation Meets Modern Reality

Known as the home of Army medicine, Fort Sam Houston houses numerous medical facilities, including BAMC and the Beach Pavilion Complex. These buildings, built in the 1930s, were replaced with a modern medical facility in 1994 and stood unoccupied for almost 10 years, impacting the installation’s maintenance budget and restricting new construction. 

WESTON and Orion Partners—combining forces to form the Fort Sam Houston Redevelopment Partners—developed a business and lease plan and obtained $60 million in financing for rehabilitation, preservation, and environmental restoration. As prime contractor, WESTON led a San Antonio-based team that included Orion – a real estate development firm, Cross & Company – a real estate brokerage firm, and Ford, Powell & Carson – a historical architectural firm. The team’s goal was to manage the redevelopment for the maximum benefit of the Army while remaining sensitive to the surrounding neighborhoods, other interested stakeholders, and the greater San Antonio community.

The process to redevelop Old BAMC and the Beach Pavilions was 3 years in the making. The team started by developing a business and lease plan that addressed a range of project requirements: marketing, financial, environmental, historic preservation, and internal and external infrastructure. The key concerns were whether or not the buildings could be cost–effectively rehabilitated, and if so, who might the tenants be. WESTON and Orion then actively investigated and negotiated the final leases, and set about finding and securing tenants. After the tragedy of September 11th, post access was limited and the partners modified the Business and Lease Plan and searched for tenants that could take advantage of the high level of security.

A Model Success

Keeping project momentum on the fast track, it took WESTON and Orion just 9 months from the day the first tenant lease was signed to the day of occupancy. Now, the BAMC and North Beach Pavilion buildings are redeveloped, and these top-grade facilities are 100% occupied. Tenants include the U.S. Army South (USARSO) and the U.S. Army Medical Information Technology Center (USAMITC), which provides worldwide IT support to the Army Medical Department. The Fort Sam Houston medical complex redevelopment stands as the Army’s most successful EUL project to date and serves as a model for future military and private-sector relationships.

Multifaceted Benefits

By using EUL, Fort Sam Houston has set a course for aggressively modernizing infrastructure management using progressive acquisition practices that produce the best value for defense investments. These new military infrastructure management approaches are critical to readiness and modernization.

• Fort Sam Houston remains the buildings’ owner while the private developer invested funds to convert the buildings from medical to administrative use.

• Fort Sam Houston earns value in the form of cash and/or in-kind services up to $250 million over the next 50 years.

• The U.S. Army reduces the costs required to maintain unusable facilities, and avoids the considerable cost of remediation of environmental issues.

• Removal of these vacant historic structures from the installation's overall asset inventory allocation enables development of new facilities that can support new state-of-the-art missions.

• Buildings will be redeveloped, maintained and turned back to the Army at the end of the lease term in immediately usable condition.

• Fort Sam Houston benefits from expanded facilities that house new mission support contractors, potential conference/training facilities, and reduced associated logistical support costs for transportation, lodging, and services previously provided off-post