NSGL Industry Day Q and A Discussion 29 Jan 2026.pdf

Naval Station Great Lakes Industry Day Q and A Discussion 29 January 2026

1. Question: Can the parking lot adjacent to the parcel north of the Visitor Center be utilized as well, or is it completely separate?

Answer: That could be negotiated. That parking lot is typically not completely full. It would depend on the nature of the use and the parking density. It’s something that NSGL has considered.

2. Question: How many stories is the property along Ray Street with the 27,264 SF office building?

Answer: The building is 2 stories. For reference, that building was the NSGL Public Works Department (PWD) about 10-years ago.

3. Question: What is the floor to ceiling height in the former-PWD building?

Answer: The finished ceiling height on the first deck is 8 feet for most of the area. The height from top of the 1st deck to bottom of 2nd deck is ~ 10 feet. The 1st and 2nd deck are cast in place concrete. The 2nd deck finished ceiling height is 8 feet and ~ 10 feet to wood framing ceiling joist. The 2nd deck is cast in place concrete and would require a structural engineering evaluation to determine the feasibility of removing all or a portion of it.

4. Question: Does the former-PWD building have rail access?

Answer: No rail access currently despite being located along rail, but there is a loading dock on the east side of the building

5. Question: Can the lease term exceed 50 years?

Answer: Under applicable statutes (such as 10 U.S.C. § 2667), the standard lease term for non-excess real property is limited to 5 years. Any lease exceeding this duration requires a determination by the Secretary concerned that a longer term would promote the national defense or be in the public interest. The Navy, as the landowner, must establish that the property is underutilized. For extended terms, such as 99 years, it becomes challenging to demonstrate that the land remains essential for Navy needs. In contrast, easements under 10 U.S.C. § 2668 are standard, require no additional approvals, and are typically not subject to the same term restrictions.

6. Question: For leases with an initial 5-year term, is it possible to include renewal options without requiring congressional approval?

Answer: Renewal options may be added to extend beyond the initial 5-year term at the end of the period, but any such extension must be justified based on national defense or public interest considerations.

7. Question: Regarding the properties on Ray Street, would the Navy prefer an easement rather than a lease?

Answer: The preference depends on the intended use. Certain uses, such as trailer storage, are not authorized under 10 U.S.C. § 2668 (easements for rights-of-way) and would therefore require a lease. The Navy generally prefers easements under § 2668 because they can be executed more quickly. Statutory requirements mandate competition, though exceptions can be justified where competition does not make sense under lease authority.

The Navy invites details on the proposed use ("the what"), after which appropriate mechanisms ("the how") can be determined.

8. Question: Can you provide an example of how In-Kind Consideration (IKC) services could apply to a hotel or restaurant development?

Answer: In the case of a hotel development, IKC would not necessarily require the provision of lodging to the Navy. Examples of IKC include contracting for services, such as snow plowing, signage installation, or routine maintenance tasks (e.g., changing lightbulbs) around Navy facilities or stations. A developer could also construct an office or warehouse space for Navy use or even demolish existing Navy-owned facilities. Historically restrictive, IKC authority is now highly flexible and commonly includes equipment purchases and repairs. There is no requirement for IKC to be one for one provision of services the Lessee (lease) or Grantee (easement) currently provides. Navy bases credit towards IKC on the Navy’s perceived value (our cost estimate for the service) not what it costs the Lessee/Grantee. Once a lease or easement is executed with a negotiated rental or purchase value (consideration) the installation determines its needs within the value of the annual and lifetime consideration. The Installation’s Public Works Department (PWD) then provides a detailed scope of work for the required service and the expectation is the Lessee/Grantee provides the service to meet the scope of work. Prior to execution the Lessee/Grantee submits a cost bid to the Navy for the services, including any overhead management of the service. If the bid does not exceed the Navy’s internal cost estimate, then the Navy will grant approval for the service to be performed. After the Navy concurs that the Lessee/Grantee has performed the service in-line with the scope of work, the Navy credits its pre-agreed amount towards the consideration.

9. Question: What guidance is available on proposing In-Kind Consideration (IKC) arrangements?

Answer: It is not recommended to independently develop detailed IKC proposals without first consulting Navy requirements. The Navy can provide insight into its specific needs, which vary depending on the developer's expertise or specialty. IKC enables the Navy to issue task orders to the private sector, with subsequent negotiation of cost and scope.

Broadly, the Navy owns and operates infrastructure equivalent to that of a full city, creating diverse opportunities for support.

10. Question: Are there restrictions on ownership if the entity is foreign-owned?

Answer: For any lease or real estate transaction involving foreign ownership on Navy property, the Navy must submit the matter for review by the Committee on Foreign Investment in the United States (CFIUS) to vet potential national security implications. This process applies to leases or other real estate contracts where foreign ownership is involved.

11. Question: Is there an option for the developer to purchase and own these parcels, or is leasing the only available mechanism?

Answer: Land is not being considered for sale at this time.

12. Question: For construction of the proposed development (e.g., a hotel), must federal prevailing wage requirements (such as Davis-Bacon Act) be followed, or do only state and local standards apply?

Answer: This matter requires further review, and a definitive response will be provided upon additional analysis. Given that the development occurs on federal land but without direct federal funding, it is suspected that federal prevailing wage requirements may not apply, though confirmation is needed.

13. Question: What is the current motivation for pursuing these arrangements, and what outcome is the Navy seeking?

Answer: The Navy faces significant budgetary constraints while responsible for operating and sustaining what is effectively a self-contained city. Declining sustainment funding necessitates creative leveraging of underutilized real estate to supplement maintenance budgets. The goal is to maximize value from available assets, operating on approximately 3 cents on the dollar, by addressing critical needs such as infrastructure repairs, hazardous tree removal, and facility improvements. For example, a commercial development (e.g., a fast-food restaurant) that contributes to tree removal or other maintenance could represent a substantial benefit. The overarching mission remains supporting sailors and personnel stationed at the installation.

14. Question: Can a private developer simply provide In-Kind Consideration funds to the Navy for disbursement to an existing Navy contractor?

Answer: No. The developer must directly contract with the service provider performing the work for the Navy.

15. Question: In the context of a fast-food example, would In-Kind Consideration agreed to upfront apply for the full term of the lease?

Answer: The Navy does not require a predefined list of services throughout the term.

Instead, a total value is established, along with an initial scope of work based on identified needs. Upon completion of that scope, the IKC obligation may be satisfied for the remainder of the term. The specific services can evolve over time (e.g., tree removal one year, fiber optic installation or pavement repairs another). The Navy develops maintenance execution plans, addresses temporary needs (e.g., HVAC), and seeks to reduce a significant facilities sustainment backlog, currently funded at only about 55% of requirements. For a restaurant developer, relevant contributions might include support for galleys, food service operations, or other base-wide needs (e.g., advertising or related services). IKC is highly negotiable and can take various forms.

16. Question: If the properties require utilities and the developer incurs costs to develop the site, how does this align with In-Kind Consideration obligations?

Answer: All site development costs, including utilities, are the responsibility of the developer unless a dual-use arrangement directly benefits the Navy.

17. Question: Will the Navy provide (i.e., sell) sewer and water services to these properties?

Answer: This depends on the specific parcel. Some parcels may offer connection options to municipal (city) utilities, while others may be limited to Navy-provided services. The Navy is open to granting easements to facilitate utility access to the site.