The heart of Northern Utah’s economic boom lies just 30 miles north of Salt Lake City within the walls of the Falcon Hill Aerospace Research Park. While many government secrets reside there, it is no secret that the planned 2.5 million-square-foot development at Hill Air Force Base has generated billions of dollars for the regional economy. Representing over 50% of Utah’s defense sector, Hill AFB generates over 32,000 jobs and contributes almost $4 billion to state GDP annually.
An Unprecedented Partnership
Hill AFB’s Falcon Hill Aerospace Research Park is the first public-private partnership of its kind for the U.S. Air Force and one of the largest projects in the Department of Defense (DOD). This 550-acre flagship development is literally a ground-breaking agreement with two private developers, Sunset Ridge Development Partners and Hunt Companies. Through an Enhanced Use Lease (EUL), the U.S. Air Force has partnered with these private-sector developers to leverage underutilized portions of the base for more productive uses. Under the EUL, the military allows these companies to develop the land and lease it to third parties in exchange for rental payments.
Falcon Hill is among the most strategically located aerospace research parks in the country. It has immediate access to Interstate 15 and a major regional commuter rail system. Its unbeatable 3.5 miles of frontage along I-15 make it attractive for hundreds of companies in the aerospace and defense industry who need to be in close proximity to their DOD counterparts. Northrop Grumman has a campus at Falcon Hill that serves as an anchor for the overall development. The campus will include four buildings totaling 900,000 square feet. In 2020 the U.S. Air Force awarded Northrop with a 9-year, $13.3 billion contract to upgrade the Ground Based Strategic Deterrent (GBSD) program, which is anticipated to create approximately 3,000 high-paying jobs.
Currently, Falcon Hill has over one million square feet of Class A commercial office and research space completed or under development. Officials anticipate that over the life of the program, more than 100 potential construction projects will be completed, revitalizing antiquated military infrastructure and bringing tens of thousands of high-paying jobs to neighboring communities.
While most EULs are one-off deals with private industry to build specific projects, the Falcon Hill partnership allows for enhanced flexibility, unparalleled collaboration and a maximized return on investment unlike anything that has come before it. An opportunity of this scale and ambition is unheard of in both the state and the country, so how did it all come together?
Getting on the Radar
Eager to unlock its potential, visionary real estate developers at the Woodbury Corporation, Hunt Companies and Hill AFB worked together for eight years before entering into the joint venture. The value of joining together paid off immediately, with the Woodbury Corporation constructing their first building on the site in 2012.
“The partnership with Falcon Hill represents many years of hard work, intense planning and unprecedented cooperation between the United States government, the State of Utah and our surrounding communities,” said Col. Jenise Carroll, 75th Air Base Wing commander. “The flexible arrangement we have with our private and public-sector partners allows us to agilely respond and quickly adapt to our ever-evolving national security needs.”
Falcon Hill Flies High
The partnership is truly unprecedented. With Falcon Hill, defense contractors have the ability to operate in very close proximity to their Air Force counterparts, an advantage that ultimately saves time and money because it provides opportunities for contractors to meet with key personnel within hours instead of weeks.
As part of the EUL, commercial property can be built on land owned by the base, either “inside the fence,” or “outside the fence” and accessible to the public. This dynamic has greatly benefited the range of companies located on site, including Northrop Grumman, Boeing, Lockheed Martin, BAE Systems, and many others. Because there is land “outside the fence,” Falcon Hill also has a Hilton-branded hotel and even a Starbucks on site.
Sunset Ridge Development Partners knowledge of defense requirements and federal regulations mean that each building is constructed with robust security in mind. The company can install government-secured networks and make a building signal impenetrable. “We think there’s huge value in being able to provide good customer service with close proximity to the Air Force Base,” said Taylor Woodbury, the director and chief operating officer of Woodbury Corporation. “We’re building state-of-the-art, classified space to the highest security standards that the Department of Defense has required, and we’re able to do that on Air Force ground.”
Serving Community and Country
Another unique aspect of Falcon Hill is that both development partners have agreed to a 50-year investment horizon, ensuring a long-term focus that maximizes return on investment and maintains high-quality standards for an extended period of time. This approach has yielded incredible success, with Falcon Hill expected to generate over $500 million in private investment by 2022.
“With our enhanced use lease, we have the ability to develop these 550 acres over time,” said Woodbury. “We don’t have to take it down as a single parcel. We can get a new parcel of ground and develop it, which allows us to be much more dynamic than most EULs with the Department of Defense. We have the flexibility to add new buildings as the need and opportunities arise.”
Revenue generated at Falcon Hill does not go back to Washington, D.C. like most other EULs. Rather, investment stays locally and is used exclusively for developments at Hill AFB. The shared goal is to make Falcon Hill profitable enough that it can provide a steady income stream for the military to utilize on future missions. Sunset Ridge Development Partners has already built a new Security Forces building, a new west gate and a 72,000-foot software development building on the base. In addition, the company anticipates building another new office building utilizing the income stream from prior developments.
Given the significant tax revenues generated from such an arrangement, state and local officials have been enthusiastic partners. The development has already attracted thousands of high-paying jobs to the state and created a multiplier effect that has rippled throughout the local community. Average salaries on the site are nearly double the salaries in the area, showcasing Falcon Hill’s ability to break down barriers literally and figuratively.
