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As Actus Lend Lease (ALL) continues to work through its $2.5 billion backlog of work for the Military Housing Privatization Initiative (MHPI), Operations Manager Steven Goraczkowski says the company is fighting a two-front battle for rentals.

When it comes time to choose housing, military personnel stationed in Hawaii can look at ALL’s on-base housing, other companies’ on-base products and off-base housing. But this
hasn’t deterred ALL from building sustainable communities at U.S. military installations in Hawaii.     

“Our biggest competition is the housing outside of the military installations, so our housing and our communities need to be better than what is available out there,” Goraczkowski says. “At the core of privatization is capitalism and competition. And with that, we subject our projects to the benefits, as well as the risks of a private business.”

ALL is currently working on three contracts through the MHPI in Hawaii that represent a 10-year backlog of construction work. Goraczkowski says he specifically relocated to ALL’s Hawaii division more than two years ago to manage the construction of these projects.

His charge is to live up to the mission of the MHPI, which is to develop improved neighborhoods and quality of life for military families.

“This gives servicemen and women more housing options,” Goraczkowski adds. “They are not required to live on the base, but our goal is to create the sustainable neighborhoods that they and their families will want to live in.”

Nationwide Leader
ALL is one of the nation’s leaders in public/private community development. It says it has a focus on creating sustainable value, and it develops communities that “regenerate the environment, enrich people’s lives and foster economic growth.”

ALL specializes in large, complex development projects where it partners with institutional owners. One of its major clients is the Department of Defense, for which it has built almost 40,000 residential units throughout the United States. These include: Beaufort/Parris Island, S.C.; Fort Hood, Texas; Fort Campbell, Ky.; Fort Drum, N.Y.; Camp Lejeune and Cherry Point, N.C.; and Stewart Terrace, N.Y. The company has financed, developed, constructed and renovated the housing units, and will operate each of these sites for at least 50 years through its asset and property management division.

ALL is part of Lend Lease Retail and Communities, which is a subsidiary of the Lend Lease global family. This group includes Bovis Lend Lease and Delfin Lend Lease.

“Community development is about improving community and family quality of life through design and planning,” ALL says. “This is a complex process of teamwork resulting in the seamless integration of communications, design, development, construction management and financing. ALL is comprised of community real estate professionals who fully understand this process and are committed to creating special homes and communities where military families will choose to live and be proud to call home.”

Large Sustainable Project
The Army Hawaii Family Housing project involves the construction of 5,388 new homes and the renovation and restoration of 2,506 existing homes in more than 40 neighborhoods across seven U.S. Army installations in Hawaii. This contract is worth $2 billion.

Goraczkowski says the project is one of the largest environmentally sustainable projects in the world. One of the highlights of the project is its dependence on solar energy. The project will incorporate photovoltaic (PV) panels that will provide seven megawatts of power for the entire project. The PV panels will generate approximately 35 percent of the community’s electrical needs. Along with electrical generation, the homes are fitted with solar panels for hot water heating.

“It is a unique opportunity because we have high energy costs in Hawaii, but we also have the ideal weather for solar energy,” Goraczkowski says. “This is unique also because of the partnership and participation of the military and private agencies, so the conditions here are really creating a tremendous advantage for solar energy use in these communities.”

ALL is using a new film-applied PV technology for the panels. This film is applied to the metal roofs of the garages adjacent to the homes. The company is in the second year of the installation process, and so far the panels are performing as promised. “This type of application is used in Europe and worldwide, so there were installations that we could study,” Goraczkowski says.

Other sustainable aspects of this project include:

• The solar power will be smart-metered back into the project micro-grid for the benefit of all families in the community.
• The Army Hawaii initiative marks the first time a grid-connected project has been profitable enough to install PV solar panels without subsidies.
• Ninety-three percent of Hawaii’s electrical power comes from burning oil, all of which is imported. The PV technology will significantly reduce the demand on existing Oahu power generation assets as well as save approximately 18,000 barrels of oil each year.
• Approximately 65 percent of the building demolition waste from the development will be recycled and put back to use in the form of road base or in other building materials.
• ALL brought in a team of arborists in an effort to preserve the original tree canopy on all the sites

This project has a 10-year initial development period for construction, and ALL is just starting the third year. With more than 8,000 new homes slated to be built in the remaining years, ALL first had to gear up labor and material resources to produce this volume. But now that everything is in place, ALL is well ahead of its anticipated delivery date

“You have to hire the key people and get the subcontractor community engaged in the process,” Goraczkowski says. “We broke the projects up to handle the construction logistics by north and south regions, and now we have separate production trains and separate subcontractors dedicated to each project.”

Historically Sensitive
ALL is also in charge of the MHPI project at the Hickam Air Force Base (AFB), which is adjacent to the Honolulu International Airport. The first phase of the project calls for the construction of 1,356 new homes.

The second phase involves the replacement of 1,118 homes, 407 historic renovations and 32 select historic renovations. The two phases combine for more than $600 million and include the management of these communities for 50 years.

ALL is working closely with the Air Force and state agencies to assure the homes’ historic significance. Goraczkowski says the neighborhood is significant because of the age and type of homes, and of its proximity to Pearl Harbor. “The architectural character of the houses, particularly on the outside, cannot be change, but they do need minor expansion and upgrades since many have not been improved since World War II,” he adds. “Collectively, we’ve done a fair amount of historic renovations but have not done anything on this scale.

“We have to be deliberate on how to approach it, and we’ve developed systems and processes to help us succeed. We will work closely with the agencies that are involved, and we have staffed up and hired key people that have experience in these kind of projects.”

Goraczkowski says a project like this needs processes and systems that serve a different purpose from the usual renovation project.

“The key is recognizing they are historical and knowing you can’t go inside and demolish or replace as you would with a typical renovation,” he adds. “So, we will salvage existing fixtures and materials for reuse. We need to view these historical homes through a completely different lens when we evaluate what the required scope of work is.”

The first phase at the Hickam AFB is approximately 50 percent complete, and ALL is on track to complete the first phase ahead of schedule.

The only challenge has been the discovery of pesticides in the soil, but the problem has been mitigated and construction has continued.

The company is also in the design stage of the Privatized Army Lodging program, an on-base hotel for Army travelers. “We wanted to diversify military housing, and not just be in single-family homes,” says Dale Connor, executive manager of construction in ALL’s Nashville, Tenn., headquarters.

The approximately $450 million program includes construction of 4,000 rooms across 13 bases, Connor adds. “There are a lot of Army bases out there,” he states, “and we look forward to getting more future work. We want to challenge ourselves to come up with the new level of sustainability.”

Core Values are Key
ALL says its employees subscribe to a set of core values that are adopted and promoted across all of its businesses throughout the world.

“They underpin the way in which we conduct our business, interact with our stakeholders and operate as individuals or teams within the Lend Lease Group,” the company adds. “The values also relate to our code of conduct, which provides guidance for employees in relation to the standards that the company expects in the conduct of its operations.”

The core values are:

• “Respect – For all people, their ideas, their culture, their views, their health and safety and their knowledge.
• “Integrity – “We don’t do it if it compromises the individual or the company’s integrity. In particular, we will not compromise on safety either within our organization or in doing business with any of our clients or suppliers.
• “Innovation – Challenge and seek to find a better solution, think outside the box and dare to do things differently. Be innovative and creative – don’t just do it because we did it yesterday.
• “Collaboration – “Redefine the way our business works by truly sharing knowledge, building on this and drawing insights. Through teamwork we value the insights of others and build on them – we must truly take the time to help.
• “Excellence – “We strive for excellence in all we do. It is evident not only in the products and services we deliver, but in how we deliver them.

“Our employees embody excellence – whether it be in the decisions they make, the products they build or the service they deliver. On construction sites in particular, but everywhere, excellence equals zero incidents.”

The Hawaiian projects require ALL to apply all of its core values, according to Goraczkowski. He says he has never experienced anything in his 25-year career quite like the challenges that come with construction on the Hawaiian Islands.

“Your construction materials and equipment all arrive by ship, so you must be good at planning, and then equally good at executing that plan,” Goraczkowski says. “And we do have an extremely tight labor market, so you have plan for that, as well.”

To assist with the labor problem, ALL has forged relationships with small businesses, labor groups, the government and educational institutions. ALL has entered into project labor agreements to create a stable labor platform for the next 10 years, which includes a no-strike clause, he says. “We know our success in Hawaii comes from working with the labor groups,” Goraczkowski says. “These labor organizations provide well-trained and safety-conscientious workers.”

With all the logistical issues contractors face in Hawaii, Goraczkowski is impressed with the sense of community in the Hawaiian construction business. “There is just more support from subcontractors and the unions,” he adds. “They want to build it right, improve the quality and safety, and they want to support our community outreach efforts.

“When you’re working on an island, you learn to be dependent on each other. That naturally draws the community together. That has been a great pleasure to experience, and it is a wonderful partnership that was really unexpected.”

Fernie Grace Tiflis contributed to this article.