Navy families move into long-awaited homes

Published 11:03 pm Sunday, June 21, 2009

OAK HARBOR — Until Friday, Navy Chief Warrant Officer David Nealon and his wife Ivette had never lived in a new house.

Four years after the Navy first formed a public-private partnership to build acres of new military housing in the Northwest, the Nealons and their daughter are among hundreds of families now enjoying the thrill of settling into new digs.

The new homes for military families at Whidbey Island Naval Air Station are a boost to morale compared with the outdated, dumpy duplexes that used to dot the base housing areas near downtown Oak Harbor.

The first attempt to build these homes ended in delays and millions of dollars in cost overruns and charges by a whistleblower about incomplete work, shoddy materials and overcharging.

American Eagle Communities, based in Dallas, Texas, was awarded a $206 million contract to build 605 homes on Whidbey, near Everett and in Kitsap County, but few houses were complete in 2007 when American Eagle sold its interest in the partnership to Forest City Military Communities.

Today, local politicians, Navy officials and residents are proud of the new homes, some of which are colorful three- and four-bedroom two-story structures with family rooms, Craftsman-style porches and energy-efficient appliances — homes that ordinarily could carry at least a $300,000 price tag out on the market.

Nealon, a career Navy man in his 40s, will spend his monthly Navy housing allowance on rent, paid to Forest City, a Cleveland-based $11.7 billion national real estate company.

The top brass at Whidbey can’t say enough good things about the work that Forest City has done in the past 18 months since taking over the contract.

The company has delivered homes on or ahead of schedule, along with playgrounds, pedestrian trails, dog parks, extra sidewalks and community centers.

“Forest City is building better houses than the Navy ever would have,” said Capt. Gerral David, commanding officer at NAS Whidbey, at a ribbon-cutting ceremony in one of the new neighborhoods last week.

Rear Adm. James Symonds of Navy Region Northwest got his start in the Navy living in one of the duplexes that once stood a short distance from the ceremony.

“It’s important that we take care of the families of these sailors, and there’s no finer way than with these fine homes by Forest City,” Symonds said. “None of those duplexes looked anything like these.”

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All seems well now, but the problems with the Navy’s original partner on the housing project, American Eagle Communities, previously caused delays in new construction on base, a former American Eagle employee said.

Before he was fired by American Eagle, project manager John Jack tried to convince Navy officials that his bosses at the company had substituted inferior building materials and attempted to overcharge for the work.

Jack, who a year ago filed a whistleblower lawsuit in U.S. District Court in Seattle, still believes American Eagle Communities cost the taxpayers about $40 million. Not even a change order approved by the Navy in 2007 excusing about $14 million worth of cost overruns by American Eagle makes a dent, Jack said.

The company could not be reached for comment.

“Forest City has done a good job,” the Port Orchard man said. “Our military families deserve that nice housing. The public-private housing venture with the Navy is a good deal.”

“What American Eagle did is very disturbing,” Jack said.

Capt. Robert Schlesinger, commanding officer of Naval Facilities Engineering Command Northwest, said the Navy wants to move on.

“The Navy has ensured that all taxpayer monies have been fully accounted for and managed responsibly,” Schlesinger said. “Delays to the construction due to weather, environmental concerns and Navy requirements were fully justified. Inexcusable delays by (American Eagle) were dealt with in a fair and appropriate manner.”

The public-private partnership that began in 2005 changed at the end of 2007 when American Eagle sold its interest to Forest City.

The federal Justice Department chose not to pursue Jack’s False Claims Act whistleblower suit because the Navy was satisfied with its outcome with American Eagle Communities, he said.

“But the Justice Department left the door open to further investigation. If that ever happens, I’m there,” Jack said.

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The military’s public-private partnerships began in 1996 when Congress approved a plan to produce new and badly needed housing on bases nationwide.

In northwest Washington, the Navy owns the land and Forest City Military Communities owns the houses. Under a 50-year agreement, Forest City has committed to managing the new homes. Revenue from rent will be reinvested to pay for renovations and repairs, said Michael Nanney, Forest City’s senior project executive on the Navy Region Northwest housing projects.

The cost of the regional project’s 605 new houses, renovation of older base homes, and construction of playgrounds and other amenities is about $290 million, and it’s all about 60 percent complete, Nanney said.

At NAS Whidbey, where close to half of those serving are in naval housing, the Oriole neighborhood has 61 new homes, Crescent Harbor has 184 new homes, and Maylor Point — the final community to be completed in Oak Harbor — has 114 new houses. The Whidbey project also includes 162 renovations, another 160 roof replacements and the demolition of some of the old duplexes.

“This is a good deal for the taxpayers because we build better, faster and cheaper,” Nanney said. “Nobody out there is doing better.”

Next up is the completion of 155 homes near Lake Stevens for people who serve at Naval Station Everett.

By mid-August, the first group of families is expected to move in and have the new-home experience enjoyed by the Nealon family at Maylor Point on Friday.

Nealon watched with pleasure as his 4-year-old daughter Malena checked out her new bedroom and the movers helped bring in the heavy boxes.

“I’m too old to try to keep up an old home,” Nealon’s wife, Ivette, said. “We’re very excited about the brand-new house.”

Gale Fiege: 425-339-3427, gfiege@heraldnet.com.