Project Justification

Justification for AFRH-W Development

The Armed Forces Retirement Home is moving ahead to implement its approved Master Plan for development of underused property and land on its 272-acre Washington campus in the heart of the Capitol City. Thoughtful and measured development will generate income needed by the Home to maintain its reputation as the nation's premier independent living retirement community for military retirees and disabled veterans.

The Home plunged into a financial crisis in the 1990's when expenses routinely began to outstrip revenues. In 2002, Congress directed the Home to hire professional managers with experience in retirement community operations and gave the Home permission to develop its underutilized property in order to replenish the Trust Fund and generate new funding sources.

Since then, a new administration brought costs under control by consolidating operations, cutting expenses and the number of employees and using vendors to provide high quality services for lower prices. These measures saved the home $1.1 billion over a 5-year period. In 2004, the Trust Fund had a balance of $118 million after adding a one-time $22 million infusion of cash from the sale of a piece of land to Catholic University. While these innovations helped, the Home cannot continue to sell off pieces of its legacy, and cost-saving measures alone cannot generate the funds needed to pay for new buildings and major renovations which will be needed to guarantee a safe and secure home and high quality medical service for future generations of American heroes.

AFRH needs a solid financial base from which to deal with its ongoing operations and to provide the resources to address unforeseen circumstances, which can be severe. The 2005 devastation of the AFRH campus in Gulfport, the evacuation of most of its residents - some of them very ill and requiring expensive air evacuation - making a home for them at AFRW-W, and operating that campus for a significantly large population have all required additional expenses and have placed drains on the operating and capital budgets.

This is why the Home has developed a Master Plan which will guide future development on the campus for the next quarter century. The Master Plan preserves the historic treasures on the campus, including the Lincoln Cottage where Abraham Lincoln spent nearly a quarter of his presidency, and protects the natural beauty of the Home's rolling meadows, fresh water ponds, gardens and mature trees. Development will be staged and compatible with the operation of a retirement community and reflect the scale and uses of the surrounding city neighborhoods and institutions. The Home intends to hold the development land and lease it long term to developers, putting the land rent into the Trust Fund.

This careful planning process was designed to keep the Armed Forces Retirement Home campus intact and maintain tight control over development rather than opening the campus to market forces with no guidance to private developers. New businesses and housing will also generate jobs for neighbors, enhance property values and create new tax revenue for the District of Columbia.