1 of 4
Jeffrey D. Allred, Deseret News
Sen. Orrin Hatch, Gov. Gary Herbert and other dignitaries attend groundbreaking ceremony at Hill Air Force Base.

HILL AIR FORCE BASE — The $1.4 billion Falcon Hill research park moved one step closer to reality Wednesday with the groundbreaking for a building that will house engineering smarts for the nation's Intercontinental Ballistic Missile program.

The research park is innovative in the military environment, bringing private contractors and aerospace industries on base in a scenario that also puts military land back on the tax rolls.

ICBM maintenance is the job of the Air Force's 526th Systems Group, located on base. Support from defense contractor Northrop Grumman is just a few miles from the base, but 650 of those employees will move into a five-story, 125,000-square-foot building that will rise from where ground was broken.

"From our perspective it works a lot better when we're on base, co-located with our customers. A year from now, I looking forward to seeing that happen," said Tony Spehar, vice president of missile systems for Northrop Grumman.

The move will put Northrop Grumman's analysts and engineers within footsteps of the 526th's maintenance facilities. In shopping-mall terms, Northrop Grumman will become the "anchor tenant" for what will eventually be an 8 million-square-foot research park.

Falcon Hill National Aerospace Research Park, which was first announced two years ago, makes use of a new military program called enhanced-use lease and is the largest project of its type planned by the Air Force. "This is completely novel what we're doing here," said Sen. Orrin Hatch, R-Utah, one of a number of elected officials on hand for the groundbreaking. Hatch has been fostering the enhanced-lease concept since federally mandated base closures in 1995 strengthened Hill's viability and brought new military jobs to Hill.

"The laws that permit this type of development are relatively new," Hatch said, explaining why the first construction project is just now being announced. Hatch said lead developer Jim Woodbury has been busy during that time working through a new federal-state-private bureaucracy.

"I think they were afraid the almighty federal government would renege on it — and so was I," Hatch said.

The lease program, in Falcon Hill's case, allows the Air Force to lease a 3.5-mile strip of almost 600 acres along Hill's west side to a private developer, Sunset Ridge Development Partners, which will build office and mixed-use buildings along with a hotel and other retail space. In exchange, the developer will build 1.6 million square feet of office and work space the Air Force can use to replace many 1940s-era buildings on base.

Officials anticipate there will be 15,000 new aerospace and defense contractor jobs when the project is built out, a process that will take several decades. After 50 years, all of the project will become government property.

The lease has significant support from state government, which is kicking in $15 million for projects like reconfiguring entrance gates to the base.

In exchange, the privatized development puts all of the improvements on base back on the tax rolls. "That's not altogether a bad thing," said Gov. Gary Herbert. "I could get used to that." He then gave Hatch a tongue-in-cheek challenge to see what the senator could do to put other federal land in Utah back on the tax rolls.

Among the changes, Hill's north and west gates will be moved to better accommodate traffic, and more than 130 old buildings will be demolished as new buildings in the Falcon Hill project take their place. That means new workspace for nearly 6,000 of the base's 23,500 employees, according to the Air Force.

"This is just the beginning of a lot of similar projects," said Rep. Rob Bishop, R-Utah, whose district includes Hill. Bishop said the project is good for the nation's defense capabilities and is good financially for Utah.

"There are incentives for the local economy," he said. At the state and community level, "All of those people were very firm in their support of this project."

Jim Sutton, director of the Plans and Programs Directorate at Hill, said Falcon Hill is a model for a new generation of government/private development. He said base closures mandated in 1995 immediately created new challenges and opportunities within the nation's defense infrastructure.

"Hill had a lot of facilities that needed replacement" as base realignments brought 3,000 new workers to the base, Sutton said.

"At the time, legal and regulatory structure didn't accommodate what we needed. Congress changed the basic leasing statue," he said. "What we are doing here is extracting value from federal lands."

e-mail: sfidel@desnews.com