Eight New Bases Officially Added to CFIUS’s Real Estate Jurisdiction
As we have discussed previously, proximity to sensitive U.S. Department of Defense military bases and operations, such as testing ranges, is an important element of many reviews by the Committee on Foreign Investment in the United States (“CFIUS”, or the “Committee”). Perhaps the most famous example being President Obama’s 2012 Executive Order directing the Ralls Corporation to divest its interest in an Oregon wind farm operation near a U.S. Navy restricted airspace and bombing zone.
Today during a CFIUS review, the Committee regularly requires the target U.S. business to submit a complete list of all facilities, including their addresses and geo-coordinates. This occurs even when a foreign acquirer or investor is from a benign region of the world, and is often one of the first questions CFIUS asks.
Historically CFIUS only had jurisdiction over the foreign acquisition of U.S. businesses. However, with the 2018 passage of the Foreign Investment Risk Review Modernization Act (“FIRRMA”), CFIUS is now authorized to review the acquisition of certain real estate transactions that do not include the acquisition of a U.S. business. CFIUS’s real estate jurisdiction is focused on transactions meeting certain criteria that are in or around specific airports, maritime ports, or military installations. The relevant military installations are listed by name and location.
Earlier this year, CFIUS proposed adding eight new military installations to its list of identified sensitive military bases that allow the Committee to review real estate transactions in various parts of the country. Effective August 23, 2023, the following eight military bases were formally added to CFIUS’s real estate regulations. They include:
- Air Force Plant 42, located in Palmdale, California;
- Dyess Air Force Base, located in Abilene, Texas;
- Ellsworth Air Force Base, located in Box Elder, South Dakota;
- Grand Forks Air Force Base, located in Grand Forks, North Dakota;
- Iowa National Guard Joint Force Headquarters, located in Des Moines, Iowa;
- Lackland Air Force Base, located in San Antonio, Texas;
- Laughlin Air Force Base, located in Del Rio, Texas; and
- Luke Air Force Base, located in Glendale, Arizona
These bases were added to Part 2 of Appendix A of the Real Estate Regulations, and are now afforded “extended range” protection (a 100 mile radius) from the outer boundary of these facilities. Not all real estate within the 100 mile radius falls within CFIUS’s jurisdiction. However, the acquisition of real estate near these and other previously identified bases by certain foreign investors will face significantly more scrutiny going forward.
Additionally, CFIUS updated its regulations to include a technical amendment that updates the names of five military installations previously included in Appendix A:
- Fort Cavazos (formerly Fort Hood);
- Fort Gregg-Adams (formerly Fort Lee);
- Fort Johnson (formerly Fort Polk);
- Fort Liberty (formerly Fort Bragg); and
- Fort Moore (formerly Fort Benning).
These changes reflect a recent decision by the U.S. Department of Defense to rename these installations. Importantly, as of the date of this alert, these name changes have not been updated in the CFIUS Geographic Reference Tool, and companies should carefully cross-reference the prior names when conducting any proximity analysis.