The U.S. Air Force is finalizing a deal with British-owned Balfour Beatty Communities to take over the ownership and management of all existing and new housing at Mountain Home Air Force Base.

Base officials expected the transfer of ownership to happen as soon as Aug. 1, but the negotiations are ongoing and may not be concluded until January, said Ian Smith, who has been involved in base privatization negotiations for the U.S. Air Force for almost 10 years.

Smith said lenders want some assurances that their investments won't be lost if there are base realignments and closures, such as a limited loan guarantee. Talk about the need for the Department of Defense to cut expenses earlier this year had raised some red flags in the private sector.

"What we have to do is work out the details, so it works out for both parties," said Smith, who is based in San Antonio, Texas. "I don’t see this falling through. Both sides have way too much invested in this to let something like that happen."

More than 3,000 airmen and family members live at Mountain Home Air Force Base.

Base officials said there are plans for Balfour Beatty to demolish about 311 dilapidated housing units and build 60 new ones (a unit is a single-family home or half a duplex). The company will add new amenities, including a community center and sports fields. The development is estimated at $10 million to $15 million.

More than 50 U.S. Air Force bases have already privatized their base housing, turning over the management and construction of housing to private businesses.

Mountain Home Air Force Base is part of a group of six bases — collectively called the Northern Group — that are among the last to be privatized. The others are: Minot, Grand Forks and Cavalier Air Force Station, all in North Dakota; Ellsworth in South Dakota; and Cannon in New Mexico.

The Department of Defense and Congress decided in 1996 that housing privatization was the way to go. At the time, half of the U.S. military’s 270,000 family housing units worldwide needed renovation or repair at an estimated cost of $25 billion.

For the past 15 years, the military has worked to convey ownership, construction and management to private companies. The goal: use private-sector financing to quickly improve aging housing through renovations and building new homes.

Katy Moeller: 377-6413