Forbes.com July 17, 2003
Don't Fight It
By Emily Lambert
Closing a military base hurts, but there may be opportunity in it.
That news may be hard to believe in U.S. military towns facing possible base closures, some of which are already suffering economically during long troop deployments.
The Pentagon has said that the military is bloated and needs to be trimmed by 23%. In 2005, it wants to roll some functions of small bases into bigger ones and possibly move others overseas. It's scary news for communities that depend on income from those bases, which collectively pump billions of dollars into local economies. The Department of Defense hasn't indicated how many or which bases will be affected, but it has plenty to choose from: There are about 400 big and medium-sized bases and thousands of small ones in the U.S. and its territories.
If the Pentagon gets its way, this will be the fifth wave of base closings since 1988, and communities are desperately lobbying to be spared. In Tucson, Ariz., groups of business leaders are making regular trips to Washington to help protect the Davis-Monthan Air Force Base, which is the third-biggest employer in Tucson behind the University of Arizona and defense company Raytheon. Florida Chamber of Commerce President Frank Ryll says military bases have a $30 billion impact on the state and that he'd like to have more of them, not fewer. Florida also has defense contractors such as Lockheed Martin, which is in Orlando, to think about. In California, the Department of Defense spent $36 billion in 2002, and $10 billion in the San Diego region alone. In Texas, the military spends $18 billion a year, but economists calculate the total impact to be $43 billion.
States and communities are spending millions of dollars lobbying, and lawmakers are listening. In May, the House Armed Services Committee proposed poison pill amendments to a bill that could block the closures. But it may a losing battle. John Pike, director of the military research group GlobalSecurity.org, says there will almost certainly be fewer troops and facilities in the U.S. in the future. "That's been a continuous trend ever since the end of World War II," he says.
Closures can be devastating. Shuttered bases can leave behind not only dependent communities but environmentally devastated sites. But in some cases closures let communities move forward, especially in urban areas where bases are hogging prime real estate. Don't expect to hear it from local officials because fighting for base closings is political suicide. "Can you imagine North Carolina without the Marine Corps? That's beyond their psyche," says Christopher Hellman, an analyst at the Center for Arms Control and Non-Proliferation, a Washington, D.C.-based think tank.
But Cameron Station in suburban Alexandria, Va., for years the home of the Defense Logistics Agency, now has 1,600 townhouses for sale at prices up to $500,000. In Texas, Bergstrom Air Force Base, which was tapped in the 1991 round of closings, reopened as the Austin-Bergstrom International Airport in 1999. John Almond, the project director, says the timing was ideal because Austin had outgrown its municipal airport. Dell Computer, 3M and Motorola are some of the companies that use the expanded airport.
In North Charleston, S.C., the community recently took over a navy base that ceased operations in 1996. The city and developers plan a massive redevelopment project that will take 20 years, $1 billion and include 3,000 acres. "All the political and business leaders tried to keep the base from being closed," says developer John Knott Jr.
"You can't imagine life without the military base, but you manage," says John Allen Williams, a professor of political science at Loyola University Chicago. He recalls Fort Sheridan on Chicago's North Shore being turned into upscale condos ("barracks loft condominiums" go for $500,000) and Newport, R.I., falling back on its tourism. "Sometimes creative things come out of necessity," Williams says, "I don't see the military as a public works program."
Some towns, like those surrounding Fort Benning in Georgia, Fort Hood in Texas, Fort Carson in Colorado, and Fort Drum in New York are almost completely supported by military installations. But even there, entrepreneurs might benefit from a proposal made by Maine Sen. Olympia Snowe. Last Tuesday, Snowe proposed--as part of the Small Business Administration 50th Anniversary Reauthorization Act--a provision that would give small businesses near shuttered bases the chance for preferential treatment when vying for government contracts. The program this falls under has a budget of just $2.5 million, but the message is clear: Economic life goes on.
Copyright © 2003, Forbes.com
