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DoD News Briefing: Mr. Kenneth H. Bacon, ATSD PA

Presenters: Mr. Kenneth H. Bacon, ATSD PA
March 17, 1995 1:30 PM EDT

Wednesday, March 15, 1995 - 1:30 p.m

Other participants were Mr. Joshua Gotbaum, ASD, Economic Security; Mayor Katy Roberts Podagrosi of Rantoul, Ill. and Mayor Edward "Ned" Randolph of Alexandria, La.

Mr. Bacon: Good afternoon.

The theme of today's briefing is, "Yes, there is life after BRAC." We're pleased to have with us Josh Gotbaum, the Assistant Secretary for Economic Security, and he will lead you through sort of a how-is-it-going briefing on the community reuse plan which he runs for bases affected by the base realignment and closure process.

He has brought with him three people, and we're very lucky to have them here. Three people who can tell you personal experiences about their efforts to bring new life to bases that have been closed by the military. First, we have Katy Roberts Podagrosi of Rantoul, Illinois, home of the former Chanute Air Force Base. We have Mayor Edward "Ned" Randolph of Alexandria, Louisiana, home of the former England Air Force Base. We also have Ben Williams who is the Deputy Director for Planning and Research for the State of California, the Office of Governor Pete Wilson.

Welcome to you all, and Josh will kick things off.

Mr. Gotbaum: Thank you very much.

Given all the activities that we've been engaged in before the BRAC Committee, i.e., making recommendations about closure, we thought it was equally important to make clear and explain that there is life after base closure. That the bases that we leave and close down are turned into other kinds of facilities; that new jobs are created; and, in many cases, what communities find is after the first response is there are new jobs, new businesses, and other new uses that are substantial, -- and in some cases as substantial, or more substantial than, when the base was open.

So what I'd like to do this afternoon very briefly is talk about what we do in the federal government to assist in this process, and then, frankly, let some of the heads of the communities talk about what their experience is.

If you all thought the process of deciding whether to close a base is complicated, then let me tell you that the laws, regulations, etc., under which we have to dispose of base property are even more complicated. As a result, before we can dispose of base property, we have to go through moving people out; making changes, doing environmental reviews, negotiating transfers, in some cases, various kinds of conveyances. It is a long, complicated, involved process. In order to help communities respond and take advantage, we do a number of activities either ourselves within the Department of Defense or with other federal agencies.

First of all, we offer transition assistance. There is within the Department of Defense a small, highly competent group of people who provide both technical advice and modest planning grants called the Office of Economic Adjustment. This is a group which has for many years been able to help communities figure out how best to get organized, what kinds of reuse are capable of being planned for, and providing limited planning grants. We're talking about several hundred thousand dollars, -- $300,000, $400,000, $500,000, -- depending on the size of the community and the size of the grant. To help communities get started.

In addition, we have as a result of President Clinton's directive, in every major base closure community, a base transition coordinator. This is a person whose job it is full time to be an ombudsman or ombudswoman, to make sure that local communities that are interested in property get the story straight; to make sure that communications are open between communities, interested parties, the base commanders, the Department of Defense and other federal agencies. There are now over 70 base transition coordinators. As a result of the latest round of BRACs, we believe there will be between 30 and 40 more. So one thing we do is provide assistance to communities and planning grants to help them get started.

The other thing we do is try to make the process of disposal more streamlined. As I mentioned, we operate under an extraordinary array of laws from the Federal Property Act of 1949 to the National Environmental Protection Act of 1972, to three separate base closure pieces of legislation, and two pieces of legislation, -- both helpful, [created] within the last couple of years to make this process more streamlined. And we are beginning to do so.

The old process was one, in effect, in which everybody had to wait in line. After a closure decision was made, first you had to offer the property to the Department of Defense and wait and see if they took it. Then you offered it to other parts of the federal government and waited to see if they took it. Then you could offer it to representatives of the homeless to see if they took it. Then state and local or private developers. As a result, we had a fairly long, complicated process.

The President of the United States in July of '93 said that can't stand -- we need some improvement. As a result, we are now doing property disposal on a more streamlined basis.

The other thing we're doing is we are trying to do faster environmental cleanup by doing it on a coordinated basis; by creating cleanup teams that include team members from the Department of Defense, from EPA where appropriate, from state and local environmental authorities; so, that working together, they can walk the base and figure out what kind of remediation is necessary.

No one would ever say that the process of cleanup is quick or easy, but what we're trying to do is do it faster and better. And we believe that we're doing so and we're making some progress.

This is, for the first three rounds of BRAC, the time it took to pull down the flags on the bases in that round. In BRAC '88, the first round, it took us almost four years to close half of the bases. In the latest rounds of BRAC we've cut that time basically in half. So we're doing this process faster.

Similarly, communities and developers are also learning more and learning how to do this process faster. As a result -- the first round of BRAC -- it took the average community over two years to develop a base reuse plan. This is a general document that provides some guidance so, that within it, we can figure out what uses make sense, what kind of conveyances make sense. Should you convey as parkland, should you convey as an educational institution, should you convey as an airport, or, as we're now legally permitted to do, should you convey for job creation?

So five years ago the first round of BRAC: two and a half years to do a base reuse plan. BRAC '91: a year and a quarter, 1.3. BRAC '93: half the communities had reuse plans within a year.

So what we find is that we're making real progress. What we hope to do is to have people talk about what the process has been and how they've dealt with it.

The result of that process, and I'm going to leave the mayor to explain.. That is, what were federal bases become a range of uses -- aviation, in some cases education, in some cases recreation and so forth. That really is all I want to say at the briefing stage.

This is a complicated process. This is one that the President of the United States has said personally the federal government will do better. And it's one we are, I believe.

Furthermore, as I will leave it to the mayor to tell you, what communities have found is that after base closing there are new jobs. In some cases there are better jobs. There's a diversity of uses. So what they find is in some cases, in many cases, a healthier economy and greater job creation.

On average, what we find thus far is a year after the formal closing -- a year after the flag comes down -- about 60 percent of the civilian jobs lost have been replaced. So there is substantial new job creation and we expect there will be more.

If I could, why I don't I turn over Mayor Randolph from Alexandria, Louisiana, to talk about your experience and the process as you found it.

Mayor Randolph: Mr. Secretary, I want to tell you how much we appreciate your help and the help of your staff in making this reuse a lot more beneficial and helpful than it might otherwise have been.

As you know probably, on March 28th we're going to have our long term signing of the lease -- long-term lease signing ceremony -- and I want to give you this personal invitation to that signing. I know our offices have been in contact, but I just wanted to do that, too.

Mr. Gotbaum: Thank you very much. I'm sure he says that to all the Assistant Secretaries. (Laughter)

Mayor Randolph: There is life after base closure. I think there are some very successful examples of that across the country.

If I can leave any one thing with people who are facing what we faced in the middle of 1991 when we were on the base closure list and then when Congress finally made it a done deal, that would be that you start as early as possible -- the communities -- getting together. As early as possible in the process. Don't wait for the closure list. Some have already waited for the closure list. But if it's possible, don't wait. Start a year ahead of time, or whenever, in deciding and planning and researching on what you're going to do when and if that base or that facility is closed. Those that have been successful in reusing, in my opinion, are those that started that planning process early on.

 

That's not to say that communities shouldn't fight to save their facilities, because in my judgment you have to do that. I don't know of any community that hasn't come up to Washington and lobbied their congressional people and talked to the Pentagon and tried to tell why their facilities shouldn't be closed, and the national interest it shouldn't be closed, economically at home it shouldn't be closed, and all the reasons that we all hear. That fight should be made. But at the same time, they should be dual-tracking. There should be another fight, if you will, going on, and that is the fight to reuse it in a successful way.

Alexandria is right in the center of Louisiana. It is the largest city in a large geographic area of the state. About 50,000 people in the city, 100,000 in the urban area. England Air Force Base was -- and the England Air Park Facility, which is what we call it now is -- just adjacent to the city limits. Al to of communities, I think, will be in that same situation, where the facility is not wholly within the corporate limits of the larger or any of the towns, but in the middle of several communities that make up indeed a large community.

England is just northwest of the city, but it's in kind of the heart of our parish which is like most people's counties. We call them parishes. The governing authority of the Parish of Rapides, the governing authority of the City of Alexandria, the governing authority of the smaller towns in the parish and the Chamber of Commerce representing the business community all got together in this planning process to decide how we were going to go about reusing it at an early stage in the process, as I said.

We asked for legislation to create a district governed by a Board of Commissioners that would speak for the community with one voice, and that is really important. If you don't do that, you're going to be fighting with.. The parish governing authority will fight with the city governing authority will fight with the civic or business leaders in the community, and the smaller towns who know they have an interest in what happens. That can go on forever. I don't believe we would be near where we are now if we hadn't come to grips with that kind of process in establishing the Redevelopment Agency as a combination of the whole community so that it can speak with one voice -- not only with the government, the Pentagon, OEA, the state legislature, but the prospective tenants that come and look at your facility to see if they want to bring something there.

We have been very successful. We had almost 800 civilian jobs at the end of '91. Our base closed in December of '92 when the last Air Force people left. We had a little under 800 civilian jobs at the end of '91. We have over 800 now. We're still open for business. We're still inviting prospects to come and let us show them what we've got.

We have reused the England Air Force Base school. It's now an elementary magnet school -- really a top notch school, academically tops. You have to have certain grades in where you're coming from in the elementary school to get in, or take a test if you haven't gone to school yet -- K-5th grade. A tremendous program, touted by a lot of education people already.

J.B. Hunt Trucking Firm has produced over 200, almost 300 jobs. Trained over 2,000 truck drivers since they've been there. They were the first tenants, they were kind of the anchor. It got a little easier after we got that first one. But they were there with a driver training school actually before the last Air Force people left in December of '92. That's because of the hard work and the help that OEA has given us and the hard work at home by the Redevelopment Agency.

We have general aviation there already. We have a 24-hour tower open. We will be moving in the next year -- or year and a half -- a commercial aircraft operation from where it is now -- which is quite east of Alexandria and off the beaten track, really -- to this facility where it will be in the middle of a critical mass of people in the area And, also, the transportation network is close by -- the interstate and other improved roads.

The hospital is being reused by a state hospital, but [is] a new facility for them. It's a new out-patient facility creating 174 jobs. The golf course is being used. There are plans now to use other recreational facilities out at the air facility. We have aircraft maintenance and other maintenance jobs. So there's over 800 in total, and we have plans for many more. We thought by this time we'd have six leases. That was the plan. We have 13 leases already. So we really got started early and we're off and running.

The England Authority as we call it, which is the Redevelopment Agency, has jurisdiction legislatively in economic development over the whole parish. Of course jurisdiction by governing the facility -- over the facility -- were all the examples that we have talked about are there. It's a little city. It's a ready-made tool for economic development.

An example I want to leave you with as to why it's good for the Redevelopment Agency to have economic development jurisdiction over the entire parish or county, if you will, is something that happened to us when Boise Cascade came to the England Authority looking at the England facility to see if they could put together something there to build a new laminating plant and employ 200 to 400 people eventually. Couldn't quite make it work at the England facility, but they wound up about 14 miles to the north, still in Rapides Parish, and will build that facility within the next year or year and a half there. It helps our whole area in economic development just as much as if they had been at the England Authority. So that's kind of an example of how it all works together.

These facilities will become magnets for economic development. They will draw interest from all over to the facility. Obviously in the case of Boise Cascade, and there are a couple of others that haven't been announced yet, [who] have looked at that facility but see something else they can put together in the area, and they stay there and create those jobs that we sorely need.

The mission of the Redevelopment Agency is obviously to create jobs that have been lost by the pulling out of the Air Force at England Air Force Base. That's the mission, and that's what we're about.

It's been an interesting experience. It's been a rewarding experience, and I think the future is even brighter. We are working together in our community on this and other things, because of this. That started with that fight openly to save the base, to save the facility. It's carried through with the reuse of the facility. And I've got to be frank with you, it carried through in a lot of other adversities that we have in our community. Problems that we've had that we have worked together. And I think you can point back to that day when we all started getting together to try to see what we could do about stopping the loss of the jobs and then creating the jobs that we had lost.

Q: How many civilian jobs did you lose when the base was first closed?

Randolph: The statistics from the Pentagon at the end of December of '91 was approximately 790 jobs.

Q: And you've picked up another 49 now, so you're on the plus side.

Randolph? That's correct?

Q: How many military personnel...

Randolph: We had right at 3,000 military jobs on the base.

Q: I think what I'm getting at is, what does this mean in terms of your tax base, in terms of income for the community, for the region? Are you still on the losing side in terms of...

Randolph: Well, there was a $70 million payroll when the Air Force was there in the end. But we have found that since then, that something we didn't know before. That is, a lot of that doesn't come into our community because it was being spent at the base exchange and being spent in other places back home to buy cars and that kind of thing. So we don't really think we lost a net $70 million direct payment. We have created almost a $13 million payroll with this replacement that's already gone on, and probably double that with indirect jobs that have been created.

Our sales tax, instead of going down by ten percent which was anticipated and predicted, has actually increased steadily since the base was closed. Our government -- our local government especially -- runs most of its operation off of sales tax. That was something we were scared to death of. As mayor, I could see losing ten percent and having to lay off several hundred people and being run out of town...

Q: It did come from sales tax?

Randolph: Yes.

Q: What's the average salary comparison... Civilians who worked for the Air Force average salary, versus the average salary of the people who work at the facility now?

Randolph: We're using a conservative figure of $15,000 times the 849 to get the figure that I told you about, the total figure. We think that's conservative. It's really higher than that. I think overall it's higher than the civilian salaries were when they Air Force was there.

Q: What about the impact on the housing market?

Randolph: We haven't done anything significant yet with the housing. One of the reasons why we've been waiting is because we didn't want to dump 600 housing units on our local market.

The housing was depressed at the time the base closed, we were afraid it was going to be depressed even more. People backed off awhile to see what was going to happen. Now there's a big demand for housing. So the agency will start releasing some of that housing, especially the goal is to try to help tenants come by showing them that they can provide housing for some of their employees. That's the first step.

Q: Who has control over the housing right now?

Mr. Gotbaum: We have a couple of other folks talking, and I suspect that the questions you're going to ask are also going to be asked of them, too. So if it's all right with you all, may I suggest, let Mayor Podagrosi tell her story and Ben Williams tell his, and then open it up for general questions.

Mayor Podagrosi: Greetings from Rantoul, Illinois. Mr. Gotbaum, Mr. Dempsey, fellow reuse communities, and members of the press.

Rantoul is a town in central Illinois of about 20,000 people. It's located about 20 miles from Champaign/Urbana, home of the University of Illinois. Until September of '93, Chanute Air Force Base was located in our town and was second only to the university in being the largest employer in Champaign County.

Shortly after we received word in 1988 that the base would be closing, we commissioned a university study on the effect that the closure would have on Rantoul, and we found that if we did not scramble very hard, that we would lose 65 percent of our economy. Evidently we had our work cut out for us. We were losing 1,000 civil service jobs, 1,600 non-appropriated fund and contracts-related jobs, and some 4,000 to 5,000 military.

We have worked, and we are successfully overcoming this horrendous challenge.

Since December 29, 1988, Rantoul has added some 2,500 additional jobs in Rantoul -- 1,300 off base, and around 1,200 on the former Air Force base property. In fact today, we're at the year 2001 in our long-range financial and jobs development projections. We have 45 new industrial and commercial tenants occupying 1.3 million square feet, generating $1.2 million in annual revenues -- that's the lease money that comes in to help us pay for the airport.

We stood to lose over half of our municipal income, but we've had no decreases. Our property valuations and all sorts of municipal tax receipts have increased slightly. They were static over all these years since 1988 at least they didn't go down -- and now they're beginning to go up.

A 40 percent increase in the use of municipally supplied electricity indicates a great deal of industrial activity. Over 300 new families have moved into the former Chanute Air Force property, and about 40 more a month are moving in. We had a total of about 1,400 family housing units out there to fill.

In Washington, 40 a month may not see very significant, but remember, we're talking about Rantoul, Illinois -- population less than 20,000.

This won't seem significant to you until you think about it, but participation in team sports in Rantoul increased 25 percent in 1994 -- one year after closure. A total increase of 55 percent since 1988. To us, this indicates a community that remained alive, vital, and it offers a great place to play as well as to work.

These things didn't happen by accident. Most of you know my name because we've corresponded with everybody in Washington except Socks, and, at times, we've even considered writing him. It's been a tenuous journey getting from there to here, but with the help of a lot of good people, it has happened.

It will be easier for those coming after us, because when we needed to accomplish something, often the laws had to be re-written regulations clarified, or staff added to enable the action that we needed. The Pryor Amendment has been adopted, the transition coordinator is in place, and I take full credit for that entire program since I called for a federal ombudsman way, way back. Everybody that came out our way or every time I came here, I said give us somebody with enough rank and enough voice that we can believe what they say and we can believe that they're going to take our message back. That message came through.

The Economic Adjustment Office is more fully funded, and EDA funds have been released to respond to the needs of communities facing base closure.

We enlisted the help of the Illinois Congressional Delegation and they've been superb. Senator Dixon, now leading the Closure Commission, was an early champion for Rantoul and remains one of our greatest allies.

We yet have a long way to go. There are deeds to be transferred, utilities and roads to assume, personal property to transfer, and countless details to be worked out. But we're working with good people who are working our priorities of jobs and population first, and then the other concerns can follow after that.

I remember meeting Allen Olsen, Director of the Air Force Base Conversion Agency, for the first time in front of Senator Pryor's committee on base reuse. He took my concerns that day seriously, and I can truly appreciate the work that he has to do, but I know that if the law will allow him to do it today, he will do what he can do to make it work in Rantoul.

I am excited about the future of Rantoul and the continuing challenge of filling up the Chanute property. Among the things that I think have contributed to our success would be these, as the mayor before we mentioned. We have spoken with one voice from day one. Our community didn't have any fighting about who or what group would be in charge. We knew that our survival depended on working together.

We were fortunate that all the Chanute property was in the city limits of Rantoul. My office is two blocks from the main gate. If we were to avoid boarded up windows in our front yard, we had to get the buildings used. Chanute is, or was, essentially a college town. There were no overriding serious environmental concerns like some of the other bases which we really feel for. But for the problems that we had, such as buried tanks and landfills the federal government -- and I think this was surprising to us -- has moved ahead on this program. We've seen no indication that the federal government doesn't intend to do a good job of cleanup.

We patterned our reuse structure after Bangor, Maine, and Roswell, New Mexico. They were successfully redeveloped towns that we identified with easily. They used existing city administrations and mostly local people to handle redevelopment. We hired one out-of-town individual, and he has become one of us and plans to remain with us as airport manager. Last, we were conservative in the amount of property that we acquired from the federal government. I did bring some handouts for any of you that want them that shows what we took as public property and what we left to be bid out.

We took the airport and airport support properties and some recreation properties. The remainder of the dorms, the housing, the administrative buildings, the hospital, the golf course and officer's club were sold at public bid to private developers. They were advertised nationwide. But every successful bidder came from those that we had recruited over the three or four years before the eventual sale. They are now our partners in marketing, and we haven't spread ourselves too thin in trying to take all of the base.

The Air Force worked with our zoning map in identifying parcels for sale and we're fortunate that all successful bidders have followed our redevelopment plan.

If I could make one suggestion for base closure situations, I'd like to see the local redevelopment authority -- whether we're talking about towns or separate authorities -- have the final sign-off on bid sales. $50 shouldn't make the difference between a responsible developer with adequate financing and an out-of-town speculator who might acquire property in the middle of town and sit on it for years waiting to arrange financing or for market changes. Community sign-offs with adequate safeguards for the government could assist communities in assuring quality redevelopment.

Again, thank you all for having me here, and I'll be available for questions if you have any.

Mr. Williams: Thank you, it's a pleasure to be here today. My name is Ben Williams. I'm with the California Governor's office, and I've had more or less oversight of base closure issues in California and have worked with communities in California facing base closure. As I think most of you know, California has faced more base closures than any other state in the nation. Currently, most of those have lakefront property, so if you'd like to make reservations, I'd be glad to take any orders. You need to act quickly, because I understand it's starting to dry out a little bit now. [Laughter]

At any rate, most of our communities -- as they've faced base closures -- as any other communities like the two we just heard from, immediately have a response of despair and uncertainty which is certainly understandable. We believe there is a great deal of hope. In fact, we see base closures and base reuse as being one of the areas where California -- which tends to be kind of constrained in terms of availability of developable land for industrial uses and other uses, urban park uses... We believe base closure may offer a great deal of hope for the future in that area.

California has seen a number of notable successes in base reuse. Fort Ord, many of you may know, is going to become home of the newest campus of California State University. It will be a different type of campus for California State University in that it will be a resident campus. It will specialize in a number of environmental fields that will tie in with other interests in the Monterey Peninsula. Adjacent to that there will be a University of California Business and Research Center. California and the Department of Defense and the federal government generally have been very supportive of these concepts and we believe they will move along successfully.

Probably the greatest, most noteworthy success that we've had was one that was just officially unveiled, or officially came about, about two or three weeks ago with the transfer to the City of Sacramento of the Sacramento Army Depot. Most of that facility is being, in turn, leased to Packard Bell -- a computer manufacturer -- one of the most successful computer manufacturers in the country right now, and they are at this moment manufacturing and turning out computers at Sacramento Army Depot. They currently are on their way to employing about 1,000 individuals. They project that possibly within the next couple of years that could increase to 3,000 which would, in turn, offset the business losses or the employment losses from the base.

This, of course, is something that is most welcome as we look at reuses. We have a couple of other areas where we have some hopes for the future. One is at Norton Air Force Base where also the property transfer has occurred just a week or so ago. There was a ceremony at Norton to accept the transfer of the remaining parcels of the base.

In the case of Norton it will be a little bit different from what happened at Sacramento Army Depot in that it's going to be more creating and building jobs a brick at a time. This is, I think, what we're going to more typically see at military bases, rather than the sudden, one big employer who solves all of your problems. I think it's going to be a little bit longer term, more marketing oriented process. At Norton they are very aggressive in seeking users. They currently have lined up employers for about 1,000 jobs. The base, I think, initially employed about 4,500. At the time of closure I think it was around 4,500. They project that by the end of the decade they may well have about 10,000 jobs. That's what their goal is, more or less, 10,000 jobs for the base. They believe they can make it there.

I believe that we're definitely moving in the right direction in the area of base reuse. As has been mentioned in 1992, we had passage of [circle] legislation which allowed parcelizing the bases and transferring the contaminated area on bases to allow reuse at the same time as the cleanup is occurring. In 1993 we had the Pryor Amendment passed, a very significant piece of legislation. Last year we had some very positive regulations that came out of Mr. Gotbaum's office to implement the Prior amendments. We also had, very notably last year, reform to the McKinney Homeless Assistance Act which most of our communities are often to fall into, to adopt, basically to take care of the homeless situation on the bases through the community plan rather than the previous procedure of homeless interests claiming property on the base without regard to the community plan.

We believe that there are more things that are needed in the coming year and we're looking forward to working with Mr. Gotbaum and with Congress and so forth to continue this process and to keep it moving in the right direction. As I say, we are optimistic about the future and we certainly hope to see more efforts of the sort that we've seen in the last couple of years.

Thank you.

Mr. Gotbaum: We'll answer whatever questions you have.

Q: Mr. Gotbaum, I understand that all of these are actually owned by the military, (inaudible) properties. The ADCOM facility (inaudible) in the St. Louis area, those buildings are (inaudible). Does that complicate or make any difference in what (inaudible) might be able to do and what (inaudible)?

Gotbaum: It means that obviously, GSA will be involved in the solution, but I fully expect that we will have a base transition coordinator to assist int he process at ADCOM. And in effect -- the services that we provide -- we'll make sure they're also available in St. Louis as well.

Q: The Navy Nuclear Power School at Naval Training Center, Orlando, has been redirected to go to Charleston. Isn't that going to be more expensive than just leaving it in Orlando? There's a good facility in Orlando, I understand. Why are you moving it -- recommending you move it -- to Charleston? How much additional cost is that going to be? Was there any politics involved in that?

Gotbaum: Let me be very clear about the BRAC process. We run that process by the numbers. Congress basically designed the process knowing that there would be political pressure on every single decision, so they said we want a process that we can tell people is done by the numbers, independently of politics. That's the process we have.

In the case that you mentioned, the Navy, first of all, had more training capacity and more school capacity than they thought they needed. They said we're sending submariners to Charleston for six months of a year anyway. We've got extra real estate in Charleston. Why don't we combine the two pieces of the training -- one had been in Orlando, the other had been in Charleston. Why don't we do all that training in one place, which will do two things. One is, it will enable us to save money and save the taxpayers money. Two, it will enable submariners to spend a year in one place instead of two six-month hops. So that one is one that the Navy thought was of benefit to sailors and of benefit to taxpayers, both.

Q: What about cost?

Gotbaum: It's a benefit to taxpayers. A net savings.

Q: Do you have figures?

Gotbaum: I don't. But I'm sure since every piece of information on the base closing process is publicly available we can get it to you, and it's already in the reading room at the Base Closure Commission.

Q: Perhaps you covered this at the very outset, but excluding the round that was just recently announced, how many bases were scheduled to close, how many actually, as you say, have flags taken down?

Gotbaum: The base closing process involves hundreds of different facilities. For our purpose of keeping track, there are about 70 in the first three rounds that have been slated to close. About half of those have already had the flag come down.

Q: Major bases?

Gotbaum: Yes.

Q: I was wondering if the communities used taxes and bond financing in any way as part of the conversion?

Podagrosi: Not yet.

Randolph: No, but the example that I gave about England and Boise Cascade, (inaudible). There will be the vehicle for revenues to do some bonds for Boise Cascade to be able to build that facility.

Williams: Most of our communities will use the redevelopment law in California which involves the issuance of tax increment anticipation bonds which I believe are tax-exempt for state purposes. I don't know about (inaudible).

Q: Can you walk through the types and amounts of assistance that's available for reuse and retraining and various other kinds of closing assistance?

Gotbaum: I can walk you through types, I can't put dollars on it, but let me start from... From day one we in the Department of Defense offer, if you will, the following. One is, we offer technical assistance. In our Office of Economic Adjustment we have people who have done economic development and reuse before themselves. They've been through the process of organizing, they've been through the process of figuring out what reuse makes sense and which ones don't. We also offer planning grants. These are usually cost-shared but not always. Their purpose, essentially, is to enable a community to get started, to hire initial consultants to say housing makes sense here, it doesn't make sense there, etc. In addition, as I mentioned, we have a Base Transition Coordinator -- an ombudsman or woman -- whose job it is to provide access and coordination, communication. That's what we do in the Department of Defense.

I should say that in addition, each service -- each military department who is the landlord for whatever base -- generally provides some personnel, some judgment, some information.

For military personnel, we offer... We obviously do relocation. For the civilians we offer job assistance and what we call the priority placement program to enable people to find other suitable jobs within the department or within the government. But if they can't, we also offer job training and job search assistance.

Beyond the Department of Defense, other federal agencies also have programs to assist base closure communities. In Commerce, the Economic Development Administration has a separate set of programs to both provide some planning assistance and also some infrastructure assistance. You may discover, as these mayors have, that you have a facility with lots of potential but not exactly the right infrastructure for development, so the Economic Development Administration has funded access roads, bridge improvements, etc., to enable these facilities to be reused.

The Department of Labor also has a series of broader job training programs, job training assistance programs. After the last base closure round, the Secretary of Labor, Bob Reich said, why don't we make sure that our people essentially go out there. He set up a SWAT team. As a result, people from the Department of Labor went and visited every base closure community. Again, we'll make sure those sorts of services are provided again.

Q: Specialized uses, Federal Aviation..

Gotbaum: An important point. It is also true that we transfer property not only for job creation -- although that's the one for which we have the latest authority -- but also for parks, educational facilities, etc., and each federal agency that's involved with that provides some people to essentially assist a community in figuring out whether they can or cannot qualify as an airport, as an educational conveyance, or as recreational and park sorts of conveyance.

Q: For communities that might be just starting in on this process, where do they start? Is there a single point of contact for them? Do they have to go to each one of these agencies...

Gotbaum: For every community that's targeted, there will be a Base Transition Coordinator.

Q: That coordinator knows where to go and...

Gotbaum: He is trained by us to know all of these programs, and will be on site. In addition, for every community that's on this background, there will be a project manager in the Office of Economic Adjustment, a person whose job it is to provide technical assistance and to get initial planning grants. As a result, any base closure community today can call the Office of Economic Adjustment and say I'm Community X, I would like some initial help. By the time the Base Closure Commission makes its recommendations, and those recommendations acquire the force of law -- which is this fall -- there will be a Base Transition Coordinator whose job it is to be helpful full time.

Q: Every base that's on the current list has a designated ombudsman...

Gotbaum: Not yet. What we are doing now is we're picking the people and training them so that by the time the BRAC process is completed in October we will have trained people assigned to each major base.

Q: They don't have them there now. What about communities that are looking...

Gotbaum: Right now, call the Office of Economic Adjustment.

Q: How much money did you all have to sink in -- either of your own money or federal money -- to kind of construct and customize those bases to bring in the new facilities? How much did you have to put in for roads, if any, or new buildings?

Podagrosi: I can answer that only partially, because we're still in the process. But of the things we've had to spend money on is, I think about 25 percent for matching grants for most of the things that you get, so there is a good deal of money involved there.

My driving force in all of this planning has been to try to keep from having to raise taxes on this little old lady who lives over on Girard Street, who lives on social security. I don't want her taxes to have to go up to pay for changes we have to make out on the Chanute Air Force Base property. We have yet to acquire the streets and water and those things. We do anticipate making some changes and it having to cost us some, but we are beginning to get some tax revenue off of the other properties. We're hoping that that will offset what we have to spend on that. It won't be all of it by a long shot.

We're also trying to establish a TIF District over the Chanute property by special state legislation which will enable us to keep all of the property taxes active on those properties. Not so much to help the individual developers, but to help us with things like roads and water plants and steam plants and things like that.

Q: What's TIF?

Patagrosi: Tax Increment Financing. All the property taxes raised there then -- rather than go to the different taxing bodies -- would go to the municipality to pay for those things.

Randolph: I'm not sure I can give you a total figure, but the state legislature for three years now -- and it's out --has appropriated quite a bit of money, probably $2 million total, I guess, something like that. I don't know how much...

Voice: From the Economic Development Administration it's probably about $6 or $7 million for infrastructure.

Randolph: And for operational budget, it's... Of course, we spent more than we've taken in but it's coming together quite nicely as we get more and more leases on line.

Williams: Most of our bases don't have, at this point, good concrete numbers in terms of estimates. We do have two that I'm aware of that have completed some rather extensive analysis of infrastructure costs. One is at Norton Air Force Base where they did almost a building by building, structure by structure, street by street inventory, and they came with something in excess of $250 million as being the total cost over a period of time. [Patuxent] Marine Corps Air Station similarly came up with, I believe it was $171 million. These, of course, are long-term costs, and the largest portion of it is both on-base and off-base transportation needs -- mostly widening roads, interchanges, main roads onto the base and so forth.

In the case of Norton, which currently has been transferred, they have had some grants from EDA and we're working on some state funding to help with some of the building retrofit. The EDA grant, I think, was in the neighborhood of $7 or $8 million. The state retrofit money is around $1.5 million. There have been a few other small sources. The major source of revenue they have to look for is redevelopment funding which currently, for them, provides them about $2 million a year. That actually is redirected state money because of the rather arcane methods that California has of collecting taxes and distributing them. I anticipate, at most, bases... That's going to be the major source of local revenue for infrastructure.

Q: In terms of federal money for some of these programs that you outlined just a couple of minutes ago, isn't it true that some of the recisions and the President's '96 spending plan as well, call for less money for some of those programs that you outlined than in the current budget?

Gotbaum: In our budget in the Department of Defense, I believe that is not the case. As far as I know, no one has proposed rescinding the transition planning grants from the Office of Economic Adjustment and nobody has proposed disestablishing base transition coordinators. In fact, because of the BRAC '95 round we're increasing the budget allocation for planning grants to about $60 million, if I recall correctly.

Q: From what?

Gotbaum: From $39 to $60.

Q: From $39 in FY95 to $60 in FY96?

Gotbaum: Yes.

Q: What's the total for overall federal budgets from all the agencies?

Gotbaum: I'll have to get back to you on that one. That's not a number I have on my fingertips.

Thank you very much.

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