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Closing Bases Tough but Necessary
Prepared statement of Joshua Gotbaum, assistant secretary of defense for economic security, The Military Installations and Facilities Subcommittee, House National Security Committee, Thursday, February 23, 1995

This is my first appearance before your subcommittee. I am especially pleased to be asked to testify on the crucial issues of base closure and reuse. Within the Office of the Secretary of Defense the organizations and individuals responsible for these important efforts report to me:

 

  • The deputy assistant secretary of defense for installations works with the services in deciding what installations will be recommended for closure or realignment.
  • The base transition coordinators are the department's on-site ombudsmen at closing bases.
  • And the Office of Economic Adjustment helps communities plan for the reuse of the facilities.

Obviously I cannot comment on the recommendations that the secretary of defense will make next week. I am happy to summarize the process and its importance to defense.

As you all know, the size of our military force and our budget both have been shrinking. Unless we downsize our infrastructure as well, we run the risk that funds will be spent on infrastructure that ought to go to readiness and modernization -- in effect, that the tail would swallow the teeth.

Congress recognized that any base closing process must unquestionably be fair. The BRAC [base realignment and closure] process was designed to be as objective, as public, as auditable as any process in government. The law requires that every BRAC recommendation must be made in accordance with the force posture. It must be made in accordance with a specific set of published criteria. Furthermore, all the data used must be signed, certified and made available to the public and every interested party. The entire process is audited and overseen by the General Accounting Office.

Within the department the services have historically taken the lead responsibility for developing and analyzing possible closures. They have done so not only because they are best acquainted with their real estate and missions, but also because they have the staff to handle the massive data analysis and provide the necessary audits. They then make their recommendations to the secretary of defense. Historically the secretary has accorded great deference to the services' recommendations.

Recommended closures are selected on the basis of eight criteria. These criteria relate to military value, savings and return on investment, and the economic and environmental impacts of closure. These same basic criteria were used in all previous BRAC rounds. We believe they serve us well. They provide the basis for recommendations that are consistent.

The final protection of the BRAC process is, of course, the BRAC commission. This independent body receives information and testimony from every party and reviews each DoD recommendation, to ensure consistency with the force structure and the criteria.

For BRAC 95 the department made a number of changes based upon the nature of the excess capacity we faced.

One change in this round is that for the first time the department has developed procedures to consider areas in which the different services perform similar or identical functions. Five joint cross-service groups were established in functional areas with significant cross-service potential. These areas are depot maintenance, test and evaluation, laboratories, medical treatment facilities and undergraduate pilot training.

Each JCSG has representation from OSD [Office of the Secretary of Defense] and from each military department. Each was tasked to analyze the capacity and requirements for each function across all services from the perspective of DoD's overall work load. After doing so the joint groups then suggested possible configurations to the military departments, which considered them as part of their overall BRAC deliberations.

Another enhancement we made for BRAC 95 was to develop a more consistent method for applying Criterion 6, economic impact on communities. Although economic impact had always been a criterion, there was no consistency in the data gathered to assess it or on the method for doing so. So this year we established an economic impact joint cross-service group. The Economic Impact Joint Cross-Service Group established guidelines for the DoD components to measure the economic impact of base closure and realignment alternatives, including cumulative economic impact from past BRAC actions. ...

Most observers consider the BRAC process an unparalleled success. It has already resulted in hundreds of closures and realignments within the United States, 70 of which are identified as major closures. By comparison, in the 10 years prior to BRAC 88 the department was able to close only four major facilities.

Some have questioned whether -- given that closing a base initially requires rather than saves money -- the taxpayers actually save as a result. The answer to that question is a resounding "yes."

Initially, of course, there are upfront costs, mostly to construct facilities and accommodate moves to receiving bases. But these initial costs are fully offset by savings within the six-year closure period that the law allows. The first three rounds of BRAC will, we believe, save some $4 billion per year when fully implemented. Even after the programed environmental costs are taken into account on a present-value basis, we expect the first three rounds to save the taxpayers and the department over $30 billion.

(We do not include the cost of environmental cleanup in making BRAC decisions since the department must comply with the law whether a base is open or closed. Nonetheless, cleanup costs are substantial.) ...

Some have noted, accurately, that the original projections of large proceeds from the sale of base real estate have not been realized in practice. Nonetheless, by far the majority of the benefits of BRAC are the result of avoiding infrastructure costs we otherwise would pay.

Others have questioned whether BRAC provides full savings to the taxpayer, because the department or other agencies sometimes choose to keep and use parts of a closing base. However, this mistakes the real purpose of the BRAC process, which is to permit both closure and realignment. Many times it makes sense to keep and use one part of a base (for example, housing or reserve facilities) while closing the rest.

The administration, the department and I personally have placed great emphasis on improving the process by which base closure properties are disposed and redeveloped into productive civilian uses. Rapid reuse is not only important to the communities and workers impacted by the base closure, it is also essential in our efforts to cut costs.

The federal government currently affects reuse in two separate ways:

 

  • Property disposal policies and procedures; and
  • Assistance in local economic development.

Under the Base Realignment and Closure Act, authority to dispose of military facilities was delegated by the administrator of the General Services Administration to the secretary of defense and subsequently redelegated to the secretaries of the military departments. Since DoD is operating under delegated authority, it must adhere to the statutory authorities and regulations promulgated by GSA. Often times this has not worked well with large-scale property disposals.

Currently, base property disposal is governed by no fewer than five statutes, ranging from the most recent amendments of the Base Closure Act to the Federal Property Act of 1949. After a closing decision is made, DoD must first offer the property to other DoD components, then to other federal agencies, then to state and local governments, and finally to local communities, developers and providers to the homeless.

Federal law provides for transfer of surplus property for any of several purposes at no costs: education, parks, airports and to homeless providers. And, as I will discuss, the Congress has given us authority to make transfers for job creation as well. But the standards and procedures for doing so differ case by case.

For any large-scale real estate development effort there are three distinct, sequential phases: organization, planning and implementation. DoD directly assists local communities in the organization and planning phases. We offer technical advice on what type of organizations have worked in the past and provide planning grants to underwrite part of the organizations costs. The amount we provide over a three- to four-year period has ranged from $45,000 to more than $3 million.

We also help indirectly in the implementation phase by working with the Department of Commerce's Economic Development Administration and the Department of Labor. We involve other federal agencies early in the process so that the transition from planning to implementation can occur smoothly.

In 1993, after reviewing the historical base property disposal process, the president himself concluded that it did not work very well. It was clear from the 1988 and 1991 closures that the federal property disposal process was not designed to promote quick economic redevelopment in base closure communities. Confounding rapid reuse were:

 

  • Federal and state laws and regulations that never contemplated land reuse transactions as massive as those resulting from base closures;
  • Environmental cleanup processes that can take years, even decades, to complete;
  • Traditional property disposal rules that focus on getting cash up front, with little consideration given to long-term development and job creation in the community.

The president resolved to change it. He announced a new federal policy to support faster redevelopment at base closure communities. And I am pleased to say today we have the legal authority and have begun to implement each of the president's proposals:

 

  • Property disposal that puts local economic redevelopment first.

Thanks to the Congress we now have legislative authority to convey property for job creation purposes. Interim leases for facilities have been encouraged, and approval for leasing has been delegated to lower organizational levels. Federal screening for reuse of facilities and equipment has been expedited. Finally, DoD now consults with local communities before removing personal property from a closing base. These changes allow communities to begin their reuse planning without delay. We have learned from bitter experience that without an active community and community consensus, redevelopment simply cannot occur.

 

  • Fast-track environmental cleanup to remove needless delays.

A base cleanup team , comprised of experts from DoD, the Environmental Protection Agency and state representatives, has been established at all closing or realigning installations where property is available for transfer. Our goal is for the BCTs to be able to make many decisions on the spot to speed up cleanup. Achieving that goal will require changes in many of the individual agencies, but we have been making some progress.

 

  • Transition coordinators.

For every major base slated for closure we now have a base transition coordinator. These on-site ombudsmen and women make sure that communities and other interested parties have the information they need, when they need it. BTCs have access to all parts of DoD, to the base commander and to other federal and state agencies. At every closing base I visit I ask the mayor and local officials who their BTC is. They always know.

 

  • More effective economic development assistance.

The department's economic adjustment support through our Office of Economic Adjustment has long been recognized as highly professional and helpful. As the BRAC process continues, our workload has increased. The average major base closure community receives technical assistance and a planning grant of on the order of $300,000 per year for three to five years. We have also accelerated the time it takes to award grants. For most communities the grant approval time is now within a matter of weeks, not months.

Commerce's Economic Development Administration and the Department of Labor have also been charged to play an active role in economic development and worker retraining. Both departments were given significantly more funding. Labor now sends a team to each base closure community to describe their job training programs and to help set up local job referral services. These departments, too, have reduced their grant processing time.

Another major improvement, about which we are very pleased, is the Base Closure Community Redevelopment and Homeless Assistance Act of 1994. It exempts base closure properties from the requirements of McKinney Act Title V, which gives automatic priority use of any surplus federal property to homeless assistance providers. The new law requires communities to integrate the needs of the homeless into their broader redevelopment procedures. As a result, arguments about priorities have become agreements that lead to economic development. Nearly 50 communities have elected to use the new process.

I am pleased to say that we are beginning to see the effects of these changes.

First, we've learned to act more quickly. As a result the average base in BRAC 93 will be closed in half the time it took in the first BRAC round only five years earlier.

Second, local communities and local developers are moving faster as well. In BRAC 88, the average community took nearly 2 1/2 years to create a reuse plan; in the last round that time dropped to only a year.

Faster reuse benefits the department as well as base closure communities, because only when a community begins to take responsibility for base property can DoD cease its security and maintenance expenses. Protection and maintenance costs for a closed base can easily run $2-3 million per year; for large industrial facilities, such as shipyards, the annual charge can be more than $10 million. The faster local communities develop reuse plans and the property is transferred, the sooner DoD is released from millions of dollars in annual holding costs. In this context our technical advice and planning grants -- if they speed up the process by even a few months -- begin to look like a very good investment.

Already the redevelopment of closed bases has created nearly 8,000 new jobs and over 200 tenant businesses. The types of reuse are as diverse as the communities themselves. England Air Force Base in Alexandria, La., and Chanute Air Force Base in Rantoul, Ill., have become the engines of their communities' economic growth by creating over 1,500 jobs on base in less than two years after closure. Today on those two former bases there are more civilians working than before the bases were closed.

Not every story is so encouraging, but there are plenty of others: At the former Lowry Air Force Base [Colo.] tenants include a community college and a museum. At Wurtsmith Air Force Base in rural Michigan 425 new jobs have been created by aviation, educational, industrial and office-related activities.

And today on the site of the former Sacramento Army Depot [Calif.] Packard Bell is producing computers -- on an interim lease, even before the final transfer is completed. Ultimately the company expects to employ 3,000 people. Follow-on employment by Packard Bell's suppliers could mean thousands more.

Sometimes reuse means other public services: airports, schools, parks, prisons, even other government offices. Such activities can reduce government costs while at the same time provide stability for development. Their presence at the installation early in the reuse process helps attract other tenants and jobs.

We have also begun to use our new jobs-centered property disposal authority to approve conveyances to local communities. In many of these conveyances we will receive fair-market value back to the taxpayers, but we will do so with flexible payment terms over time as that value is realized by economic recovery.

This process is not easy. It is not quick, and it is certainly not smooth. Some communities have a tough time attracting new businesses, and sometimes doing so takes considerable time, but it does happen. For example, the department has tracked nearly 100 pre-BRAC closures from 1961 through 1993. Almost 90,000 civilian jobs were eliminated from these closures. How many new jobs have been created to replace them? Over 170,000 jobs -- almost twice as many.

And we are helping. All these changes -- to the law, to regulations, in policies, programs and communication -- should make new job creation easier and faster.

But there is much more to be done:

First, better communication. Within the next month, long before BRAC 95 becomes final, we will publish a guide to help community leaders understand closure and reuse. This summer and fall we will hold conferences throughout the country, explaining what tools are available and introducing communities to EDA, DoL and other sources of support. We've always known that the most successful reuse comes when community leaders act early and knowledgeably. And we intend to help them do so.

Our next step is to make clear what we can and cannot do. This spring we will follow up on the community handbook with a detailed manual geared to the military departments and federal agencies who will carry out the new laws, regulations and policies. And we will accompany it with a new set of rules, developed by all parts of the department after receiving nearly 1,000 comments from 126 communities and organizations.

Last, but certainly not least, we hope you will agree to further legislative reform. Base reuse is still at the mercy of an incredibly complex maze of laws. Many of those, we believe, were drafted in a simpler time, for simpler transactions. They were not created to deal with the challenges of property transfer on this grand scale.

For some months now we have been reviewing ways to streamline the process and make it work better for DoD and the communities. We are looking at ways to work federal, state and local issues in parallel, rather than going down to the slowest common denominator. There are also proposals to permit near-term job creation by allowing leasing on still-operating bases. Sometime this spring, I hope we can discuss just these steps with the Congress and that you will give them the same high priority that we do.

In closing, let me reiterate three points:

First, we strongly support the BRAC process and believe it will ultimately save the taxpayers and the department billions of dollars.

Second, we are proud of the achievements we have made to reform the reuse/property disposal process. Mayors and governors from around the country have told us that our efforts to make the process more user friendly are on the right track.

But third, there is much more to do. With your help we will continue looking for ways to streamline our laws and procedures to permit faster disposal and more effective job creation. Because, after all, that is part of what economic security is about. ...

 

 

1995 Base Closure and Realignment Recommendations

 

Base Closures

 

Army

 

Fort McClellan, Ala.

Fort Chaffee, Ark.

U.S. Disciplinary Barracks Branch, Lompoc, Calif.

East Fort Baker, Calif.

Rio Vista Army Reserve Center, Calif.

Stratford Army Engine Plant, Conn.

Fitzsimons Army Medical Center, Aurora, Colo.

Big Coppett Key, Fla.

Price Support Center, Granite City, Ill.

Savanna (Ill.) Army Depot Activity

Fort Ritchie, Md.

Hingham (Mass.) Cohasset

Sudbury (Mass.) Training Annex

Selfridge Army Garrison, Detroit

Fort Missoula, Mont.

Bayonne (N.J.) Military Ocean Terminal

Camp Kilmer, N.J.

Caven Point Reserve Center, N.J.

Camp Pedricktown, N.J.

Bellmore Logistics Activity, Long Island, N.Y.

Fort Totten, N.Y.

Seneca Army Depot, Romulus, N.Y.

Recreation Center #2, Fayetteville, N.C.

Fort Indiantown Gap, Pa.

Red River Army Depot, Texarkana, Texas

Fort Pickett, Va.

Camp Bonneville, Wash.

Valley Grove (W.Va.) Area Maintenance Support Activity

 

Navy

 

Naval Reserve Center, Huntsville, Ala.

Naval Air Facility, Adak, Alaska

Naval Shipyard, Long Beach, Calif.

Naval Reserve Center, Stockton, Calif.

Naval Reserve Center, Santa Ana-Irvine, Calif.

Naval Reserve Center, Pomona, Calif.

Ship Repair Facility, Guam

Naval Air Warfare Center, Aircraft Division, Indianapolis

Naval Air Reserve Center, Olathe, Kan.

Naval Surface Warfare Center, Crane Division Detachment, Louisville, Ky.

Naval Biodynamics Laboratory, New Orleans

Naval Reserve Readiness Command (Region 10), New Orleans

Naval Medical Research Institute, Bethesda, Md.

Naval Surface Warfare Center, Carderock Division Detachment, Annapolis, Md.

Naval Surface Warfare Center, Dahlgren Division Detachment, White Oak, Md.

Naval Air Station, South Weymouth, Mass.

Naval Reserve Center, Cadillac, Mich.

Naval Air Station, Meridian, Miss.

Naval Technical Training Center, Meridian, Miss.

Naval Air Warfare Center, Aircraft Division, Lakehurst, N.J.

Naval Reserve Center, Staten Island, N.Y.

Naval Aviation Engineering Support Unit, Philadelphia

Naval Air Technical Services Facility, Philadelphia

Naval Air Warfare Center, Aircraft Division, Open Water Test Facility, Oreland, Pa.

Naval Command, Control and Ocean Surveillance Center, RDT&E Division Detachment, Warminster, Pa.

Naval Air Warfare Center, Aircraft Division, Warminster, Pa.

Naval Reserve Readiness Command (Region 7), Charleston, S.C.

Fleet and Industrial Supply Center, Charleston, S.C.

Naval Reserve Center, Laredo, Texas

Naval Command, Control and Ocean Surveillance Center, In-Service Engineering East Coast Detachment, Norfolk, Va.

Naval Reserve Center, Sheboygan, Wis.

 

Air Force

 

Moffett Federal Airfield Air Guard Station, Calif.

North Highlands Air Guard Station, Calif.

Ontario (Calif.) International Airport Air Guard Station

Rome (N.Y.) Laboratory,

Roslyn Air Guard Station, N.Y.

Springfield-Beckley Municipal Airport, Air Guard Station, Ohio

Greater Pittsburgh International Airport Air Reserve Station, Pa.

Bergstrom Air Reserve Base, Texas

Brooks Air Force Base, Texas

Reese Air Force Base, Texas

 

Defense Agencies

 

Defense Distribution Depot Memphis, Tenn.

Defense Distribution Depot Ogden, Utah

 

Realignments

 

Army

 

Fort Greely, Alaska

Fort Hunter Liggett, Calif.

Sierra Army Depot, Herlong, Calif.

Fort Meade, Md.

Detroit Arsenal

Fort Dix, N.J.

Fort Hamilton, N.Y.

Charles E. Kelly Support Center, Pa.

Letterkenny Army Depot, Chambersburg, Pa.

Fort Buchanan, Puerto Rico

Dugway Proving Ground, Utah

Fort Lee, Va.

 

Navy

 

Naval Air Station, Key West, Fla.

Naval Activities, Guam

Naval Air Station, Corpus Christi, Texas

Naval Undersea Warfare Center, Keyport, Wash.

 

Air Force

 

McClellan Air Force Base, Calif.

Onizuka Air Station, Calif.

Eglin Air Force Base, Fla.

Robins Air Force Base, Ga.

Malmstrom Air Force Base, Mont.

Kirtland Air Force Base, N.M.

Grand Forks Air Force Base, N.D.

Minot Air Force Base, N.D.

Tinker Air Force Base, Okla.

Kelly Air Force Base, Texas

Hill Air Force Base, Utah

 

Disestablishments and Relocations

 

Army

 

Concepts Analysis Agency, Bethesda, Md.

Publications Distribution Center, Baltimore

Aviation and Troop Command, St. Louis

Information Systems Software Command, Fairfax, Va.

 

Navy

 

Naval Command, Control and Ocean Surveillance Center, In-Service Engineering West Coast Division, San Diego

Naval Health Research Center, San Diego

Naval Personnel Research and Development Center, San Diego

Supervisor of Shipbuilding, Conversion and Repair, Long Beach, Calif.

Naval Undersea Warfare Center-Newport Division, New London Detachment, New London, Conn.

Naval Research Laboratory, Underwater Sound Reference Detachment, Orlando, Fla.

Fleet and Industrial Supply Center, Guam

Naval Information Systems Management Center, Arlington, Va.

Naval Management Systems Support Office, Chesapeake, Va.

 

Air Force

Real-Time Digitally Controlled Analyzer Processor Activity, Buffalo, New York

Air Force Electronic Warfare Evaluation Simulator Activity, Fort Worth, Texas

 

Defense Agencies

 

Defense Contract Management District South, Marietta, Ga.

Defense Contract Management Command International, Dayton, Ohio

Defense Distribution Depot Columbus, Ohio

Defense Distribution Depot Letterkenny, Pa.

Defense Industrial Supply Center, Philadelphia

Defense Distribution Depot, Red River, Texas

Investigations Control and Automation Directorate, Fort Holabird, Md.

 

Published for internal information use by the American Forces Information Service, a field activity of the Office of the Assistant to the Secretary of Defense (Public Affairs), Washington, D.C. Parenthetical entries are speaker/author notes; bracketed entries are editorial notes. This material is in the public domain and may be reprinted without permission