Fort Ord closing offers lessons for base towns


MARINA, Calif. -- Here on the front line of the struggle to cut U.S. military spending, Chuck Williams' hardware store is losing a war of attrition.

Sales are down. His payroll is less than half of what it used to be. And as he stands by a silent cash register, the moan of a train whistle two blocks away tells him that more customers from nearby Fort Ord are headed north, gone for good.

That's because Fort Ord is closing, and this week the Army began an exodus that will eventually result in the departure of more than 31,000 soldiers and family members. Leaving with them will be $423 million in annual payroll checks and service contracts.

But for all that, Fort Ord may be the best example of the smart way to handle a base closing. Not many bases are as attractive, and that surely makes conversion easier.

Local governments in Monterey County have overcome petty town-to-town squabbling to endorse a plan that would convert Fort Ord's 44 square miles of beachfront real estate to a college campus, an agricultural distribution center, a small commercial airport, a vast wildlife sanctuary and, perhaps, even a junior version of the Pebble Beach golf resort just down the coast.

If Mr. Williams and other merchants can survive the economic downturn of the next few years, local leaders say, they'll eventually enjoy a prosperity they never would have attained with Fort Ord as a neighbor. That's why other communities facing a shutdown of a military base would be well advised to take a look at the Fort Ord experience, said Keith Cunningham, a policy analyst with Business Executives for National Security, a Washington organization that has studied the impact of recent closings.

Biggest lesson

The biggest lesson to be learned, Mr. Cunningham said, is that "a base closing doesn't have to be the end of the world."

But the harder lesson implicit in all this is that even the best managed shutdown inflicts economic pain. And much of the pain to be felt nationwide will be felt in California, the state that had a lot to do with electing the president who must lead the long, hard push to a post-Cold War economy.

Still recovering from the round of closings announced two years ago that included Fort Ord and other California sites, the state was hit a week ago with the news that eight more military installations have been put on the hit list.

McClellan Air Force Base in the Sacramento area and the Army's Presidio in Monterey were on the list, but then were given a reprieve by Defense Secretary Les Aspin. Yesterday, Jim Courter, the chairman of the Defense Base Closure Commission, said McClellan and the Presidio likely will be put back on the closure list.

Mr. Aspin's action drew Republican accusations of favoritism. McClellan and the Presidio are in the districts of Democratic Reps. Vic Fazio and Robert T. Matsui.

The communities around the targeted facilities can expect to feel the effects right away, even though soldiers and equipment won't begin leaving for years.

"The impact was felt here [in Monterey County] right after Fort Ord was designated for closing two years ago," said Kim Bowersox, a commercial real estate broker. "Activity stopped. It just scared the investors right out of the market."

Coping with downturn

Since then, vacancies in shopping centers have remained, and rents have dropped. Sensing the downturn, Mr. Williams stopped filling jobs as they came open at his hardware store. He used to have a full-time employee and six part-timers. Now he employs three part-timers and a young man who is subsidized by a county jobs program for underprivileged youths.

"Basically, everybody's at a point where you're just seeing if you can wait it out," he said.

A few storefronts away at a Radio Shack, manager George VTC Harrison is not sure the store's owners will have enough patience. "If the business gets any slower than it is already, they're going to close the store," he said. "This is going to turn Marina into a ghost town."

He has a point. Marina's population of about 26,000 will drop to around 11,000 when all the soldiers have gone. The town houses a large number of soldiers who live off the base, and their departure will leave about 5,000 of the county's homes and apartments vacant.

Mr. Williams is hoping the government can help his store and other small businesses get by with low interest loans until a new wave of residents comes along to replace the soldiers.

'A good test case'

County officials seem optimistic such help will arrive, and the Fort Ord shutdown should provide some early indicators on how successful the Clinton administration can be in meeting the president's goal of easing transition. "Fort Ord is a good test case," said county supervisor Karin Strasser Kauffman.

But when transition costs are added to the costs of closing down the base and the price of cleaning up its various environmental problems (such as the oil seepage at the base's gas stations), one begins to see that it may be a long time before the federal budget actually realizes any of the $70-million-a-year savings from the closing of Fort Ord.

It could take as much as $350-million in federal money, for instance, to help retrofit the buildings and infrastructure at the base for civilian use, according to Joe Cavanaugh, the project coordinator of the Fort Ord Re-use Group. (Private interests may end up spending about $600 million toward that purpose, he said.)

The estimated environmental cleanup could add another $75 million to $165 million, and it could take $150 million to shut down the base and move all the personnel and equipment of the 7th Light Infantry Division up the coast to Fort Lewis, near Tacoma, Wash.

Add up those figures and the total would negate the savings of the first eight or nine years, without even talking about grants or loans to small businesses.

But the community's long-term hopes rest on the base re-use plan, not on long-term government aid. Some locals consider it a minor miracle that the governing boards of five towns and the county were able to agree on anything, much less a master plan.

The towns of Seaside and Marina, likely to feel the worst pain in the short-term, favored more development, while the town of Monterey, already a heavily-developed destination for well-heeled tourists, favored preserving more open space and the scenic beauty of the base's rolling green hills and towering dunes. Other problems further complicated the differences among local officials, such as what to do with the 8,000-acre "impact zone" of the artillery range, a virtual minefield of unexploded shells and bombs.

Then there's the long list of endangered and threatened species to work around, including such suddenly-very-important residents as the Smith Blue Butterfly, the Black Legless Lizard, the Monterey Ornate Shrew and the Western Snowy Plover. Of Fort Ord's 28,000 acres, only about a fourth has ever been developed, and that has left plenty of room for rare plants and animals to thrive.

But somehow the opposing interests have held themselves together long enough to complete a plan, and last week the plan cleared its last local government hurdle when the Monterey County Board of Supervisors voted to endorse it.

Along the way, some ideas have come and gone at blinding speed, including proposals for an artists colony, a giant amusement park, an Internal Revenue Service Center, a national cemetery and a retirement community.

For a fleeting moment there was even a discussion between the Pentagon and the German government over the possibility of locating a German military air base at Fort Ord. It seems there's a shortage of Califor- nia-style weather over Germany, and the pilots get rusty waiting for clear skies.

The eventual centerpiece of the re-use plan was a proposal to convert about 1,300 acres into a new campus for the state university system. Hank Hendrickson, director of planning and development for the new campus, figures it would cost the state as much as $1 billion to buy the land and put up the buildings they'll get free at Fort Ord.

Plans call for 2,000 students to enroll for the first classes in the fall of 1995. The campus, to be known as California State University-Monterey Bay, will specialize in the environmental sciences, and the enrollment demand that is already bulging the doors of the university system is expected to easily push the total to 20,000 students by the year 2015.

Also enjoying consensus support in the re-use plan are proposals for a marine sciences research center for the University of California's Santa Cruz campus, a distribution center for the county's bustling agricultural center and the designation of several sites for light industrial use.

Other proposals in the plan, such as one to build a golf course along the dunes near the beach, will probably set off future squabbling.

But that will matter little to the local economy, because most of the impact is expected to come from the campus. By the time it reaches peak enrollment, it will have created 3,000 jobs with an annual payroll of $200 million, and the spending of the 20,000 students will have pushed the total economic impact well past the old level provided by Fort Ord, according to county estimates.

Mr. Williams said he thinks that's great. "But the things that they're trying to tackle are so long-term that I'll probably be retired by the time

they're in full use."

There lies the rub for any base that's closing. No matter how good the real estate of a military base, it takes time to convert it. Mr. Cavanaugh, coordinator of the base Re-use Group, figures "there's going to be a definite downturn period of about 18 months," but others talk of years.

"In the long term there's a real opportunity here," Mr. Bowersox, the real estate broker, said. "But that's tempered by this concern over how we're going to deal with the very difficult transition period."

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