WASHINGTON -- More civilian employment was created than lost in the closings of military bases over the past three decades, but that may not happen in the current round, credit analysts at Standard & Poor's Corp. say.
"While [the] reuse process historically has been successful, current circumstances could make the transition more difficult," analysts said in yesterday's Credit Week Municipal.
From 1961 to 1990, 158,100 civilian jobs were created on bases converted to non-military use, compared with 93,400 civilian jobs lost, according to the Defense Department data. the article says.
The bases closed were turned into colleges, vocational and technical schools, industrial and office parks, and airports, among other things, says the article, Military Conversion: Obstacles & Opportunities."
However, "most of the previous closings occurred in the 1960s and 1970s, and economic conditions today differ from the earlier conversion periods," the article says. For example, the current glut of industrial space may stifle such conversions today, the article contends.
The Clinton administration plans to spend $5 billion over five years to help convert closed bases to civilian use, the article notes. Of that, $2.8 billion will go for economic development and $2.2 billion for environmental cleanup, the article says.
"Nevertheless, funding in real terms is still less than what was available for base closures in the 1960s and 1970s," the article says.
Environmental cleanup represents perhaps the biggest obstacle to the successful conversion of many military bases, the article says.
"Toxic contamination is common among former military installations and, in some cases contamination is excessive," the article says. "The total cost of base cleanup has been estimated at between 20 billion to $40 billion and could take decades to complete."
One bright spot, the article says, is that base closings frequently provide an opportunity for a municipality to obtain a valuable piece of property at little or no cost.
The value of closed base is usually determined at least in part by whether it is located in a rural or urban area, the article says. Bases in urban areas are usually more easily converted to private use, the article notes.
"In established urban and even suburban areas, surplus federal property often represents the single largest block of land to become available," the article says. On the other hand, "in rural areas that lack local and state initiatives, economic dislocation and financial hardships caused by base closings could lead to lower bond ratings." the article says.
