Brooklyn Navy yard a model for future conversions.

"Military base to close, threatening economic vitality of entire neighborhood."

While this has been a headline emblazoned across newspapers throughout the nation recently, it was no news bulletin to the Brooklyn Navy Yard or to our neighbors who suffered a U.S. Naval pull-out nearly 25 years ago. Thousands of employees were left without work, and many thought that this part of New York's economy would not survive.

For 160 years the Brooklyn Navy Yard served as a military shipbuilding facility - at one time providing tens-of-thousands of jobs. Today, after having nearly thirty years experience, the Navy Yard has pioneered the transition from military complex to commercial civilian-use, and can act as a model for a deluge of communities soon faced with the same fate.

Experience is the best teacher, and with over 25 years of it, the Brooklyn Navy Yard has learned some important lessons. Other military facilities in transition can immensely benefit from the following lessons that summarize the pitfalls and successes of the Navy Yard's past three decades

First, in effort to ensure a solid foundation for the future, the Yard determined to strike a delicate balance between public-sector control and private-sector know-how.

Managed and operated by a not-for profit, quasi-public development entity known as the Brooklyn Navy Yard Development Corporation (BNYDC), this balance in leadership has guided the Yard to become one of the most successful commercial developments of its kind to date. Its 4.3 million square-feet of waterfront space, which includes 6 dry-docks and 5 shipping piers, has a phenomenally high occupancy rate of nearly 95 percent.

The Yard is home to a diversity of over 200 companies, occupying a range of space from 500 to 50,000 square-feet and employing over 3,300 workers.

The second important lesson from the Navy Yard's past has been to determine the ideal composition of its tenant base. In hind-sight, the Yard discovered that leasing should provide a diversification of tenants, because it could not be determined with any certainty that one entity or industry could provide long-term stability.

After the Navy vacated, the BNYDC continued to seek a single big tenant to anchor the Yard, unsuccessfully targeting huge manufactures like the automotive industry. After such failed attempts, the Yard returned to its roots in the naval and ship repair industry, courting Seatrain, an oil tanker repair firm. A fruitless effort as well, finally the Navy Yard was able to secure a large single tenant, Coastal Dry Dock, that alone occupied nearly a third of the Yard (1.3 million square-feet) and accounted for 50 percent of the Yard's revenue.

Dependence on such a tenant left the Navy Yard vulnerable to another pull-out. When Coastal want bankrupt in the mid-1980s, it threatened the Navy Yard's future.

Recognizing such dangers, the Navy Yard re-examined its direction and purpose. This provided the impetus for our third lesson. Determined to continue its pivotal role in the community, the Yard charter a course to serve as a public-sector driven development for local enterprises. To this end, the Navy Yard has become something of a small business incubator by providing a nurturing environment and a solid economic resource that fosters growth.

According to the U.S. Small Business Administration, in the 1990s small businesses account for 99.7 percent of all employers and will hire 54 percent of the American workforce. In fact since 1990, small businesses have generated 100 percent of all new job growth.

A number of small start-ups that have located at the Navy Yard since 1988 have expanded - sometimes more than once - in some instances growing from a 2 person operation to over 70. The Yard will soon open a Small Business Center, equipped to provide the facilities and services of a large corporation, such as fax machines, secretarial services, technical assistance, photocopiers, computers and conference rooms. Moreover, BNYDC has attracted a large number of businesses that are owned and operated by minority and women entrepreneurs, proving that fiscal, as well as laudable objectives can be achieved in a military facility's transition.

Finally, the fourth lesson gained from the Navy Yard's years of experience is that although military facilities in transition may not require huge amounts of funds up-front for start-up, such facilities will need to commit to investments over a long period of time. Such has been the case with the Navy Yard. The past year's success in securing and retaining tenants has generated over $1 million for capital improvements in 1993. Combined with $3 million in federal development grants and $300,000 in local borough contributions, the Navy Yard has begun a long-term capital improvements program to properly maintain the Yard's vital physical plant and infrastructure.

The results of thirty years of experience are evident in the Yard's successful growth during the past year. Twenty new tenants leased 82,000 square-feet of space, including the MPN Industries , the first large ship repair firm to open in the New York area in recent years.

The BNYDC has been able to assume a pivotal role in the surrounding economy in its transition. As tenants grow, the Navy Yard has the capacity to grow with them, creating a long and prosperous relationship. Other communities with military facilities in transition will benefit from continued public developments, but will require patience for long-term investment.

Albert C. Wiltshire President and Chief Executive Officer The Brooklyn Navy Yard Development Corp.