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FED ECONOMIST SAYS IMPACT OF MILITARY BASE CLOSINGS VARIES

 SAN FRANCISCO, Aug. 12 /PRNewswire/ -- Overall, net job losses from currently anticipated military base closings and realignments in the West are "quite small" with cutbacks concentrated in California and significant gains in Washington, says an economist at the Federal Reserve Bank of San Francisco.
 Carolyn Sherwood-Call states that direct job losses in the nine western states that comprise the 12th Federal Reserve District amount to only 0.3 percent of total employment. She adds that the western economy is large enough that the changes called for by the Base Closure and Realignment Commission "are unlikely to have significant effects on the area's overall economic health."
 "However," she notes, "some parts of the West will see large job losses and a few will see significant gains. When the three rounds announced to date are completed, bases in California will have seen a net employment decline of 78,500, a drop of 22 percent. Washington, in contrast, will add a net 17,000 jobs at military bases, a gain of 20 percent.
 "In Utah, the number of jobs will have fallen by 2,500 or 9 percent. The declines in Oregon and Arizona will be much smaller, while in Hawaii and Idaho gains from earlier rounds will be offset by subsequent cutbacks. There will be no changes in Alaska, while Nevada will see very small net gains."
 Within the West, Sherwood-Call said effects of military closures vary widely. Writing in the Bank's Weekly Letter of Aug. 20, she notes that the Monterey (Fort Ord, Presidio) and Vallejo (Mare Island) areas in California are most affected, with direct loss of 13 and 6 percent, respectively, of jobs in those areas.
 "Several other areas, all in California, will see more modest, but still significant, direct job losses of between 1 and 2 percent. These areas include Oakland, Riverside-San Bernardino, Sacramento and San Francisco. In some metropolitan areas, certain communities would be hit much harder, such as Alameda in the Oakland area. In contrast, other areas stand to gain significantly. Personnel will be transferred to the San Diego, Puget Sound (Washington) and Fresno (California) areas."
 She said the economic effects due to the initial job losses and their associated secondary effects can be mitigated if the base ultimately is converted to alternative uses. Most of the California bases closed in the 1970s are serving a wide variety of public and private sector uses, albeit with generally fewer jobs than the military bases provided. One exception is the former Benecia Arsenal in California which provides more than twice as many jobs now after being converted to an industrial park.
 Base closures usually take three to six years. This process can be longer if the base has toxic contamination or unexploded ordnance. At least two of the California bases slated for closure on the 1993 list -- El Toro Marine Corps Air Station and Mare Island Naval Shipyard -- have such extensive contamination problems that the Environmental Protection Agency has designated them as Superfund sites. In these cases, the cleanup process itself could generate a significant number of jobs.
 In some cases, the conversion process has been delayed by disagreements among local authorities regarding how the property should be used, such as at George Air Force Base in San Bernardino County. In contrast, the process is farthest along when local authorities agreed early on about how the property would be used. For example, the Presidio of San Francisco will become part of the Golden Gate National Recreation Area.
 "Communities in which bases are closed can recoup some or all of those losses over the long term if the bases are put to job-creating civilian uses," said the regional economist. "While a few communities can complete the conversion relatively quickly, for most it will be a long process."
 -0- 8/12/93
 /CONTACT: Carolyn Sherwood-Call of the Federal Reserve Bank of San Francisco, 415-974-3175/


CO: Federal Reserve Bank of San Francisco ST: California IN: FIN SU:

PK-SG -- SF005 -- 2089 08/12/93 11:31 EDT
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Publication:PR Newswire
Date:Aug 12, 1993
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