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Economic impact of the military in Alaska.

Will Fort Richardson be shut down? According to a recent edition of the Washington Kiplinger Letter, "Another round of base closing coming up... Among those that'll be on the hit list: Fort Richardson, Alaska."

Many local residents hope to prove that prediction wrong, because the military is big business in Alaska, employing thousands of uniformed and civilian personnel.

But speculation about Fort Richardson's closure comes on the heels of the Department of Defense's decision to cut military personnel 25 to 30 percent over the next five years. With this drastic reduction, many military installations are no longer needed.

For many years, the military has been a strong presence in Alaska; Fort Richardson is one of the three major army bases in the state. Fort Wainwright, near Fairbanks, and Fort Greeley, near Delta Junction, complete the trio. Of the total 9,760 uniformed personnel, 4,390 are on active duty at Fort Richardson.

In addition to the Army, the U.S. Air Force has over 6,300 personnel stationed at Elmendorf Air Force Base in Anchorage. Eielson Air Force Base in Fairbanks has an active-duty staff of about 4,000. Altogether, Army and Air Force personnel represent an annual payroll topping $590 million.

Active military personnel outnumber employees in seafood production and those employed in oil and gas production, according to a 1991 study conducted by the McDowell Group for the Alaska Department of Commerce and Economic Development's Division of Tourism. In total annual payroll, active military ranks a close third, trailing the seafood and oil and gas industries.

According to the study, "The military spends about $1.4 billion in Alaska each year. It is estimated that the military personnel and their dependents account for about 13 percent of Alaska's population. While these are impressive statistics, the exact impact of the military on Alaska's economy remains unknown."

Maj. Ronald McGee, chief of public affairs at Elmendorf Air Force Base, says that most Air Force personnel tend to shop at the base commissary for groceries and at the base exchange for goods like clothing and electronics. He notes, however, that because the average age of Air Force personnel is around 28 years, many have young families and are buying autos, appliances and other goods off-base. The purchasing power of this group is felt by several businesses around Anchorage.

Sadler Home Furnishing's president Dave Cavitt says 17 percent of the sales at their Anchorage store are made to military personnel. At the Fairbanks store, 33 percent of the sales are attributed to active military.

Brand central manager Dan McDonald at Sears in Anchorage estimates 20 to 25 percent of the company's appliance sales are made to service personnel. McDonald says that Sears does not track its sales by market segment but feels his estimate is conservative.

Auto sales are also affected by the military dollar. General manager Ray Jager of Cal Worthington Ford of Alaska estimated about 30 percent of the company's sales are to military personnel. Other dealers in Anchorage put the figure at 20 percent.

The real estate market may be the first to feel the military presence or lack of it. According to Doris Thomas, public affairs specialist at Fort Richardson, 1,040 active duty personnel live off-base with 1,520 dependents. About one-third live in Eagle River. In Anchorage, most live between Muldoon and Lake Otis and the Glenn Highway and Tudor Road.

McGee says 3,139 Elmendorf personnel, along with 6,512 military dependents, live off-base, most choosing the Mountain View, Muldoon and Eagle River areas. There is a one year waiting list for base housing, McGee adds.

Air Force personnel in Alaska is increasing. Maj. McGee cites several reasons for the increase, including the closure of bases in Europe and the Philippines, resulting in the transfer of personnel to Alaska.

McGee also notes the geopolitical importance of Alaska. For contingency operations, troops can be flown over the Arctic cap to Europe six hours faster than from most bases in the Lower 48. And you don't have to get the permission of the American government, he adds, to fly the polar route.

Another advantage of stationing troops in Alaska is the availability of large areas for training. "You can't train pilots over the city of Chicago," McGee says. "Elmendorf is seen as a place that is going to grow."

Thomas says the army is maintaining status quo in Alaska with virtually no growth or reduction in troops.

In October, President Bush signed the FY 1993 Military Construction Appropriations bill, which gave Alaska's defense industry a shot in the arm. Included were $95 million for Air Force construction projects and $27 million for the Army.

Elmendorf received $15 million to begin construction of the $160 million Pacific Region Medical Center previously approved by Congress, along with local-hire provisions that will boost the local economy. Elmendorf also received $16 million for aircraft shelter construction, nearly $2 million for a fire training facility and $4.6 million to replace underground fuel tanks.

Fort Richardson was granted $16.9 million for renovation of family housing. While the base waits for Congress to decide its destiny, the appropriation of these funds could be construed as a positive signal. After all, why would money be appropriated if the base was being closed? But then, the decision is political and anything can happen.

Alaska Sen. Ted Stevens and Rep. Don Young are Fort Richardson's watchdogs. Regarding the rumor fostered by the Washington Kiplinger Letter, Stevens' press secretary, Mitch Rose, says, "We've got nothing that says Fort Rich is being treated differently than any other military installation."

A spokesperson for Young said that Young accompanied Defense Secretary Dick Cheney on a tour of the military base in mid-July. "The Department of Defense recognizes the strategic importance of Alaska's military personnel and bases in the post-cold-war era," the spokesperson says, adding, "Cheney could not guarantee that no bases would be closed."

Congress is expected to approve another round of base closures in March or April. Whether or not Fort Richardson will be on the list and exactly how the closure would affect Alaska's economy is anyone's guess.
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Author:Maschmeyer, Gloria
Publication:Alaska Business Monthly
Date:Jan 1, 1993
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Next Article:Inside Alaska industry.

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