California Institute Special Report: California’s Past Base Closure Experiences and the 2005 BRAC Round

By mid-May, the Department of Defense will announce which military bases it thinks should be closed. Expected to dwarf prior closure cycles, the 2005 BRAC round comes 10 years after a series of closures that targeted California for far more cuts than other states. Despite these past reductions, the military in California remains a significant economic force, and the state’s base communities are girding for a potentially difficult year. In that context, this paper seeks to provide some background regarding past actions, current status, and future processes. We intend it to complement and support an upcoming report prepared by the California Council on Base Support and Retention, appointed by the Governor to oversee preparation for the upcoming BRAC round. This report, supporting material, and other base and defense information is posted at http://www.calinst.org/defense.htm .

On May 16, 2005, Secretary of Defense Donald Rumsfeld will release a list of military bases recommended for closure and realignment. The 2005 Base Realignment and Closure (BRAC) round, sought by the Pentagon and authorized by Congress, may reduce the military’s current installation capacity by as much as one fourth, in the process deciding the fate of hundreds of military bases and hundreds of thousands of Department of Defense (DoD) personnel throughout the United States and around the world.[1]

Citing a need to reduce unnecessary spending and better distribute defense assets, the Pentagon uses the BRAC process to close purportedly less effective installations and realign forces, capital, weaponry, funds and other limited resources to maximize the military’s effectiveness. A Government Accountability Office report estimates that four recent rounds of base closures—conducted in 1988, 1991, 1993 and 1995—have saved the defense budget more than $35 billion to date.[2]

However, despite the military and budgetary benefits BRAC may yield, the base closure process stirs enormous concern and consternation at the local level. Entire communities risk losing an important, if not essential, source of economic, cultural, and social support. Politicians worry about the potential harm to their regions’ constituents, businesses, and tax bases. Military contractors wonder how the closure of bases might affect their employees and shareholders. The angst surrounding BRAC is exacerbated by the private nature of the process. For the most part, closure and realignment decisions are made internally at the Pentagon with little input from outside sources. If a base appears on the Secretary’s list for closure, it is extremely difficult to alter its fate.

More than any other state, California has an intimate understanding of the pain base closures can cause and how unevenly that pain can be distributed. In the four most recent BRAC rounds, California absorbed 54 percent of the nation’s overall personnel cuts, losing more than 93,000 jobs and nearly 30 major bases.[3] Many communities have still not fully recovered from the closure of local bases. Analysts estimate that the base closures cost the state $9.6 billion in annual revenue.[4]

Despite the disproportionate cuts, today California still hosts more military bases and personnel than any other state in the nation. California’s 424 military locations, including 26 large and medium installations, support nearly 200,000 military and civilian Department of Defense personnel.[5] DoD directly spends more than $40 billion annually in the state, yielding considerably more in overall benefit to the state’s economy.[6] Thus, even though California experienced severe losses in the first four rounds of base closures, the military still plays a very important role in the state.

On the eve of yet another round of base closures, the California Institute for Federal Policy Research compiled this report to review California’s history with base closure, the presence of the military in California today, and the BRAC process in general. The report deliberately avoids speculating over the fate of current military installations in California or the U.S. Rather, it offers a broad overview of the base closure process in an effort to demonstrate how past closure rounds affected the state and discuss the ongoing importance of defense expenditures to the state’s economy.

This report, with its accompanying tables and graphics, is available on the California Institute website at http://www.calinst.org/defense/base1a.htm or in printable (pdf) format at http://www.calinst.org/defense/base1a.pdf . In addition, the report and further information regarding military bases, closures, and defense procurement is available on the California Institute’s base and defense page, http://www.calinst.org/defense.htm .

After release of the DoD list of proposed closures, and at other points during the BRAC process, the Institute will provide additional information at http://www.calinst.org/defense.htm .

California’s Base Closure Experiences

The four recent rounds of base closures in 1988, 1991, 1993 and 1995 collectively comprise a distressing chapter in California’s military, political and economic history. The state suffered remarkably disproportionate cuts in military personnel in each of the four rounds. Once the dust settled, the military’s presence in California was sharply reduced from pre-BRAC levels.

The raw statistics for California are jarring. Before the 1988 BRAC round, California had by far the largest military presence of any state, housing 335,979 (14.7 percent) of the 2,275,264 Department of Defense personnel and 91 (18.3 percent) of the 495 major military bases in the country.[7] By the end of the four BRAC rounds, California lost 93,546 military and civilian jobs within the Department of Defense, a staggering 53.8 percent of the 173,919 net Department of Defense cuts for the entire country.[8] Said slightly differently, and rather starkly, California shouldered the loss of nearly 100,000 jobs, whereas the other 49 states combined absorbed just 80,373 net cuts. While California lost 27.8 percent of its personnel between 1988 and 1995, the rest of the nation saw its military personnel reduced by just 3.6 percent.[9]

Comparing the number of military bases rather than personnel, California fared slightly better. According to the 1995 Defense Base Closure and Realignment Commission Report to the President, the four BRAC rounds closed 98 “major” installations throughout the country.[10] Of those, 24 (25 percent) installations were in California.[11] The BRAC rounds also led to the realignment of 65 major installations, of which 8 (11 percent) were in California.[12]

However, if the base closures are examined with a focus on the size of closed installations, the magnitude of California’s losses becomes more apparent. The Golden State absorbed 30 percent of the closures at installations with more than 1,000 personnel, 59 percent of the closures at installations with more than 5,000 personnel, and 100 percent of the closures at installations with more than 10,000 personnel.[13]

The BRAC process’s disproportionate treatment of California was surprising, particularly to the state’s elected officials and residents. Some charge that California’s lopsided reductions were at least partly due to a lack of preparation for the base closure process and to political disunity at the local, state and national levels.[14] Instead of cooperating to consolidate and strengthen California’s preeminent position as a home for the military, some communities within the state fought against one another over the dwindling number of bases. Although some collaborations within the state may have proved effective, when they are compared with campaigns waged by some other states, lawmakers neither organized a broad statewide effort to protect California’s military interests nor used their strength to protect the state. In fact, some observers have speculated that decision-makers within the Pentagon relied on disunity within California in targeting the state for drastic cuts, convinced that rivalries would prevent the state from mounting an effective organized defense of its bases and personnel.[15]

Throughout the state, the base closures had a dramatic ripple effect on the economy. In particular, the aerospace industry, most heavily concentrated in Los Angeles County but significant to many other regions, experienced a severe recession that negatively impacted the economic health of the state for at least a decade. At the same time, communities from San Francisco to San Diego were forced to undergo the slow, often painful process of designing and implementing transition and reuse plans for closed bases. A number of closed facilities in California are still not fully transitioned to non-military use. For some parts of California, the cumulative effect of the 1988, 1991, 1993 and 1995 rounds of base closures was nothing less than disastrous. Analysts estimate that the state experiences approximately $9.6 billion in annual economic loss from the BRAC processes.[16]

Each of the four BRAC rounds was similarly harsh on California. Unlike other states, where one round hit hard while others had no effect at all, California’s share of reductions was grossly disproportionate at every turn.

The following capsules offer brief description of the four base closure rounds for California, including personnel and base losses.

BRAC I: 1988

In the 1988 BRAC round, California had four major military installations closed, zero realigned, and lost 17,353 Department of Defense jobs.[17] Nationally, this round of closures eliminated a net total of 20,607 DoD jobs and 16 major bases.[18] Thus, California sustained 84 percent of the nation’s net personnel cuts and 25 percent of base closures.[19] In California, the 1988 BRAC round closures included George Air Force Base (Victorville, San Bernardino County), Mather Air Force Base (Sacramento, Sacramento County), Norton Air Force Base (San Bernardino, San Bernardino County), and the Presidio Army Base (San Francisco, San Francisco County).[20] Additionally, Naval Station Hunters Point, (San Francisco, San Francisco County), which was not classified as major by the Pentagon, lost more than 4,000 personnel from this round of base closures.[21]

With a strategic perch overlooking the entrance to the San Francisco Bay, the Presidio of San Francisco served three countries militarily for more than 200 years,[22] functioning as headquarters for the Western Defense Command during World War II and later the Sixth Army. Its lush environment, expansive views, and proximity to San Francisco made the Presidio one of the most desirable posts in the nation, and that desirability waned little when it was transitioned to non-military use.[23] A unique public-private partnership, the Presidio Trust has managed the area, and its 500 historic buildings, since the facility was transferred to the National Park Service.

George Air Force Base, located in the Mojave Desert began as a flight training school during World War II, and became a training hub for the ubiquitous F-4 Phantom fighter. Five years after the 1988 closure announcement, George was among a small number of facilities slated for fast track transfer for reuse, but the military remains a central player at the former George, now the Southern California Logistics Airport. Calling itself “a dedicated air cargo facility and a 5,000-acre multimodal business complex integrating manufacturing, industrial and office facilities,” SCLA began efforts to extend the main runway in order to accept larger cargo jets and better serve the more than 70,000 troops that annually pass through the airport on their way to and from the Army’s Fort Irwin training center.^[24] The base serves multimodal distribution functions, with interfaces to truck and rail shipping, though smaller hangers and global weakness in the air freight industry have countered some benefits of the successful runway expansion. A recent estimate found that approximately one-fifth of George’s 7,500 jobs had been replaced.^[25] Considering its relatively remote location in the Mojave Desert, many consider George’s recovery from closure a success.

The former Mather Air Force Base near Sacramento, now called Sacramento Mather Airport and operated by the County of Sacramento was another facility eyed for its trade and distribution potential. Despite substantial later successes,[26] Mather in some respects began as one example of what can go wrong in closing a base. Relatively new to the business of selling real estate, the Air Force thought it could make some money on the base’s 1,000 housing units. Rejecting Sacramento County’s $3 million bid, the Air Force held firm to its $25 million asking price, and negotiations stalemated. By the time the buildings were finally sold many years later for only $2.5 million, most were so damaged by deterioration and vandalism that they had to be torn down.

BRAC II: 1991

Pursuant to the 1991 BRAC round, California had eight major military installations closed, three realigned, and lost 31,452 Department of Defense jobs.[27] Nationally, this BRAC round closed 26 major bases, realigned 19 others, and eliminated 59,466 military jobs. California sustained 31 percent of major base closures, 16 percent of major realignments, and 53 percent of the nation’s personnel cuts.[28] In California, the 1991 closures included Castle Air Force Base (Merced/Atwater, Merced County), Fort Ord Army Base (Marina/Seaside, Monterey County), Hunter’s Point Annex (San Francisco, San Francisco County), Long Beach Naval Station (Long Beach, Los Angeles County), Marine Corps Air Station Tustin (Tustin, Orange County), Naval Air Station Moffett Field (Mountain View, Santa Clara County), Sacramento Army Depot (Sacramento, Sacramento County), and the Naval Electronics Systems Engineering Center San Diego (San Diego, San Diego County).[29] Beale Air Force Base (Marysville, Yolo County), Naval Weapons Center, China Lake (Ridgecrest, Kern County), and the Pacific Missile Test Center Point Mugu (Oxnard, Ventura County) were realigned.[30]

Fort Ord is often cited as an example of what can be done right in a military base conversion. The Department of Defense transferred much of the sprawling 28,000 sandy acres of agricultural land and Monterey Bay beachfront in 1994, except for 800 acres the Army retained as a reserve center and an annex for the Presidio of Monterey. California sanctioned a Fort Ord Reuse Authority (FORA) to oversee the handoff,[31] and the base now houses the new and growing campus of the California State University Monterey Bay.[32] The campus takes up 1,365 acres, leaving much of the former base property unused. Recent development has begun providing housing for local military stationed at nearby facilities and has improved landscaping, facilities, infrastructure, and access. However, many challenges remain. The area’s unique geography houses a sensitive environment and some protected species, such as the threatened California tiger salamander. Also, cleanup of a wide array of potentially unexploded ordinance, toxic spills, and abandoned and dilapidated buildings will take many years and considerable funding. Nevertheless, the area’s geographic desirability and high housing prices auger well for the base’s future.

Some observers have opined that the lessons of Mather’s stutter-step reuse were learned by the time the Sacramento Army Depot was closed. The transfer from DoD was accomplished at high speed. The day the Army flag came down, the city leased the facility to Packard Bell, which transferred 5,000 employees from its former headquarters in Southern California.[33] Unfortunately, the technology company’s fortunes faltered, and by the close of 2000, all of the employees had been laid off. Sacramento Army Depot serves as a reminder that the economic recovery of a base depends on both controllable factors (transfer speeds, usability of land) and uncontrollable factors (the strength of the local economy and the success of individual businesses.)

BRAC III: 1993

In the 1993 BRAC round, California had seven major military installations closed and two realigned, leading to the loss of 29,683 Department of Defense jobs.[34] Nationally, this round of closures closed 28 major bases, realigned 13 major installations, and eliminated 62,426 jobs, meaning California sustained 25 percent of base closures, 15 percent of realignments, and 48 percent of the nation’s personnel cuts.[35] For this round, Pentagon closures included El Toro Marine Corps Air Station (Irvine, Orange County), Mare Island Naval Shipyard (Vallejo, Solano County), Alameda Naval Air Station & Depot (Alameda, Alameda County), Naval Hospital Oakland (Oakland, Alameda County), Naval Training Center San Diego (San Diego, San Diego County), and Treasure Island Naval Station (San Francisco, San Francisco County). Marine Corps Logistics Base Barstow (Barstow, San Bernardino) and Naval Weapons Station Seal Beach (Seal Beach, Orange County) were realigned.[36] Additionally, the Naval Public Works Center, Oakland (Oakland, Alameda County) was disestablished and March Air Force Base (Riverside, Riverside County) was significantly realigned.[37]

The 1993 round of closures decimated the

Oakland/Alameda naval operation. The Naval Air Station Alameda and Depot, the Oakland Naval Hospital, and the Naval Public Works Center were eliminated, complementing the fellow San Francisco Bay closures of Mare Island Naval Shipyard and Treasure Island. Once housing 18,000 personnel, NAS Alameda was transferred to the City of Alameda in 1997, and the city’s initial tenants included the federal government’s Maritime Administration (MARAD) and a local reuse authority. A mixture of tidewater, submerged land, and dry land, the facility was built by diking off muddy flats and filling in with dredging material. Environmental issues are also raised by the site’s past use as an oil refinery and a borax processing plant. Some sites have been successfully reused by nonprofit organizations.

Initially christened as a shipyard in 1853 at the North end of San Francisco Bay, the Mare Island Naval Shipyard served as a major refueling and renovation facility for ships, including those powered by nuclear energy. It also built more than 500 new vessels, from a paddlewheel gunboat in 1859 to a nuclear submarine in 1970. The facility closed in 1996, a relatively swift decommissioning. However, not surprisingly given the diversity and age of the facility, Mare Island remains heavily contaminated with myriad toxins, including PCBs, asbestos, solvents, oil and petroleum products, and aging ordinance, not to mention the byproducts of several decades conducting work on nuclear submarines.

BRAC IV: 1995

In the 1995 BRAC round, California had five major military installations closed and three realigned, leading to the loss of 15,058 Department of Defense jobs.[38] Nationally, this round of closures closed 28 major bases, realigned 22 major installations, and cut 31,420 military jobs, meaning that California sustained 18 percent of major base closures, 14 percent of major realignments, and 48 percent of the nation’s personnel cuts.[39] Closed bases include: Long Beach Naval Shipyard (Long Beach, Los Angeles County), McClellan Air Force Base (Sacramento, Sacramento County), Oakland Army Base (Oakland, Alameda County), Ontario International Airport Air Guard Station, and the Defense Distribution Depot McClellan (Sacramento, Sacramento County).[40] Onizuka Air Force Base (Sunnyvale, Santa Clara County), Fort Hunter Liggett (Monterey County), and Sierra Army Depot (Herlong, Lassen County) were realigned.

Well before it was slated for closure in 1995, the Long Beach Naval Shipyard had already begun to experience reductions. Three dozen ships associated with Naval Station Long Beach were assigned elsewhere when that base went on the 1991 closure list, taking with them an estimated 17,000 jobs when it was ultimately closed in 1994. The nearby shipyard, built on Terminal Island largely during World War II and highly respected for its workmanship, was slated for closure one year later. It closed its military gates in September 1997, and more than two-thirds of the acreage has been transferred to other entities in various parcels. The City of Long Beach assumed most of the land and drydocks, with other parcels transferred to the Army, Air Force, nonprofit organizations, and to a developer for housing for a college and a preparatory school. Final transfer is expected in September 2005.

Once a major DoD technology repair center employing 13,500 workers before 1995, McClellan Air Force Base North of Sacramento became a battleground regarding political influence over the BRAC process. McClellan, and a second base outside San Antonio, Texas, were on the BRAC list proposed by the Air Force, but the Clinton Administration pledged to retain base employees as long as possible and to privatize many of those jobs—thereby raising the eyebrows and ire of many BRAC proponents.[41] The facility later returned to the more traditional closure pipeline and was shuttered in 2001, but not until after widespread criticism that the Clinton Administration tampered with a supposedly apolitical base closure process in order to better his and Democrats’ 1996 election prospects in two key states. Many believe that lingering resentment among Republicans over the President’s breaking of rules by choosing favorites of McClellan and Kelly, was responsible for the 10-year hiatus in the military base closure process.

Past BRACs in Context: Geography and Defense Contracts

As evidenced by these details, California found no refuge from the bad news throughout four rounds of base downsizing. More than half of the nation’s net personnel reductions were taken from California facilities.

Each BRAC round battered California’s military base communities, but the results were far from uniform across the state. The military presence in the Bay Area has been nearly eliminated by recent base closures, with the bulk of the reductions effected by the 1993 base closure round. Once the dust had settled, the Bay Area had experienced a net reduction of more than 44,000 personnel; the area’s 46,741 gross personnel reductions were offset by a mere 2,617 in personnel gains.[42] In addition, most of the 17,306 reductions from the Central Coast region came from Fort Ord, which is often associated with the Bay Area as well.[43]

In contrast, the San Diego area was a net receiver; the closures in the area resulted in the elimination of more than 24,000 positions, but DoD elected to relocate more than 30,000 personnel to San Diego installations by the time the BRAC process had come to a close, yielding a net increase of 6,099 personnel for the San Diego area.[44]

Two other California areas saw vast reductions in personnel: the greater Los Angeles region declined by nearly 24,000 personnel, and Central Valley installations saw totals fall by more than 17,000 jobs.[45]

At the same time that California was experiencing disproportionate decreases in numbers of military bases and personnel, California suffered the parallel blow of a steep decline in federal defense procurement expenditures. According to the U.S. Census Bureau, California’s share of contract procurement spending for national defense was once as high as 23 percent—in 1984, the Department of Defense spent $29 billion on contracts in California and $141 billion in all states.[46] After a slow but steady decline, by 2003, the state received just 14.2 percent of defense contract expenditures, $26 billion of the $201 billion total distributed nationwide. In the aftermath of base closures, contract spending in all states had risen by $60 billion (42 percent), whereas spending in California declined $3.2 billion (-11 percent). DoD procurement spending in California is now roughly half of its inflation-adjusted 1984 levels.

When DoD contracts are considered alongside salary and other defense spending, California experienced a similar, and starker, decline. In 1984 through 1986, total defense spending in California hovered near the $40 billion mark, accounting for more than 20 percent of the nation’s $197 billion in total 1984 defense spending in all states.[47] Nearly two decades later, California’s share of total 2003 defense spending nationwide, including salaries, contracts, and other categories, was just 13 percent—or $39 billion of the nation’s $320 billion total spending in all states. Thus, 2003 defense spending in California remained $2 billion (-5 percent) less than in 1984 (even before adjusting for inflation), whereas spending in all states had grown by $89 billion (38 percent) during the same period.

The base closures and concomitant decline in federal defense spending in California had much to do with the changing, post-Cold War world. While many credit U.S. defense spending on bases, personnel, and procurement with hastening the fall of the Soviet Union, maintaining force strength and defense spending at Cold War levels after the end of the conflict made little sense. After essentially spending itself to victory, it was not surprising that the United States pared back on military spending—terminating weapons programs, downscaling recruitment, and closing existing installations.

While California had a particularly negative experience with base closures, the Pentagon views the first four BRAC rounds as a collective success, effectively reducing excess force capacity and cutting costs. A January 2005 Government Accountability Office (GAO) report to Congress measured net savings from the four prior BRAC rounds through fiscal year 2003 at $28.9 billion.[48] The Department of Defense estimates approximately $7 billion in savings for FY 2004 and every year thereafter, generated mostly from reduced operating expenses. As of September 30, 2004, DoD data shows that 72 percent of 504,000 acres of closed base land had been transferred to federal or non-federal entities.[49]

The same GAO report examines how individual military bases and their surrounding communities have recovered from the closure process. While the data is not comprehensive or incisive enough to paint a full picture of these communities’ experiences, the report concludes that “most communities have recovered or are recovering from the impact of base closures.”^[50] In 2002, nearly 70 percent of the 62 BRAC communities reviewed by the GAO had unemployment rates lower than the national average, and 48 percent had annual real per capita income growth rates above the U.S. average.^[51] Furthermore, as of October 31, 2003, 92,921 (72 percent) of the 129,649 Department of Defense civilian jobs lost on 73 military bases as a result of closures have been replaced at those locations.^[52]

California’s overall recovery, measured by civilian jobs replaced, has been worse than the national average. The 18 California bases examined in the GAO report lost approximately 42,800 civilian jobs from DoD payroll.[53] As of October 31, 2003, those bases had only regained 24,179 jobs (57 percent).

Personnel Changes by California Region, Combined Total, 1988-1995 BRAC Rounds
	Personnel Out			Personnel In				Net Gain or Loss
	Total	Mil.	Civ.	Total	Mil.	Civ.	Total		Mil	Civ
Bay Area	(46,741)	(25,460)	(21,281)	2,617	1,725	892	(44,124)		(23,735)	(20,389)
Central Coast	(17,306)	(14,092)	(3,214)	0	0	0	(17,306)		(14,092)	(3,214)
Central Valley	(25,010)	(10,329)	(14,681)	8,162	6,656	1,506	(16,848)		(3,673)	(13,175)
Desert	(3,489)	(3,225)	(264)	6,132	5,028	1,104	2,643		1,803	840
Greater LA	(29,530)	(22,107)	(7,423)	5,947	3,764	2,183	(23,583)		(18,343)	(5,240)
Other	(427)	(53)	(374)	0	0	0	(427)		(53)	(374)
San Diego	(24,256)	(21,379)	(2,877)	30,355	25,258	5,097	6,099		3,879	2,220
Source: Analysis of DoD data from the Directorate of Information Operations and Reports.