OT: "The Lord works in mysterious ways"

(Payback time; Self ass-biting arrogance.)

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"It takes a crisis to sort of shake our complacency," Blodgett said. "I
think we're finally coming to the realization that growth in prosperity
is not a birthright in Connecticut."

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http://www.courant.com/news/local/hc-economicimpact0514.artmay14,0,5637556.story?page=2&coll=hc-big-headlines-breaking

Will Southeastern Connecticut Wither, Or Weather Latest Base Closing
Storm?
By DAN HAAR And KENNETH R. GOSSELIN
Courant Staff Writers

May 14 2005

They tried hard Friday, but people assessing a southeastern Connecticut
without the Navy's submarine base found that positive economic spin
fell flat.

The numbers vary, depending on the expert or the study. The base and
attached sub school are worth 10,500 direct jobs (including military
personnel, civilians and contractors) and perhaps 6,000 jobs at
suppliers throughout the state and at dry cleaners, restaurants and
other service establishments in the Groton area. The direct payroll
totals $452 million a year, and the base accounts for hundreds of
millions more spent on goods and services.

Big, scary numbers. They boil down to this: At best, it's very bad. It
could become an outright calamity if the base's closing pulls down the
Electric Boat shipyard down the road with its 8,700 workers.

Over time, the state and region could compensate for the loss - but
that could take a generation to happen and still yield mixed results,
experts said.

"The urgency of the crisis is what motivates people to start thinking
creatively," said Jeff Blodgett, vice president for research at the
private, nonprofit Connecticut Economic Research Center, who in 2003
studied the impact of the base's closing.

As for rebuilding something else to replace the base, Blodgett added,
"It's a long, drawn-out process, so there's going to be a lot of pain
in the interim."

Among the morsels on the plus side, it would take years for the
spending and job cuts to happen, because winding down the base
operations would take until 2011, the Pentagon's report said. On the
other hand, that delay would forestall redevelopment of the vast
complex now in place to keep 18 advanced seagoing vessels in the water
- 230 major buildings on 687 acres, and about 4,000 housing units, some
of them on an adjoining 530 acres.

In the meantime, ideas are plentiful - retrofit the housing, bring in
cruise ships, expand casino gambling, build offices, create an
industrial park - but all of them come with huge roadblocks.

And none packs the punch of a military base. The reason comes back to a
basic principle in economics. Most development plans work at least
partly by moving around money that's already in a region. A new
football stadium, for example, adds few jobs to the economy because
most fans going to the game are spending money they would have spent
locally anyway.

In sharp contrast, military bases run entirely on money that pours in
from elsewhere - so, dollar for dollar, they are pure gain for a
region.

Factories shipping their goods out of state have the same effect, but
these days, plants are heavy on advanced machines and light on people.
And companies aren't rushing to build factories in Connecticut.

Still, even assuming that the effort to save the base fails, hope
lurked under the surface on Friday, based on two concepts. The first is
that economic shocks tend to create conditions that spur new growth,
like pruning a shrub. Second, as Blodgett and others suggested, crises
breed action.

It's generally assumed that thousands of people would leave
southeastern Connecticut if the base closed, especially many of the
7,500 military men and women whose jobs would move to Georgia and
Virginia.

"When you take a chunk of people out of an economy, you do lower wage
rates, and that actually makes the region in the long run more
attractive to people moving in," said Fred Carstensen, professor of
economics at the University of Connecticut and director of UConn's
Center for Economic Analysis, which studied the impact of the submarine
base's closing when this battle took place in 1993.

By "people," Carstensen meant employers.

As for action bred by crisis - it kicked into high gear Friday.

"If you go from all those military jobs, which really don't pay a heck
of a lot, to a diversified mix, you could be better off in the long
run," said economist Bruce Blakey, manager of market research for
Northeast Utilities. "The problem is that that could be 25 years."

Redevelopment of the site would be challenging because its terrain is
hilly and the buildings are densely packed. The government also
estimates that it would take between $20 million and $25 million to
clean up contamination on the site, which was in operation long before
modern environmental laws.

Groton Town Manager Mark Oefinger said he believes that the best use of
the land - if the base must close - would be for industrial and office
development, something that would replace jobs being lost.

"Not knocking everything down and putting a golf course there,"
Oefinger said.

Experts said Friday that other government agencies might be offered the
first shot at taking over some or all of the property - which already
has utilities and ready access to Route 12.

No plans for base redevelopment were drawn up in 1993, when the Groton
base was first threatened, Oefinger said. That was because the entire
base wasn't slated for closure, just the waterfront. And the waterfront
was slated to be mothballed by the government for possible future use.

It's possible that Pfizer Inc., with its global research headquarters
nearby, might need more space in the future, Oefinger said.

Pfizer employs 4,500 people at its sprawling Groton campus. Spokeswoman
Liz Power said that the company does not have any plans to expand in
town. She said that she could not speculate on any interest the company
might have in the base property.

"It's hard to say if we would have interest in property that is not
available," she said. "Those folks are still there."

Economists said that the site could also be considered for
single-family houses or condominiums.

"The fact that it is prime river property would be enticing to someone
at some point," said Edward J. Deak, a professor of economics at
Fairfield University.

Deak said that the Coast Guard, now located nearby, might consider
taking over some of the site.

One developer, who asked not to be named, said that the waterfront
property could be used for cruise ship docking because the water is
deep enough to accommodate large vessels. That could boost the area's
tourism industry.

Other regions where the Pentagon has closed bases have successfully
converted the properties. In the best cases, such as the old Pease Air
Force Base in New Hampshire, developers have built industrial parks.

But that could be a tougher challenge in Connecticut, where towns tax
business equipment, salaries are high and there is no major
metropolitan area drawing people in.

If the base does close, the economic wild card is the fate of Electric
Boat, the Groton submarine-maker with close ties to the base. Among
1,000 outside contractors who work at the base, more than half are from
Electric Boat.

"We want to stress that Electric Boat's future is not tied directly to
the submarine base," said company spokesman Neil D. Ruenzel.

"It is important to note that Electric Boat has a significant
Virginia-class construction backlog in what is likely to be a 30-ship
program, and we remain the nation's premier designer and builder of
nuclear submarines," Ruenzel said. "We intend to build on our
rock-solid foundation of advancing submarine capabilities."

Paul Nisbet, an analyst for JSA Research who follows the stock of
Electric Boat's parent company, General Dynamics, said that Electric
Boat can continue building submarines with or without the sub base
nearby.

"They've got these contracts for submarines that would be very, very
difficult and costly to break," he said. "I can't think of any
connection between them that couldn't be taken care of."

Still, many in-state observers remain fearful.

"It certainly is a troubling scenario that they would consider closing
this base knowing that there's a clear link between the base and EB,"
said Peter Gioia, who tracks the economy for the Connecticut Business &
Industry Association. "I'm very concerned about it."

Just the threat of the base's closing has already stirred pro-business,
pro-development proposals at the state Capitol, as well as a more
serious approach to regional planning.

"It takes a crisis to sort of shake our complacency," Blodgett said. "I
think we're finally coming to the realization that growth in prosperity
is not a birthright in Connecticut."

Courant Staff Writers John M. Moran and Stacy Wong contributed to this
story.
Copyright 2005, Hartford Courant


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