A potential mega hit to Frederick County’s business and commercial real estate recovery?
I did a double take when I read Monday’s issue of The Kiplinger Letter.
On page three of the March 16, 2012 issue there is a small article about new military base closings.
The first base Kiplinger listed as among “top candidates for closure?” Ft. Detrick!
In case you haven’t been following the White House budget news, in February President Obama requested that Congress authorize two more rounds of military base closings and realignments (BRAC) to fulfill a mission of realigning the military to create a “leaner, more agile and flexible force.”
Defense Secretary Leon Panetta is calling for the next round to begin as soon as next year, two full years earlier than military officials recommend.
The closure of Ft. Detrick would have a profound negative ripple effect on Frederick County’s economy, one that would most certainly be felt in the commercial real estate market as well. In a previous MacRo Report Blog post stating our region is too heavily dependent on federal jobs, we sure did not imagine that Ft. Detrick was in any immediate peril!
We placed a call to Kiplinger and spoke with Richard Sammon, the editor who wrote the base closing article. He stated that Kiplinger doesn’t expect the next BRAC round to begin until 2014 or 2015 because “2013 will not be the right political or economic atmosphere” to get it passed.
According to Sammon, “To develop the list of candidates for closure, we had conversations with military and defense experts at think tanks, and with people we trust within the military itself. It is NOT intended as a death knell for Ft. Detrick.”
Sources at Ft. Detrick tell us that the base has fielded numerous calls as a result of the brief article. “We contacted Congressman Roscoe Bartlett’s office and were told on no uncertain terms that there is no validity to Ft. Detrick having been discussed as a candidate for closing,” our source reported.
A professional staff member of the House Armed Services Committee sent the following email:
“We will be seeing a number of these types of prognostications of potential closures. This occurred prior to BRAC 2005 as well. There is no way the Department is at this level in BRAC planning. We are very aware of the DoD plans for another round, but there are no locations or planning at this level yet and lots of opposition on the House Armed Services Committee.”
Fortunately for Frederick, any new round of BRAC closings is not going to be popular politically. The long-term cost savings of the most recent BRAC effort came in dramatically under prior estimates, mainly due to high environmental clean-up costs.
Government Accounting Office (GAO) testimony on March 8, 2012 confirms this. The 20-year net savings from the 2005 BRAC implementation will only be $9.9 billion, 73% less than estimated by the 2005 BRAC commission. The last bases closed in 2011, but the DoD will not recoup upfront costs of the 2005 BRAC until 2018!
There has of course been outcry from congress over this, and many are predicting a bloody battle to prevent further military base closures. Rep. Mac Thornberry, the House Armed Services Committee (HASC) vice chairman, declared the new BRAC proposal “dead on arrival.”
Ft. Detrick has powerful allies, including Frederick’s own Congressman Bartlett, who is Chairman of the Tactical Air & Land Forces Subcommittee of the HASC. Also, state and local officials are optimistic that the research and development at Ft. Detrick is in line with the growing importance of the military’s “missions of the future.”
The biggest unknown seems to be how the mission of a new round of BRAC (cost savings) versus the mission of the 2005 BRAC (Donald Rumsfeld’s “transformation” of the military) will impact decision makers. According to Daniel Sernovitz of the Washington Business Journal, a new BRAC commission “might look more closely at the military’s assets and could determine this time there are no sacred cows.” Anthony Principi, chairman of the 2005 BRAC Commission, agrees.
What do you think?
Are the 11,000 jobs at Ft. Detrick truly at risk? Or is this just a political ploy by the White House to stir up emotions and distract lawmakers from the budgets cuts President Obama really wants to pass?
Either way, one thing is for sure: Controlling Federal spending will be a high voter priority in the upcoming November election. How that all shakes out in the end is something the Frederick community should not take lightly.
The author: Rocky Mackintosh, President, MacRo, Ltd., a Land and Commercial Real Estate firm based in Frederick, Maryland. He also writes for TheTentacle.com.