Monday, July 30, 2012

Summary Of Expected Economic Effects Of F-16 Move From Eielson To Elmendorf Upon North Pole And Metro Fairbanks

Although the proposed relocation of a squadron of 21 F-16 aircraft from Eielson AFB to Joint Base Elmendorf-Richardson (JBER) has been delayed by a year, the prospective economic effects upon local businesses in the Fairbanks metro area continue to be discussed. The Air Force estimates the move would save more than $200 million over five years by moving 542 positions with the 18th Aggressor Squadron from Eielson to JBER; as part of the move, 81 positions would be reduced. Additional savings would come in other areas, such as eliminating excess facility capacity. By fiscal year 2015, even more money would be saved by eliminating 749 military and 179 civilian manpower authorizations deemed no longer be needed at Eielson once the remaining infrastructure and support functions are adjusted after the squadron's relocation. The KeepTheF16s website hosts a copy of the full proposal.

Upon initial disclosure of the plan, all three members of Alaska's Congressional delegation threw up a caution flag; Sen. Mark Begich even went so far as to temporarily delay the nomination process for Lt. Gen. Herbert J. Carlisle, who was being considered for promotion to four-star general and as Commander of Pacific Air Forces (PACAF), until the Air Force provided more answers. One of the major concerns was the possibility that the F-16 relocation would be a precursor to Eielson's closure. Back in May, Defense Secretary Leon Panetta assured Sen. Begich that the F-16 relocation was not a back-door move towards base closure.

Another concern put forth by numerous other sources was the danger of concentrating so many eggs in one basket. One of the reasons why we bounced back from Pearl Harbor so quickly was because our carriers were at sea instead of in port. Placing F-16s at JBER would mean an enemy strike upon JBER would take out more of our aerial warfighting capability in one fell swoop. Additionally, Gov. Sean Parnell pointed out that JBER is much closer to several active volcanoes than Eielson; Mt. Spurr's eruption in 1992 curtailed operations at JBER for several days.

Finally, on June 26th, the Air Force announced a one-year delay in the squadron move, pushing it forward to October 1st, 2013. But the ultimate objective is still to prevent the move, and so local people are holding forth on the economic impacts upon the local economy. In March 2012, North Pole Mayor Doug Isaacson published a community perspective. He stated that the North Pole area represents almost one-third of the Fairbanks-North Star Borough population; the city of North Pole has 2,200 residents surrounded by an additional 25,800 residents. He projected that if Eielson loses 1,500 or more military personnel, that could translate into a loss of more than 3,750 people from our community — possibly half of those would be school-aged students. This could adversely impact the school district’s state funding through a reduction in its base student allocation, leaving some schools shuttered or underutilized.

Isaacson also noted that Eielson is the second largest job generator in the borough, creating one in every 10 jobs. Eight percent of all revenue in the borough is generated by Eielson to the tune of $1.3 billion. A loss of 1,500 personnel could translate into a loss of 3,405 civilian jobs. Those jobs would be in construction, education, retail, restaurants, grocery stores, automotive, health care and across the board. Isaacson also projects that the greater North Pole area may see a loss of 7,155 people, which is three times greater than the population of the city of North Pole and is more than 25 percent of its metro area population.

But there are a couple of more recent News-Miner articles focusing upon individual businesses. According to one article, Ed Richards, owner of Little Richard’s Family Diner in North Pole, says that up to 65 percent of his business comes from the military, much of it from Eielson. Some of them dine in his restaurant twice daily; individually at breakfast and/or lunch, and again with their families at dinner. The proposed F-16 relocation would translate into about a 20 percent dip in business for the diner. One commenter recommended the diner open two hours earlier, at 6 A.M., to catch the traffic that must be in Fairbanks by 8 A.M. in order to compensate for the loss.

According to Eielson’s annual economic impact statement, the Air Force employs 2,164 active-duty personnel, with a total salary of $131 million. Those federal dollars turn over an estimated three times in the local economy, according to Jim Dodson, the president and CEO of the Fairbanks Economic Development Corp. So that $131 million, spent on restaurant meals, cars, clothes and gas, turn into local wages and eventually account for a nearly $360 million economic impact. In addition to salaries, there’s about $98 million spent hiring local contractors and about $37 million spent employing about 900 civilians. Already, one project to build a new $45 million dormitory on Eielson has been delayed.

Another article addresses the impact upon real estate. According to local real estate agents, there were 219 single-family homes for sale in North Pole in mid-July 2012, compared to 158 homes a year earlier. Several agents say the uncertainty behind Eielson’s F-16s, which are tied to about half the 3,100 jobs on base, explains most of the increase. Throughout the borough, 447 homes had been sold in 2012 through July 5th, a decline of 14 percent from the year before. Prices have dipped by roughly 2 percent; buyers are paying an average of about $211,000 for a home in 2012, compared to nearly $215,000 last year. Another real estate agency, Stars & Stripes Realty, discloses that their clients are about 80 percent military.

The Bottom Line: While the Air Force would save money by relocating the F-16s to JBER, we would sacrifice important depth and redundancy. We'd be putting too many of our military eggs in one basket; an enemy attack on JBER would risk taking out too much of our aerial warfighting capability. But the high fuel prices in the Interior are a valid concern, and a timetable to bring natural gas to the Fairbanks metro area, which would lower fuel costs, would increase the chances of the F-16s remaining at Eielson.

1 comment:

  1. What exactly is the DOD Corpse-oration defending?

    Also the Stars & Stripes Realty corpse-oration, needs to close it's doors.