In many cases it’s impossible to separate the military and waterfront in San Diego. So much of what happens on 6,000 acres of tidelands has a military theme. The San Diego Unified Port District governs 3,000 acres of land, with the remaining 3,000 controlled mostly by the federal government and a few acres owned privately.

San Diego is home to one-fifth of the U.S. Navy fleet and host to the world’s largest Navy/Marine Corps complex. Add the Coast Guard, and you have within the confines of San Diego Bay not only a military force to be reckoned with, but an economic powerhouse that has, and continues to, profoundly influence the character of San Diego.

It is the location on the Pacific Ocean and the temperate weather that brought and keeps the U.S. military in San Diego. Strategic positioning for control of the Panama Canal 85 years ago partly convinced the Navy to make this a primary home. Nearly a century later, that decision has an everyday impact on the region. In 2000, the most recent year figures are available, the Department of Defense was responsible for $9.96 billion of the region’s $114 billion gross regional product, with the Navy alone contributing $5.46 billion, or more than half.

The Navy controls three primary bases and a combined 9,160 acres of land and water in San Diego. It prides itself on running the collection like a single operation. This was not always the case. Before 1998, it was common for each base to have little idea what its counterparts were doing, to the point that each used a different radio system. Now, the commanding officers of Naval Base San Diego, Naval Base Point Loma and Naval Base Coronado report to Rear Adm. Jose Betancourt, who reports to the commander in chief of the Pacific Fleet based in Hawaii. Everyone keeps aware of what the other is doing. “It’s like a giant ballet,” says Cmdr. David Koontz, director of public affairs for Navy Region Southwest. “But we don’t wear the tutu or pink tights.”

The cooperative spirit along the bay’s 33 linear miles of coastal land seems to be shared with the Navy’s waterfront counterpart. “The majority of the land around the bay is pretty much divided between port jurisdiction and Navy jurisdiction, and we’ve always gotten along quite well,” says Steve Shultz, assistant director of communications for the port.

The Navy and tourism are two of San Diego’s largest industries, with the Navy being the more stable, says Robert J. “Rocky” Spane, Coronado’s representative on the port commission and a retired vice admiral. “With the three aircraft carriers here, the airfield and the Marines, it’s a major base. San Diego and the Navy have been connected since the turn of the century when aviation was born at North Island.

“From the San Diego side, even though tourism is a major industry and biotechnology and computer industries are growing here, the bread and butter of this economy is the U.S. Navy and all of its service men and women who have a great budget multiplier with their salary and then the goods and services the Navy buys here,” Spane says.

Considered a combined business, the primary bases employ 56,680 military and 17,470 civilian personnel. As a group, the annual active duty payroll is $2.89 billion and the civilian payroll is $723.4 million.

With an operating budget of $68 million, Naval Base San Diego boasts the largest waterfront military population with more than 24,800 military personnel, along with nearly 4,500 civilians working at a variety of commands at Naval Station San Diego and the Navy’s Broadway Complex in Downtown. Most of the sailors here are assigned to deploying ships based at the naval station. About 533 military and 1,088 civilian employees are assigned directly to the naval base to carry out the day-to-day base operations.

Similarly, Naval Base Coronado, which includes Naval Air Station North Island, the Naval Amphibious Base where the Navy SEALs train, Naval Outlying Field Imperial Beach and Naval Auxiliary Landing Facility San Clemente Island, relies on about 739 military and 875 civilians to conduct routine base operations like security, running the galleys and military housing, and base maintenance. However, the base’s total population is a little more than 24,600 military personnel and about 6,000 civilians, with more than half the sailor population assigned to the three aircraft carriers and 21 aviation squadrons based at North Island. The base’s operating budget is $107 million.

Naval Base Point Loma, the smallest of the three major naval complexes in San Diego in both acreage and personnel, has an operating budget of $33 million. More than 4,000 military and 1,700 civilian employees make up the base’s total population, with about 230 military and 400 civilians handling day-to-day operations. The Naval Space and Warfare Systems Command, which is on tidelands property operated by Naval Base Point Loma, has a workforce that includes 95 military and 3,200 civilians at its Pacific Highway headquarters.

Economic Impact

Like most large businesses, the bases don’t try to do everything themselves. That’s hundreds of millions of dollars of good news for local shipyards and other businesses among the port’s 600 tenants.

Each of the two dozen or so ships home- ported in San Diego is maintained and repaired locally during its interdeployment training cycles. “Typically, ships will deploy for a six-month period overseas, return home to San Diego for a 12- to 18-month period during which repairs, training and a variety of exercises are accomplished, followed by another six-month deployment,” says Capt. Ken Roey, deputy supervisor of shipbuilding in San Diego.

Most ships will be berthed at one of the three private shipyards in San Diego while repairs are conducted by National Steel and Shipbuilding Co., Southwest Marine Inc. or Continental Maritime Inc. In addition, NASSCO builds new Navy ships, most recently launching the USNS Soderman in April. Those ships not in dedicated maintenance periods are quite often visited by contractors in port at San Diego to accomplish selected repairs.

The value of contracts to repair San Diego homeported ships averaged between $300 million and $350 million annually over the last four years. An individual contract will vary in worth from several thousand dollars to in excess of $100 million. An average scheduled maintenance would likely be in the $10 million to $15 million range per ship. In addition, the new construction efforts at NASSCO contribute another $300 million annually to the economy.

NASSCO, a $550 million a year business, would not exist without Navy projects. “The Navy is very important to NASSCO and is our major customer,” says Steve Clarey, the shipyard’s marketing and corporate relations manager. “A little over $100 million a year comes from routine repair and maintenance of Navy ships homeported here. Ninety-five percent of our repair work is for the Navy. A very small part of our business is commercial repair. San Diego is not a major seaport and as a consequence, we don’t have much opportunity to do commercial ship repair.”

Clarey says San Diego is unique among Navy home ports because of its lack of government and naval shipyards. A commitment by the commercial industry to provide services and corresponding commitment by the Navy to ensure steady work keeps everything running. “Our sailors are away from home for a lengthy period (while on deployment),” says Koontz. “Because we use local ship-repair facilities, we don’t send the ships out for repair, requiring sailors to be away longer. This allows the sailors to stay with their families.”

The major repair yards in San Diego all have multi-ship, multi-year contracts. The Navy benefits because they have the same people working on the same ships each time, the local businesses benefit because they can count on the work and the ship crews benefit by being able to stay in their home port. San Diego benefits from each aspect because the civilian and military employees spend their paychecks at local businesses.

Big, Powerful Boats

Without the Navy, San Diego likely would lack a marine industry of consequence. NASSCO alone employs about 3,000 with a journeyman wage of about $16 an hour.

In San Diego, the Navy has three aircraft carriers, five Los Angeles class fast-attack submarines, 49 surface combat ships and 18 support vessels. The private industry works on all the ships homeported in San Diego except for the nuclear submarines. Sub work still is performed by naval shipyard personnel from Puget Sound, New Hampshire and Honolulu.

NASSCO is the only shipyard here capable of building large ocean-going military vessels. About 20 percent of its business is from repair; 80 percent is building new ships. “The commercial customer (work) in the United States is not sufficient to sustain the industry and we need both a strong Navy and a strong commercial customer base,” Clarey says. “It’s the two together that allow us to stay in business.” NASSCO long-term contracts include maintaining amphibious assault ships, guided-missile cruisers and destroyers. Later this year it expects contracts to handle guided-missile frigates. Southwest Marine has long-term contracts for the smaller amphibious ships, guided missile destroyers and the USS Coronado, an auxiliary command ship.

Much of the work is shared between the various large yards. “We often assist each other on the smaller vessels as well,” Clarey says. “The formal agreement on work sharing also is unique to San Diego. It allows each yard to balance its work load and to develop unique skills for certain types of work. It’s a great tribute to the cooperative relationships and the wisdom of the repair industry executives in San Diego.”

Feeding Local Business

Navy contracts of all shapes and sizes feed the San Diego economy. Everything from toilet paper to nuts and bolts to concrete planters to sinks for a ship galley are purchased from San Diego businesses by Navy departments. In 2000, 23 of San Diego’s top defense contracts were valued at a total of $3.6 billion.

All contracts and acquisitions go through the Fleet and Industrial Supply Center located on Pacific Highway south of Broadway. FISC has a budget of $500 million a year and oversees 6,000 deals, or “actions” in Navyspeak. Purchases of more than $25,000 are open to bidding. Businesses and contractors that comply with federal regulations may bid for opportunities posted online at www.fedbizops.gov.

One of those contracts is with Foss Maritime to run the Navy barge at San Clemente Island. Because of that existing relationship, a Foss tugboat, the Pacific Viking, was hired in May to tow the 950-ton disabled research submarine Dolphin back to port. About 20 percent of the company’s business is Navy contracts.

Not everything needs a contract to benefit from Navy dollars. San Diego Hardware in Downtown has been doing business with the Navy since it opened in 1892. From the front, the business appears to be a mom-and-pop hardware operation. In the back of the store is a department dedicated to government and industrial sales. Tom Griswold, responsible for meeting government needs, has filled Navy purchase orders for a wide variety of items. Although a hardware store, he orders things like altimeters, embroidery machines, audio/visual fixtures and, of course, tool sets. “For a relatively small government sales department, we do a pretty good volume on a wide range of items,” Griswold says.

Other businesses make a living catering to those who work on the various bases. Coronado Brewing Co. credits the Navy with about 35 percent of its business. Owner Ron Chapman says many a party has been held in his restaurant for change of commands. “They give us a ton of business in hail and farewell parties,” Chapman says. “Especially now that the carriers are at North Island.” Chapman says the Navy clientele brings in about $500,000 in sales a year. “That’s great for one small business,” he says. “This is not an easy environment to survive in.” Coronado Brewing Co. also credits Navy patrons for helping it through a post-Sept. 11 economy that was especially hard on the restaurant industry.

Greg McPartlin, owner of McP’s Irish Pub and Grill in Coronado, says the military is worth $1 million to his business. A former Navy SEAL, he has run his pub for 20 years as the home of the SEALS. “We’re the Navy’s watering hole over here,” he says. “Without them I don’t think I’d be open.” Almost 75 percent of his patrons are military and McPartlin has designed his menu to reflect his thanks. It reads, “We are very proud of our military heritage here in Coronado, so please raise your glass to men and women in uniform you may occasionally see in here during lunch or dinner.”

Keeping Environmental Peace

The Navy is about more than protecting the country. It protects its piece of the environment too. It has a budget of $31.4 million from which it uses $14 million to put programs in place that protect and enhance San Diego Bay and its wildlife. During a recent visit to North Island, oil spill barriers surrounding docked aircraft carriers were visible, as were similar barriers around on-shore generators pumping electricity to the docked ships. “We’re a neighbor here,” says Capt. Donald Boland, commanding officer of Naval Base Point Loma and assistant chief of staff for Environment Commander, Navy Region Southwest. “We’ve a significant investment here to be a good neighbor so you’ll keep us.”

The Navy has done things like use sand dredged for a new pier to create a habitat south of Coronado off the Silver Strand in Navy waters. As a result, fish and seahorses are beginning to flourish in an area where before there was very little sea life. An experiment that began at SPAWAR led to an abalone farm at the submarine base in protected waters. Adult abalone are being released in the bay. Efforts are under way to obtain state funds to continue the program.

The bases and military exercise areas house habitats for endangered species protected by law, and Navy programs have ensured that the species flourish and are released elsewhere. A least tern refuge on North Island has done so well that other agencies are beginning to tap the Navy’s knowledge in this area. Environment friendly programs include the new pier at North Island constructed with pilings made from recycled plastic. During additional pier upgrades, creosote-soaked wood pilings are being replaced by the new concrete and plastic pilings. As part of a team effort, oil spill cleanup exercises are conducted with the Coast Guard and state.

A prosperous San Diego is important to the Navy. Feeding the economy of the city that houses such a significant military presence ensures the future of the naval bases and the industry that cares for and supports its ships and troops. “It’s important for the Navy to have a port that has an airfield connected to it and has ample training room and has a population that is supportive,” Spane says. “And certainly, San Diego is that way. As the Navy continues to change, San Diego will become even more important.”