TALLIL AIR BASE, Iraq — A 64th Expeditionary Reconnaissance Squadron airman guides a Predator unmanned aerial vehicle into its hangar here following a mission. The Predators roam the skies of Iraq providing real-time information to commanders around the world. (U.S. Air Force photo by Staff Sgt. Robert Grande)

San Diego’s defense industry is booming, experiencing growth not seen for nearly 20 years. After a slow rise of $1 billion over a 19-year period, defense spending in fiscal 2002 jumped $3.1 billion, or 30.1 percent, to a total of $13.6 billion. Of that amount were $4.6 billion in defense procurements, a 62.6 percent increase from a year earlier. The wealth was widespread. Telecommunications contracts, for example, hit $135 million, a 1,000 percent increase from a year earlier.

The federal government’s fiscal 2003 numbers are expected to show another significant annual increase, perhaps 14 percent, or another $1.9 billion. Old line companies like Cubic, having maintained government work and strong R&D budgets are roaring. SAIC, with $1.4 billion in local contracts, is starring. National Steel and Shipbuilding landed $1.2 billion in blue-collar work. Missile builders are gone, but General Atomics flew in $229 million in contracts, much of it for the company’s increasingly versatile Predator drones that are right on beam with the Department of Defense’s desire to collect better information while making troops safer.

Kelly Cunningham, the veteran number cruncher at the San Diego Regional Chamber of Commerce who compiled many of the defense spending totals, was not prepared for the magnitude of the rise. “I expected there would be some increase but I was amazed to see this,” he says. “San Diego was trying to get away from being dependent on the military, or was being forced to anyway. Looking at the numbers it was almost incredible that it was such a big increase.”

Aerospace used to be the main driver of San Diego’s defense economy, Cunningham says. Those days are gone. “It is not like in the past where we had the missiles,” Cunningham says. “Our growth is in the SPAWAR. Also, the military payroll has increased dramatically. When the troops ship out they get combat pay.”

The military’s steady presence combined with the recent run-up in defense spending helped San Diego in ways many people don’t appreciate. “It has kept the San Diego economy from going through the floor,” says Marney Cox, chief economist for the San Diego Association of Governments. “Even in the 1990s, unemployment of 8 percent was bad but it wasn’t the 12 percent unemployment that other areas were experiencing.”

War, as always, is good for San Diego.

But as the community also knows, that prosperity can be fickle. Normally peace breaking out, or a Berlin Wall falling, turns the tide. This time, the most immediate threat is the Department of Defense itself which is preparing to embark on Base Realignment And Closure 2005. Tasked by U.S. Defense Secretary Donald Rumsfeld with aligning assets with military needs for the next 20 years, BRAC 2005 may result in the closure and/or merger of up to 25 percent of the nation’s military installations.

What that may mean locally is now just an educated guess.

Line Of Defense

San Diego is home to the nation’s largest collection of military installations. Department of Defense wages and salaries here jumped 13.2 percent to $4.3 billion in 2002. That’s the biggest increase in the country.

While many communities have one or two military commands, San Diego has nearly 300 which are staffed by about 55,000 active duty military and 19,000 civilians. At least a handful of significant commands may be on the chopping block — there is no official list — and the stakes are high. So high that even though this round of BRAC is tightly designed to ward off political lobbying, San Diego political and business leaders already have committed thousands of hours of time, and significant civic treasure, to trying to protect what the region has and, maybe, even get some more.

Leading the effort is the San Diego Regional Economic Development Corp. headed by Julie Meier Wright. She brings to the task experience gained having been involved with each round of BRAC since 1988, both in the private sector for TRW in Los Angeles in 1988 and the public side as California’s secretary of trade and commerce in 1991. She has been working on the ’05 issues for about a year.

“I think San Diego is very well prepared,” says the EDC’s president and chief executive. “But that said, we are looking at where we could be vulnerable.”

Wright is acutely aware that perhaps the most vulnerable military asset is the Space and Naval Warfare Systems Command in Old Town and Point Loma. While consolidating the business with a counterpart elsewhere in the nation likely will be considered, Wright says San Diego, with its technology, research, military and academic climate, is where that $4.2 billion command should remain. “Those operations are in the center of a hotbed of activity in advanced information technology and commercial and academic activities that are highly complementary to what the military functions are doing.”

She and others will advocate consolidating the SPAWAR equivalents from other parts of the country into San Diego.

“One of the greatest unknown assets of this military complex is the contribution of entities such as SPAWAR,” says Mitch Mitchell, the San Diego Chamber’s vice president for public policy and communication. “They contribute so much to the national defense formula, but also to the economy as a driver in this region. And also they’re a great lure to large companies such as SAIC. We have had numerous discussions about the need to educate people about the need to keep entities like SPAWAR in San Diego.”

Counsel From The Hired Gun

Sitting in a conference room at EDC’s offices, consultant Bill Cassidy is a wanted man. He’s been in meetings and interviews all morning. Now, in the early afternoon, he’s going through another interview while a cadre of ranking local officials and executives buzz in the lobby, eager for their monthly powwow with him as members of EDC’s year-old BRAC Steering Committee

Cassidy is San Diego’s hired gun. An insider to the BRAC process, he served from 1994 to 2001 as deputy assistant secretary of the Navy for conversion and redevelopment. There he dealt with issues arising from four rounds of Marine and Navy base closures. Among his duties was conveyance of the Naval Training Center to the city of San Diego. In 2001 he founded Defense Conversion Resources where he advises clients on base closure issues.

San Diego County tops the list of places where military salaries are paid. Some of 2002’s 13.2 percent increase resulted from the cashing of combat pay increases to the region’s active duty personnel.

Flanked by retired Vice Adm. Peter Hekman who represents the San Diego Chamber on the BRAC Committee, Cassidy methodically and confidently advances a case that San Diego’s collection of military bases are so interwoven, and so capable of meeting the defense department’s 21st century requirements, that it is unlikely any of the trophy bases — Miramar, North Island, 32nd Street Naval Station, the Marine Corps Recruit Depot and Camp Pendleton — will be shuttered. At little risk are the smaller bases, like Ream Field in Imperial Beach, which is the training base for North Island’s helicopter squadrons.

In making the case for the traditional bases, he focuses on how interconnected they are operationally. His charts show how on a single load of fuel, helicopters and aircraft from the various bases can access numerous training and bombing ranges in the mountains, deserts and sea surrounding San Diego. Marines can practice storming San Clemente Island; large complicated exercises featuring thousands of troops on the ground can take place in the Twentynine Palms desert; fighter aircraft can conduct intense aerial maneuvers over the Goldwater Range while firing long-range, live weapons at the Chocolate Mountains. The climate is temperate.

“As a result, the military forces of all kinds can train in all forms of warfare, 365 days a year,” Cassidy says.

It also helps that the Marines jet squadrons are now totally integrated into the aircraft carrier groups. And for the local troops that don’t leave town by ship, Miramar is where the Air Force transport planes pick them up.

San Diego officials argue the close proximity of San Diego’s highly-integrated military bases to training ranges on land, sea and air is of extraordinary national value.

Hekman picks up on the theme.

“There is no other complex in the United States that provides what is required in the BRAC legislation having to do with military value,” says Hekman, who when he retired in 1991 was commanding the $25 billion Naval Sea Systems Command. He has since held private sector executive positions and is now a technical and management consultant.

While BRAC still is a year away from compiling its official list, Hekman says San Diegans need to care now.

“There is an economic case and a national security case,” Hekman says. “The economic case is San Diego has the largest complex of Navy and Marine bases in the nation. It is at least a fifth or sixth of our economy. On the other side it is an irreplaceable national asset when it comes to national security.”

BRAC procedures are tightly crafted to prevent political meddling and lobbying. Still, Cassidy says it is important “to convey to the Department of Defense that the city of San Diego values its bases and wants them to remain active and vibrant.”

“San Diego has a unique confluence of public sector scientists, engineers and technicians for (SPAWAR),” he says. “Secondly you have private sector companies in the San Diego area also engaged in information technology programs and systems. Third, you have the academic institutions at the universities that have programs that use technology. It seems to us that one lesson that is evident from this is that progress comes from collaboration. No one has a monopoly on all of the information and all of the ideas. And so in San Diego this confluence of public, private and academic sector, scientists and technicians, produces an energy and synergy that drives progress in the (SPAWAR) area. When you overlay the presence of the Navy and Marine Corps operational forces, you have an experiential, or empirical base that you can test and, to put it into even more basic turns, you can talk to. For example, C4I (the Navy’s chief engineer and command, control, communications, computer and intelligence systems) is actually working on ships. You can find out what new requirements the operations would like to have. You find out the advantages your product has and the deficiencies, if there are any. Here, you can do everything. Additionally, the R&D are activities here, specifically SPAWAR Systems in Point Loma. It not only designs these systems, it installs them and maintains them.”

Mr. Murphy Goes To Washington

Government reports show 865 firms in San Diego were issued a combined $4.68 billion in defense contracts in 2002. The biggest players by far are SAIC, which handles professional and technical tasks, and NASSCO, which builds and repairs ships.

Accompanied by Cassidy, San Diego officials have made several visits to defense officials in Washington, D.C. The first, on Aug. 14-15, included San Diego Mayor Dick Murphy.

“I thought it was important that I personally commit to the leadership of the Navy, the Marine Corps and the Department of Defense, that preserving San Diego’s military base and facilities were critical to San Diego and America,” says Murphy. “I wanted to explain that we are a military town and that we support our military facilities. I wanted them to know that the mayor is personally a military veteran who understands the strategic importance of the facilities to the free world. And then sort of the third thing, I wanted to be sure I personally made the case to the decision makers that each military facility in San Diego has high military value and collectively, those military facilities have extraordinary value for the defense of America.”

The value of SPAWAR, which Murphy has visited, was stressed in those sessions.

“SPAWAR is very important to San Diego because it provides some very high-paying jobs that are excellent for our economy,” Murphy says. “But that really wasn’t our pitch. What we tried to communicate was having these support facilities adjacent to the military bases allowed these support facilities to be more efficient.”

Among those the mayor met with were H.T. Johnson, then the active secretary of the Navy who will be a senior decision maker in the BRAC process; Vice Adm. John Mathnen who is deputy chief of Naval operations for warfare requirements; Rear Adm. David Hart, the director of fleet readiness; Rear Adm. Jay Cohen, chief of naval research and director of the office of Naval research who will look at the key issue of consolidation involving SPAWAR; Gen. William Myland, assistant commandant of the Marine Corps who is on one of the senior committees that the secretary of defense formed to oversee the BRAC process; and Rear Adm. William Klemm, deputy commander of the Naval Sea Systems Command who is part of the team analyzing shipyards and repair depots.

Murphy was pleased by the reception.

“I thought we were extremely well received by both the Navy admiral and Marine Corps generals who basically agree with me,” he says. “I’d say the Department of Defense executives were more non-committal because they are the ones charged with making the ultimate decision on what bases were closed.”

In December, Mayor Dick Murphy, right, was at SPAWAR for a commemoration of the final launch of a satellite that provides secure communications for top government agencies, including the White House. Pictured with him are Bob Tarleton, left, from the Navy’s communications satellite program office and Rear Adm. Rand Fisher, director of Naval Space Technology Programs. The SPAWAR office here oversees the purchase of the satellites. Fittingly, the satellite was carried into space on an Atlas rocket made in San Diego.

Yet Murphy and others involved know their influence is limited. Indeed, Chris Helman, a military policy analyst with the Center For Arms Control and Non Proliferation, says defense officials are willing to listen but that communities should not read too much into that courtesy.

“Do they listen?” he says. “Yeah, they do. Which is why the BRAC people do site inspections and hold local hearings. But by and large, unless there is something huge they totally miss, they have a handle on the situation. If you look at the past BRAC experiences, you are not seeing wholesale changes.”

In San Diego’s case, officials are trying to get the information to the “right people” before it gets to the point of BRAC hearings.

“I agree that the Department of Defense will make their decisions based on objective criteria,” says Murphy. “But the people making these decisions are still human beings who I think can be influenced by providing them objective information in making their decision process.”

Yet it is one thing to travel to Washington, D.C., and present the city’s case on paper and in PowerPoint. What Wright really wants is to bring the decision makers to town. “We are encouraging people to come to San Diego,” she says. “You can say ‘this is what we have,’ but it is much better if you bring someone into the middle of it and let them see it first hand. The level of collaboration and potential for collaboration here just about outstrips any other area in the country.”

No ‘Plan B’

While the discussion has been held, nearly everyone involved with BRAC says it is unwise to advance any kind of contingency plan for giving up bases. For starters, no procedure exists for such maneuvering. “Maybe on ‘The West Wing’ there is this thing that BRAC is about horse trading,” says W. Erik Bruvold, EDC’s vice president of government affairs. “But from everything that we understand there is no opportunity to make the kind of deal where you take A away and leave B in place. There really is no good mechanism.”

Even though BRAC 2005 contains language to address a community’s interest in closing a base, it seems an unlikely offer. No one could cite such an example. And woe be the future of a politician who advocates closing a base. The best strategy seems to lobby hardest for what you want most but lobby for everything and even if ultimately that isn’t in the best interest of your community.

“Here is the dirty little secret,” says Hekman. “There are some real estate people and developers who look at a site and say ‘Gee, wouldn’t that make some lovely waterfront condos.’ But no elected official in their right mind is going to talk about base closing. That has a chilling effect on a lot of people. But I guarantee you if the military had a community willing to close a base and they had two other bases that provided that function, they would close that base.”

A decade ago San Diego pondered the future of Miramar when the Navy announced the base was closing and its star division, the Top Gun school, was moving to Fallon in Northern Nevada. In an advisory vote, a slim majority of county residents favored turning Miramar into a commercial airport. But with voters nearest the base solidly against the idea, the city never advanced the case and instead Miramar went from a Navy to a Marine base with most of the El Toro helicopter squadrons moving in.

Both Cassidy and Hekman say they doubt it would make any difference even if the city was asking for Miramar.

Reasonable Expectations?

At the same time San Diego is going through this process of building a case to protect its bases, so are other communities. Someone is going to lose. “There will be closures,” Cassidy says.

So how reasonable is it for San Diego to expect to take no hits?

“When you look at this kind of process and say everybody ought to share the pain, that is the wrong way to look at it,” Hekman says. “The criteria for this process is not sharing of the pain. The criterion of this process is not economic impact. The criteria for this process is national defense and readiness. When you look at our area, it is trimmed down to being a very efficient machine for carrying out that function. If we lose any element in it you have damaged that very, very effective machine we have here.”

Cassidy agrees, noting again that the primary criteria is military value. “Collectively, the bases in the San Diego area have even higher military value because they constitute a network of military resources,” he says. “They can support each other.”

Wright says other communities across the country are looking at San Diego’s collection of bases and likely advocating for a piece of the action.

“We know there are members in Congress trying to find out why things that are being done in San Diego couldn’t be done in their states,” Wright says. “I guess you could say we are a target, but we are a hardened target. We are going to have to be mindful about what others are saying and doing to put up the strongest defense. I don’t know that we won’t lose anything but our intent going in is to make a case to keep everything.”

Wright says her BRAC Committee will adjust its tactics to fit what is happening.

“If you made it analogous to a political campaign, we’ve got our fact base, we have to constantly do opposition research and we have to get our message out in a compelling way, throughout the campaign,” Wright says. “The vote is taken in the spring of 2005 when the BRAC commission publishes its list. I just hope it doesn’t get as ugly as a campaign.”