This spring, we expect the return of virtually every soldier in the 10th Mountain Division to Fort Drum. That will be the largest concentration of military troops and economic impact that we have ever seen. At the same time, the Department of Defense is talking about another round of Base Realignment and Closing the dreaded BRAC process that could result in Fort Drum being closed. While few people seem to feel that Fort Drum is threatened at the moment, it could happen. What would life in the north country be like if we lost our economic engine? And if we keep it, could we expect better things from it in the future?
Life without Fort Drum would be much poorer. According to Fort Drums 2010 Economic Impact report, the post employs more than 24,000 soldiers and civilian workers, with an annual payroll of more than $1.2 billion. That amounts to roughly a third of all jobs in Jefferson County.
The Army also spends millions of dollars on housing, education, medical care, construction and other local purchases, for a total annual value of over $1.5 billion. That spending supports businesses and jobs in the north country, as well as providing a level of demand in areas such as medical care and retail that allow local providers to gain a critical level of scale that benefits us all.
Losing that spending and the 24,000-plus families that go with it would leave the region and especially Watertown and northern Jefferson County economically desolated. Property values would plummet and tax revenues would crash; businesses would close and jobs would be lost. Local governments would struggle to provide needed services to the citizenry while school districts would contract. It would not be the end of life here, but it would be the end of life as we know it. Our economy has grown and changed to meet the needs of Fort Drum and its soldiers. Losing them would mean painful restructuring.
So what does keeping Fort Drum mean for us? If the Fort is saved and perhaps even expanded, what could we expect?
Last month, at an economic forecasting event in Watertown, one of my fellow panelists, Robert Simpson, the CEO of Centerstate, a not-for-profit economic development corporation operating in New York, told us that the most significant opportunity we could look for from Fort Drum is the potential work force the post brings us from the families of soldiers and retirees who remain in our region. That supply of human capital could be the source of much greater economic growth than we have seen to date.
In theory, Mr. Simpson is completely correct. I have heard those sentiments from many people over the years and have spoken them myself on occasion. There are enough success stories of Fort Drum families and retirees who have built lives in our region to demonstrate the potential of that resource.
Unfortunately, after years of study, we have yet to develop any systematic way to tap the human capital of Fort Drum. Nor have we developed any methods of using the post to leverage the development of a regional defense sector, although not for want of trying.
In 2001, the Center for Community Studies at Jefferson Community College conducted a detailed study on behalf of the Jefferson County Job Development Corp. The study, called the Black River Corridor Economic Adjustment Strategy, looked at how Fort Drum could be used as the starting point of a defense sector in the north country. It also conducted an assessment of the skills and intentions of the Fort Drum community. The report is still available on the JCJDC website, www.jcjdc.net.
Disclaimer I was the project director for the research and the report itself.
The report was pessimistic about the possibility of attracting more defense business and offered limited recommendations, as few of the optimistic expectations leading to the study had survived close examination. Fort Drum was already doing more than most Army posts to encourage local business, and there wasnt much room to expand those efforts.
The only recommendation from that section of the report that seems to have been implemented was to establish a Procurement Technical Assistance Center to help local businesses bid on government contracts. The Greater Watertown North Country Chamber of Commerce now operates a PTAC. If you want to bid on a contract at Fort Drum, give them a call.
The Black River Corridor report also involved a detailed survey of Fort Drum spouses and retiring soldiers, asking about skills and plans to remain in the area after retirement. The results generally supported the conventional wisdom that the Fort Drum population is better educated and has more technical and language skills than our general population, but the difference was not striking. Fort Drums contribution to our human capital base looked positive but not too much different than what we had already.
Only 17 percent of the retiring soldiers surveyed suggested they would stay in our region, which seemed to disagree with other estimates and earlier reports that claimed us as an unusually popular retirement destination. Fort Drums own figures suggest we are home to 2,200-plus retirees, or about 0.01 percent of the tri-county population. Many of those retirees have become successful business owners and leaders in our community. It would be nice to have more, but no one really knows how to get them.
In 2007, the Fort Drum Regional Liaison Organization commissioned a second report from another research firm that essentially re-examined the idea of Fort Drum as a leverage point for expanding the local defense industry. That report, called the North Country Gap Analysis, was vastly more optimistic and described 13 primary and nine secondary industry targets that could become new growth sectors in our region, based on national defense trends.
Six years later, only the construction industry, fifth on the primary list, has shown any results. That report is available at www.fdrlo.org.
Fort Drum is a huge economic prize for our community, and all the struggles of our state and local government agencies to support it are worth the cost. Angst over BRAC, housing developments, PILOT agreements and other local tempests are a small price to pay for the economic benefits of Fort Drum.
How we can capitalize on Fort Drum and its soldiers and their families as resources for further economic growth, however, is harder to see. Maybe we need another study?
Greg Gardner is an associate professor of business at SUNY Potsdam. His column on business issues in the north country is published monthly in Money Matters. Email him at email@example.com.