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DEFENSE COMMUNITIES 360

BRAC 2005: The Pain and the Profit

  • April 26, 2011
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The Federal Reserve Bank of Richmond has published a well-researched examination of the economic growth occurring at several mid-Atlantic installations gaining new missions as a result of BRAC 2005, along with the burden neighboring defense communities are striving to meet to accommodate the influx.

Overall, according to the latest issue of Region Focus, regions with higher manufacturing and retail shares — and in those that already receive a large share of military prime contracts — are best positioned to benefit from military growth. The benefits are lower in isolated areas where there are only troop-related activities.

Already, 40 new defense contractors have opened offices in Harford County, Md., to take advantage of the 8,000-plus jobs, many in R&D and engineering, moving to Aberdeen Proving Ground. The area surrounding Fort Lee, Va., has benefitted from the tremendous amount of construction needed on post, and with the installation’s population slated to double, the region’s total wages are expected to jump as well.

Activity around Fort Bragg is on an upswing, as the post is expected to gain 9,000 military personnel and an estimated 1,000 contractors are projected to set up shop to be close to the headquarters for Army Forces Command and Army Reserve Command. The city of Fayetteville, N.C., issued $300 million in building permits in 2010 for a variety of projects, according to the article.

At the same time, growth communities still have tens of millions of dollars in outstanding capital needs to support relocating personnel and their families. School systems around Bragg need an estimated $220 million for school construction, with $68 million of that related to military growth. The time lag between increased enrollments and the federal government’s payment of impact aid funds leaves local schools at a disadvantage when it comes to financing school construction. Prince George County, outside of Fort Lee, has only recently received its impact aid for the 2007-2008 school year, the article states.

The other critical infrastructure need is roads. Communities neighboring Bragg, for example, need $344 million to wide roads and provide direct interstate access to the post.

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