Understanding the impact of closing Naval Air Station Brunswick

January 1, 2007

The closure of Naval Air Station Brunswick (NASB) will give a new face to the mid-coast Maine communities that have hosted military personnel and their families for years. Businesses will look for new customers; base workers will change jobs; landlords will advertise for new tenants; and everyone will contemplate potential reuses of the base. In short, the entire community will feel the change. The closure will also bring opportunities. Research shows that most communities facing a military base closure recover after an initial adjustment period. Some even experience enhanced economic growth when military facilities are successfully converted to civilian use.

Understanding the expected economic impact of a base closure is vital to successful redevelopment. Knowing which of Maine’s economic sectors will experience growth during the closure can help local communities capitalize on new opportunities. Knowing which sectors will not grow as much can help mitigate the potential negative effects.

In earlier analysis, the Maine State Planning Office estimated the economic impact of NASB’s closure at the state level. This report looks at the same impact on the local and regional levels.

This report isolates the impact of the closure alone, and does not incorporate any mitigating effects of redevelopment. This information will help policymakers and service providers plan for the adjustment period. However, because redevelopment is not considered, the actual observed impact of the closure will likely be less than predicted by this analysis. Such has been the experience with prospective impact analyses nationwide.

We find that Maine’s economy will experience moderate growth during and after the closure of NASB. Statewide employment will continue growing, just at a slightly slower pace. Closing NASB lowers the forecast for 2006-2012 employment growth from 8.4% to about 7.7%, a difference of roughly 6,000 jobs. That is not an estimate of actual job losses. Rather, it is the difference between forecasts of employment growth with NASB and new forecasts of growth without NASB. Roughly half of the jobs will be federal military and civilian positions. The rest are both lost jobs and reduced job growth during the adjustment period. NASB’s closure will result in a less than one percent reduction in the state’s expected growth in Gross State Product, employment, population, and total and per capita personal income.

Some private sector industries will continue to expand throughout the closure. Others will feel the impact more acutely, specifically retail, construction, food services and drinking places, professional services, and administrative support services. Impacts on retail and food services are a direct consequence of the loss of federal payrolls and the ripple effects of lost consumer spending by federal employees. The construction sector will feel the loss of base contracts, as well as reduced demand for residential construction as vacated military housing comes onto the market. Impacts on local government employment, which includes public schools, are also near the top of the list, accounting for roughly five percent of total job reductions.

Communities immediately adjacent to the base and communities where base workers live will experience the fullest effects of the closure. The Brunswick Labor Market Area -- which includes the communities of Brunswick, Bath, and Topsham -- will experience roughly 85 percent of the employment and 75 percent of the population impacts. Over half of this is attributable to the direct loss of base-related jobs. The neighboring labor markets of Portland-South Portland, Lewiston-Auburn, and Augusta may also see small to moderate impacts, following the spread of NASB commuters and contractors. Together the three neighboring regions account for 13 percent of employment and 22 percent of population impacts. The impact on the rest of the state will be minimal beyond a relatively small number of long distance commuters and contractors based in other regions.

These findings offer guidance for region and state planning efforts. First, most of the indirect impact comes from lost spending by households supported by federal military and civilian jobs. That underscores the need to repopulate the base and surrounding areas with new households, and replenish the community with new families.

Second, studies from prior BRAC rounds show that most communities recover from major base closures. Some actually experience higher long-term economic growth if military facilities are successfully converted to private-sector uses. But the transition period immediately following the closure is often challenging for individuals, communities, and businesses with direct ties to the base. Swift economic recovery hinges on early planning, leadership, coordination of key stakeholders, and full community involvement.

Third, the relative health of the Mid-Coast bodes well for economic recovery, but the region may be more susceptible to economic shocks during the recovery period. Military staffing levels are not susceptible to economic cycles and provide a stable economic base during slow-downs in the private sector economy. After the base closure, the region should seek to leverage base and regional assets to diversify its industrial base as a buffer against future economic shocks.

Fourth, redevelopment efforts must be cognizant of prevailing market forces. In particular, on- and off-base redevelopment plans should capitalize on the unique strengths and assets of the mid-coast economy, such as the potential growth of its nascent composite materials and boat building cluster. More research may be necessary to identify other sectors with high-growth potential, with a particular eye to those that could take advantage of the base’s special assets. This further reinforces the importance of continued coordination between on-base redevelopment effects spearheaded by the two Local Redevelopment Authorities (LRAs) and the off-base efforts

The closure of Naval Air Station Brunswick (NASB) will give a new face to the mid-coast Maine communities that have hosted military personnel and their families for years. Businesses will look for new customers; base workers will change jobs; landlords will advertise for new tenants; and everyone will contemplate potential reuses of the base. In short, the entire community will feel the change. The closure will also bring opportunities. Research shows that most communities facing a military base closure recover after an initial adjustment period. Some even experience enhanced economic growth when military facilities are successfully converted to civilian use.

Supporting documents

Understanding the Impact of Closing Naval Air Station Brunswick (PDF)