Virginia weighs its dependence on defense spending, Hampton Roads is Pentagon South

from Virginia Business, 1 Sep 08


The 2005 Base Realignment and Closure process (BRAC) is shutting down 33 major installations in 22 states. In Hampton Roads, Fort Monroe is scheduled to close its doors in Sep 2011, a move that will eliminate an estimated 3,300 jobs (military and civilian) while causing the loss of another 1,000 local support jobs.

“The military is probably the single most important driver of the Virginia economy,” says Stephen Fuller, director of George Mason University’s Center for Regional Analysis in Fairfax and a member of the Governor’s Advisory Board of Economists.

Fort Monroe, which has housed fortifications since 1609, sits on the edge of the port of Hampton Roads, Virginia’s oldest and most coveted military asset. Hampton Roads is home to 59% of Virginia’s defense employees, more than a dozen military facilities, and a large number of defense- and homeland security-related companies, earning the moniker Pentagon South. “We are the hub,” says Rep. Thelma Drake (R-2nd District).

Hampton Roads is a major player in building ships and serving as home port for ships. For example, Norfolk Naval Shipyard in Portsmouth has been building ships since 1767, and Newport News Shipbuilding (purchased in 2003 by defense giant Northrop Grumman Corp.) has been in business for more than a century.

“We’ve shrunk from a 600-ship Navy in the 1980s, the Reagan era, to roughly 280,” says David Dickson, executive director of the Virginia National Defense Industrial Authority (VNDIA), a Richmond-based state agency charged with supporting defense and military-related opportunities in the commonwealth. “Today we’re working toward a stated goal of 313 ships.”

Hampton Roads serves as home port for close to 70 ships, including six aircraft carriers. (closest competition, San Diego, serves as home port to two) Each of these floating cities has a crew of 5,000 or more. Greg Grootendorst, deputy executive director for economics for the Hampton Roads Planning District Commission, says that just one aircraft carrier can create an additional 6,000 jobs in the community and contribute $650 million a year to the regional economy.

Hampton Roads will enjoy some trickle down effects from BRAC, too. Langley Air Force Base in Hampton is increasing by 750 and Fort Eustis in Newport News by 300. Overall, by the 2011 BRAC deadline Virginia will have gained more than 5,000 employees and an investment of $4.7 billion, according to VNDIA.

Adds U.S. Senator Jim Webb, “we’ve got the military presence but we have many other strengths. High-tech in Northern Virginia is strong. With the right infrastructure, the importance of Hampton Roads to the entire country is going to grow.”

Virginia without the military is something Fuller can’t foresee. Not with Hampton Roads. “No one can say they have a better port,” says Fuller. “And you just don’t walk away from a channel where you can float an aircraft carrier.”

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