California's Castle Air Force Base Learns a Hard Lesson in Reinvention

The Department of Defense's Base Closure and Realignment Commission (BRAC) plans to close 20 military bases across the country by Sept. 15, 2011. Once a military facility closes, the ripple effect is felt throughout the surrounding communities: families lose neighbors, businesses lose customers and workers lose jobs.In this series of stories,DailyFinance looks at how closures have affected communities in the past, and what some military families and the businesses that cater to them plan to do once their base closes.

In 1991, when the military announced the closure of California's Castle Air Force Base, the future looked grim for nearby Merced County. A sprawling Strategic Air Command Base, Castle was the linchpin of the military's B-52 program, serving as a major training facility for air crews and a launch site for airplanes that flew regular flights over the North Pole. At its height, the base employed 6,000 military and civilian personnel and hosted thousands of families. It was also the area's major nonagricultural employer, pouring almost 4,000 civilian jobs and an estimated $105 million in retail sales into the local economy. But with the end of the Cold War, the military no longer needed Castle. On Dec. 19, 1996, the base closed its doors.

At the time, Mark Hendrickson was a high school student and the son of a master sergeant stationed at Castle. "It was difficult news for the residents to hear. We rallied with a grassroots petition drive, but we couldn't sway the government. The base had so much meaning for this community. . .the area had, and always will have, a great deal of affection for Castle."

The Merced Miracle

In the following years, however, a surprising thing happened: Instead of losing its population, Atwater -- the nearest town to Castle -- actually grew by 3% between 1990 and 2000. In Merced County, the growth was even more shocking: The population exploded with an 18% jump. Writing about the Merced miracle, researcher Ted K. Bradshaw sought to explain how a rural area somehow managed to not only survive but thrive in the wake of a base closure. Citing the growth in construction work, on-base toxic waste cleanup jobs and privatization of local businesses, he argued that the loss of Castle may have been a boon for Merced.

However, the county owes much of its salvation to the launch of the University of California at Merced. The new campus, the 10th in the UC family and the first in the San Joaquin Valley, was announced in 1995 and construction began in 2002. The university has already become a major economic impetus in the area, employing over 1,100 faculty and staff members. And this impact has extended far beyond the campus. According to university officials, between July 2000 and June 2010, UC Merced poured more than $546 million into the local economy.

"1,912 Acres of Opportunity"

Even with the university taking up much of the economic slack of the former military base, Castle's absence is still felt in the area. Today, unemployment is at 18% -- almost twice the national rate of 9.6%. And, while Merced County blossomed during the recent real estate boom, its foreclosure rate is among California's highest. According to RealtyTrac, the county currently has 4,344 homes in foreclosure, and Atwater's zip code has 574, making it one of the hardest-hit areas in the county.

Hendrickson, who is now the director of Merced's Department of Commerce, Aviation and Economic Development, attributes the high rate of joblessness directly to the closing of Castle, Yet he remains optimistic, referring to the base as "1,912 acres of opportunity."

The base now houses 55 commercial tenants, including an AT&T call center, and a U.S. penitentiary with both a high-security facility and a low-security satellite camp. The airfield itself, which occupies two-thirds of the base, has become Castle Airport, a commercial airport that serves area farmers who are engaged in agricultural export. And, in May 2009, First Lady Michelle Obama landed at the airstrip on her way to delivering the first commencement speech at UC Merced. Her plane is pictured above.

Hendrickson has high hopes for the area, noting that a planned development could ultimately produce 14,500 area jobs by 2027. One promising opportunity is the proposed California high-speed rail system. Castle is one of several potential candidates being considered for the rail's central maintenance facility, but Hendrickson is optimistic about Castle's chances: "We have nine competitors, but we are the only potential site with an airport that is large enough to fly in large pieces of equipment from around the world," he notes. If the facility comes to Castle, it will immediately bring in 1,500 jobs, and its ripple effect would be even larger. According to planners, the center could generate 3,000 more support jobs throughout the community, yielding $320 million in payroll, $80 million in retail sales and $8 million in taxes.

As Hendrickson continues to develop the former base, he sees his work as yet another step in its continuing history: "Castle had so much meaning for this community and for veterans from this area. What better way to honor the past than to turn Castle into a commercial success for the future?"

See also:
Denver's Lowry Air Force Base Defies the Odds
A Maine Town's Long Recovery After Losing Loring AFB
Will Military Base Closures Mortally Wound Local Real Estate Markets?
Military Families Face Harsh Realities When Forced to Relocate
Cleaning Up the Toxic Legacy of Closed Military Bases
Military Base Closures and the Towns They Leave Behind

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