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US military economic footprint in San Diego is growing, new report says

Sailors attend a ceremony on the flight deck of the aircraft carrier USS Theodore Roosevelt (CVN 71). Theodore Roosevelt is home-ported in San Diego.

MASS COMMUNICATION SPECIALIST SEAMAN OLYMPIA O. MCCOY/U.S. NAVY

By ANDREW DYER | | Published: October 10, 2019

SAN DIEGO (Tribune News Service) —  Defense industry personnel and military operations continue to be a significant driver of San Diego’s economy and, according to a new report, are projected to grow in the coming years.

According to the 2019 San Diego Military Economic Impact Study, 354,000 military-connected jobs accounted for 22% of all jobs in the region. This amounts to a $51 billion contribution to the local economy, or one-fifth of San Diego’s total gross regional product (GRP).

The report, released today by the San Diego Military Advisory Council, projected this impact will increase 7% next year as the national defense strategy continues to shift toward the Pacific, and more Navy ships are home-ported in San Diego.

San Diego was home port to fewer than 50 Navy ships four years ago. By 2020, it’s projected to be home to 65. The impact of these ships on the local economy is not insignificant: just one aircraft carrier generates up to $800 million in GRP, the report says.

San Diego now has two permanently stationed carriers — the Theodore Roosevelt and the currently deployed Abraham Lincoln.

Cmdr. Ron Flanders, a Naval Air Forces spokesman, said Wednesday it is “very possible” San Diego sees a third carrier assigned here in the near future.

SDMAC, which commissions the yearly report, is a local non-profit that, according to its website, supports and promotes “mutual business and other interests of the military, their quality of life and the defense community” in San Diego. The Union-Tribune is a corporate member of the organization.

The report tallies the number of active duty military members in the area as well as the number of civilian jobs supported by defense spending.

According to the report, one out of every six sailors in the entire U.S. Navy, and more than one out of every four Marines in the Marine Corps, are stationed across San Diego’s bases — that’s 56,000 sailors and 52,000 Marines.

The report estimates 143,000 people are directly employed by the military, when adding reservists, other civilian employees and Veterans Affairs. That number is projected to grow to more than 150,000 next year.

These jobs create what the report calls a “ripple effect” in the local economy, said retired Rear Adm. Mark Balmert, the executive director of SDMAC.

“Servicemembers purchase cars, pay rent and buy homes,” Balmert said.

The jobs created directly and indirectly by defense spending include diverse fields such as health care, shipbuilding, real estate and education, according to the report. General Dynamics NASSCO shipbuilding facility, for instance, employs 3,100 people, according to Dennis DuBard, its spokesman.

Lynn Reaser is the chief economist at the Fermanian Business and Economic Institute at Point Loma Nazarine University, which authored the report. She said the myriad industries affected by defense spending created a “mega-cluster” in the region.

“Tourism, health care, medicine, shipbuilding — it doesn’t fit into one box,” she said. “What makes it so complex is what makes it so important to our region.”

The report includes a special section highlighting the large Naval Information Warfare Systems Command, or NAVWAR, sandwiched in the Midway District between the airport and Old Town.

According to the report, NAVWAR, which is a hub for military communication technology development and procurement, is projected to generate $3.5 billion for the local economy this year and account for 29,000 jobs.

In September, the San Diego Association of Governments and the Navy agreed to move forward on a public-private redevelopment project on the site, often called “San Diego Grand Central Station.”

Reaser said she was surprised by the data on NAVWAR.

“It was quite interesting in terms of the huge influence we’re seeing there,” Reaser said. “Looking at (the data) shows the impact of innovation in the region in creating high-paying jobs and impact it has on STEM education.”

"(The military) is a big factor in why there are so many good jobs in our region,” Balmert said. “They tend to be better than average — both in quality and quantity. A lot of high tech jobs.”

The report also notes the challenges faced by local military personnel.

“The military, just like the entire community, struggles to find affordable housing,” Balmert said. “We have people in the military who live as far away as Temecula. It’s something our entire community needs to deal with; it’s not unique to the military.”

Balmert said the study was invaluable to government policy-makers at the local, state and federal level.

“It serves our community in several ways,” Balmert said. "(It helps) the community understand the positive side of having a large military presence. It also serves elected officials.... It gives them a look at what the military brings to our region.”

©2019 The San Diego Union-Tribune
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