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How Will The USS Vinson Impact San Diego’s Economy?

Audio

Aired 4/16/10

This week San Diego welcomed home the travel-weary sailors of the USS Carl Vinson. Local cash registers welcomed their paychecks which total $400 million. We discuss the economic and military meaning of a third aircraft carrier now home-ported in San Diego.

GLORIA PENNER (Host): San Diego grew by thousands of new people on Monday and was predicted to add millions to the local economy. The reason was the arrival of the USS Navy – the U.S. Navy aircraft carrier, the USS Carl Vinson, and it’s now homeported at the Naval Base in Coronado. So first of all, Tom, why was San Diego chosen as the port? It had been in Newport News, Virginia for years.

TOM YORK (Contributing Editor, San Diego Business Journal): Well, I think it’s part of the ongoing efforts of the military, especially the Navy, to, you know, to have more of its activities in one place. I think it brings an economy of scale that helps keep the cost down. By having another aircraft carrier here and its supporting ships, I think that, you know, just plays into what’s happening in San Diego, which is that we’re becoming a military bastion. In fact, San Diego County is now the number one recipient county in terms of military spending in the country.

PENNER: Well, let’s find out why. Tony, you’ve been covering the military for a long time. Why is there this shift to San Diego that we’re seeing? A shift of, certainly, Navy vessels.

TONY PERRY (San Diego Bureau Chief, Los Angeles Times): Well, for one thing, we face in the right direction. Not a lot of opponents that we need to confront on the western side of Africa and in Europe. The opponents, the threat if you will, is in the other part of the world where we have two wars going on. San Diego faces that part of the world, and so we’re getting more ships, more Marines, more commands, if you will. We already have, what, 14 bases and 30-odd different commands. So San Diego is benefiting—and I hate to use that word—by 9/11. I mean, the percentage of our overall economy that’s tied to the military had been plunging pretty substantially for several decades and then along came 9/11 and it’s increasing once again. It’s not nearly what it was in 1970 where by some estimates it was 30% of our economy—it’s about half that now—but it’s increasing. As long as they don’t beat those swords into plowshares very quickly, San Diego’s going to do very well.

PENNER: Our number is 1-888-895-5727, 895-KPBS. We now have this aircraft carrier, it’s not new, it’s been overhauled. Actually, it was born—if aircraft carriers are born—in 1982, so that’s 28 years old. But we now have it in San Diego with 3500 crew members plus their families plus their cars, all of them now in San Diego. I’d like to get your reaction as to the impact that you believe that the growth of the Navy in San Diego will have on our community, and certainly with the advent of the Carl Vinson coming here as well. 1-888-895-5727. Let me get – Let me go to you on this one, Andrew. Real estate researchers said, in anticipation of the Carl Vinson’s arrival, that returning thousands of relocated families to the metro area will provide a boost to the rental housing demand. Well, if you’re going to have more competition for rentals in San Diego, does boost mean that we’re going to see rents increase?

ANDREW DONOHUE (Editor, voiceofsandiego.org): Oh, that’s a good one.

PENNER: Well, you’re – I mean, you’re heading up a major online newspaper.

DONOHUE: Yes.

PENNER: You should know about rents in San Diego.

DONOHUE: I should. No, I do. You know, I’m not sure if the – I’m not sure that the number is great enough to sort of flood the whole market and shift them but I think, you know, I think we sort of beat – we’re tending to speak in this whole discussion about what this means, you know, financially for the region and everything…

PENNER: Yes.

DONOHUE: …and I think that’s important.

PENNER: Yes.

DONOHUE: Obviously it’s a big – you know, military spending’s always been a big part of San Diego’s economy and it is going to be for the future. I think let’s make sure that we are just opening and welcoming to the people that arrive. I mean, this – I thought it was fascinating. This ship, as it was on its way to San Diego, actually got rerouted to Haiti to have to deal with the earthquake there so you’re coming back with a lot of people who’ve seen a whole lot of destruction and everything like that, so let’s – while we’re opening our arms to them, let’s just talk to them a little bit rather than thinking about how much money they’re going to make for us.

PENNER: Okay, well, Andrew, what a lovely thought that was. On the other hand, Tom York, I mean, we have to think about the infusion of families and what that might mean to the local school systems that are struggling with diminished budgets, all kinds of problems, and increased class sizes. Now we’re going to have a lot more kids coming into our school systems.

YORK: Well, I never quite thought of it that way but I would think that…

PENNER: Well, that’s my job. I’ve got to think of all kinds of things.

YORK: Well, I would think with more students in the schools that they bring with them, you know, the state gives so much money per capita per student in the school so that it might benefit the school districts in terms of getting more students and more money. But I would like to say that from what – the numbers I’ve seen is that the military here accounts for 30% of all jobs, close to 30% of all jobs, so that’s a fairly significant impact. And with the arrival of the USS Carl Vinson, that just adds to that.

PENNER: All right, now there are, Tony, now three aircraft carriers based at North Island, correct?

PERRY: Correct.

PENNER: Right, with thousands of crew members who are involved in that. I guess the question here is – I mentioned cars before. They all have cars. What’s being done to mitigate the impact on the community, especially in Coronado, of the additional cars and the traffic?

PERRY: Well, you have to understand about the American military, it is more self-sufficient than it was. In other words, they don’t arrive and suddenly start shopping in downtown Oceanside and downtown San Diego. They have a lot more on their bases where they can, you know, spend their money on the base. Now that does not mean retail sales tax, for example, so it is not quite what it once was. In terms of transportation, they have all sorts of jitneys and buses and that sort of thing but it will mean more cars, more cars going across that bridge every day. Don’t forget, however, these folks are going to pretty soon float away for seven months. So it’s…

PENNER: But their families won’t float away.

PERRY: Yeah, although the percentage of married among the enlisted is fairly low and the percentage of children among those families is also not what it was just a few years ago so we always have to realize it’s not like a small city arriving. It is, in a way, but it’s a different kind of city that floats away and that is self-sufficient in ways that, I don’t know, Tierrasanta, Encinitas, Santee, are not.

PENNER: Okay, let’s hear from Don in Hillcrest now. Let me just remind you, our number is 1-888-895-5727, 895-KPBS. Don, welcome. Welcome to the Editors Roundtable.

DON (Caller, Hillcrest): Thank you. I was curious whether the editors think that the concentration of Naval and other military here would make San Diego possibly a more attractive target for terrorists, radioactive bombs and such.

PENNER: Tom York?

YORK: Well, if history is any guide, it could happen because of such incidents as Pearl Harbor and – but I would say that it’s unlikely, I don’t know.

PENNER: Making us a target.

YORK: For making us a target.

PENNER: Because of the concentration of the military here?

YORK: Yeah, it’s a difficult thing to do to build a dirty bomb or a nuclear type bomb and, you know, sneak it into the country and detonate it.

PENNER: Tony.

PERRY: If I was someone in a fly-bespecked cave somewhere in Pakistan and making a short list of American cities that I would like to do evil to, I can imagine San Diego would be on that list. There’s a reason why the Navy has taken all sorts of measures to keep people from zipping right up to those ships in the harbor. Yes, San Diego is probably on some jihadist’s short list. That is the modern world that we live with.

PENNER: Okay, thank you. We have time for another call during this segment and we’ll hear from Larry in La Jolla. Larry, you’re on with the editors.

LARRY (Caller, La Jolla): Hey, good morning. I’m retired Navy but I’ve been on carriers both on the east coast and the west coast and I’ll take San Diego. It’s great for morale. You know, it’s a great place to live and a great place for a sailor, so my vote is San Diego.

PENNER: However, Larry, and I’ll pose this to Tom York, the cost of living here is certainly – I mean, despite the opportunity to shop on base and the services that are offered by the Navy, the cost of living here is significantly higher than just about any other Navy base in the United States, Tom.

YORK: Yes, I would agree with that but the Navy and the Marines have tried to mitigate that over the last few years and are continuing to do so. They’re spending $5 billion here to upgrade living facilities, housing facilities, whatnot, to sort of offset the impact of the high cost of living here.

PENNER: Okay, and I think we have time for another call. And this one is from, well, I guess we don’t have a call ready. Yes, we do. Jeff in Carlsbad, hi, Jeff, you’re getting in to speak to the editors.

JEFF (Caller, Carlsbad): Good morning, Gloria. Thank you for taking the call. I had just a quick question on the overall economic impact. It’s great the Vinson is coming to homeport in San Diego but isn’t it true that Nimitz is scheduled to leave San Diego in December for Washington, and what will the net effect be?

PENNER: Thank you very much, Jeff. Tony.

PERRY: Absolutely. It’s the coming and going or the reshuffling as they – all sorts of factors impact that including the threat, and the caller’s exactly right. Probably – I don’t have my green eyeshade so I can’t give you a decimal point on it but it’d probably be a net zero. Some come, some go.

PENNER: But, Tony, what plans are there for San Diego’s future as a home port for more Navy ships?

PERRY: San Diego is ‘the’ west coast home of the United States Navy and the United States Marine Corps. That’s going to continue. Without Camp Pendleton, we’d be part of Orange County.

PENNER: All right. This is the Editors Roundtable. I’m Gloria Penner. We’re talking about the USS Carl Vinson arriving this week and its – it already arrived, and its impact on San Diego and whether it’s, you know, good, bad. Sounds like everybody’s pretty positive about it. Our number again, 1-888-895-5727, and we’ll be back in just a moment.

Comments

Avatar for user 'PamRider'

PamRider | April 16, 2010 at 9:49 a.m. ― 4 years, 4 months ago

As a native San Diegan, I have delighted in the company of military personnel and family my entire life, but a large military presence is not an economic boon.

Quantitatively the military payroll is impressive, qualitatively it is poor. The economic multipler from the military is only payroll--most from lower ranks. If the same persons were working in an industry producing a product, vastly more benefits would follow. The product would be sold in stores, enhancing value beyond the shopping of the military. Of course, product sales would enhance tax revenues. Also factories would have more needs than the somewhat self-contained military. Ancillary businesses would grow to support the needs of the industry. This is neglible for the military.

Being the "world's largest military complex," certainly makes us a target for terrorists or enemy states.

If San Diego is willing to make these sacrifices for war, then our traditional financial volitility will continue.

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Avatar for user 'geoff'

geoff | April 16, 2010 at 10:53 a.m. ― 4 years, 4 months ago

So we currently have 3 (of 10) Nimitz class carriers here.
I'm curious about crew count. Press releases state an influx of 3500 crew, but I've often seen Nimitz class crew numbers around 5000.
1. Can anyone help clarify the disparity?
2. When Nimitz leaves San Diego in December how many crew will be leaving here? Are we left flush, or will we realize a net loss or gain in San Diego based crew?

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