San Bernardino’s Bid for Major Finance Center Sidetracked

After a year of planning and nearly $100,000 in consulting fees, San Bernardino’s quest for a Defense Department regional finance center--and its promise of 4,000 jobs--came to an abrupt end Friday when the Pentagon decided to scrap bidding for the nationwide project.

Sources said Secretary of Defense Les Aspin was opposed to the unusual selection process, which required communities to scrape together financial incentive packages to win one of the coveted federal centers.

San Bernardino had managed to compile $108 million in rent subsidies and other inducements from development funds, state and local contributions. But now the city will have to regroup.

“If they’re going to delay this, then the question becomes, can we afford to sit and wait?” said Mayor W.R. (Bob) Holcomb. “The answer is, we can’t. We have to make other plans.”

The surprise development left congressional and local officials puzzled and disappointed but may be a blessing in disguise. Local officials had been warned by congressional sources that the San Bernardino bid would not have been a finalist.

The city’s proposal was one of 20 being considered by the Pentagon.

“If any bright light comes out of the decision to delay it is that it allows us to broaden the case we want to make,” said Rep. Jerry Lewis (R-Redlands), whose redrawn district now encompasses Norton Air Force Base. “We were put in a position of not being very competitive.”

It was unclear when--or if--the new regional defense finance centers would be proposed.

Aspin said the Defense Finance and Accounting Center will continue operations at five existing centers “for the time being.”

The centerpiece of San Bernardino’s proposal was using part of Norton Air Force Base, which is scheduled to close down in 1994.

Parts of the base are already being used by Lockheed to refurbish Boeing 747 jetliners. Holcomb said other private companies--some air freight firms, even a “major domestic airline”--have made inquiries.

“We are getting some tremendous interest in Norton, and we’re not in a real high-gear marketing program,” said the mayor. “The world is coming to us. Nothing will add up to 4,000 jobs, but it’s a beginning.”

It was precisely the potent attraction of 4,000 federal accounting and clerical jobs that sent more than 200 communities around the country scrambling to compete for the three to seven accounting centers the Pentagon envisioned last March.

As a cost-cutting move, the Pentagon decided to ask the local communities, in effect, to bid for the centers. Although other federal agencies had experimented with such a procedure, this was the first time the Defense Department had used the technique.

Some critics in Congress objected to the idea.

“It was a rotten idea from a public policy standpoint,” said a congressional source. “It encouraged states to change laws and raise new revenues, and cities to compete against each other--sometimes within the same state. And then there’s the fairness issue: The better-off communities have an inherent advantage.”

The Inland Empire has been severely hurt by earlier base closings and has one of the highest unemployment rates in the nation.

If the Pentagon decides to revive the plan, Lewis hopes that the region’s bleak economic health will play a bigger role.

“It’s my guess that they wanted more time to evaluate the formulas being used (for selection),” Lewis said. “That opens the door for us to provide more information and make a stronger case.”