Closing of Bases Could Derail Recovery, Economist Says

Ventura County’s economy should continue to improve in 1995--unless.

The big “unless” that could derail the county’s recovery from the recession is the threatened closure of the Navy bases at Point Mugu and Port Hueneme, says Jamshid Damooei, economics professor at Cal Lutheran University in Thousand Oaks. If the bases remain open, Damooei believes that the new year will see improved retail sales, reduced unemployment and more companies moving into the county.

But, he cautions, all bets are off if the Clinton Administration decides to include Mugu and Hueneme on its base closure list. A decision is expected by summer. Between them, the two bases employ 20,000 civilians and service personnel, contributing an estimated $1.5 billion annually to the local economy.

“That single issue will be the story of the year,” predicted Damooei, whose specialties include tracking the county’s business climate. “If the bases are closed, or even partially closed, the result would be very, very catastrophic.”

In addition to the jobs lost, retail stores throughout the county would see their sales plummet, the economist says. “Practically every sector of the economy would suffer. Real estate would be affected in places like Camarillo, where many people who work at the bases live.”

But not all the civilian jobs at Mugu and Hueneme would be lost, Damooei concedes. In the several years it would take to close the facilities, some defense companies doing work at the bases would probably move to other locations--if their contracts hadn’t been phased out.

Still, Damooei is more optimistic than he was several months ago about the chances that the bases will be kept open. “The international picture has been changing. NATO seems to be in disarray. This could mean the United States is going to need a higher level of military preparedness. I think the bases’ prospects are definitely brighter than they were four or five months ago.”

The threatened closures aside, Damooei sees several strengths developing in the county. “Computer-related businesses are among the county’s brightest stars. Clusters of software companies are springing up in several areas.

“The same is true of biotechnology. Firms in that field are starting to cluster around Amgen in Thousand Oaks. Service industries such as insurance are moving into the county, too. In some cases, of course, companies were pushed into the area by the earthquake,” he said.

The county’s retailers had “a pretty good Christmas” and should do well in 1995, Damooei said. “If a middle-class tax cut is enacted, it will make people confident enough to keep buying, even though they probably won’t feel the cut’s effects until ’96.”

On the negative side, Damooei expects the county’s manufacturing and defense industries to continue their slide. He looks for little change in agriculture.

If Mugu and Hueneme are closed, the economic loss might be partially offset by industrial developments and the proposed Mugu regional airport on the bases’ former sites, Damooei noted. “Such projects might take years to become reality, but they could happen.”

Some business people have bypassed Ventura County as a potential plant location because they believed that the county lacked the infrastructure to support large plants, Damooei said.

“The county’s lifestyle and location make it a candidate for economic growth. But if the county’s cities want to enjoy the benefits of attracting job-creating businesses, they’re going to have to ease up on some of their slow-growth policies.”