Preparing for Takeoff

The 1940s a cappella tune crackles from the local radio station: “Sam, Sam, oh dear Uncle Sam, won’t you please come back to Guam.”

It is a call that the Pentagon is answering with a resounding “yes.”

After three decades of troop reductions, the U.S. military has quietly begun ramping up its presence on this remote Pacific island. And most residents are putting out the welcome mat, hoping that a renewed commitment from Uncle Sam will revive the U.S. territory’s slumbering economy.

The first signs of the buildup are visible from the control tower of Andersen Air Force Base at the island’s north end. For years, the airfield sat nearly deserted, used as a stopover by military flights and little more. But recently, six B-52 bombers were posted here.

Meanwhile, workers are constructing a $32-million air-conditioned hangar capable of housing B-2 stealth bombers. The B-2 is nearly invisible to radar, in large part because its special rubber-like skin absorbs radar waves. But the plane is sensitive to humidity, hence the need for a climate-controlled hangar.

At the south end of the island, work is underway at the Naval Station at Apra Harbor. The Navy expects to spend $30 million to dredge the harbor so it can accommodate any U.S. submarine.

“As of today, all of the Pentagon road maps lead to Guam,” said Loren Thompson, a defense analyst for the Lexington Institute. “There is definitely going to be an increase in force structure in Guam, and a drawdown in South Korea and Japan. Guam ultimately could become one of two or three major hubs for U.S. activity in the world.”

In turn, many of Guam’s 160,000 inhabitants are hoping for a rerun of the island’s glory days.

Last year, devastated by typhoons, a slump in tourism from Japan and a reduction of U.S. forces that began when the Vietnam War ended, Guam’s economy hit rock bottom. Its unemployment rate climbed to a record 15.5% and home values fell to barely half of what they had been a decade earlier.

“We all now recognize the value and economic stability of greater military presence on Guam,” said Gov. Felix Camacho, 46, whose father was the first elected governor of the island and presided over its economic heyday during the Vietnam War. “We really want them here.”

Besides the hangar, about a dozen other construction projects potentially worth a total of $500 million have been launched or are planned at Andersen, the Air Force said.

Pentagon strategists are considering basing Global Hawk unmanned spy planes, new F-22 fighter jets and a Marine expeditionary force on Guam, which is part of the Mariana Islands chain.

The Navy already has reactivated a submarine squadron on the island that could include up to nine attack and Trident ballistic missile submarines. Two subs already have been transferred to Guam and a third is expected by fall. Nine submarines would add more than 2,000 crewmen and their families to the base.

The military’s buildup in Guam has been felt at the Port of Los Angeles, where workers have been busy in recent months moving military cargo bound for the island. “It’s just getting busier and busier,” said longshoreman Rob Lukin.

Military presence on the island has grown steadily since the Sept. 11, 2001, terrorist attacks as part of a major shift in the Pentagon’s positioning of military forces worldwide. During the Iraq War, a U.S. Army invasion force had to be diverted when Turkey refused military access. Pentagon planners prefer to base U.S. forces in locations that are free of potential political problems. Because Guam is a U.S. territory, that won’t be a concern, officials say.

Additionally, Guam is only a three-hour flight or a two-day sail to most potential hot spots in Asia, versus eight hours by plane or a week by sea from bases in Hawaii.

“Guam has a lot going for it,” said Gen. William J. Begert, who stepped down this month as the commander of the Pacific Air Force.

The Guam buildup comes as the Pentagon is reviewing its installations around the world. By May, a formal list of up to 100 military bases could be recommended for closing.

Any strategic repositioning could affect all areas of the Pacific from San Diego to Japan and South Korea, where local economies rely heavily on the spending of U.S. military personnel. Pentagon officials privately say that no other location is likely to benefit as much from the realignment as Guam, an island that’s barely 32 miles long and 10 miles wide.

The buildup appears to be trickling down through the Guamanian economy: Pickup trucks filled with construction workers line up outside the gates of U.S. military bases every morning. And at resort hotels along Tumon Bay, uniformed U.S. military personnel can be seen milling in lobbies that once catered to Japanese tourists.

“The leading edge of any recovery is usually behind the construction industry, and they’ve been really busy with military projects,” said Stephen Nygard, publisher of the Guam Business Journal.

In recent months, Nygard noted, the construction of golf courses and hotel renovations -- on hold for years -- have finally started up.

Real estate agents also see a glimmer of recovery. The island’s median home price, which peaked at nearly $200,000 in 1991 before tumbling to $106,000 last year, has bounced back in recent months to $124,000.

“It’s been a real struggle,” said W. Nicolas Captain, president of a Guam real estate brokerage. In 2001 half of all Guam real estate transactions involved foreclosures, he said. During the ‘90s some apartment complexes were barely 25% occupied.

Captain survived the lean years by doing more work in Hawaii, where he kept an office.

So far the biggest impact of the military buildup has been on rental property because most U.S. military personnel live off base in rental units, Captain said.

He recently leased to an officer a three-bedroom, two-bath oceanfront condominium for $2,250 a month, up 15% from a year ago.

“It’s not skyrocketing, but it’s healthy,” Captain said. “As time goes on, new construction will be justified.”

In 1978, accounting firm Deloitte & Touche sent Jerold W. Filush to Guam for a three-year stint. He fell in love with the island and stayed.

During the economic downturn, some of his friends were handling more bankruptcies than start-ups. Filush recently began hiring again after a long lull and now frets about his senior managers being lured away by his clients.

“It’s been a wild ride,” he said.

Guam became a U.S. territory in 1898. Japanese forces captured the island in 1941 and the U.S. recaptured it in 1944. The island has numerous memorials marking World War II battles.

During the Vietnam War, more than 30,000 U.S. sailors and airmen were stationed in Guam, with more than 150 B-52s based on the island to conduct bombing missions over Southeast Asia. The military at that time accounted for about 80% of Guam’s economy.

With the end of the Cold War, the military pullout accelerated and the number of troops in Guam fell to 5,000.

The island turned to tourism and for a while it seemed that Guam had been unshackled from its reliance on the military.

Japanese and South Korean tourists, lured by the inexpensive travel packages and relatively short three-hour flights, flocked to Guam, lured by its sandy beaches and balmy weather.

Dozens of luxury hotels, some operated by Hilton, Hyatt and Marriott, were built along pristine Tumon Bay. Tiffany and Louis Vuitton opened stores. With a line of hotels on the beach and shops across the street, Tumon Bay resembled a small version of Honolulu’s Waikiki Beach.

By the late 1990s, tourism accounted for 60% of Guam’s economy.

Then as Japan’s stock market slumped, coupled with the outbreaks of the SARS respiratory ailment and avian flu, Guam’s tourism business sank.

“For a while you had people running around saying it was depression,” Captain recalled.

With many skilled construction workers leaving for jobs on the U.S. mainland, Guam’s workforce was declining about 5% a year.

Today, with public sentiment in South Korea and Japan shifting against the U.S. and pressure mounting for the withdrawal of American troops from those countries, most Guamanians favor a larger U.S. presence. In a recent poll, more than 85% of those surveyed supported the buildup, said Lee P. Webber, publisher of Guam’s newspaper, the Pacific Daily News.

One idea the Pentagon is considering is basing an aircraft carrier group on Guam. That typically includes an aircraft carrier, with 5,000 sailors and 80 airplanes, plus various supporting ships.

Guamanian officials estimate that a carrier group could pump more than $400 million annually into the economy and create more than 4,000 civilian jobs.

Some Pentagon insiders suggest that U.S. troop levels on Guam eventually could reach close to the record of 30,000.

With all the military construction, and some pickup in tourism, officials on Guam believe its unemployment rate will drop by more than half, to 7%.

“The island is in a good position for economic recovery,” Gov. Camacho said. “We’re anticipating a spurt of growth we haven’t seen in many, many years.”