Port San Antonio may have lessons for Wichita

The fall of the Berlin Wall and the end of the Cold War led to military budget cuts and base closures across the country.

Yet the 1995 announcement that Kelly Air Force Base – a presence in San Antonio since 1916 – would close stunned the city.

“It wasn’t even on the agenda,” recalls Bexar County Judge Nelson Wolff, the mayor of San Antonio at the time. “The shock was unbelievable.”

Today, the former base boasts 80 employers and about 14,000 employees, generating more than $4 billion a year in economic impact. Major employers include Boeing, Lockheed Martin, Pratt & Whitney and Gore Design Completions.

There may be some lessons in the creation and growth of Port San Antonio – as the base is now called – as Wichita faces the closure of its Boeing plant, San Antonio leaders say.

“I know this stings,” said Jim Perschbach, a San Antonio lawyer who heads the Greater San Antonio Chamber of Commerce Aerospace Committee. “I’ve watched San Antonio lose jobs and lose businesses before.”

For example, the AT&T headquarters picked up and moved to Dallas in 2008.

“We’re finding ways to move beyond that,” Perschbach said.

Kelly’s transformation

News of the Kelly Air Force Base closure was a big blow to San Antonio.

The base, a major employer, was a huge installation with 1,900 acres and a massive 11,500-foot runway.

“There was real concern that we were going to lose an industry that more than any other created the middle class in San Antonio,” Perschbach said.

After news of the closure hit, business leaders banded together and created a success story on the site, now known as Port San Antonio.

A key development was President Bill Clinton’s agreement to extend the closure transition from one to two years to five years.

“We had time to think things out and to begin working on legislation that allowed them (the Air Force) to contract out their work” to private companies, Wolff said.

The Air Force officially left the base in 2001, six years after the initial announcement.

Before then, however, Boeing and Lockheed Martin – enticed by an available workforce – agreed to open maintenance, repair and overhaul centers inside Kelly’s hangars and contract with the military for work.

The base never “went dark” – in other words, it was never without operations or enterprises of some sort.

After the closure announcement, a task force was quickly created to help with the transfer of control from the military to the community. With ownership “free and clear,” the site was marketed as a mixed industrial park for private use with reasonable leases on its buildings.

Port San Antonio operates as a self-sustaining entity funded by leases and services. Its staff totals about 120 people.

“We, as a community, felt it was important to stand behind some of these big aerospace companies that were taking a chance on us,” Perschbach said. “If they had a need, we would do whatever we could to ethically and legally fulfill” it.

A task force secured a $35 million loan for facility improvements and modifications, and studied redevelopment job requirements to support growth and the job skills required to entice companies to Kelly.

Boeing received a 20-year lease with options for two five-year extensions at “very attractive” prices and help with workforce training expenses, said Boeing San Antonio site leader Kevin Devine. Port San Antonio also constructed a hangar that Boeing leases.

Boeing does not receive state incentives, Devine said.

Workforce training was among the priorities as Kelly transitioned into a private site. There was a sense during the 1990s that the San Antonio workforce was below par, Perschbach said.

“We thought it was undeserved back then, but we recognized that it was out there,” he said.

Aerospace training programs were developed with community colleges to target high school students and graduates. And the schools began to design specific training programs for certain companies.

It established the Aerospace Academy, which provides training to meet needs of the maintenance, repair and overhaul employers.

“The key to any redevelopment in my opinion … is really investing in your workforce,” Perschbach said.

A few years ago, the Air Force began returning to the site. It now accounts for half of Port San Antonio’s jobs.

Lessons for Wichita

Boeing announced in January that it would close its iconic facility in south Wichita at the end of 2013.

In addition to losing an employer that had employed generations of Kansans, the city would lose more than 2,000 jobs.

“First of all, don’t panic,” Perschbach advised.

Instead, view it as an opportunity.

“You’ve already got a reputation as being one of the stellar aviation manufacturing (cities),” he said.

Look at Spirit AeroSystems’ growth since it spun off from Boeing and became an independent company with its fuselage business, Perschbach said.

It’s also important to remember that “this is one company that’s made a decision; it’s just one company,” he said.

Wichita could try to create a redevelopment authority with the property when it’s available, Perschbach said. Consider whether the best use is aerospace or whether it could be used for something else.

“Then look at the folks you already have,” he said. “In any business, the best customer to expand is the customer that you already have. It’s a lot easier to grow.”

Wichita should also work with existing companies and make sure companies “feel loved” – that they know how important they are to the city, Perschbach said.

Hiring a consultant could also help by allowing the city to see itself in a new way and by measuring it with other cities, he said.

Everybody sees their own positives, Perschbach said. “And everybody sees their own warts.”

Because Boeing’s facilities aren’t closing until the end of 2013, Wichita has a bit of time, Wolff said, although it’s not as much as San Antonio had to plan.

During this time, Wichita should see whether Boeing would be willing to deed the property over or sell it at a “brother-in-law” price, Wolff said.

Marketing should target both the private sector and military sector, he said. It should try to recruit a mix of warehouse distribution, manufacturing and other industry, Wolff said.

Wichita has many advantages, including strong manufacturing capabilities and a strong workforce, Perschbach said.

Its 80-plus-year history in aviation gives the city a head start in backfilling jobs and bringing in business as a result of Boeing’s move, he said.

“This is not the worst thing that’s ever happened to Wichita,” Perschbach said. “I think you’re going to come through this stronger than ever.”

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