Let's raise a glass to Donald Rumsfeld and the Base Realignment and Closure Commission. They may have just done the Washington region a great big favor.
Pay no attention to those whiny politicians who've been running around like so many Chicken Littles, complaining about secret plots or flawed methodology behind the decision to close the Army's Walter Reed Medical Center and relocate more than 20,000 Pentagon employees from leased space in Crystal City and other Northern Virginia locations. Politicians reflexively oppose anything that might dislocate workers, reduce local tax revenue or hurt the bottom line for some local developers. Economic progress always creates winners and losers. But you can always count on vote-sensitive politicians to take the side of the losers, who are known, rather than the more numerous winners, who are not.
Real leaders, on the other hand, would see this round of Pentagon restructuring as a once-in-a-generation opportunity to diversify a local economy that is becoming dangerously dependent on defense and homeland security while getting higher and better use from some of the region's choicest real estate.
Let's start with the jobs. Although you might not know it from all the political posturing of recent months, ours is truly a regional economy where millions of people cross political boundaries every day to go to work. From a regional perspective, it doesn't matter a whit that jobs move from one part of Northern Virginia to another, or even, heaven forbid, from Maryland to Virginia. Statements to the effect that the District or Arlington are "losing" jobs are meaningless and misguided. What matters is what happens to the region as a whole -- and on that, the potential impact of military restructuring ranges from neutral to positive.
A draft report prepared by Delta Associates, an Alexandria firm that tracks real estate trends, and the Center for Regional Analysis at George Mason University concludes that by 2011, the region stands to lose 7,500 jobs on an employment base of 3.3 million. By 2015, the study predicts, precisely 6,600 jobs would be added. These numbers are so small, and the margin of error on such projections is so large, that this amounts to no meaningful change in overall employment.
The problem with such studies, however, is that they really can't consider the longer-term impacts of major changes in land use. Nobody knows how the Walter Reed site will be developed, or how the exodus of government agencies will reshape Crystal City, or how the transportation infrastructure will change as a result of the transfer of 20,000 jobs to Fort Belvoir and vicinity.
One could imagine scenarios that turn out quite badly, resulting in years of high vacancy rates and snarled traffic. If that were to happen, the Delta/Mason study might prove wildly optimistic, with significant loss of jobs and tax revenue and a lower quality of life.
By the same token, one could imagine a more favorable outcome:
One in which Walter Reed becomes one of the most desirable, mixed-race neighborhoods in the city, finally spurring the retail development that has eluded Georgia Avenue for decades.
One in which the federal government recognizes its financial responsibility and provides 50 percent of the funding for the extension of Metrorail to Fort Belvoir, bringing with it not only new offices and stores but a residential real estate boom in that part of Fairfax County.
One in which Crystal City is quickly transformed from a second-tier office district catering to government employees and contractors into a hip, urban Ballston-like corridor with Class A office space and condo towers boasting spectacular views of the Potomac.
Were things to work out in such a fashion, the favorable impact on jobs, incomes, profits and tax revenue would be enormous, far exceeding those projected by standard economic models.
Yes, these scenarios are rosy, but hardly fanciful. They come at a time when an already-prosperous region is growing fast enough to absorb the short-term shocks. All that is needed to make it happen is a bit of luck, foresighted leadership and the leap of faith required for any breakthrough development. Think of Reston in the 1970s, downtown Bethesda in the '80s, or the District's east end in the '90s.
Indeed, a decade from now, someone may propose to erect a statue to Donald Henry Rumsfeld by the squash courts at the Walter Reed Estates, or in front of the Four Seasons Hotel in Crystal City, in recognition of his singular contribution to a region he may privately have hoped to put in its place.
Steven Pearlstein can be reached at firstname.lastname@example.org.