With command's future in doubt, Suffolk holds its breath

By Jeff Sheler

SUFFOLK

When Bob Williams looks upon the cluster of gleaming office buildings, hotels and restaurants that have sprouted during the past decade along Interstate 664 and the Western Freeway in northern Suffolk, he is amazed at how far the city has come in so short a time, but also at how fickle change can be.

A longtime real-estate developer in Hampton Roads, Williams was in on the earliest stages of northern Suffolk's makeover from farmland to commercial development in the early 1980s.

In the 1970s, the site had been slated to be a tank farm for an oil refinery in neighboring Portsmouth, but those plans fell through. Eventually, the vision shifted into high gear with the onset of a military-fueled technology boom.

Today, the corridor's chief tenant, the Joint Forces Command, and its orbit of defense contractors, university researchers and related businesses pour hundreds of millions of dollars into the economy each year, making it the city's prime economic engine and a symbol of its prosperity and progress.

Now, it might end.

Last week, Defense Secretary Robert Gates announced plans to close the command within a year, potentially wiping out about 6,000 jobs, at least half of which are in Suffolk. What took years to build suddenly may have only months to live.

"We've had a pretty good run out here these past 24 years," said Williams, his voice betraying a hint of nostalgia. "What happens now is anyone's guess."

Williams was not the only one left guessing. The announcement touched off a frenzy of phone calls and closed-door meetings in city halls and corporate and legislative offices. Worried officials tried to sort out what the announcement meant and what its potential impact on communities and businesses might be.

Topping the list of uncertainties was whether a closure of JFCOM's center in Suffolk's Lake View Technology Park off College Drive would mean emptying out the facility or scaling back its operations and transferring some operations to other military commands.

The 640,000-square-foot Suf-folk facility houses JFCOM's modeling and simulation operations, a fledgling technology that uses high-powered computers to simulate combat for training purposes and for command and control operations.

In Suffolk, Mayor Linda Johnson, City Manager Selena Cuffee-Glenn and Economic Development Director Kevin Hughes spent much of the week huddled with defense contractors and other employers whose businesses stand to lose ground if JFCOM closes its Suffolk operations.

"We're trying to learn what their plans are in terms of possible closings and to let them know that the city is engaged, that we're working all the channels to stay on top of this," Hughes said.

But by the end of the week, there were far more questions than answers.

"It's far too soon to gauge the potential impact," said Jeffery Adams, a spokesman for Lockheed Martin, sounding a familiar refrain. The Bethesda, Md.-based company has a $186 million contract providing information technology support to JFCOM and employs about 100 people at its Suffolk location. Adams noted that while JFCOM "is one customer, we do have others" who are served out of the Suffolk location.

Also likely to be hit hard by a JFCOM closing is Old Dominion University's Virginia Modeling, Analysis, and Simulation Center, a $12 million research facility that opened in 2007 off the Western Freeway on Suffolk's border with Portsmouth. Over the past 13 years, JFCOM has accounted for 80 percent of the center's funding, about $80 million in all. The center has two contracts with JFCOM that could bring in about $52 million over six years.

John Sokolowski, the center's executive director, said it is uncertain whether those contracts will be completed. But, he added, the center also has contracts involving medical, Homeland Security and transportation applications.

"JFCOM has been a good partner to us, and we to them," Sokolowski said. "Whatever happens, modeling and simulation is not going to go away, and neither will our mission."

Yet while JFCOM's partners and beneficiaries were waiting for answers out of Washington, business and city leaders could not avoid pondering worst-case scenarios: the extent of economic devastation that a JFCOM closure would bring to Suffolk and its environs.

For Bharat Patel, it takes little effort to envision the worst-case scenario. In April 2009, he opened a 135-room Hilton Garden Inn on Harbour View Boulevard, about a mile from JFCOM's front gate. He estimates 70 percent of his business is directly related to JFCOM and its contractors.

"There is no question that this will have a devastating impact," said Patel, who owns three other hotels within three miles of the JFCOM center. "If the Joint Command closes, I don't see how we can survive. I'm talking about 300 employees and their families who stand to lose their livelihood."

Patel said his plans to build a Candlewood Suites hotel across the street from the Hilton Garden Inn have been put on indefinite hold. He said he has spent about $200,000 on permits and site preparations but now intends to cut his losses. "I don't know of anyone in his right mind who would consider opening a new property in this situation."

As grim as it appears now, Patel said he is hopeful that the Defense Department will reconsider.

"Something is better than nothing," he said. "But if I had a buyer, I would sell the property tomorrow. Maybe the government should buy it. They bailed out Wall Street. Let them help out the business that will be hurt by this decision."

For the city and its residents, a shutdown of the command center and its rippling effects throughout the high-tech community would tear a mammoth hole in the tax base. It could potentially affect everything from basic city services to public education.

Last year, commercial and industrial property in the Harbour View area, which encompasses most of the high-tech corridor, was assessed at nearly $528 million and produced tax revenues totaling more than $6.1 million. That was nearly three times the tax revenues generated in 2003.

If businesses there do close, Suffolk City Assessor Sid Daughtrey said, it may take two or three years before it would work its way through the tax system and reach the city's bottom line. Yet, in a worst-case scenario in which the buildings remained empty and unproductive for the long haul, the impact undoubtedly would be severe.

Old Dominion University economist James Koch last week estimated that JFCOM contributes about $1 billion annually to the regional economy, or about 1 percent of the Hampton Roads gross regional product. One of the first noticeable effects, he predicted, would be on the region's housing market, particularly in the high-end housing developments that have sprung up in northern Suffolk.

At least one real estate broker disagrees.

"Any time you lose 4,000 jobs, you're going to have an impact on real estate," said Jimmy Gillerlain, manager of Rose & Womble Realty's Harbour View residential sales office. "But the way I see it, if you lose a thousand government employees, you have an opportunity to have a thousand new listings."

Last year, he said, in the midst of a down market, his office logged a 40 percent increase in sales volume.

"I tell my people, 'You have to be out there, busy every day. You do that and you'll be successful - I don't care how bad the market is.' "

For years, Suffolk's leaders have carefully nurtured the city's image as a high-tech hot spot. Paying homage to the Joint Forces Command, and to the modeling and simulation industry that has grown up around it, has become a staple of the mayor's annual State of the City address. City officials have trumpeted ambitions to supplant Orlando, Fla., as the nation's modeling and simulation leader.

"We are honored to be the location of choice for a number of high-tech firms working with the United States Joint Forces Command," Mayor Johnson said in her annual speech in May, adding that the city had "taken the opportunity to establish a technology zone to further encourage this sector to diversify in our city."

For now, at least, whether the city can maintain that image and continue building its reputation as a high-tech magnet may be beyond its control, relegated to the hands of decision-makers in Washington and elsewhere.

"It probably will hurt for a while," said Williams, the real estate developer. "But modeling and simulation is not going to go away. We have some fantastic facilities here with high-tech infrastructure that will be attractive to somebody.

"One thing is for certain: we're not going back to tank farms."

Jeff Sheler, (757) 222-5563, jeffery.sheler@pilotonline.com