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The Honolulu Advertiser

Posted on: Sunday, December 28, 2003

MILITARY
Base construction will be booming

By William Cole
Advertiser Military Writer

State to lose 8,000 soldiers this year

An Army Kiowa helicopter flies over a convoy of soldiers taking part in live-fire exercises that began this month at the Makua Military Reservation in preparation for deployment to the Middle East.

Advertiser library photo

General contactor Rick Hill already is seeing the boom in military construction arriving at his doorstep.

The Wai'alae-area owner of Hill Construction Inc. was approached about two months ago by someone from the carpenter's union.

"I was working on remodeling a home, a $200,000 contract on a home over here," Hill said, "and he walked up and wanted to know if we wanted to work on any military projects that are coming in the future."

It's an unusual approach, said Hill, who has been a contractor for 22 years and is not a member of the union.

"I don't (usually) have anybody walk up on a job site and do that. They need more help — more carpenters, more construction people, period."

Jim Tollefson, president of the Chamber of Commerce of Hawai'i, won't call it a boom year for defense-related spending in the state. He prefers to characterize it as the start of a "ramping up" of military investment.

But by all accounts, it's the start of something big.

Expected to begin next year is work on more than $3 billion in military housing renewal projects involving 16,000 homes, $693 million in construction on O'ahu and the Big Island for an Army Stryker brigade, and more than $150 million in additions at Hickam Air Force Base for eight C-17 cargo carriers.

Defense-related, dual-use technology is on the upswing, and a second $1 billion Navy destroyer will be added to the Pearl Harbor fleet, bringing more than $15 million in salaries. And state and military officials are looking at the possibility of basing an aircraft carrier battle group in Hawai'i.

"It's the start of a (military) buildup," Tollefson said. "This is primarily due to the strategic location of Hawai'i. The term I heard used the other day in a military briefing was 'power projection platform.' "

On the downside, the deployment of more than 8,000 soldiers from Schofield Barracks — 4,800 heading to Iraq in February and 3,500 going to Afghanistan in April — will be sorely felt in central O'ahu's economy.

"They (the Schofield soldiers) are doing their job — that's why they are there. Again, it's the strategic positioning of the military here in Hawai'i," Tollefson said. "So there's going to be a definite impact during the 2004 time period, but we have to kind of look beyond that."

With the end of the Cold War, and a new focus on Asia, the merits of having significant U.S. firepower projected 2,000 miles out in the Pacific are being seen in the Pentagon and on Capitol Hill.

For Hawai'i, that means the state's second-biggest source of income is reaching new highs. And with it come new opportunities.

"It means more jobs and more capital investment in the state. Construction is going to take off," Tollefson said. "I'm definitely optimistic for 2004 and see it as a continuation of the improving economic climate of the state. And a lot of that is going to be driven by military activity."

It's not only carpenters and plumbers that will be needed; some in the high-tech sector are hiring, too.

Honolulu-based Science & Technology International, which gets 60 percent of its business from the Defense Department, recently more than doubled its work space. It has grown from 12 employees to 150 in 10 years and just won two new government contracts worth $75 million that will mean more hiring.

Another Hawai'i firm, NovaSol, received nearly $30 million in new contracts since September to develop new software for the Navy and to work on small optical "tags" for U.S. Special Operations Command that can identify and track targets.

"We recently staffed up to over 80 people, and we'll break the 100-person mark this coming calendar year, so we're looking for a number of staff — trained engineering staff, science staff," said Rick Holasek, NovaSol vice president in charge of product development and services.

Defense-related expenditures in Hawai'i totaled nearly $4 billion in 2002, up from $2.5 billion in 1986, according to the state Department of Business, Economic Development and Tourism.

The figure is only increasing.

The 2004 defense authorization and military construction bills reached $772.3 million combined for fiscal 2004, or about $89 million more than approved the previous year.

The chamber estimates that every $1 billion in military expenditures in Hawai'i translates to $1.8 billion in revenues to local businesses and the creation of 24,650 jobs. These will be not only in military and civilian defense, but also in business and professional services, retail, construction and health services.

Civilian employment in the military in Hawai'i fluctuated between 19,350 people in 1990 and 16,508 people in 2002.

The Air Force is preparing to begin more than $150 million in construction projects at Hickam for C-17 jet aircraft due to arrive in late 2005, including a new painting and maintenance hangar, squadron and maintenance operations buildings and a state-of-the-art flight simulator.

Col. Raymond Torres, commander of the 15th Airlift Wing, previously said that $54 million to $57 million in construction projects would be awarded in fiscal 2004.

"I can't quantify how many jobs (that represents)," Torres said, "but it is clearly a lot of construction jobs over at least the next two years."

The Air Force in October also selected Napa, Calif.-based Actus Lend Lease LLC to renovate, replace and manage 1,356 housing units at Hickam, an effort expected to start in April.

The award followed the Army's selection of Actus for a 7,700-home project, and the Navy's selection of Hawai'i Military Communities LLC for renovations covering 7,300 Navy and Marine Corps homes.

Work could begin as early as midyear on the Army project and late next year on the Navy and Marine Corps housing.

The later start for the bulk of the military construction projects provides time for Hawai'i's workforce to gear up, Tollefson said.

"That's really the good news, because what this will allow is the various job-training activities to gain momentum," he said.

Reach William Cole at wcole@honoluluadvertiser.com or 525-5459.