Going Private
Port San Antonio prospers following 85 years of military service.
Resounding success has replaced any residual fears that Kelly Air Force Base (AFB) would fall into ruin following its closure in 2001. Thanks to steadfast support from San Antonio’s city and economic development leaders, the former military installation has reinvented itself into a phenomenal economic force.
No End in Sight
Tenants of Port San Antonio, named for its airport and rail facilities, generated $2.5 billion for the Texas economy last year, about the same output Kelly AFB generated in 1995. In 2007, Boeing added 400 workers to install electronic and mechanical equipment on its Dreamliner 787, and the port leased a building to the Air Force, helping increase the port’s total output by as much as $808 million, according to a study from the University of Texas at San Antonio. The port and its 74 tenants also produced $52.2 million in Bexar County taxes, $44.6 million in state taxes and $20.3 million in utility usage in 2007.
With an air cargo facility nearing completion and its railport open for more than a year, the growth possibilities seem endless. (For a list of Port San Antonio tenants, go to www.portsanantonio.us). On the horizon is a 200-acre high-density, mixed-use development called Kelly Town Center, which will feature shops, restaurants and multi-family housing.
A Rapid Rebound
How fast has the community bounced back from the military base closure? Look back to the mid-1990s, when more than 20,000 people were assigned to Kelly AFB, including more than 15,000 civilian workers and about 5,000 military personnel. The base had a $666 million annual payroll.
By 2007, Port San Antonio employed 8,529 workers and had a total payroll of about $813 million. The port produced a direct economic impact of $1.5 billion, most of which was generated by tenants.
Two fortunate twists occurred in what was at first perceived as an unfortunate base closure. First, the military gave the city five years’ notice of its departure. Second, the port quickly secured key tenants Lockheed Martin and Boeing. This one-two punch created what Port San Antonio CEO and President Bruce Miller calls “an instant success.”
But don’t confuse instant with inexpensive. Transferring the industrial park from federal to city governance meant millions of dollars in new construction. It also involved branding the industrial park as a global transportation hub. Port San Antonio has positioned itself as a prime entry point into the United States with air, rail and interstate highway access.
Planes, Trains and Opportunities
Among the milestones in the port’s development, Miller points to the partnership with Estafeta, Mexico’s version of FedEx. In 2007, it agreed to provide cargo service between Mexico and the U.S. for small- and medium-sized export companies. That and the imminent opening of an air cargo facility have strengthened the port’s foothold in global shipping.
Last year the port received $38 million to build an 89,000-square-foot air cargo terminal from the Texas Military Value Revolving Loan Fund, created by the Texas Legislature. The fund provides financial support to communities impacted by the Department of Defense’s Base Realignment and Closure (BRAC) program. Port San Antonio will use Kelly Field’s 11,500-foot runway under a joint agreement with neighboring Lackland Air Force Base.
Port San Antonio’s East Kelly Railport, which opened in 2007, has become a critical shipping link with access to Union Pacific and BNSF Railway. It provides access to deepwater ports in Houston, Corpus Christi, Los Angeles and Long Beach, Calif.
Port San Antonio is the city’s most important economic development project in the past decade, says Mario Hernandez, president of the San Antonio Economic Development Foundation. Port San Antonio also worked hard to align itself with the sentimental value that generations of people placed on Kelly AFB.
“It took a few years for people to recover and realize Port San Antonio would create opportunities in other sectors,” Hernandez says. FN
For more information on Port San Antonio, visit www.portsanantonio.us. To view a list of of smaller installations and activities that were also affected by BRAC, visit www.fiscalnotes.com.
