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Monday, June 30, 1997

City to take over Kelly Air Force Base for $108 million

SAN ANTONIO, Texas (AP) - City officials and senior U.S. Air Force officers will get together this week to complete the largest deal of its kind in the history of U.S. military base closures when the base is transferred to a city agency for $108 million.

The deal, to be completed on Wednesday, is the first step in the eventual purchase of the military base and improvements by the Greater Kelly Development Corp. The city agency was formed to guide the future use of the facilities and work force after Congress voted in 1995 to close the San Antonio Air Logistics Center at Kelly by 2001.

When Air Force and local officials sign the agreement at the Spanish Governor's Palace, they will at once break the mold and build on an evolution that began with the Defense Base Realignment and Closure Commission.

The Greater Kelly Development Corp. will officially begin the redevelopment of the 1,871-acre base, which the Air Force will leave by 2001.

The ceremony will be attended by San Antonio Mayor Howard Peak and top Air Force officers, but the actual start of the privatization program will come in August with the award of the C-5 aircraft maintenance contract.

The agreement will transfer all Kelly land, buildings, equipment and utilities east of the runway from the Air Force to GKDC, the city-appointed local redevelopment authority.

The proposed deal is a landmark not only for San Antonio but for the Defense Department.

The $108 million, 40-year deal is the largest and longest of the 19 economic development conveyances the Pentagon had done nationwide through March 1997.

Still unanswered is the question of exactly what will happen to the aircraft maintenance workload formerly handled by military personnel at the base.

An independent base closure commission in 1995 recommended that the workloads of Kelly and McClellan AFB in Sacramento be shifted to surviving depots in Georgia, Oklahoma and Utah. The administration quickly countered with a plan to allow private contractors to take over much of the two depots' work, sparing thousands of jobs there - but depriving the three remaining depots of jobs they expected and need to operate more efficiently.

Last week the House voted to retain a prohibition on shifting much of the work to the private sector. Kelly and McClellan privatization supporters said they will focus on the Senate to undo the House action, and if necessary urge President Clinton to deliver on a threatened veto of the defense authorization bill. Send a Letter to the Editor about This Story | Start or Join A Discussion about This Story
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