Luke AFB: Flying into the future
Editor's note: This story is part of a special section included with the Jan. 22 print edition of the Phoenix Business Journal. For more on the print edition: jbertolino@bizjournals.com.
Paul Smiley understands on a personal level what Luke Air Force Base means to the economy.
Smiley, a military retiree, and his partner, Peter Ehrenfeld, started Sonoran Technology and Professional Services in Goodyear two years ago to offer technical support primarily to the military. They get the bulk of their business from Luke.
It has branched out from there, but Smiley, the company’s president and CEO, said building relationships through Luke created a good foundation for his business — and Luke has been a good foundation for the local market.
“There is no global economy without a local economy,” he said.
In 2002, the first economic impact study of Arizona’s military bases conducted by the Maguire Co. for the Arizona Department of Commerce pegged their input into the state’s economic system at $5.7 billion. In 2008, a revised study found the military industry was infusing
$9.1 billion in direct and indirect economic impact into the state. Those numbers make the military Arizona’s largest industrial group.
Luke’s economic impact was reported as $2.1 billion in the 2008 study. The facility got its start as a World War II training base and now trains F-16 fighter jet pilots.
Preserving value
West Valley officials had always known Luke had intrinsic value to the region beyond security.
“I don’t think we ever put a number on it, but we weren’t surprised,” said Glendale Mayor Elaine Scruggs.
The initial Maguire study led the region and state to work together to keep all of the state’s military bases — including Davis-Monthan AFB in Tucson and the U cash advance.S.
Army’s Fort Huachuca in Sierra Vista — off the Base Realignment and Closure list in the early part of the 2000s.
All were spared, but now Luke is fighting for survival once again.
The military has chosen a new fighter, the F-35, to replace most of its fighter and bomber jets, including the F-16. Several bases across the country, including Luke along with bases in Idaho, Florida and even Tucson, are jockeying for the right to host pilot and mechanic training for the F-35.
The outcome could dramatically alter the future of Luke as an ongoing military installation.
“Sometimes, I think we have to go back and sell that (economic) message again,” Scruggs said. “The military is somewhat invisible. You don’t really see it every day.”
60 percent boost
According to the 2008 Maguire study, Luke directly employs 10,281 people, and money from those employees is filtered into the local economy by way of direct and indirect purchases. The base’s greatest impacts are in the retail, service and real estate industries, where it pumps roughly $1.1 billion into the economy.
“When you see how the money cycles around the economy, and the services it goes to, it was impressive,” said Deb Sydenham, assistant deputy director of the Arizona Department of Commerce.
The jump in the combined economic impact reported for the state’s three bases from 2002 to 2008 was roughly
60 percent — in part because the wars in Iraq and Afghanistan have kept the military active, and in part because base officials better understood during the second study how to recognize the impact they were having, Sydenham said.
Filed under: marketing by Specialist