As government officials scramble to prevent the closure of the U.S. Navy Submarine Base in Groton, citing the thousands of jobs that could be lost and the negative effect it could have on the economy, real estate agents in southeastern Connecticut are supporting those efforts. But the agents also recognize that, if the base is emptied of the people who make it work, it could open up hundreds of affordable housing units in a region where those are hard to find.

“I know, and everybody knows, that southeastern Connecticut has a shortage of 7,000 single-family units,” said Larry Gemma of Larry Gemma Realty in Groton. “I’m looking for the silver lining.”

The Pentagon proposed closing the base earlier this month, but the final decision won’t be made until the end of the year.

Although Gemma – and most real estate agents – would like to see the base stay open, he describes himself as a “hopeless optimist,” saying he hopes that if the base is closed, as the Pentagon has proposed, more people will become homeowners in a hot real estate market.

The closure of the base could prompt a flood of less expensive listings, causing a correction in the market, according to Lorelei Mitchell of Lorelei Mitchell Agency in Groton.

“That might be a good thing,” she said.

The area has a lack of housing for under $300,000, Mitchell said.

But while the closure could create a boost for residents shopping for affordable housing, it could hurt hundreds of businesses, thereby influencing the region’s housing market.

“Obviously, on the economy, if you lose 8,500 jobs, it’s going to have an effect,” said Bob Fiorito, president of the Connecticut Association of Realtors. “We feel that anytime you have a hit on the economy, it’s going to have some effect on the housing market.”

There has already been something of an effect, Gemma said. Several of his peers told him they lost sales shortly after the announcement that the sub base was on the list of potential closings. People who were being transferred to the Navy base decided to rent homes instead of buying, in case the base does close and they have to move, Gemma said.

‘A Major Blow’

Such a hit to the economy would likely have an even greater effect on the commercial real estate market.

“I think it would seriously affect [commercial real estate],” Gemma said.

The closure of the base could have an impact on office, retail and restaurant space.

And the closure would have an effect on the economy, according to the Connecticut Business and Industry Association. The closure could hurt hundreds of Connecticut businesses, in addition to costing jobs at the base itself.

“If this happens, it would be a major blow to job recovery in Connecticut,” said Pete Gioia, CBIA economist, in a prepared statement. “It’s important to note that this is not a final decision. There is still time for state officials and businesses, and Connecticut’s congressional delegation to work together as a team and rally support to keep the base from closing. Keeping the base open is important to the long-term economic health of the state and the preservation of manufacturing jobs,” said Gioia.

More than 500 Connecticut manufacturers that are direct subcontractors of the sub base could be affected, including one of its most important nearby companies, Groton-based Electric Boat Corp., according to CBIA.

“I think the hotels and restaurants built up around the base will be adversely affected,” Mitchell said.

Southeastern Connecticut, however, has done a lot of work to diversify its economy, CAR’s Fiorito said, so it would weather the closure of the base better than it would have several years ago. The Pentagon also proposed the base’s closure in 1993, but it survived.

Other business expansions in the area will help the economy move forward, Gemma said. Mohegan Sun is set to expand and there is the possibility of a NASCAR track coming to the area.

But one of the biggest concerns if the base closes is the land on which it sits. The base occupies about 300 acres of land, according to the governor’s office. Because it has been used for a sub base for close to 100 years, it will require a substantial amount of environmental cleanup before it can be sold to a private entity.

“We don’t know what the [environmental ramifications] are,” Gemma said.

Gov. M. Jodi Rell, who has been fighting the base closure, announced Tuesday that the Navy has granted her request to give the state Department of Environmental Protection access to the base to assess the environmental conditions.

The cost of the cleanup will be an issue when the Base Realignment and Closure Commission decides whether to advise for the closure of the base.

“I have asked DEP Commissioner Gina McCarthy to form a special team to go over every square inch of the base and make a thorough record of all contamination, waste storage locations and other such sites,” Rell said in a prepared statement. “The Navy has been a presence in Groton for nearly 100 years. If they were ever to really leave, we would require them to make sure that 100 years of environmental effects have been fully addressed – and we need to know exactly how much that is going to cost, because that has to be figured into any savings calculation by BRAC.”

The federal government initially claimed the cleanup would cost $23 million. But McCarthy soon after said that amount would not cover the remediation costs for an estimated 29 contaminated sites on the sprawling 300-acre property.

“It will be staggering to see how you can come up with a $23 million figure,” McCarthy said.

The Pentagon proposed closing four Connecticut military bases, in addition to the Groton base. But the vast majority of the jobs lost in the state would come from Groton.

Defense Secretary Donald Rumsfeld forwarded the Pentagon’s recommendations to the Base Realignment and Closure Commission on May 13. BRAC is reviewing the recommendations and will forward its report to President Bush in early September. Bush will then have until Sept. 23 to accept or reject the recommendations in their entirety. Congress then will have 45 legislative days to reject the recommendations.

Rell’s office is sifting through the Pentagon’s report that recommends the base closure, looking for faults in the decision-making process, according to the Associated Press.

CAR has offered to assist in the fight to keep the base open, Fiorito said.