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Town fears Army decision could cost it millions

By Evan Glass, CNN
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Town impacted by Army decision
  • Plans to deploy more troops to Fort Stewart led to big investments by area developers
  • They say they fear major losses after Army changed its plans
  • Towns around post got some federal dollars to recoup their losses
  • See full story on "The Situation Room with Wolf Blitzer" at 5 p.m. ET

See how the Army's decision not to send a new brigade to Fort Stewart affected an entire town on CNN's "The Situation Room with Wolf Blitzer," 5 p.m. ET today.

Hinesville, Georgia (CNN) -- Residents of Hinesville, Georgia, have long lived in the shadow of Fort Stewart. In good times, the city thrived from the close economic relationship with the Army base, which is home to 20,000 soldiers. These days, life is tough, given that most of those soldiers are overseas in Iraq and Afghanistan, resulting in the loss of clientele for many local businesses.

And life has become even tougher for many townspeople because of a decision made hundreds of miles away in the Pentagon.

The promise

City residents cheered when the Army announced in 2007 the arrival of a new brigade to Fort Stewart. The addition of nearly 10,000 people -- soldiers, their families and extra personnel -- was seen as a boon to many, a new way to benefit from the Army's expansion.

Bankers and real estate developers in the Hinesville area say they quickly held a meeting Fort Stewart commanders, who implored them to finance and build homes and commercial centers for the coming additions. They say they complied; land was cleared in order to build, followed by the laying of water, sewer and electric lines. Roads were built to connect the new neighborhoods

"They have never come off of Fort Stewart and asked for help before [Maj. Gen. Tony Cucolo] came off and asked for help," James Rogers of Heritage Bank said of the meeting he and others had with the commander of Fort Stewart. "That is the first time and only time they asked the community for help. Out of our love of Fort Stewart and our support, we stepped up. "

According to bankers, businessmen and public officials, more than $200 million flowed into dozens of regional projects, both public and private.

"The challenge for the city and the challenge for the community as a whole was to prepare for the influx of 10,000 new citizens. In a community that has a base population of 40,000, a [25] percent increase in the population creates a huge demand on infrastructure, housing, schools and other pressures," said Clay Sikes, a leading local developer who attended the various meetings with the Army personnel. Because of the Army's promise, "We put everything into an accelerated process," Sikes said.

But in April, the town was told that the additional brigade would not be arriving. The Army decided not to send additional soldiers to Georgia, denying the developers a need for their homes

The shock

A local developer, Johnny Carnes, says the Army's plan prompted him to invest $16 million into a handful of projects. He now fears foreclosure.

"I've got my life savings and everything I've ever worked for in this county and city because it is where the growth was coming ... where the government said it was coming," Carnes said. "I've invested my heart and soul in this thing, trying to make it work. We were trying to do what the government asked of us: provide affordable housing and good housing for people off [base] to live."

Hinesville Mayor James Thomas Jr. says he has never seen the Army back out of an agreement like this, despite multiple meetings and assurances with military officials.

"I have been around the military 48 years. I have never seen them come out and definitively say they are going to do something and then not get it done."

The Army's response

When the Army announced that a fifth brigade would be joining the others at Fort Stewart, it was part of the military's "Grow the Army" plan to expand by almost 75,000 soldiers, increasing the number of combat brigades from 42 to 48.

But Secretary of Defense Robert Gates announced in June that the Army would revise its plan, scaling back its enlargement to only 45 brigades. Fort Stewart found itself left out, along with Fort Carson, Colorado, and Fort Bliss, Texas.

The official announcement from Fort Stewart at that time said that "the Army is adjusting its plans to comply with the 2010 budget guidance issued by Secretary Gates, and the leaders at Fort Stewart, both military and civilian, will continue to work to make this the best installation in the Army and a true Army Community of Excellence." It added that planned construction on the base itself would continue.

CNN asked the Pentagon to explain the decision-making process for soldier realignments and whether the ramifications for the local communities are taken into account.

The Pentagon would not answer directly, saying only, "strategic-level decisions and strategic-level thinking often ripples into the local communities. But in this case, I think the Army is best capable of answering that question," according to Janine Davidson, deputy assistant secretary of defense for plans.

A plea for help

Fearing that the tens of millions of dollars invested might never be recouped, a coalition of local interests went to Washington in 2009, asking members of Congress for help.

"We believe the Army and the Department must consider the extensive, good faith reliance of its partner community," Rep. Jack Kingston, R-Georgia, wrote to Gates in May. "DoD must live up to its commitments. It must not break its word."

Though short of getting the Army to change course again, members of Georgia's congressional delegation were able to secure $40 million in the fiscal year 2010 defense appropriations bill, enough to pay back the municipalities for their infrastructure costs.

But no money has been allocated to the private developers, who worry about being perceived as financial opportunists trying to outmaneuver a national tidal wave against the real estate market.

"We took risks, and we expanded ourselves, predicated on the assurances by the Pentagon that our money was good and it was OK to expand now," Sikes said. "People make mistakes, and you pay consequences for those mistakes. To our detriment, we relied on the word of the Army."