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Watervliet Arsenal is Home to 13 Companies & 250 Jobs; And There is the Potential To Add More – But Arsenal Economic Development Agency Cannot Use Rental Income The Site Generates to Attract New Companies & Jobs; Schumer Says This Needs To Change

Schumer Calls on Army Sec. McHugh to Work With Arsenal & Partnership to Develop Plan that Would Allow it to Use Rental Income to Reinvest in Campus & Keep Watervliet Viable – Schumer Says There Is Precedent for this Type of Arrangement

Schumer: The Arsenal Partnership Should Be Able To Keep the Revenue It Generates, Not Send It Back to The Army

Today, U.S. Senator Charles E. Schumer urged Secretary of the Army John M. McHugh to enable the local development corporation at the Watervliet Arsenal, called the Arsenal Business & Technology Partnership, to control a portion of the rental income they generate in order to reinvest it into the facility and continue attracting businesses. Currently all rental income and fees the Partnership generates from the businesses located there is sent right back to the Army for use in its base operations budget, instead of being used to bring additional jobs to the Watervliet facility. Schumer said that the campus generates more than $2 million per year in revenue, and a significant portion of that should go back to the Arsenal  Business & Technology Partnership so the Arsenal can continue to grow. Schumer said there is precedent for this request, noting that this contractual arrangement exists in a number of Army Ammunition Plants, including Milan, Radford, Hawthorne, Iowa, Scranton, and Holston. Schumer said that securing this new arrangement is critical because, without a dedicated revenue stream, its long-term viability is not guaranteed. In addition to his letter to Secretary McHugh, Schumer is also seeking to add an amendment to the National Defense Authorization bill (NDAA), which would make this arrangement permanent as well. The NDAA will likely come up for a vote by the end of this Congress

“Being able to keep and re-invest $2 million per year in order to attract new businesses to the Watervliet Arsenal would go a long way in helping the site remain a viable, job-creating engine in the Capital Region for years to come. Plain and simple, the Arsenal Partnership should be able to keep the revenue it generates, instead of sending it back into the general Army coffers,” said Schumer. “There is precedent for this type of arrangement, and there is no reason why the Watervliet Arsenal should be forced to function with one hand tied behind its back when other similar sites do not. The Arsenal & Business Technology Partnership has proven to be successful at attracting companies to the site, but they need resources to continue their work. There is major potential to create more good-paying jobs at the Arsenal, and I will fight tooth and nail – as I always have for the Arsenal – to make this arrangement a reality.”

Schumer has long been a supporter of the Watervliet Arsenal and has looked for solutions to keep it viable. As the demand for cannon has decreased since the end of the Cold War, the Army has reduced its workload at the Arsenal and cut jobs from 1,700 in 1991 to 560 today.   The Partnership was created to help bring in new companies to fill unused space and keep the campus a viable large scale employer.   By rehabilitating, maintaining and using the unused space on the campus,  this effort supports the Arsenal’s “core mission” of building our nation’s cannon.   Just this year, Schumer worked with the Capital Region delegation to secure $30 million to support the production of artillery and cannon tubes at the Arsenal by offsetting some of their overhead costs and making their rates more competitive.

Schumer has worked for years with both the Arsenal and the Partnership in order to spur private investment and make use of the underutilized space on its campus. The Arsenal Business & Technology Partnership currently partners with 13 private companies, which employ 250 private sector employees on site. Schumer said that being able to access this revenue generated through rent and other fees—or even a portion of it—would allow the partnership to better invest in the historic facility and continue to attract private-sector companies to utilize the space, thereby ensuring the Arsenal remains a vital engine for economy. 

Despite the positive impact and the jobs the Arsenal brings to the surrounding region, a constant, dependable revenue steam is needed if the campus is going to remain a staple of the Capital Region economy for years to come. As it stands, the site generates revenues in excess of $2,000,000 annually in rents and other fees. However, the bulk of this profit goes directly to the Army’s base operations budget. This means that the Partnership cannot use this money, as it must be given to the Army, rather than reinvested in the Capital Region and on the Watervliet campus. That is why Schumer is pushing the Army to work with the Watervliet Arsenal and the Arsenal & Business Technology Partnership to develop a mechanism that would allow the Partnership to control the fees they raise for the purpose of reinvestment into the site.

Constructed in 1813, the Watervliet Arsenal has played a vital role in America's defense throughout its long history producing large bore cannon and a wide variety of other products for military needs.

A copy of Senator Schumer’s letter to the Secretary of the Army appears below:

Dear Secretary McHugh:

I am writing with concern over the future of the Watervliet Arsenal and specifically the future of the local development corporation that was created to help utilize the unused space on the campus. As a fellow New Yorker, you fully understand the value our military installations provide communities throughout New York and to the entire nation’s defense.  Since being elected to the Senate, I’ve been a strong supporter of the preservation of New York’s installations and have fought to do whatever we can to ensure their viability for generations to come. One of our many success stories is in Upstate New York, just north of Albany at the historic Watervliet Arsenal.

The proud history of the facility is well-documented throughout its 201 year history: from its reputation as America’s Cannon Factory, to the manufacture of the Bunker Buster that was instrumental in the first Persian Gulf conflict, to the more contemporary Armor Kit retrofits performed to fortify our vehicles used in the most recent conflicts in the Middle East, the Arsenal has consistently been there when this country has needed it.

Recent trends cannot be ignored, however, and workload and employment levels continue to dwindle, and there is quite a lot of unused space on the Watervliet campus. One of the solutions I was instrumental in supporting was enhancing private development at the site through the utilization of an Economic Development entity called the Arsenal Business & Technology Partnership.  The Partnership works to secure funding to invest in the historic facility and then attracts private-sector companies to utilize the space, ensuring the Arsenal remains a vital economic engine in the regional economy.  Currently they partner with 13 private companies that have 250 private sector employees on site.  This development generates revenues in excess of $2,000,000 annually in rents and other fees, the bulk of which, goes directly to the Arsenal’s base operations budget.

The Partnership has been effective in attracting investment, from both the public and private sectors.  However, the end of the Arsenal Support and Program Initiative and the elimination of earmarks have taken a toll on their ability to invest in the site and now their very existence is threatened.  To be clear, the Partnership has done an admirable job of standing on their own two feet, becoming a rarely seen, self-supporting non-profit organization.  But without a dependable revenue stream, the organization is at a crossroads.  A decision must be made whether we continue to reinvest in jobs here in the Capital Region or continue to send all of the rental income to the Army. 

To that extent, I’m seeking your assistance to allow the Partnership a mechanism, under their current contract authorities or by modification, to control the fees, or at least a portion, they raise for the purpose of reinvestment in this facility and to continue to sustain a valuable, commercial use program that reduces the cost of Army operations at Watervliet Arsenal.  There is established precedent throughout the Department of Defense where site managers have performed services and executed infrastructure projects in lieu of rent for this exact purpose.  This contractual arrangement exists in a number Army Ammunition Plants (Milan, Radford, Hawthorne, Iowa, Scranton, Holston) under ARMS and at EUL sites such as Fort Sam Houston.

Together, we can ensure the continued viability of the critical public sector work at Watervliet and grow private sector jobs and continue to provide savings to the Army at this historic facility.

Thanks, in advance, for your consideration.

Charles E. Schumer

United States Senator