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The $42 billion that passes through Patuxent River Naval Air Station, with its 22,000-plus jobs, dominate the local economy and changes in policy by the federal government are already affecting the defense contracting industry in St. Mary’s.

Now what happens to Pax River’s employees in the sequestration process, part of the “fiscal cliff” that includes tax hikes and broad spending cuts? Sequestration could result in $500 billion in defense spending cuts in the next decade.

The challenge right now is the waiting. There is a “big inability [by companies] to plan in some cases” for companies as the nation waits for Congress to come up with an alternative spending and tax plan by the end of the year, said Steve Anderson. Anderson is the county’s new director of economic and community development, on the job now for just more than two months.

At this point, though much could change, 20 percent of defense contracts could be frozen, Anderson said, but there could be a six-month window to react to avoid massive losses.

County Commissioner Todd Morgan (R), a program manager with a defense contracting firm, said the contracting community in St. Mary’s is already seeing the impact of federal action and inaction, and some smaller firms have gone under. “Layoffs have begun to occur in the contractor community,” he said, because of many federal government initiatives that have made it more affordable to have civil servants do work instead of contractors.

“There are unintended consequences that have taken place,” Morgan said.

However, “the base has tremendous opportunity,” he said, as the Navy will keep flying jets and continue to use unmanned aerial vehicles, which are developed and tested here.

Meanwhile, federal defense funding is stable until the end of March, he said.

“If something hits us hard, we have to dance like a boxer in the ring,” Anderson said. He said the county has to be in a position to be adaptive and flexible.

“We’re never going to lose the base — it’s going to be here a long time,” he said. However, his office needs to evaluate what the county’s economy is with and without the Navy base, he said.

“If we sit and wait there won’t be any growth. We need to engage the consultants,” he said.

Whatever happens in Washington, D.C., in 2013, Anderson said of the general economic recovery, “It’s not going to grow leaps and bounds. It’s been fits and starts” so far.

Anderson is already working with some new businesses that are interested in moving to St. Mary’s that are not defense related. It is too soon to name them, he said, because their location here has not been finalized.

He said he would like to target and attract company headquarters offices, banking groups and background support offices.

With a national property manager, Hines Interests, working on a proposal to build work at Pax River under the Enhanced Use Lease process, business focus is already on Lexington Park, he said.

The redevelopment of Lexington Park is still a challenge, one that the Community Development Corporation has been working on for years.

The challenge there, Anderson said, “is the perception that it has a lot of crime, that it’s run down.”

Land in Lexington Park is affordable and the zoning there is the most lenient in the county for development, he said.

Lexington Park has the opportunity to be a hub of small businesses, he said. A business association is already formed there and meets frequently. “They’re very passionate. They love their town,” Anderson said.

“They need to get the master plan out there and finished,” he said. A consultant and the St. Mary’s County Department of Land Use and Growth Management has been working on a Lexington Park Development District Master Plan since last year.

Director Phil Shire said it’s his intent to brief the commissioners in January about the plan and hold public hearings in the spring.

The county’s other development district is in Leonardtown, but is under the purview of its town government. Anderson said there is much retailer interest there and the town is host to many family friendly events. “I think that’s going to drive Leonardtown; it’s better than Mayberry,” he said.

At the north end of St. Mary’s, Charlotte Hall is already growing on its own, but the area needs transportation planning. There is also no central sewer system, which would be needed for denser development.

Anderson said of the businesses there, “They’re quite comfortable having a septic system. For future growth we’ll have to revisit [sewer lines] at some point,” for sewer service. “It’s up to the residents there, too,” he said.