America holding onto its 1,100-acre navy base land in the East End after troops withdraw.

If America chose to maintain its 99-year-lease on the US Navy base land "it would be worse than anything,'' said the Wor. Henry Hayward.

He was commenting on the impact on St. George's of the scheduled September, 1995 closure of the US Naval Air Station and military withdrawal. A defence bill passed by US Congress last year cut funding for the base.

Mr. Hayward did not believe the base closure would cause major harm to St.

George's businesses and homeowners.

The pubs and restaurants and some landlords would be hurt, he said. But he felt the possibility of the land being returned to Bermuda would make up for any short-term financial effects on St. Georgians.

However, he noted, the Americans had not yet said whether they would maintain their land lease after the US military withdrawal.

"The way we understand the lease is they are not compelled to return the land once the US Navy leaves,'' Mr. Hayward said. "And we have not had a definite answer yet.'' Mr. Hayward was excited about the prospects of possible uses of the land if America returned it.

"It all depends on whether the base is completely closed or whether they decide to keep a maintenance crew there,'' he said.

The beaches would be available for visitors, locals and St. George's cruise passengers, he said. And the town of St. George's might enjoy considerable new local and tourist business.

He did not think there would be a major effect on the real estate market, because most navy personnel lived on base and their numbers had been steadily declining over the years due to recessionary and post-Cold War defence cuts.

And, he noted, the base facilities were such that officers never had to leave it.

"A lot of expendable cash was used on base instead of in the town,'' he said.

The reasonable rents offered in St. George's and new homes on the market might attract more locals to the East End, which would make up for the loss of Navy officers and their families, he said.

But Chamber of Commerce St. George's Division head Mr. David Rowntree questioned whether there was enough local demand to fill the void left by base personnel.

"Does Bermuda have a housing shortage?,'' he asked. He said he knew of at least two St. George's landlords who felt they would be unable to re-rent their accommodations once their US Navy tenants left.

One was considering turning his rental complex into tourist accommodations, he said.

Mr. Rowntree said the pull-put could also lead to further drops in rents, although they might return to a "more realistic area''.

The COC's Real Estate Division head, Mr. Thomas Moss, agreed with the Mayor.

"An awful lot of the officers were housed on the base and have been for years,'' he said. "I don't think it will be a big problem.'' He believed the current boom in executive rentals would help fill the void in the market.