The San Francisco Bay Area is one of the main victims of the falling defence budget following the end of the Cold War.

During the past seven years, the region has experienced more military base closures than any other in the United States, accounting for 15 per cent of the national total.

Government agencies in San Francisco have been attempting to lure foreign investment, especially money from Asia, to redevelop the 4,860 hectares of land left vacant by the cutbacks.

The closure of Treasure Island Naval Station is the latest military conversion project in San Francisco.

The base, due to close by the third quarter of 1997, would be available for private investors and the official forum working on the conversion programme was considering turning the base into a holiday resort.

Proposals under review include the building of five hotels and holiday facilities, water transportation network connecting the island with San Francisco city centre and a theme park.

The forum also suggested making a bid for World Expo 1999 to be held on the site, which would provide an opening showcase for the new resort.

'Originally, it [Treasure Island] was conceived for the 1939 World Fair,' president and chief executive officer of the forum Sunne Wright McPeak said.

'There is a new committee that has been formed to do another Expo on Treasure Island as a way to renewing the original vision,' she said.

Investment needed to convert the base into an Expo venue and a holiday resort could stand in the region of US$500-$700 million, according to the forum's studies.

Of that sum, the forum said $170 million was needed for infrastructural development.

'If we are looking at the Expo and additional hotel space and rooms and the investment associated with that, we are certainly talking about several hundred million dollars,' Ms McPeak said.

'The target was in the order of five to seven hundred million [dollars] if you look at all of the opportunities that were identified with the feasibility study, including water access and landing,' she said.

Tourism is the largest industry in the city of San Francisco. More than 13 million people visit the city every year, generating more than US$3.2 billion a year in revenue.

The Treasure Island project was estimated to be able to hold at least five tourist facilities, including hotels and other commercial complexes.

'Obviously, space for hotels for Treasure Island will not only be on the island itself but also on the mainland,' Ms McPeak said.

Hotel occupancy rates in San Francisco city centre were estimated at higher than 70 per cent, she said.

She said it was likely height and density restrictions would be imposed on the project and at least two historic buildings on the site would be preserved as national monuments.

Details of the investment projects would be ironed out in about four months and tenders were likely to be sought early next year.