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LEONARD M. TODD still remembers the panic that hit Greenville, S.C., when the Pentagon closed 5,500-employee Donaldson Air Force Base in 1963. ``Car dealers closed up. Filling stations closed up,'' recalls Mr. Todd, then a banker in the military and textiles town. ``Houses stood empty out near the base. People were terribly upset.''

But Todd never shared in the gloom that swept the town. As a member of a citizens' committee charged with redeveloping the former base, he saw the military closing as a potential economic windfall - and time has proven him right.

Today the sprawling, 2,400-acre former air base is the successful Donaldson Industrial Air Park, home to 86 companies including Lockheed Aeromod, Minnesota Mining & Manufacturing Company, Procter & Gamble Company, F.W. Woolworth Company, and Auto Shack.

Together these companies employ 4,200 civilians at about $78 million a year. The companies help diversify the local economy. And unlike the Air Force, they pay local taxes.

Donaldson is just one example of the scores of military closures during the 1960s and 1970s that have proven a boon to their communities. From Dow Air Force Base in Maine to Walker Air Force Base in New Mexico, former bases have been redeveloped as office parks, industrial parks, regional airports, and colleges.

Not all have made the transformation. The remote lands of the former Igloo Army Depot in South Dakota have languished ``in transition'' for more than 20 years. But according to the Pentagon's Office of Economic Adjustment, a majority of former bases have been successfully converted to civilian use.

Many factors have changed since the base conversions of 15 and 20 years ago. The 86 military bases to be closed beginning in 1990 face economic and environmental conditions that will likely make their redevelopment a more expensive and lengthy process.

During the 1960s and 1970s, the Defense Department sold former base property to communities at what was often a favorable rate. Greenville city and county paid just $421,000 for Donaldson's 27 miles of paved road, 14 aircraft hangars, miles of railway, and South Carolina's second-longest runway.

Thanks to history, Greenville received the Donaldson land for free. First leased to the Army Air Corps for $1 a year by the citizens of Greenville during World War II, the land was restricted with a reversionary clause that returned the property to local government when the military left.

``What the Air Force left to the city and county was a finished industrial park, just waiting to be converted,'' says J.P. Southerland, executive director of Donaldson Development Commission. Four years after the Pentagon declared the base surplus, Donaldson Industrial Air Park had tenants and was turning a profit.

But in coming base closures, the Defense Department intends to gain maximum income from sales of property and facilities, according to the 1988 report of the Defense Secretary's Commission. That will mean a longer process of competitive bids and a higher cost to local governments and private developers.

Even more time-consuming may be the Defense Department's cleanup of hazardous waste on old bases. Decades of fuel draining and storage, degreasing, paint stripping, and ammunition burial have created toxic waste sites on Pentagon properties nationwide.

Twenty-seven of the 86 bases slated for closure contain areas of chemical contamination, according to the Defense Secretary's Commission report.

Twenty-five years ago, private industries moved to Donaldson without regard for old underground fuel tanks, which were imperceptibly leaking volatile organic chemicals into the ground water. Lockheed, which leases the property directly above the giant tanks, moved in without even knowing the tanks existed, says one senior company official.

Now, under the Superfund Amendment of 1984, the Defense Department must assess and clean up hazardous contamination before it can turn base property over to other owners. This requirement could stall base redevelopment.

``To close a base doesn't mean you have to clean it up,'' explains Kevin Doxey, acting director of the Defense Environmental Restoration Program. ``To dispose of a base means you have to clean it up.''

Five of the bases selected for closure are so severely contaminated that no one knows just how cleanup will proceed. A congressional hearing last March focused on Jefferson Proving Ground in Indiana, where 39,000 acres are contaminated with herbicides, metals, PCBs and artillery shells. But ``I don't know that Jefferson is the worst,'' says Doxey.

According to its report, the Defense Secretary's Commission chose the bases for closure without regard to environmental contamination, reasoning that the Defense Department is legally obligated to clean up the waste sites anyway.

But there is no clear timetable on when Jefferson or any other base will be clean. Some $500 million is allocated in 1989, and $517 million in 1990, to investigate and clean up some 15,000 active and former bases.

``We follow `worst-first''' priorities, says Doxey. But ``some sites are so bad, they can swallow all the money.''

At Donaldson, the environmental assessment, conducted by the Army Corps of Engineers, has created little disturbance to industrial activities. None of the park's firms use the groundwater.

Lockheed Aeromod doesn't use any holding tanks, says president Matthew Hodnett.