Economy and Economic Development and Technology

State awaits Crane's fate: Indiana tech promoters hope feds will expand naval base

April 25, 2005

In just a few weeks, Hoosiers will learn whether the Navy plans to multiply southwest Indiana's economic development prospects, or mothball its Crane base, the region's primary high-tech asset.

The latter scenario would not only devastate the region; it would seriously set back statewide efforts to modernize Indiana's economy.

"If Indiana were in a position where we were a recognized technology leader, the loss of that one asset might not loom as large," said Central Indiana Corporate Partnership Vice President Lee Lewellen. "But we're in a real race here to leverage all our technology assets, our universities, our companies. And Crane is certainly a big asset."

"When you look at its capacity to expand, we have a good story to tell," he continued. "The question is whether we've been telling that story long enough to the right people, and whether we've positioned the base well politically."

Indiana's local, state and national officials have all attempted to make the case for the Crane Naval Surface Warfare Center, which is nearly 90 miles southwest of Indianapolis. As recently as April 18, Gov. Mitch Daniels, a Republican, personally visited Washington, D.C., on Crane's behalf.

Obstacles along the way set back the Crane effort. Some were clearly the result of bad luck, such as the death of a key lobbyist and the hospitalization of another important Crane leader. But other impediments were perhaps self-imposed, such as the state's troubles directing money to build a certified technology park outside the base's gates.

"Are you a baseball fan? I relate it to competing for the batting title," explained Ron Arnold, executive director of the Daviess County Growth Council. "To win that batting title, you're going to have a player that hits grand slams, home runs, singles, doubles and triples. It also helps when he takes a sacrifice or a base on balls. At the end of the day, it's only the guy who does everything right who wins the crown."

Base Realignment and Closure

On May 16, U.S. Secretary of Defense Donald Rumsfeld is slated to reveal his recommendations for the international Base Realignment and Closure, or BRAC, process. A massive effort to redesign the U.S. military's efficiency and structure, it's likely to forever alter Crane.

Established in 1941 as a World War II munitions dump, the 100-square-mile naval base is still one of the nation's largest ordnance storage sites. But in the decades since, Crane has also become home to some of the Navy's most advanced research and development. With 4,000 employees, its engineers design and test cutting-edge electronic systems, both for the military and for Indiana businesses.

If BRAC goes favorably for Indiana, Crane will be expanded as a receiver base, taking on the high-tech mission that once belonged to other facilities. If not, the Navy could choose to shutter Crane-or worse, keep it open, but move its engineering capacity elsewhere. That would leave tons of deadly munitions in storage under Crane's rolling hills and trees, preventing any other development.

Public officials have long recognized the threat. For example, U.S. Sen. Evan Bayh, a Democrat, began a series of numerous meetings with military leaders on Crane's behalf in March 2003. Bayh has focused on securing military construction funds for Crane projects, as well as research and development money to increase Crane's collaborations with the state's universities. To date, he said, he's secured more than $90 million.

"I'm not an oddsmaker, but based on its unique strengths and the support area Hoosiers have demonstrated for it, Crane should have a good shot at surviving the base closures," Bayh said. "Crane's joint service to both the Army and the Navy makes it especially valuable to the military, as does its role in producing life-saving equipment for our troops in the battlefield. I will do everything possible to remind the [BRAC] Commission of Crane's value to our armed forces in the coming month."

Certified technology parks

Inside the base, Crane has responded repeatedly to the military's BRAC questions. Meanwhile, the leaders of Daviess, Martin and Greene counties-which all border the town of Crane, have attempted to create a state-certified technology park outside the base gates.

Arnold recalls filing the first version of his tech park application in February 2004, hoping for $1.8 million. The plan was to level an abandoned apartment complex and build a home for businesses that support or benefit from Crane. The goal was to have the money in place by summer to meet BRAC's information-gathering timetable.

Purdue University and Rose Hulman Institute of Technology submitted letters in support of the new technology park, Arnold said, and EG&G Corp. was to be its anchor tenant. The counties also worked to pass a local economic development income tax.

Officials knew the technology park alone wouldn't secure Crane's fortune. But their hope was it might provide an extra boost.

"It was all geared around trying to increase that BRAC score as much as possible," Arnold said. "No one could tell us how much it would add to the score. Our point was, at the end of the day, if we fell a point or two short, then shame on everyone associated with it."

At that time, Indiana had already established seven certified technology parks, granting them a total of $7.4 million. State records show West Lafayette's had received nearly $1.9 million. So had Anderson's. Shelbyville's received $1.2 million and Hammond's received $1.2 million.

Since then, Indiana has certified eight more technology parks. But they received far less money than earlier applicants. In total, the later parks received $1.6 million. Daviess County's was among them. State records show it was certified on March 26, 2004. It ended up receiving $300,000 in certified technology park grants.

Lt. Gov. Kathy Davis announced $1 million in support for Crane on Oct. 13, but $700,000 was from the Department of Commerce's Community Economic Development Fund for demolition and debris removal. That was too late to influence BRAC, Arnold said.

County officials operated under the assumption that, by July 1, 2004, they "needed to have as much funding in place as possible" to bolster Crane's case and meet BRAC's timetable, he said. "When it came down, all we could show was what the county had pledged."

Jerome McCluskey, now a Baker & Daniels associate, was then general counsel for the Department of Commerce. He recalls the campaign to retain Crane and establish the technology park as a team effort, one of Gov. Joe Kernan's and Davis' highest priorities. Their efforts included directing the plans for the Interstate 69 extension past Crane's gates and ensuring that fiber-optic cable would be laid along its path.

McCluskey said the state originally had questions about the cost of the consultant the local officials had hired, as well as the land they wanted to buy. Arnold's final grant application to the state was dated Aug. 26, 2004.

In any event, McCluskey said, Indiana had already shown its commitment to Crane with its original park certification in March.

"For anyone at the local community level to pretend to know what goes on in the BRAC committee, or what will actually hold weight is purely farce and a guess," McCluskey said. "It's a black-box process, and we really don't know what factors are most important. But I can assure you this: We did everything we could to make sure they were certified in time to be considered. And we worked with them to make sure they did get funded at a later date."

One of Kernan's last actions as governor was to visit Washington, D.C., in January on Crane's behalf. He met with Chief of Naval Operations Adm. Vern Clark.

A new team

When Daniels took office, he fired Kernan's lead Crane lobbyist, former Deputy Assistant Secretary of the Navy William J. Cassidy Jr. Former Florida congresswoman Tillie Fowler was Cassidy's replacement. Since Fowler was chairwoman of the defense policy advisory board, the highest non-military adviser to the secretary of defense, it was considered an early coup for Daniels.

The governor visited Washington in early March, meeting with Secretary of the Navy Gordon England and dining with President George W. Bush. He returned to the capital April 18.

"Those two trips to Washington are about the only trips he's made since being elected governor," said John Clark, Daniels' senior adviser for economic growth. "He's taken this time to make these trips to show how important the issue is to him personally."

But on March 2, Fowler died unexpectedly.

Daniels replaced her a month later with former U.S. Senator Dan Coats, who had just completed a term as U.S. ambassador to Germany. By BRAC's stated criteria, Coats said, Crane stacks up well.

"We want to make a rational, hard case for Crane, and we think it can withstand that test," Coats said. "The key is getting it in the hands of the people who will make the ultimate decision."

Meanwhile, the Crane campaign suffered another setback early this month, when Bob Matthews, the Crane base's lead internal BRAC coordinator, was hospitalized for a head injury he suffered while working on his lawn.

"We've been plagued with unfortunate health episodes for key players in this process," Clark said. "But obviously, we just keep on keeping on."

If Rumsfeld's May 16 recommendation goes against Crane, Indiana will still have an outside chance to sway the BRAC commission and, ultimately, the president and Congress, before the process concludes this fall. But some are beginning to question whether Indiana has already lost its best opportunities to retain Crane.

"Our efforts were very late to the game," CICP's Lewellen said. "The problem is, it's out in the middle of nowhere, and it hasn't [always] caught the attention of the leaders of this state. Other communities in other states that have facilities in this BRAC, they've been in Washington telling the stories of their facilities for probably two to three years. The question is, 'Have we made the case loudly enough, long enough and aggressively enough?'"
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