Dow AgroSciences’ new $340 million local research-and-development investment almost wasn't made in Indianapolis. In its due diligence leading up to Thursday’s expansion announcement, the company hired a site-selection firm and seriously explored establishing those operations elsewhere.

That ugly scenario would have been a devastating blow to the city’s life sciences economy. It would have cost Indianapolis not only the 577 new jobs Dow AgroSciences has pledged to add by 2015, and possibly the 1,200 it already has at its local headquarters—part of a 5,400 global headcount.

In short, other cities across the globe had a chance to steal one of the jewels in Indianapolis’ life science crown.

“It was being looked at not only across America, but across the world where they could relocate this facility. It was extremely competitive,” said Indianapolis Economic Development Inc. CEO Scott Miller on Thursday after the expansion was announced. “They made it very clear to us they were going to look throughout their global enterprise, and look at where they felt it would be the best location for them to locate these jobs.”

Miller softened those comments on Friday afternoon, and said Dow Agro never discussed relocation of its existing local corporate campus with IEDI. In economic development talks that began about a year ago, Miller said the company made it clear it was competitively comparing potential locations around the world for the expanded operations.

“They were looking all across the world where to locate that $340 million new facility, not relocate the jobs currently here in Indianapolis,” he said.

Rewind the calendar one year, however, and there was little doubt about an uncertain future for Dow Agro, a subsidiary of Midland, Mich.-based Dow Chemical Co. In a Feb. 3, 2009 conference call with analysts, Dow Chemical CEO Andrew Liveris said his company was working with investment banks to evaluate potential buyers for 12 major assets, including Dow Agro.

At that time, the parent firm was pinched for cash after it got caught in the middle of a pair of mega-deals that sputtered in the recession. A planned joint venture with Kuwait’s state-run Petrochemical Industries Co. had collapsed in late 2008. That wrecked Dow Chemical’s plans to use the deal’s $9 billion in proceeds to underwrite the $15.3 billion acquisition of Philadelphia-based Rohm & Haas Co.

While Dow Chemical attempted to sort out the aftermath in court, it explored a variety of unattractive options to raise cash, including selling divisions, slashing its dividend, closing plants, borrowing that might’ve led to downgrades in its debt rating, or selling new stock at a depressed price.

In a July 30 conference call, Liveris told analysts his company was “very, very deep” into explorations for divesting Dow Agro, although it wasn’t his preferred path. At the time, analysts speculated Dow Agro might fetch $12 billion.

“Based on our strategic review and our desire to move to higher-growth, technology-driven and innovation-based business platforms, I can tell you that our current thinking and my personal preference is this business should be part of Dow’s long-term future,” Liveris said then. “With that said, we remain open to exploring all options that will strengthen Dow and position it for growth while at the same time maximizing value for our shareholders.”

Eventually, Liveris decided to keep Dow Agro in the Dow Chemical fold. He also promoted Dow Agro CEO Jerome Peribere, putting him in charge of the parent company’s Philadelphia-based advanced materials business. The unit now includes Rohm & Haas.

Peribere had been the prime architect of Dow Agro's transformation from an average-performing maker of low-margin chemicals to a thriving seed-biotechnology powerhouse. On his watch, which started in 2004, its annual sales increased 50 percent, to $4.5 billion.

Liveris noted Dow Chemical’s 180-degree change in direction in his Feb. 2 conference call with analysts. “Whoa, what a difference a year makes!” was his opening remark.

He went on to tick off Dow Chemical’s 2009 accomplishments, including a reorganization that shrank the company’s footprint, increased its sales of high-growth products and closed the Rohm & Haas deal, despite the “traumatic failure” of the Kuwait partnership.

“We reviewed and recommitted ourselves to our strategy, and after an enterprise-wide review, we remain committed to ongoing and active portfolio management to improve profitability and focus resources on higher-growth, higher margin opportunities,” Liveris told analysts.

“We have a deliberate and well-thought-out plan, with $12 billion of divestment options as well as targeted areas for growth. And to me, the best proof of our renewed commitment to grow and deliver shareholder value is our record year of R&D investment, reinforcing our focus on market-driven, science-based innovation.”

In 2009, Liveris later noted, his company invested $1.6 billion in R&D. Once he decided to keep Dow Agro, prioritized as a core recipient of that R&D investment, the next step was clearly a choice on whether to double down on Indianapolis.

IEDI’s Miller, the city’s lead economic developer, said Dow AgroSciences hired locally-based Ginovus LLC as its site-selection consultant. Ginovus Managing Director Larry Gigerich said he could not discuss his company's work for Dow Agro.

In a telephone interview, Dow Agro CEO Antonio Galindez, who succeeded Peribere, declined to share details about the process that led the company to stay put, or name other locations that competed for the deal.

“I won’t go into who else came close,” he said. “There were other places that are very attractive, too. As you can imagine, a project like this is very attractive to many places.”

When it reviewed other potential locations, Galindez said, Dow Agro looked for the same convergence of many factors it found here. They included Indiana’s classic strength as an agricultural hub; the city’s strong infrastructure; the clear support of its officials and its mix of available scientific talent.

“We know what we can expect from Indianapolis, and we like it,” Galindez said. “Put it all together and we concluded this is the right place to be.”

Dow Agro also received a healthy incentive package from state and local governments. The Indiana Economic Development Corp. gave the company $12.5 million in performance-based tax credits and another $205,000 in training grants to encourage the expansion. The city of Indianapolis will kick in another $500,000 from its Industrial Development Grant Fund to help pay for road, sewer and water improvements related to the project.

Indianapolis has also committed to establish a property tax increment financing, or TIF, district to help Dow AgroSciences defer $20 million in project costs. The TIF district still must be approved by city and state officials.

For his part, Miller is happy to have won the high-stakes contest on merit, and will now attempt to leverage the bragging rights to attract even more agricultural biotech activity.

Miller pointed out that Dow AgroSciences has been a great asset and a reliable partner to the city for over two decades. The company was founded in 1989 as a 50-50 joint venture between locally-based Eli Lilly & Co.’s Elanco Plant Services business and Dow Chemical’s agricultural products business. Dow Chemical bought Lilly’s stake in 1997.

Galindez and his management team were instrumental in making Indianapolis’ case to Liveris and Dow Chemical, Miller said. So were other local corporate life sciences leaders, who volunteered their time on the city’s behalf.

Now Miller will have even more to talk about when he approaches other companies involved in the high-tech plant and seed industry, soliciting their expansion or relocation here. He plans to regularly tap Galindez and his team on the shoulder.

“There’s no doubt about it,” Miller said. “Now that the announcement is public, we’ll take this to other companies we’re working with, we have in our pipeline, and say ‘We’d love to get you in front of the Dow folks,’ and have them serve as a proponent of doing business in Indianapolis.”