Life Sciences Go
Way Back in Indiana

It was Capt. Eli Lilly's battery that was key to Union victory in the Middle Tennessee campaign of 1863. Now, 140 years later, the company that bears his name is pursuing its own corporate real estate campaign in his home state and elsewhere, all in the name of diversification and marketplace pre-eminence. But they are not the only life sciences leader in the state.
        In fact, says Wade Lange, the Hoosier predilection for advanced manufacturing extends into the seldom-measured life sciences sector of medical devices.
        "Even within metals," he says, "they're taking it to a finer cut, making high-precision wires for pacemakers. Under the major medical device OEMs, there are an awful lot of firms that make the parts, whether it's plastics or wires. In Warsaw, we know about the three or four really big companies there, but there's about another 80 to 90 companies that make things, and their customers are the Zimmers of the world."
        Those Zimmers are growing too. Zimmer Holdings, the Warsaw-based orthopaedic implant and fracture management product maker, announced in July plans to add a Minimally Invasive Solutions Institute to its one-million-sq.-ft. campus in Warsaw. The 15,000-sq.-ft. (1,394-sq.-m.) first phase will be devoted to surgical operating labs and training suites that will help facilitate collaboration between the company, surgeons and affiliated clinical institutions. Company spokesperson Brad Bishop says $1 million to $2 million will be initially invested in the project.
        Among other recent expansions in the sector is the transfer by Dow AgroSciences of an-in-house biotech R&D group from San Diego back home to company headquarters in Indianapolis, creating from 20 to 40 new jobs in the city. The move was helped along by facility and training grants from the state department of commerce, as well as city tax abatements totaling $1.3 million.
        Lange says West Lafayette alone has a cluster of nine companies spun out of Purdue. From the other end of the spe ctrum, potential employers are helping cluster development too. Besides helping Lange's organization with efforts in cultivating a healthcare delivery work force, Lilly and others are working with him to "protect jobs that don't exist right now," evaluating whether there might be similar enough needs among major players like Roche Diagnostics, Lilly and Dow to form the core of a work force development program.
        The seed of that core is already there. "We at Lilly have requested that the educational institutions work together to develop a two-year biotech degree," says Leicht. "A lot of the people who work at our plants may eventually get a four-year degree, but a focus on analytical chemistry and biology and some other core disciplines in a two-year program is very essential to us today in our manufacturing component. Ivy Tech and Purdue are already on board, we have a facility near West Lafayette and Purdue and IUPUI and Vincennes are coming along with that now. So with regard to having the infrastructure in place to provide us with knowledgeable workers for the future, who can interact with technologies that are coming into our facilities, we see in this new initiative something that's very encouraging."

Smart Growth On the Ground

In some U.S. localities, at the same time that brownfield programs are being pushed, companies have also encountered encroaching growth management legislation that ends up being punitive in the end. How has Indiana defined "smart growth" to the state's and companies' best benefit, and how has the much-ballyhooed concept manifested itself on the ground?
        "From an energy provider's standpoint, in terms of making sure we don't increase the cost of doing business, we're trying to maximize the use of existing infrastructure," says AEP's John Sampson. "We have an interest in seeing the economy grow in general. If we can do that by participating with the local economic development people and getting them to sites where there is already infrastructure, that contributes to the concept of keeping down the cost of business."
        Lt. Gov. Kernan points out that the state's Land Resource Council and Hoosier Farmland Preservation Task Force have made great strides in setting a course that includes room for both economic development and natural resource preservation. Evansville's Ken Robinson says brownfield locations are picking up steam across the state.
        "We have seen the adaptive re-use of a number of old industrial sites, where they've been broken into smaller sites because the dinosaur buildings were just too large," he says, identifying a familiar challenge in today's market. "A developer who really had a lot of foresight and initiative got in there and did some strategic demolition and created some real unique opportunities."
        That's just what they're looking for in Elkhart, where the former Bayer Diagnostics campus, all 1 million sq. ft. (92,900 sq. m.) of it, is being offered for sale at a price of $1 for one year. Complete demolition of the 27-acre (11- hectare) property, complete with its own power plant, is estimated to cost $20 million. While some operations are staying, Bayer has moved its primary production to Germany and to Mexico. The ongoing costs of maintaining the dormant property total around $7 million annually.

One of two distribution centers located in Indiana this year by off-price retailer TJX Companies, the 805,200-sq.-ft. (74,803-sq.-m.) facility in Brownsburg (top) will join with a forthcoming 560,000-sq. ft. (52,024-sq.m.) center in South Bend (bottom) to employ some 1,450 people over the next five years.

        Meanwhile, real brownfield action is taking place on the ground in both Indianapolis and South Bend at the behest of retail giant TJX Companies, the parent of T.J. Maxx, Marshall's and A.J. Wright retail stores. In South Bend, longtime home to vacant Studebaker buildings, a new warehouse and distribution facility will create more than 850 jobs over the next five years when completed next spring. The overall project comprises two phases, the first being the 560,000-sq.-ft. (52,024-sq.m.) distribution center, which will be located where 100 acres (40.5 hectares) of abandoned freight terminals and warehouses once stood. Construction of a second, 300,000-sq.-ft. (27,870-sq.-m.) building will begin in July 2005.
        "The decision to do that was out of the norm from what we usually see because if you're looking to build a facility that is half a million and in this case will become 800,000 square feet, you're thinking greenfield," says Kernan. Several Indiana locations were considered, but the South Bend demographics and brownfield scenario won the day.
        "This is a good example of where TJX could have easily chosen to go elsewhere had not the community gotten together," adds Sampson, whose own company had to move quickly to sell a piece of its own land for the deal to go through.
        The distribution facility is the second executed for TJX by Indianapolis-based Lauth Property Group. The first, sold to the company in March, was an 805,200-sq.-ft. (74,803-sq.-m.) national distribution center for TJX's HomeGoods division, located in Brownsburg, a northern Indianapolis suburb that is among the fastest-growing in the state. The facility is expected to create more than 600 new jobs.
        TJX is not the only company with designs on better transport of goods. Book publisher Random House Inc. has broken ground on a $6.2 million expansion of its Crawfordsville distribution center, retaining 120 jobs with plans to add more jobs by 2003. The company plans to expand the 360,000-square-foot (33,444-sq.-m.) facility by 270,000 sq. ft. (25,083 sq. m.). When fully operational in 2003, the facility will house more than 90 million books and serve as the national distribution center for the Random House Children's Books imprint.