An Indiana county that's home to an old Army howitzer-shell propellant plant is taking dead aim at an innovative, $100 million program that seeks to convert unneeded Army bases into productive private-sector uses. Participants suggest that it could be a portent of future struggles over the fate of old federal assets that are being turned over to the private sector.
In the early 1990s, the Army--stung by the end of the Cold War and a decline in Pentagon budgets--decided to try turning some of its white-elephant bases into moneymakers. In 1993, under the federal Armament Retooling Manufacturing Support (ARMS) initiative, chemical giant ICI Americas Inc. began marketing the 10,000-acre Indiana Army Ammunition Plant (INAAP) as a small-business incubator and private-sector industrial site. Two years later, ICI began doing the same with the 7,000-acre Volunteer Army Ammunition Plant in Chattanooga, Tenn. (See Daily Fed, April 1.) In all, the ARMS program gives money to 13 Army ammunition plants across the country.
But now, Indiana would like to get out of the agreement. Today, Indiana lieutenant governor Joe Kernan is scheduled to join Clark County officials for separate meetings with Rep. Lee Hamilton, D-Ind., and Kenneth J. Oscar, the Army's deputy assistant secretary for procurement. The county says that once ICI's site-management contract with the Pentagon expires in March 1998, it wants to take over the INAAP site for itself. David Gogol, a Washington consultant to Clark County, said the county wants to foster "options for economic development under the control of persons with expertise in that field."
Critics have been focusing their fire on ICI's alleged shortcomings in its promises on environmental remediation and economic development, as well as its non-taxable status. "Given the absence of a defense mission for the facility, should the Army, through a contractor, serve as the de facto economic development partner of Clark County?" Gogol asks. "Despite the good intentions of the ARMS program, if the county no longer wishes to enjoy the advantages of the ARMS program, then why should the Army remain in control of the property?"
Gogol added that Hamilton already discussed the issue with Oscar in June. But a spokesman for Hamilton emphasized that the congressman has not yet decided his stance on the issue, nor has he committed to any legislation on the matter. One source familiar with the issue said that other communities near military bases have been contacted by consultants who suggest that they ask the federal government to cede control of prime but superfluous holdings back to the localities.
Charles S. (Sid) Saunders, the ICI official in charge of both the Indiana and Tennessee sites, said that the flap is understandable given the site's transitional state following years in Army hands. With 80 companies now operating on the site, Saunders says it's a struggle for control of a successful asset. "Now all of a sudden this place has become a fairly active industrial site," Saunders said. "The county seeks more control, and if they had a way to do it, they'd take it. But the rules don't allow it. We're kind of getting caught in the middle."
Saunders added that at a time when the military's options under the base realignment and closure process are frozen, the Pentagon will need to rely more than ever on innovative programs like ARMS.
ICI has found less success so far in marketing Chattanooga's Volunteer site to the private sector. Civic officials in Chattanooga said privately that some minor irritations with ICI exist, but they add that those issues are being handled in ongoing negotiations, rather than in a full-blown controversy like the one in Clark County.
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