Gov. Evan Bayh of Indiana has awarded Gary Regional Airport $500,000 in state and federal funds for an economic study and environmental assessment of the airport's possible expansion, following Mayor Richard M. Daley of Chicago's announcement that plans for a new airport on the Illinois-Indiana border are dead.

Curt Wiley, executive assistant to Gov. Bayh, said the governor decided to promote improvements at Gary Regional Airport to replace the economic growth that had been expected from the canceled $10.8 billion airport, which would have been partially located in northwest Indiana.

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