Douglas County directs staff to finalize 10-year PILOT for KU Innovation Park, asks staff to explore admin fee

Douglas County commissioners on July 8 unanimously directed staff to finalize a 10-year payment-in-lieu-of-taxes (PILOT) agreement for KU Innovation Park and to explore an administrative fee to cover county staff time.

KU Innovation Park leaders presented the draft agreement and a summary of the park’s local economic impact. "Our goal is simple: we want to continue the partnership with Douglas County while preserving the economic development engine this community created," Lindsay Slater, vice president of strategic communications at KU Innovation Park, told the commission. Slater and KUIP CEO Adam Courtney said the park has grown over 15 years to include 77 companies, more than 800 jobs and roughly $53,000,000 in annual payroll, and that county and founding partners’ investments helped leverage about $67,000,000 in outside funding.

Courtney described the proposed PILOT as voluntary and administered at lease renewal. "It's a voluntary payment in lieu of taxes agreement," he said, explaining the structure would begin at $2.12 per square foot in 2027 and increment about 5% annually to $2.77 by year 10. He said the policy is intended to apply to "mature" for-profit tenants (companies with positive cash flow) and to exclude early-stage startups, research tenants, nonprofits and vacant space.

Brad Eldridge, the county appraiser, said the starting rate was based on a Class A office market tax rate of roughly $8 per square foot and applying a 25% share commonly used in similar incentive agreements. "We worked with 25% of what the fair market taxes would be, and we did that on a per square foot basis," Eldridge said, adding that the county treasurer’s office would calculate each hand tax bill and distributing taxing entities (including the city of Lawrence) would receive their shares based on the park’s tax bill.

Commissioners pressed staff on administration and implementation. Several commissioners said the county should consider an administrative fee to compensate staff — particularly the appraisal and tax teams — for the ongoing work required to calculate PILOT shares and manage the agreements. County staff agreed to research whether that fee should be written into the PILOT, included via a memorandum of understanding, or handled another way.

Commissioners also raised timing questions related to the park’s West facility payments and whether implementing the PILOT in 2027 could overlap with other revenue changes. KUIP told the board that phase 4 construction is coming online and that the first company likely to roll onto the PILOT would do so in the third quarter of 2027; KUIP said phase 4 could add another 10–20 companies and that some current startups may mature into eligible tenants over the 10-year term.

The motion to "direct staff to finalize the payment in lieu of taxes agreement for KU Innovation Park with the added conversation of how to include an admin fee that covers our staff time and bring it back to us for a further vote" was moved by Commissioner (SEG 740) and seconded; the commission approved the motion by voice vote.

Public comment at the meeting included supportive remarks from resident Eric Hyde, who said community members should support the park and its role in local economic development.

Next steps: county staff will finalize PILOT terms, study administrative-fee options and return to the commission with recommended language and any required legal analysis before a final vote.