Douglas County directs staff to finalize KU Innovation Park PILOT agreement with administrative-fee review

Douglas County commissioners on July 8 directed staff to finalize a voluntary payment-in-lieu-of-taxes agreement with KU Innovation Park, including staff work to evaluate an administrative fee to cover county costs, then return the final agreement for a future vote.

KU Innovation Park leaders described a 10-year PILOT framework designed to apply at lease renewals for "mature, revenue-generating" for-profit tenants and to exclude early-stage startups, nonprofits and vacant space. "Our goal is simple. We wanna continue the partnership with Douglas County while preserving the economic development engine this community created," said Lindsay Slater, vice president of strategic communications at KU Innovation Park.

Adam Courtney, KUIP’s chief executive, said the draft ties implementation to lease renewals so that PILOT charges would roll on incrementally rather than be added mid-lease. The proposal starts at $2.12 per square foot in 2027 and increases about 5% per year to $2.77 per square foot in year 10, Courtney said, with annual reporting and financial safeguards for the park. "It applies to mature, revenue generating companies," he said, and would be implemented on renewals for Phase 4 and beyond.

County appraiser Brad Eldridge explained the rate basis: "We came up with that, based on the conventional class a office space model," he said, adding that the team used roughly 25% of a market tax rate after reviewing precedent rebate/discount levels to calculate a per-square-foot payment. Eldridge said the county treasurer's office and tax team would calculate individual PILOT payments so all taxing entities that receive revenue from the property would participate.

Commissioners pressed on several practical points: who determines eligibility for the "mature" designation (KUIP and county staff would confer), how staffing and administrative burden would be handled, and whether an administrative fee could be included to compensate county staff for processing PILOT payments. Commissioner (Speaker 9) and others advocated for an admin fee to value county staff time; staff said the commission could direct research into adding an administrative fee either within the pilot or via a separate memorandum of understanding.

KUIP gave projections based on current tenants, with estimated pilot payments starting in the low five figures (about $11,000 in 2027 based on current companies) and rising to an estimated $85,000 by 2035 if current companies mature and roll onto the schedule. Courtney stressed projections rely on known companies and that Phase 4 construction will add additional tenants who could become eligible over time.

During public comment, resident Eric Hyde urged the county to pursue voluntary PILOT agreements with tax-exempt institutions in the community and told commissioners, "It's innovative ... just do it." After discussion, Commissioner (Speaker 10) moved "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." The motion was seconded and passed unanimously.

The commission did not adopt the PILOT agreement as an ordinance tonight; commissioners directed staff to return with final agreement language, legal review and any recommended administrative-fee options before a formal adoption vote.

Staff also noted ongoing budget hearings and that the county packet includes a letter from the city of Eudora about a proposed TIF district. The meeting adjourned with a reminder of a 9 a.m. budget hearing the next day.