Douglas County commissioners signal support for an agreement with KU Innovation Park to make tax-like payments for its long-term tenants on Wednesday.

The proposed payment in lieu of taxes agreement with KU Innovation Park would have the organization make payments based on its long-term, mature tenants to local taxing jurisdictions despite exemption under state law. The proposed agreement was voluntarily put together by KU Innovation Park, and it is intended to create a framework that recognizes both the park’s tax-exempt status and its use of county and city services.

Commissioner Patrick Kelly thanked KU Innovation Park for being responsive to commissioners’ concerns about long-term tenants not paying taxes. Those concerns were discussed last year during 2026 budget deliberations, as the Journal-World reported, and commissioners cut $60,000 of the county’s total allocation to KU Innovation Park.

“Any time change happens, we get uncomfortable because it’s different,” Kelly said. “So I just want to appreciate staff’s work. This has been a long time coming.”

On Wednesday, county commissioners directed staff to further finalize the agreement with KU Innovation Park. Commissioners also want both the county and KU Innovation Park to further explore adding an “administrative fee,” to cover staff time toward the work resulting from the agreement.

These payments will be based on KU Innovation Park’s mature, long-term tenants, and the agreement would run from 2027 to 2037. Annual payments would begin at $2.12 per square foot in the first year and gradually increase to $2.77 per square foot by the 10th year.

Douglas County would collect the payments and distribute them to local taxing jurisdictions “in the same manner as property tax revenues are distributed,” a memo in the agenda said.

The tenants that do not apply to that calculation are nonprofit organizations, research-only tenants, vacant space and early-stage companies still in incubation or startup phases. The agreement defines startup companies as technology businesses less than five years old, biotechnology companies less than 10 years old, or companies without positive revenue.

It’s estimated that the city and county will receive roughly $11,231 in 2027, about $23,115 in 2028, about $41,379 by 2032, and could reach approximately $85,040 annually by 2034 and 2035 as other tenants become subject to the agreement. The estimates are based on current lease schedules and are expected to change depending on tenant turnover and lease renewals.

With Wednesday’s proposal, KU Innovation Park is also asking commissioners to restore the county funding that was taken away last year in the 2027 budget. County funding was reduced from $175,000 to $115,000 for 2026. The $60,000 in additional funding will restore funding to its prior levels and support core services. Commissioners will consider the request during budget deliberations next week.