Innovation Campus being run by business leaders

LINCOLN ? As Lincoln leaders were considering doling out $10.7 million in public subsidies for the University of Nebraska?s Innovation Campus on Monday, an amendment was proposed deleting the university as a partner in the deal.

Why? Because the campus is being run by a nonprofit corporation called Innovation Campus Development Corporation ? with a board of directors run by a handful of Nebraska business leaders. Even though the planned research campus is owned by the university and is getting hefty subsidies from the state and city, five Nebraska business leaders are running the show.

That?s why the redevelopment agreement was amended to take the university out ? leaving it a deal between the city, developers and the nonprofit corporation.

Kent Seacrest, a development attorney representing the developer of the campus, told Lincoln City Council members on Monday that he originally put the University of Nebraska in the redevelopment agreement since the university owns the land, but then proposed taking the university out since it is not technically operating the campus. The university has a 99-year ground lease with the nonprofit corporation.

?They set it up so that the 501c3 is running the show, not the University of Nebraska Board of Regents,? Seacrest said.

Seacrest said the university thought it would be more entrepreneurial for the nonprofit and the ?specialists? on its board of directors to run the research park.

?We thought it would be more responsive if the university board of regents didn?t have to meet and have to approve everything,? Seacrest said. ?The university set it up so that the 501c3 is in charge of the old former state fairgrounds.?

Dan Duncan, executive director of Innovation Campus, said the nonprofit is owned by the University of Nebraska and operated by a nine-member board of directors ? five from the private sector and four representing the university. The private-sector members are Tom Henning, CEO of Assurity Life Insurance Co.; Dana Bradford, president of McCarthy Capital Corp.; Matt Williams, president of Gothenburg State Bank; Tonn Ostergard, president and CEO of Crete Carrier Corp. and JoAnn Martin, CEO of Ameritas Life Insurance.

The university representatives are NU President James Milliken; UNL Chancellor Harvey Perlman; Prem Paul, UNL vice chancellor of research and economic development and John Owens, vice president and vice chancellor of the Institute of Agriculture and Natural Resources.

Duncan said there are a variety of different structures at other research campuses, but a consultant recommended Nebraska take this approach.

?I would say most of them have some type of distance from the university,? he said. ?It enables different partnerships, different deal structures that the university couldn?t do, shouldn?t do.?

Innovation Campus will be a public-private research campus focused on food, fuel and water. The university hopes to eventually have 7,000 people working on the campus north of UNL, on the former state fairgrounds, which the university took ownership of in January 2010. The State Fair moved to Grand Island.

In all, about two-thirds of Innovation Campus will be privately developed, and one-third publicly developed.

The state has kicked in $25 million worth of funding and the city plans to eventually contribute up to $25 million in public subsidies, through tax increment financing. The Lincoln City Council will vote Monday on whether to approve $10.7 million in subsidies for the first phase of development.

Reported by Deena Winter, deena@nebraskawatchdog.org.

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