Complete 2012 forensic audit documents - Kansas Bioscience ...

However, the Kansas Board of Regents institutions are subject to a Service Area Agreement
which limits the institutions to certain areas of the state. At that time, an institution wishing to
locate facilities in another institution’s service area required the approval of that institution’s
Chancellor or President in order to do so. Dick Bond indicated that Chancellor Hemenway was
approached regarding KSU locating in KU’s Service Area. Informal polling had indicated that a
tax to support the KU Edwards Campus and the KU Cancer Clinical Research Center would not
succeed. However, it was determined that the tax might succeed if KSU was added as there were
18,000 to 20,000 KSU graduates in Johnson County. Furthermore, KSU committed that its
Johnson County campus would only provide programs in the areas of Animal Health and Food
Science, which are not in competition with KU’s offerings in the Service Area. In a July 23,
2006 Lawrence Journal World article, Chancellor Hemenway indicated he heard about the plans
for the site two or three days before the announcement. Hemenway indicated that Wefald called
him and told him about it. Hemenway indicated that “I didn’t think about it one way or the
other. I really don’t see this as a competitive situation at all.” Chancellor Hemenway gave his
approval to KSU and both Hemenway and Wefald began championing what had become the
Johnson County Educational Research Triangle (“JCERT”) 1/8 cent sales tax in 2006.
Dr. Wefald recalled that he and Hemenway made several joint presentations in support of
JCERT to help it gain voter approval. Voters approved the JCERT tax in November 2008. KSU
will now pay for construction costs on its campus with the JCERT sales tax rather than through
private financing. Please refer to Exhibit 29 for copies of articles.
With respect to the siting discussions and decisions, there is evidence of a lack of involvement
and active participation by the BOD (other than Clay Blair) with respect to these important
decisions. For example, Blair appears to have been the only individual negotiating with Olathe
and KSU on behalf of KBA. There is a difference of opinion as to whether the siting decision
was presented to the BOD as a fait accompli. Overall, the impression is that the siting
negotiating, decisions and approval was largely the result of the efforts of one person acting on
behalf of KBA. However, without the active involvement and leadership of Clay Blair, there is
serious question as to whether the siting decision would have occurred.
KANSAS BIOSCIENCE PARK
K.S.A. 74-99b09(16) states that KBA may own, acquire, construct, renovate, equip, improve,
operate, maintain, sell or lease any land, buildings or facilities in the state that can be used in
researching, developing, sponsoring or commercializing bioscience in the state, including,
without limitation, a state-of-the-art facility, laboratory or commercial wet lab space incubator to
be used by KBA, and also to be made available for use by bioscience research institutions or
Kansas companies conducting bioscience research and development for bioscience research,
commercialization and technology transfer of bioscience products, processes and other
intellectual property in accordance with provisions of KEGA.
It was announced in July 2006 that Olathe would donate approximately 100 acres of land at Lone
Elm and Highway 7 to KBA and KSU to be used for KSU’s Olathe campus, KBA headquarters
and incubator space and a bioscience park with potential graduation space for incubated
companies.
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