University of Iowa Research Park seeks changes to stay competitive

CORALVILLE — The University of Iowa wants to make a 185-acre portion of its research park in Coralville more attractive to companies by removing the Board of Regents as owner and allowing prospective developers to either buy parcels or lease land directly — making it more like Iowa State University’s booming research park.

“Allowing the university to directly sell or lease land where appropriate will help attract new business to the research park, growing Iowa’s workforce and enhancing the state’s biosciences industry reputation,” UI Chief Innovation Officer Jon Darsee said of the request going before the regents next week to prematurely terminate the board’s ground lease with the UI Research Park Corp.

That request also involves transferring the research park property — located within the university’s Oakdale Campus — from board ownership to the UI Research Park Corp. “at no cost.”

“The result would grow our workforce, expand the existing industry presence and enhance the biosciences industry reputation of the state of Iowa,” according to the UI request.

Limitations

The university established its Research Park Corp. in 1989 to develop, operate and manage the park through a long-term ground lease with the regents.

But because the corporation has only a “ground lease interest” in the land, options available to third-party developers and companies looking to locate there are limited to subleasing individual lots.

The sublease terms are limited by the current ground-lease deal, which in November 2021 was extended through 2086.

That arrangement poses “challenges,” according to UI officials, as developers and lenders “are often hesitant to enter into ground lease and sub-ground lease agreements to construct new privately owned research-based facilities, especially when the underlying ground remains state of Iowa property.”

“Under the current arrangement, there is no option for the (the research park corporation) to either sell land or lease land directly to potential developers,” according to the university’s request to prematurely terminate the ground lease.

The UI Research Park arrangement differs from most research parks, including Iowa State University’s Research Park Corp., which owns its 550-plus-acre park that employs more than 2,000 people in more than 100 companies and organizations.

“The current arrangement often eliminates the (UI Research Park) from contention in location decision-making, as companies seek ownership opportunities and developers seek company lease-back agreements,” according to the UI request.

“This is particularly true of biotech companies, otherwise interested in resources and talent found proximate to the University of Iowa Hospitals and Clinics and the Carver College of Medicine.”

Sometimes, according to UI, land ownership is an essential part of a development project and having flexibility to sell gives the university more tools to attract and compete for businesses.

“Granting the (research park corporation) land control levels the playing field and enables (it) to compete fairly for development projects in the medical industry,” according to the request.

UI, ISU details and differences

Although the university’s broader Oakdale Campus in Coralville spans nearly 500 acres — and includes things like the State Hygienic Lab and Kirkwood Regional Center — the 185 acres it wants to own hosts its business incubator and more than 30 companies, like Higher Learning Technologies and Firefly Photonics.

Within that 185-acre portion, the UI on its website reports 14 available lots — amounting to more than 80 acres, or 43 percent of that 185 acres. Some offices and wet labs already are built on some of the available spaces.

In touting benefits of its existing land-lease options, the UI Research Park on its website reports a tax advantage.

“Leased ground on the park remains publicly owned and not subject to property tax,” according to the park website.

The UI Research Park Corp. for its 2022 budget year reported total assets of $4.8 million and net assets of $2.7 million.

Iowa State University established its now 550-plus-acre research park in 1987. It boasts more than 800,000 square feet of work space in 16 buildings, 11 of which the ISU Research Park owns and operates.

The ISU Research Park in 2022 reported total assets of $68.2 million and net assets of $15 million, given its liabilities in notes and loans to third parties.

Vanessa Miller covers higher education for The Gazette.

Comments: (319) 339-3158; vanessa.miller@thegazette.com