Legal setup allows K-State Olathe to partner with Animal Health Corridor companies

June 22, 2010

OLATHE, Kan. - With an Animal Health and Food Safety and Security program comprised of approximately 160 faculty experts across six colleges and over a dozen departments, K-State has all kinds of expertise to offer the bioscience community. With companies whose revenue accounts for nearly a third of total sales in the $19 billion global animal health market, the Kansas City area – home to America's Animal Health Corridor – has use for K-State's research. K-State Olathe will bring the two together.

The initial focus of the campus will be graduate programs and research with a bent to commercialized technology that benefits society. K-State Olathe CEO Dan Richardson said the programs will be developed based on what stakeholders need. Research will be geared toward the needs of the animal health industry and the people who support it.

One reason for the flexibility K-State Olathe will have to partner with industry is its setup as a 509(a)(3). That means it is legally defined as a support organization for a non-profit, the non-profit being Kansas State University. K-State Olathe is technically K-State Olathe Innovation Campus, Inc. – a controlled corporation. The Board of Directors for K-State Olathe is composed primarily of a leadership team of executives at K-State.

Lindy Eakin, K-State Olathe's Director of Fiscal Affairs, explained that a 509(a)(3) allows the campus to function as a non-profit entity but not as a state agency. Richardson credits the foresight of the K-State administration to set up the new campus that way.

"I joke that we're not a rogue elephant," Richardson said. "We can't just run off and do whatever we want; we have to follow the guidelines. It does allow us to take advantage of the state systems where it helps us – for example, procurement and purchasing – and it allows us to maybe avoid some of the things in the state system that slow you down, but still following basic guidelines. Now, when it comes to curriculum, it's exactly like Kansas State. We don't step out of that; that goes to the Board of Regents when necessary and follows the processes and procedures already in place."

The campus is funded with a combination of taxable bonds and non-taxable bonds. The non-taxable bonds are used only for not-for-profit relationships; most schools are built with those. Taxable bonds are more expensive but give more latitude to partner with the private sector in the building.

"It gives us more flexibility on relationships, all of which still have to fall under guidelines and the mission of the university, but more flexibility is what it gives us," Richardson said.

- By Ashley Dunkak -