State unsure how much money it will get from Bioscience Authority sale

The state’s secretary of commerce tempered expectations Wednesday about how much money the sale of the Kansas Bioscience Authority will bring into state coffers.

The authority, established under former Gov. Kathleen Sebelius as a way to spur investment in the state’s biotech sector, was merged into the Kansas Department of Commerce on Wednesday at a meeting of the State Finance Council. It’s the first step toward selling off its assets to boost the state’s cash supply.

The authority’s assets, including an investment portfolio and property in Olathe, were initially estimated to bring in about $25 million.

Any amount over that is to go toward providing aid to poor school districts, lawmakers decided last month when they approved a plan under a court deadline to make school funding more equitable.

Secretary of Commerce Antonio Soave was careful when asked if he thought the authority sale would draw enough money to do that.

“We’ll have to meet with the investment bankers … and get what their current analysis is,” Soave said.

He said his department does not yet have “full disclosure” of the authority’s books.

“So we don’t know if that assessment is still correct,” he said.

Earlier this year, the authority refused to provide The Eagle with an accounting of its investment portfolio.

In the past, the authority functioned as a public-private partnership, funded by the state but run by an independent board. That structure drew scrutiny, with a 2012 state audit determining that the authority’s former president had misspent funds.

After the commerce department has received the financial information from the authority on Thursday and Friday, it will conduct an analysis and then meet with investment bankers, Soave said.

Soave told the State Finance Council that his agency probably would be ready to begin processing bids for the sale by September or October. He said the preference is to sell all the assets to one buyer rather than selling them piecemeal.

House Minority Leader Tom Burroughs, D-Kansas City, expressed concern that the state was moving too quickly with the sale, saying that he “would hate to pull out too soon” and receive less than full value for the assets.

Gov. Sam Brownback’s budget director, Shawn Sullivan, said even if the state wasn’t in financial straits, dissolving the Bioscience Authority would be a good idea.

“Regardless of our budget situation, we should not be in the business of being a venture capitalist,” Sullivan said. “…I haven’t found any other states that have been successful in doing this.”

This story was originally published July 20, 2016 at 1:27 PM with the headline "State unsure how much money it will get from Bioscience Authority sale."