Wichita State University leased a building on its campus to a new private school that began construction, hired staff and is well on its way to welcoming its first students – all without a public vote or open bidding process.
WSU’s Innovation Campus has become “a mindset,” not a specific location, university officials said.
And that means properties across campus and beyond can be leased to the nonprofit Wichita State Innovation Alliance and then sub-leased to third parties without a public discussion or vote, which normally are required for state-owned property.
That has raised questions from at least one state lawmaker, who says the process seems like a “work-around” to bypass public discussion and accountability.
Lou Heldman, the university’s vice president for strategic communications, said the concept of the Innovation Campus is evolving.
“Innovation Campus has transformed into a mindset as well as a physical place,” he said. “The mission is to further Kansas and improve the quality of life, so we really think about the whole campus – the whole 330 acres – as an innovation university.”
The Eagle reported last month that Chase and Annie Koch, the son and daughter-in-law of Koch Industries chief Charles Koch, are financing a new pre-K-through-12th-grade school on the WSU campus.
The school, called Wonder, is being built in a former print shop on the east side of WSU’s campus, adjacent to but not within a 120-acre tract – the former Braeburn Golf course – that was designated as the Innovation Campus in 2014.
According to university officials, WSU leased the print shop building to its affiliate nonprofit, the Wichita State Innovation Alliance, on Dec. 19 – the same day the alliance subleased it to Wonder Inc. for its private school project.
WSU President John Bardo, who signed the lease agreement between WSU and the Innovation Alliance, also serves as chairman of the 16-member Innovation Alliance board.
Because “leases from WSU to its affiliated entities are not subject to Board (of Regents) approval,” neither the lease nor sublease required discussion or action by that board, which oversees state universities, said Matt Keith, the board’s director of communications.
Plans for the school weren’t made public until The Eagle’s initial report.
The deal marks the first time an existing campus property has been leased to the Innovation Alliance and sub-leased to a private business, Heldman said. Buildings on the Innovation Campus, such as Airbus, YMCA and The Flats, were built by private developers under agreements with the Innovation Alliance.
Heldman said Fairmount Towers, the former residence hall at the corner of 21st and Hillside, which closed last year, may “eventually be available for other uses.”
The Innovation Alliance “is relatively new, but long-term it may become the bridge to community and industry partnerships involving buildings or land beyond the original 120 acres of Innovation Campus,” Heldman said.
State lawmaker concerned
At least one state lawmaker said he’s troubled that details of the Wonder deal weren’t made public until leases were signed and the project was well underway.
“I’m having more and more questions about how business is done there,” said Kansas Sen. Lynn Rogers, D-Wichita. “And it has caused a lot of conversation in the hallways between legislators that aren’t necessarily from Wichita.”
Rogers, a former Wichita school board member, said Wichita State should be subject to the same requirements as school boards or city councils regarding the sale or lease of public property. Leasing property to the Innovation Alliance to sub-lease to a private company seems like “a work-around” to bypass the public bidding process, he said.
“It gives me very serious concerns, not just about this building but any future building on the WSU campus or other campuses,” Rogers said.
“There’s no community involvement, no public involvement, and we’re talking about property that’s owned by taxpayers,” he said. “There could be benefits, but there could also be some negatives there, where you’re giving away things that are investments of the state.”
The 9,000-square-foot print shop building, which last was used as overflow offices and storage, has an appraised value of $437,730, according to Sedgwick County tax records.
Rogers said he and other legislators have “raised questions” about the Wonder deal because they worry about public entities skirting accountability.
“It kind of opens the floodgates,” he said. “There could be some really great things that happen, and if publicly we discuss it and look at it, that’s fine. But we have not had that discussion about assets that way.”
Critics of the new Koch-financed Wonder school raised questions on social media after it was announced, saying WSU – and any public university that receives state funding – should not be the site of an exclusive private school.
Heldman said universities have rented or leased campus space to outside groups “for many years.” Examples at WSU include Dassault Systemes, Youth Entrepreneurs, Lords and Ladys Hair Salon and Commerce Bank, which has a branch in the Rhatigan Student Center, he said.
“The university will consider leasing property and/or space to third parties who are financially qualified and whose presence on campus would advance the university’s applied learning vision or its mission as an educational, cultural, and economic driver for Kansas and the greater public good,” Heldman said.
In late October and early November, WSU posted a notice in the Kansas Register, the state’s official publication for legal notices, of its intention to lease “approximately 9,004 square feet of office/classroom/lab space” on campus – the print shop building.
The university also posted a second notice, which does not describe any specific property and has run in every issue of the Kansas Register since Oct. 19:
“Public notice is hereby given that Wichita State University (WSU) intends to lease available land and building space,” the notice says. “The university will consider serious offers and inquiries from any financially qualified individual, group, organization, or company.”
The notice directs interested parties to contact John Tomblin, vice president for research and technology transfer, or Crystal Deselms, university property manager.
In his monthly “President’s Message” posted online, WSU President John Bardo recently addressed the “rapid evolution” of Innovation Campus.
He pointed to several partnerships located away from campus, including WSU Old Town, where the university and Wichita Area Technical College have several health professions programs, and Shocker Studios, a media arts facility at the former Wichita Mall on East Harry.
“One part of the evolution underway is the changing nature of how I’m using the term ‘Innovation Campus,’” Bardo said in the statement.
“In discussions with the executive team and deans, we’ve begun to think about Innovation Campus as any place where the university has the opportunity to put the strategic plan vision and mission into action.”
The Innovation Alliance was incorporated in 2015 to manage relationships with private industry on the Innovation Campus. The alliance’s nonprofit status allows it to award development contracts outside of the competitive bidding process normally required by a state-owned university.
Making it public
Zach Lahn and Annie Koch, co-founders of Wonder, said they wanted a stand-alone space on or near the Innovation Campus because it fit with their vision for a non-traditional, studio-model school.
“We asked if there was something on campus” and university officials offered the vacant print shop as an option, Lahn said.
Lahn said the founders liked the location because it’s within walking distance of GoCreate, a makerspace in the nearby Experiential Engineering Building on 17th Street. That space includes a fully equipped metal shop, wood shop, graphics design studio and more, which Wonder students could use for projects, he said.
“We’re a tenant, but the partnership is much grander,” Lahn said. “We have big ideas for how we can work together and benefit students at WSU that want to come in and have experience in this learning environment.”
Recently Lahn said interest in the new school has been so overwhelming, officials already are talking about building a larger site on the Innovation Campus.
In a news release posted online last month, WSU officials responded to some questions about the Wonder project that arose after The Eagle’s initial story, including the university’s decision not to announce plans for the new school.
“When innovation partners are making a major investment on campus we let them shape how they want to make it public,” the release said.
“In retrospect, we recognize our students, faculty and staff would have benefited from timelier direct communication from the university.”