Wichita State seeks taxable refinancing to allow private leases in research hub; KDFA calls the change tax‑compliance remedial action

Wichita State requested approval to replace part of outstanding tax‑exempt bonds for the Digital Research & Transformation Hub (DIRF) with taxable bonds so that private companies may lease research space in the building.

David Miller outlined the rationale: the DIRF was financed in 2021 with tax‑exempt revenue bonds under assumptions that the space would be used solely for academic research. Under current plans the university wants to permit private tenants in part of the facility. Miller said KDFA’s financial advisor estimates the change would add roughly $138,000 annually to debt service — increasing the university’s contribution to debt service from about $632,000 to $770,000 — and that the university would cover that cost with additional rent revenue from lessees.

Jim McMurray of the Kansas Development Finance Authority told the committee the requested transaction is a remedial, tax‑compliance‑driven action rather than a refinancing for savings. McMurray said the university’s policy allows refunding transactions when necessary and that alternatives would require the university to retire the bonds with cash. The committee recommended approval of the refunding request to the full board.

The committee also heard clarification that the taxable debt would retain the original term (maturity in fiscal 2051) and that the Board of Trustees is responsible for a portion of the debt service.