CHAMPAIGN – The University of Illinois is closer to signing an agreement with the local developer who will build the next phase of the university's research park.

Members of the park's board of managers will meet Monday in Champaign to approve the 55-page agreement that gives Fox/Atkins the authority to construct buildings in the park and market the park to technology and other research-focused companies. UI staff have recommended approval of the agreement.

If approved by the board that governs the park, the agreement will next go to the UI Board of Trustees for final approval. University officials can then begin negotiating a ground lease between the developer and the university for the next tract of land to be developed.

For the first 10 years of the park, Fox/Atkins, a partnership between Peter Fox and Clint Atkins, has been the park's developer. After a national search for the developer of the park's expansion onto land south of St. Mary's Road, east of First Street and south to Windsor Road, the UI in November announced it would pursue another agreement with Fox/Atkins.

This next agreement is also for 10 years.

Avijit Ghosh, who, as the UI's vice president of technology and economic development, is the park's executive director, said the contract "represents a very fair and transparent agreement."

As with the first 10 years, the university will continue to own land in the research park, but it will lease the ground for at least 50 years to the developer.

This time, however, the UI will not lease the land at flat annual rates to Fox/Atkins. It will lease the property at market rates set by an appraiser, and those rates can increase if the value of the land increases.

"It gives reassurance to everybody that it's been based on market forces. If the value of the land increases, then rent will increase with it," Ghosh said.

The UI can rent the land at reduced rates for the first 10 years of the lease, according to the agreement.

But if it does, it shares in the risk, Ghosh said, and there should be a commensurate return to the university if, for example, Fox/Atkins later sells a research park building to another real estate firm.

"We see this as a partnership," Ghosh said. "We're protecting the university's resources at the same time we're trying to create the environment through which we can grow faster."

The new contract now allows for the university to potentially share in the profits of a sale of a building in the park.

Fox/Atkins sold two of its buildings in the research park in 2006, but the university did not share in any possible profits from those sales because it had no profit-sharing arrangement included in the first development agreement.

This new agreement also proposes to require the developer to pay an infrastructure fee to help offset the university's costs for bringing utilities to the park's buildings. The developer will pay $1.50 per gross square foot of the building area, according to the agreement.

The developer is responsible for streets, storm sewers, bike paths and telecommunications facilities; the UI is responsible for street signs and for bringing utilities like electricity, water and natural gas to within 200 feet of the building sites.

According to the proposed agreement, the developer also will be responsible for crafting a marketing plan that will be presented to and approved by the executive director of the park and the board of managers. Both the UI and the developers will help in marketing the park to potential tenants and current ones.

The contract also calls on the developer to build a minimum average of 120,000 net square feet of leasable floor area in the park every three years. But that requirement does not kick in when there is at least 20,000 net square feet of vacant space.

"Fox/Atkins has shown a deep interest in developing this research park and a deep interest in the economic growth in this community," Ghosh said. "They have been great partners with us, and we look forward to a thriving partnership through the next 10 years."

As for Ghosh, in the coming weeks he will shift to new duties as a special assistant to UI President Michael Hogan. The new executive director of the park will be the newly-appointed UI Vice President for Research Lawrence Schook. Hogan announced Schook's appointment to the vice president of research position this week. The vice president of research position replaces the vice president of technology and economic development.