Throughout the OECD world and beyond, localised cluster based initiatives have increasingly being seen as the main industrial policy option to sustain regional competitiveness and economic prosperity (OECD, 2000). Industrialized nations in particular have come up with large scale plans to develop what is known in the literature as the 'Knowledge Based Urban Developments' (KBUD). This paper focuses on the urban design aspect of such large scale long term developments which has been given less importance in the planning literature. The paper discusses two important challenges related to land use design planning currently faced by planners of such specialized spaces. Firstly, Long term land use designs have become inefficient tools to guide development as they are constantly subjected to changing market forces. Second, design criteria for fostering interactive environments remains sketchy for such knowledge precincts. We discuss one possible design criteria with a primary aim to enhance 'knowledge interactions' between different participants and their relevance to progress of knowledge intensive communities. Using the unique criteria a new framework for a simple land use design model (LUDM-KBUD) is proposed using Agent Based Modelling (ABM) technique. Such a land use design model can help planners to develop physical planning guidelines in a continuous manner that would create a spatial design with the goal of maximizing knowledge/information interactions between participants. The research will provide planners with an alternative dynamic methodology to design such long term post-industrial mixed use developments. Future work in this direction and their ensuing implications on zoning practices of Knowledge Based Urban Developments (KBUD) and similar large scale urban developments will also be discussed.