Alder Rebecca Kemble
210 Martin Luther King, Jr. Blvd
Madison, WI 53703
Phone: (608) 266-4071
Fax: (608) 267-8669
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Alder Kemble’s Blog
Breaking Up Is Hard (And Expensive) To Do
This coming Tuesday I will be voting for the amended development agreement between the City and Beitler Real Estate for the development of Judge Doyle Square. I strongly opposed the previous proposals, arguing that timelines for beginning construction needed to be shortened, and that if we were going to give Beitler "walk away" money, they needed to actually walk away from Block 88, the parcel directly behind the Madison Municipal Building, and relinquish all development rights.
The agreement before Common Council accomplishes both of those objectives.
My decision is primarily being driven by concern for the financial health of our Parking Utility and the seamless operation of this important downtown parking structure.
After Beitler told city staff last Spring that they would not be able to continue building on Block 88 above the giant hole in the ground already dug for the City's new parking structure, I voted in favor of allocating $6 million from Parking Utility reserves to complete construction of the "podium", the two floors above the new parking garage. Had we not taken that step to assure completion of a structure to the point where it could be occupied, the City would have been stuck with a useless new garage, as well as the old Government East garage that would require more investment in maintenance if it were to continue to operate. Government East generates about $6 million per year in revenue for the Parking Utility, and any significant lapse in operation would have been a big financial hit.
At that time I also argued strongly for the JDS negotiating team to come up with a new development agreement that significantly shortened the timeline for Beitler to proceed with development of their portion of the building and that prioritized and protected the City's interest in Block 88.
No sooner had we voted to build the podium ourselves than Beitler brought a spurious lawsuit against the City in a Chicago court for "taking" their development rights. They later withdrew the suit in anticipation of a new agreement, which would include a payout to them.
Before the November 20, 2018 vote of the Council on the slightly amended development agreement, John Paul Beitler III threatened Council and the Mayor with "...a lawsuit for damages associated with the entire Project in excess of $40 million dollars."
At that point it became painfully obvious to me that the City should not jointly own a building with a developer that continues to threaten us with lawsuits and that alters their prior commitments to build. That is why I now support what amounts to a settlement for Beitler to completely relinquish development rights to Block 88. We are in a bad situation that will only be made worse with continued uncertainty about how, if and when the rest of the Block 88 development will proceed.
Part of the new agreement allows the City to hold off on demolishing Government East on Block 105 until Beitler is ready to build. This apparently will save the city $700,000 in costs associated with maintaining yet another giant hole in the ground for whatever length of time it takes for the construction of the hotel to begin.
In retrospect it is clear that the original development agreement with Beitler did not adequately protect the interests of the City and left us vulnerable to the harmful actions (and inactions) of the developer. I am confident that all involved have learned a thing or two over the past year and that staff will proceed with much more caution in negotiating future agreements. I know for sure that Council will scrutinize any new development agreement much more carefully.
Should the amended agreement pass on Tuesday, we will be back to square one with the building on top of our new parking ramp. This offers us an opportunity to rethink both the form and the function of a new structure. I wonder - could we figure out a way to develop permanently affordable housing in an energy-efficient building in this prime location? That would truly be a development to be proud of.
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