City of

District 18

Alder Rebecca Kemble

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Alder Rebecca Kemble

Contact Information

Home Address:

4217 School Rd
Madison , WI 53704

Council Office

Common Council Office:
210 Martin Luther King, Jr. Blvd
Room 417
Madison, WI 53703
Phone: (608) 266-4071
Fax: (608) 267-8669
WI Relay Service

Alder Kemble’s Blog

Judge Doyle Square Vote Tomorrow

September 28, 2015 7:49 PM

Four weeks after the vote on the JDS, LLC/Exact Sciences proposal to develop Judge Doyle Square was originally scheduled, the Madison Common Council will finally decide on whether or not to move forward with the JDS, LLC/Exact Sciences project. Tomorrow night the Council will meet in a special session to hear from the city negotiators, the Mayor, Bob Dunn of JDS, LLC and the CEO of Exact Sciences, Kevin Conroy, before deliberating and finally taking the vote.

Making a decision about an investment of over $62 million in public funds should be well informed and thoroughly researched. To that end I have dedicated a good deal of time during my first five months in office studying and keeping up to date with the city's negotiations with Bob Dunn and Exact Sciences on the Judge Doyle Square development agreements.

Although I'm not a member of the Board of Estimates, this summer I sat in on many BoE meetings in order to keep up with the latest updates and changes to the proposal.

As a member of the Transit and Parking Commission with fiduciary responsibility for our Parking Utility, I have worked hard to understand the multiple impacts the deal will have on transit, downtown traffic and the financial health of the Parking Utility.

Last spring I voted to allow the City to enter into fast-track negotiations with Bob Dunn and Exact Sciences on their proposal to build two office buildings, a hotel and a new parking structure on either side of the 200 block of S. Pinckney St. Although there were three other responses to the city's request for proposals to develop that land, one of which was not requesting any public funding at all, I agreed that bringing a large employer downtown in addition to the requested benefits of an undergrounded, rebuilt Government East parking structure and a hotel with a 250 room block for the Monona Terrace Convention Center was worth exploring in an expedited time frame.

I am keenly interested in the use of the City's new jobs-based TIF loan program. I ran for office on a platform of people-centered economic development and believe that investing in the creation of family-supporting jobs and uplifting the quality of already existing jobs will do more to support struggling families and stabilize the City's tax base over the long-term than the trickle down effects of investments in amenities for visitors and high-rent apartment buildings. The JDS proposal is the first to make use of this program and I was eager to see how the tool would be used.

Parking Structure

As details of the project began to emerge last summer, it became clear that the City's Parking Utility would not get the efficient, undergrounded parking structure that the Request For Proposal required. Because of the aggressive timeline of Exact Sciences, which needs to move into their new headquarters in January of 2017, their office building on block 88 can only accommodate one tray of underground parking with the lion's share of the 1,250 parking spaces to be built on 9 levels - 5 underground, 4 above ground - across the street on block 105 where the current Government East parking structure is located.

The developer's refusal to build an underground parking structure at block 88, pushing all the parking over to block 105, will cause the parking to rise 4 stories above ground, diminishing the size of the hotel and office building that may or may not eventually be built above it (I'll describe that problem later). The hotel proposed by JDS is thus under-sized and will only have 216 rooms, far fewer than the number required for the Monona Terrace Convention Center to be able to block out 250 rooms at a time in order to attract big conventions.

The layout of the parking structure is cut up into many inefficient sections with poor traffic flow within it. To confuse matters more, 650 of the 1,250 spaces will be operated as a profit-making business by JDS, LLC, which has the option to purchase their section after 27 years for $4 million. The JDS portion of the parking garage will be in direct competition for monthly and daily parking customers with our Parking Utility.

Block 105 Hotel and Office Building

The final development agreement we will vote on tomorrow states that JDS, LLC has 18 months to commence construction of the hotel above the parking structure on block 105. Bob Dunn of JDS, LLC has stated that market conditions may not be favorable at that time for them to construct the hotel. Therefore, the city may have to re-acquire the property and secure another developer to build the hotel. If the city is unable to get the hotel built by another developer within 18 months after that, JDS, LLC has the right to re-purchase the property and sit on it for another 7 years. Thus it is possible that the hotel may not be built for another 10 years, if at all.

The office building on block 105 also may not be completed by the developer until 2024, if at all. 

Earlier this month at a Development Assistance Team meeting, a representative from the Madison Fire Department said that the parking structure would not be given a certificate of occupancy until all of the steel and concrete of the structures above it - the hotel and second office building - are complete. This could mean that the Parking Utility will forego not just 18 months of revenue while the new parking structure is being built, but possibly 9 years if the second office building isn't completed until 2024. 

Public Risk, Private Rewards

The two buildings on block 105 account for $50.4 million of the $103.9 million estimated property value that will be added to the tax rolls as the total result of the JDS/Exact Sciences proposal. These are the numbers upon which tax increment projections are based. But if these two buildings never get built - or get built after 2022 when TID 25 is due to close - then those projections are too high, and the assumption that there will be a $19 million balance in TID 25 when it closes in 2022 is overly optimistic.

If those two buildings aren't built then the public funding portion of the project increases from an already high 25.9% of the financing to 39% of the financing of these privately owned profit-making businesses, with a very vague and indeterminate return on investment.

While the city is being asked to take this huge risk, the developer and the officers of Exact Sciences have refused to provide personal guarantees for their portions of the deal, offering only corporate guarantees. JDS, LLC is a new corporation formed, in part, by Bob Dunn, whose Edgewater Hotel Company, LLC currently has 19 lawsuits filed against it as the result of problems during construction of the Edgewater Hotel. A corporate guarantee from a new entity which holds no assets isn't worth the paper it's written on. Exact Sciences is a company whose future is uncertain and whose single product may be eclipsed in the market by a newer, more efficient blood-based test.

This level of public subsidy - $46.7 million - is being requested by a company who compensated its top three exectuives over $20 million in the past three years, according to public filings. Former Governor Jim Doyle who sits on the Exact Sciences board was given $400,000 in compensation last year alone. The $12 million Jobs TIF grant is justified by the addition of 100 jobs over the next 4 years. That's a public subsidy of $120,000 per job for jobs for which Exact Sciences is already receiving over $9 million in WEDC tax credits from the state.

All told, on average each homeowner in Madison will be giving $320 to Exact Sciences and JDS, LLC for a project for which there is not a clear public benefit. 

Back To The Drawing Board

For all of the reasons listed above, I will not be voting to approve the development agreement between the city and JDS/Exact Sciences. After one failed round of development proposals for Judge Doyle Square last year, the city requested a new round of proposals with three basic elements:

1) a new, underground parking structure to replace Government East;

2) a hotel with a 250 room block for Monona Terrace Convention Center;

3) public subsidy for publicly-owned elements only.

What we received from JDS/Exact Sciences is a proposal for a sub-standard parking structure and hotel (possibly even no hotel at all) and massive public subsidies for private businesses, the likes of which Madison has never even contemplated before. Should this deal pass, we will be getting less value for triple the investment that the framers of the last RFP were willing to make.


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