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Judge Doyle Square - JDS Development

This rendering shows JDS Development's proposal for Judge Doyle Square, which includes a massive corporate headquarters for Madison biotech Exact Sciences.

A divided Madison City Council approved framework for a preliminary development agreement for the Judge Doyle Square project Tuesday evening after more than two hours of debate, allowing negotiators to move forward on hashing out key details.

The almost $200 million project involves developing two downtown blocks into headquarters and a research facility for biotech company Exact Sciences, along with a hotel, parking, retail and a bicycle center.

The city has long been planning to develop the two blocks — one containing the Madison Municipal Building and one holding the Government East parking ramp — and has sped up the timeline for the project to accommodate JDS Development’s most recent proposal and Exact Sciences’ desire to occupy new headquarters by July 2017.

Tuesday evening, the City Council approved the preliminary development agreement, paving the way to meet Exact Sciences’ deadline of having a preliminary development agreement signed by July 17.

That deadline, however, has left council members with many questions and concerns about the project. Tuesday evening, council members raised significant issues with the parking agreement and configuration, which would involve free parking for Exact Sciences employees and would only go one floor underground on block 88.

Exact Sciences COO Maneesh Arora said the company wants to provide free parking to employees like they would if located in the suburbs, and negotiating staff said the timeline is too tight to go below one floor of underground parking.

“I’d hope that these issues are revisited,” said District 11 Ald. Chris Schmidt.

The preliminary agreement approved Tuesday evening includes basics for financing, parking, land use and a guaranty to hinder Exact Sciences from relocating out of the downtown within eight years. The negotiating team will now continue to nail down details while the developer secures financing, bringing terms for a final development agreement before the Board of Estimates on Aug. 24 with the full council voting on it Sept. 1.

Some council members felt uncertain continuing negotiations, with the council ultimately voting on a divided voice vote to proceed.

“We’re going to have to make a decision whether or not we want to embrace this challenge or walk away from it,” said Mayor Paul Soglin Tuesday evening. “This is risky, there’s no question about it. We are going to be taking risks which involve the environment of the city, the transportation system of the city, housing patterns for the city and certainly the economics of the city.”

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He said the potential benefit for the city, however, is significant, particularly given state levy limits and the need to build property tax base to increase city revenue.

The details of the preliminary agreement involve a financial commitment of more than $60 million from the city in various forms of contributions and more than $130 million from JDS Development, a joint venture of Hammes Company and Majestic Realty Co.

As part of the city’s commitment, $12 million in job-based tax increment financing would go toward Exact Sciences, with a requirement of 300 living wage jobs on block 88 by occupancy on July 1, 2017, and another 100 jobs by Jan. 1, 2019. If Exact Sciences does not meet that requirement, it will have six months from those deadlines to meet the deficiency. Beyond those six months, it will have to pay $30,000 for each deficient job, according to an addendum to the negotiation report providing more detail.

For the second stage of guaranty regarding relocation, Exact Sciences would be required to pay back the $12 million to the city if it relocated prior to occupancy. Each year after that for eight years, the amount due to the city upon relocation would reduce $1.5 million. If it relocated after four years at the site, for instance, Exact Sciences would owe Madison $6 million. After eight years, the loan is fully satisfied and there would be no financial penalty for the company to leave.

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