For the second time in 12 months, Madison is restarting a process to realize the massive Judge Doyle Square redevelopment Downtown, this time with uncertainties about changing markets and a shrinking window to tap a major city financial resource for the project.

Mayor Paul Soglin wants to re-engage four development teams that offered projects in the spring and give them a chance to adjust their proposals before the city decides how to move forward.

In May, the city began exclusive negotiations with JDS Development, composed of the Hammes Co. of Madison and Majestic Realty of Los Angeles, and set the others aside.

But JDS’ $200 million concept collapsed on Monday when its anchor tenant, Exact Sciences Corp., announced it will instead expand at University Research Park on the West Side.

It’s unclear if any, or all, of the teams — JDS, Beitler Real Estate Services, Doyle Square Development and Vermilion Development — will want to proceed.

JDS and Doyle Square Development on Tuesday said they’ve made no final decisions.

“I can’t say at this point,” Hammes president Robert Dunn said. “I think this is an extremely important project for the city. We have some thoughts about what it would take to drive the project forward. We’ve had an inside look at this for a long period of time. We see what the opportunities and the challenges are.”

As challenges, Dunn cited evolving hotel and office markets, the cost of underground parking, and private financing. “By Madison standards, it’s a very large project,” he said. “It has layers of complexity that will make it very difficult to finance. That can’t be overlooked.”

Doyle Square Development, made up of Urban Land Interests of Madison and North Central Group of Middleton, remains interested, ULI principal Brad Binkowski said, adding “We’re going to look into it very seriously.”

The key is underground parking, Binkowski said, adding that the site is the largest of three properties Downtown suitable for a substantial underground parking garage. “It’s all about building underground parking,” he said. “It’s the only responsible thing to do.”

Beitler and Vermilion, both of Chicago, could not be reached.

Soglin wants to know by Nov. 13 whether the developers want to remain in the process.

In negotiating with JDS/Exact Sciences, the city lost six months to get a project approved and started, critical because the city must have contracts in place by Sept. 19, 2017, to access surplus funds from a lucrative tax increment financing (TIF) district.

Given the deadline, use of TIF funds for the project “will have to be carefully evaluated,” city finance director David Schmiedicke said. “It will depend how quickly we review proposals and decide on the project.”

The TIF district, called TID No. 25, had a surplus of $19.5 million at the end of 2014 and is projected to have $55 million by 2023.

The TIF deadline is another reason the city should proceed now to find a development alternative for the blocks that hold the Madison Municipal Building and aging Government East parking garage, some officials said.

“I think we move forward right away,” City Council President Denise DeMarb said. “We have momentum. We have a time frame to use the TID money.”

But Ald. David Ahrens, 15th District, said the recent experience exposed flaws in the city’s vision and that he prefers the city sell the two blocks for $15 million or more, see what developers want to build, and divide the TID No. 25 surplus among taxing entities.

The city began a process seeking developers in February 2013 and chose JDS a year later.

The city and JDS negotiated for most of 2014 but in December the council voted to reopen the process.

That decision led to the four proposals unveiled May 1. The city again began exclusive negotiations with JDS, which resulted in a project with up to 357,000 square feet of office space for Exact Sciences, a 216-room hotel, commercial space, a bicycle center and 1,250 parking spaces. It required a $46.7 million public investment.

“It’s unfortunate that wasn’t able to come together,” Dunn said.

The city has spent $913,100 on the Judge Doyle Square initiative, largely on consultants, from 2011 through September this year, Schmiedicke said.

Of that, $603,000 came from TID No. 25 and the rest from a federal grant.

Soglin wants the city’s Board of Estimates to discuss next steps on Monday. He wants developers to express continuing interest by Nov. 13 and to share changes to proposals by Dec. 18.

By Jan. 31, city negotiators would do an initial review and get council direction.

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• City Council extends Judge Doyle Square project manager’s contract. A4


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