Just a week after receiving four developer proposals, a special negotiating team is recommending the city begin exclusive negotiations with JDS Development and Exact Sciences Corp. for the Judge Doyle Square project.
The JDS proposal to bring a massive corporate headquarters for Exact Sciences, a booming Madison biotech company, to Downtown represents an “unprecedented historic opportunity for the city” and should be pursued right away, the city negotiating team said in a four-page report Friday.
The recommendation, spurred by a deadline for Exact Sciences, would greatly accelerate the project’s timeline, which called for more than three months of review before the City Council picked a developer to negotiate with in August.
The city’s Board of Estimates will consider the recommendation on Monday.
JDS was one of four developers to submit proposals for the redevelopment of blocks that encompass the landmark Madison Municipal Building and aging Government East parking garage.
The developers — JDS, Beitler Real Estate Services, Doyle Square Development and Vermilion Development — are proposing projects with a hotel, housing, commercial space and parking. But they offer differing designs, features and price tags.
The opportunity presented by the JDS proposal — which includes more than 350,000 square feet for Exact Sciences, bringing up to 900 employees to the site by 2017 — was simply too dynamic, city project director George Austin said.
“Assuming they can come up with a proposal for the hotel as competitive as any of the others, the location of Exact Sciences on the site is not a once-in-a-lifetime but a once-in-a-century opportunity for the city,” Mayor Paul Soglin said.
Ald. Mike Verveer, 4th District, who represents the Downtown and sits on the Board of Estimates, is co-sponsoring a resolution with the mayor to begin talks with JDS.
“I believe the Exact Sciences corporate headquarters is a game-changer for Judge Doyle Square, the Downtown and the whole city,” he said. “We need to do everything we can to take advantage of this tremendous opportunity.”
Said City Council President Denise DeMarb: “Having Exact Sciences Downtown is very exciting. At the same time, I’m a little disappointed that, presumably, we have to make a decision so quickly. I don’t think we can dismiss the other three proposals.”
Austin said the city was not dismissing the other proposals but “putting Exact Sciences at the head of the line.”
The city’s request for proposals specifies that the city can accept or reject proposals at its own discretion and holds the right to independently negotiate the final terms of the project, the staff report notes. “The language allows flexibility to react to special circumstances,” Austin said.
JDS, composed of the Hammes Co. of Madison and Majestic Realty of Los Angeles, is proposing a $186.4 million to $203.2 million project with a hotel, entertainment establishments, terraced gathering areas, public food hall, health and wellness facilities, and a whopping 250,000 square feet of office space for Exact Sciences, as well as another 107,000 square feet if the company wants to expand.
Exact Sciences, which has headquarters on the city’s West Side and a new lab in the Novation Campus off Rimrock Road, created the first and only federally approved noninvasive colorectal cancer screening test now available for use in the U.S. and Europe.
“We’re obviously very pleased,” Hammes president Robert Dunn said. “We believe the uniqueness to our proposal and the approach we’re taking will maximize the opportunity of Judge Doyle Square.”
Kevin Conroy, chairman and CEO of Exact Sciences, said the company fully respects the city’s need to be deliberative, but a compressed timeline is needed to accommodate growth and get all employees under one roof. In its submission with JDS, Exact Sciences says it needs a preliminary development agreement with the city by June 15 and a final deal by Aug. 1.
“Really, we have to break ground by the end of the year,” Conroy said.
As alternatives, the company is exploring options in Fitchburg, the town of Madison and University Research Park, Conroy said.
Officials at Doyle Square Development, Beitler and Vermilion could not immediately be reached.
The city had negotiated with JDS for most of 2014 on an earlier iteration of the project. But the City Council in December voted to reopen the process to others because the redevelopment — especially the hotel — had evolved dramatically amid concern about city costs. That decision led to new proposals that were unveiled on May 1.
Dunn said he’s confident a deal can be reached on the timeline because a lot of issues were dealt with in the previous process and the new submittal involving Exact Sciences better addresses city concerns about the amount of public support.
The negotiating team recommends immediately engaging JDS/Exact Sciences in exclusive negotiation and reporting back to the Board of Estimates with a preliminary deal by its June 29 meeting. The board would report its actions to the City Council at its May 19 meeting, looking for affirmation of the process.
If approved by the Board of Estimates on June 29, the negotiating team would continue talks over a final agreement, with a report due on Aug. 24, followed by City Council action.
If a preliminary agreement can’t be reached by June 29, and Exact Sciences can’t extend the deadline, the negotiating team would start a review of the three remaining proposals, the staff memo says.
“We are pleased with the quality of all the proposals we received,” Austin said. The recommendation to start talks with JDS is not a reflection on the others, he stressed.
“I would expect that there would be disappointment,” he said. “Hopefully, the disappointment can be balanced with the unique circumstances.”
The city, Soglin said, could still split the project among the development teams, with JDS doing Exact Sciences and another team doing the hotel or some other elements.