Booming Exact Sciences Corp. is seeking the remaining $2.6 million of capacity in a tax incremental financing (TIF) district to help pay for a parking garage at the $88.2 million second phase of its new campus along the Beltline on Madison’s West Side.
But the city is unsure if the next phase needs public financial support.
Exact Sciences — the Madison company whose Cologuard DNA stool test screens for colorectal cancer — is re-imagining the former Spectrum Brands property just off Schroeder Road.
“We are returning a long-vacant space to use, creating hundreds of family-supporting jobs, and investing in the economic development of the city’s underutilized Southwest Side,” Exact spokesman Scott Larrivee said.
In its TIF application, Exact claims a $5.6 million financing gap after borrowing and developer investment is applied for the second phase, which includes a production lab, an amenities building with office space, cafeteria and exercise facilities, and a 900-space parking garage. But Exact is seeking only $2.6 million, the remaining capacity in the TIF district under the district’s existing project plan.
City staff members, however, have done analysis showing no financing gap at all or some gap up to the $2.6 million, depending on assumptions such as income produced or the number of parking spaces needed, said Matt Mikolajewski, city economic development director. No city analysis shows a gap of $5.6 million, he said.
“Exact has a set of assumptions. City staff has a set of assumptions it typically uses. The assumptions differ,” Mikolajewski said.
Department of Planning, Community and Economic Development staff are scheduled to seek negotiating direction from the city’s Finance Committee on Monday.
Exact’s $50 million first phase includes renovating the first floor of the four-story office building at 1 Exact Lane and constructing a 137,000-square-foot clinical laboratory. The city delivered $2.5 million in TIF for that phase for a promise to create or retain 250 jobs over five years.
Now, Exact is seeking the $2.6 million for the $88.2 second phase, which includes renovating the rest of the original office building and expanding it, adding a 75,500-square-foot production lab, building the 900-space parking garage and finishing 704 surface parking stalls.
Exact’s new TIF application subtracts $13.7 million in specialty lab improvements from the project cost, leaving a net, TIF-eligible cost of $74.5 million. To cover that cost, Exact would borrow $42.4 million and provide $26.5 million in equity, leaving the claimed $5.6 million financing gap.
The application asks the city for $2.6 million to help build parking for up to 1,925 employees on site, or about 1,600 stalls, Larrivee said.
“The city’s current working formula for TIF funding is limited to three parking stalls per 1,000 square feet,” he said. “This would equate to 900 parking stalls at our site – far less than is needed. We are asking the city to support a variance from its current TIF guidelines, recognizing that companies have varying needs and a one-size-fits-all formula doesn’t work.”
If the city won’t support the TIF request, Exact may have to shift from building a parking garage to building more surface parking, Larrivee said.The City Council will make the final decision on any TIF support.
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