Allison Geyer
In a sharp turn of events, Exact Sciences has pulled out of the Judge Doyle Square development project and will instead expand its headquarters at University Research Park on Madison’s west side, company officials announced Monday.
Exact CEO Kevin Conroy, Mayor Paul Soglin and University Research Park managing director Aaron Olver shared details about the new plan at a news conference Monday afternoon at the Exact research and development facility on Charmany Drive.
“The chance to build a headquarters downtown was incredibly appealing,” Conroy said. “But an opportunity to bring our team together on a campus where Exact Sciences started in the heart of this state’s biotech corridor is a prudent decision for our company and the community.”
The biotech startup and maker of Cologuard, a colorectal screening test, was to be the main tenant of the controversial $200 million downtown development approved by the Common Council last month.
The project’s $47 million subsidy and lack of financial guarantees, along with the proposal’s deviations from the city’s tax incremental financing policy, had drawn criticism from some on the council. Some also voiced concern over the absence of a hotel requirement and the proposed management of the development’s parking structure.
Soglin was a major champion of the project, saying it was a chance to invest in downtown infrastructure and would bring hundreds of jobs to Madison.
But a week after the project won approval, Exact’s stock dropped more than 50% after the U.S. Prevention Services Task Force issued a draft recommendation statement characterizing the Cologuard test as an “alternative screening test” rather than a “recommended” one.
Conroy said the stock drop was not the reason for Exact’s withdrawal from the Judge Doyle Square project, but the unfavorable report was a factor in the decision. He emphasized his belief in the continued success of the company and the Colorguard test, but did acknowledge a new level of uncertainty. Part of the Judge Doyle Square agreement required Exact Sciences to put aside $15 million as a “security deposit” — an amount Conroy says is too much for the company at this time.
"It just doesn’t make a lot of sense to do that if the world becomes a little less certain than it was before," Conroy said.
After the report’s publication, Soglin gave Exact two weeks to report on any potential impacts the draft recommendation statement might have on the Judge Doyle Square project; he received his answer Monday after granting an extension on Oct. 28.
“There’s no question that having Exact Sciences downtown was our preference — it was my preference,” he said. “Well, it’s not going to happen, but we’re getting a second choice, which is pretty good.”
That second choice will be one of the other three proposals the city received for the project in May from Beitler Real Estate Services, Vermilion Enterprises and Doyle Square Development (a joint proposal from Urban Land Interests and North Central Group). Soglin said the developers will be given a chance to revise their proposals.
The review process will begin at the Nov. 9 Board of Estimates meeting, and the city negotiating team will meet with the Board of Estimates and the Common Council by the end of January for further direction.
While several alders shared Soglin’s disappointment with Exact’s decision, Ald. David Ahrens says the city “dodged a bullet.”
He’s calling for the city to reopen the request for proposal process to other developers and to select a development that minimizes the amount of public investment.
“My view from the very beginning was that this project was not well thought out,” he said, adding that the fallout from the stock drop and the unfavorable draft recommendation would have been disastrous had it occurred after the building had already been constructed.
“This really averted what could have been a catastrophe,” he said.
