Developer Bob Dunn proposes a $186-203 million project that would headquarter growing bio-tech company Exact Sciences, as well as a hotel, food court and health club.
For Ald. Mike Verveer, a proposal to headquarter Exact Sciences downtown is simply a transformative project that justifies speeding up the city’s notoriously contemplative approval process.
“Rather than this slow deliberate approach we’ve been known for, hopefully the Board of Estimates and then Common Council will concur that we need to move as quickly as possible,” Verveer said Friday. “The number of new employees that would come downtown, the fact that there hasn’t been a private employer making their home downtown in decades is first and foremost why it’s a game-changer.”
Verveer got the first part of his wish on Monday evening, when the Board of Estimates recommended that the full Council — at its May 19 meeting — enter into negotiations with developer Bob Dunn of Hammes Company over the project. Three other proposals would remain on the backburner.
Dunn proposes building a $186.4 to $203.2 million project next to the Madison Municipal Building that would include 250,000-square-feet of space for Exact Sciences’ headquarters and laboratories, with room to expand. Dunn also proposes a hotel of 210 to 250 rooms, a food hall, a health and wellness facility, and as many as 1,540 parking spaces.
While the proposal has been described by officials and the media in effusive terms, it’s not without critics, who fear the city is moving too fast and paying too much.
Ald. David Ahrens, who has been a fierce critic of a subsidized Judge Doyle project, warned the board Monday that “It’s important for us to keep our heads about this. [Exact Sciences] would be a great addition to the city...but at what price? The developer is well cognizant of the prize being dangled before us with this major employer for downtown, and therefore is stuffing the proposal with other costs.”
Founded in Boston in 1995, Exact Sciences moved into University Research Park, near Mineral Point Road and South Whitney Way, in 2009.
“At the time, Exact Sciences was four employees,” says Kevin Conroy, the company’s chairman and CEO. The company has been booming ever since, especially after the U.S. Food and Drug Administration approved Cologuard, its colon cancer screening test that can be done at home and sent away for analysis.
“It wasn’t until we received FDA approval that we were able to invest in major growth of the company,” Conroy says. “We’ve grown to 575 employees... and we’re growing every week.”
But that growth requires more space and Conroy would prefer to be in one central structure. “We’re not all in one building and able to collaborate, to bring our next generation products to physicians and patients.”
Conroy says the company would like to occupy new space by the middle of 2017, meaning construction must start soon. And for that reason, Exact Sciences and Dunn are asking the city to decide about its proposal by next month.
“That’s the reason for the tight timeline,” Conroy says. “We truly respect that the city council has important decisions to make and don’t want to put pressure on the city.”
The company is also considering moving to Fitchburg and the Town of Madison. But, downtown is the exciting option, Conroy says, with its proximity to UW-Madison (whose researchers it collaborates with), restaurants, alternative transportation options, cultural attractions and Monona Terrace, where it could hold meetings.
Exact Sciences would initially employ about 600 people downtown, but with expected rapid growth estimates it will nationally employ 900 workers by the end of 2016 and 1,400 in subsequent years. The company wouldn’t own the downtown space, but Conroy says it is willing to sign an initial lease of 10 to 20 years.
He sees the company and city helping each other. “It always has to go two ways,” Conroy says. “Exact Sciences has to be a good corporate citizen and have a good impact on our community and our community has to have a good impact on Exact Sciences. We think downtown Madison is the place where you can have maximum impact both ways.”
At Monday’s Board of Estimates meeting, Mayor Paul Soglin acknowledged that there are “challenges” regarding the proposal. But he called it one of the biggest decisions ever made by Madison, on par with the city’s incorporation, Epic System’s move to Verona and Madison College building its Truax campus.
“This project...is going to have a far more positive impact than anything we’ve seen in the last 150 years,” said the mayor, who noted that Madison has been slower than other college/government towns in nurturing private industry.
George Austin, a consultant hired by the city to oversee the project, told the board that the three other proposals the city received are not necessarily dead.
“We’re recommending to you that we move that proposal to the front of the line,” Austin said. If the city cannot reach agreeable terms by the end of June, it could revisit the others. “No one is being pushed out the door on this.”
The other proposals — by Madison’s Urban Land Interests, Chicago’s Beitler Real Estate, and Chicago’s Vermillion Enterprises — all propose mixed-use developments including a hotel, apartments, offices, parking and retail.
Ald. Denise DeMarb, council president, says all of the proposals are more exciting than the last round of reviews. The city had originally selected a different plan from Dunn, but couldn’t come to terms with him and put out another request for proposals.
“I just wish that we could give all of them their due,” she says. “All of the developers have put time into this.”
The new Dunn proposal is the most expensive of the four for the city, with a subsidy initially estimated between $55 million to $65 million. Beitler is not requesting any subsidy for its private components and would be the cheapest for the city.
Ahrens is troubled that Dunn wants the city to fund its food court and health club, in exchange for a marquee employer. “We’re on the hook to build a food court, a health club [and] a conference center for a wealthy well-funded corporation,” he says.
Moreover, he worries about the tone the city is taking from the get go. “The city’s public position is this is extraordinary, unprecedented — it uses language the developer doesn’t even use,” Ahrens says. “It’s difficult to go into negotiations when you’ve already declared this is the most fantastic proposal you can get. That’s a pretty weak position to start from.”
Long-time cheerleaders of the Judge Doyle Square project also have concerns, mainly that the original motivation for the project — another hotel to support Monona Terrace — is being overshadowed by a major employer.
Deb Archer, president and CEO of the Greater Madison Convention & Visitors Bureau, which markets Monona Terrace, told the board: “Other aspects of the development don’t necessarily take precedent over what was one of the primary reasons the Judge Doyle Square conversation began.”
Ald. Mark Clear, while excited by the Exact Sciences plan, agrees that none of the proposals meet Monona Terrace’s needs. “We still need to think about some other facility, not on this site, that will meet the needs of Monona Terrace,” he said.
