Live blog means lotsa typos, I’ll update as often as I can and still try to keep up, and that means you’ll probably have to refresh more frequently than usual. Probably no time to answer tweets and facebook and emails if I’m going to catch the majority of this . . .
My prediction on the votes:
Definite Yes: Clear, Phair, Verveer, King,
Probably Yes: Bidar, Wood, Skidmore, Schmidt,
Probably No: McKinney, Hall, Palm, Eskrich, Carter, DeMarb,
No: Rummel, Kemble, Ahrens, Baldeh
Absent: Zellers
Recused: Cheeks
Reminder, they have to get to 11 votes, no matter who is missing or not voting. Mayor only votes to break a tie. People most likely to move from probably no to probably yes column for me are Carter and DeMarb, maybe Eskrich. Move from yes to no might be Schmidt or Bidar or Wood. Tho, I think they can’t get to 11 . . . and we start over! sigh.
Denise DeMarb is chairing tonight, Mo Cheeks hasn’t shown up yet – don’t expect him, tho many people are wondering if he’ll change his mind, I don’t think he will. Mayor is out of town but will be back. Maybe 40 people in the audience at the moment. More than I expected to some extent. Alders have a meal catered in for them, mores snacks than anything. Media row is full!!!! That almost never happens any more.
Oooo, Cheeks is here. Curious. Staff are high-fiving him. I presume he’s her to recuse himself on the record, no? Susan Schmitz is lobbying him it appears.
All here but Zellers, Verveer is late.
EARLY SPEAKER
It’s not on the agenda by they allow it. Tanya Mauer – she wants to know why people want to cut off its nose to spite its face. She says that we are jeopardizing the parking utility. She says the parking utility covers costs for the in various ways (pays a pilot, pays for parking enforcement and a fee for parking meters) She thinks this will inconvenience our own citizens, business will trump individuals, they propose tax breaks to the disadvantage of residents.
ANNOUNCEMENTS
Alder Bidar asks for a moment of silence in memory of Skyler, a youth we lost in our community way to young. She wants us to find ways to support our youth.
DeMarb says this is a special meeting.
Alder Cheeks makes a statement. He says that they know from previous disclosures that Kevin Conroy sits on his board where he is employed full time, this puts him in a spot. This vote is too important to have people question the vote. He disqualifies himself from the vote. He stays seated.
DeMarb explains the order of the meeting. She wants the public to understand what we are doing. WE are going to take it up as follows:
1. Negotiating Team – go over the proposals. Alders already saw this and got to ask questions and the public should get the same info. Alders can ask questions.
2. Developer will speak about the development and then alders can ask questions.
3. Kevin Conroy from Exact Sciences will answer questions.
4. Soglin, if here, will make a statement.
5. Public – there are 16 registrants. They will ask questions when all speakers have finished.
6. Committee of the Whole – DeMarb will chair and they will have a less formal conversation about the development.
7. Come out of the committee of the whole, take amendments and vote.
MOTION
Chris Schmidt moves approval of item 1.
STAFF PRESENTATION
George Austin is the city Project Director, he says the council members saw this presentation already. He says this an agreement between them and the negotiating team who he introduces, says they negotiated in conjunction with the mayor and Board of Estimates. He outlines what they will cover in the presentation.
He says this is the first city initiated project for the new downtown plan. He says this will increase the tax base, replace the parking ramp, have a hotel for Monona Terrace and increase pedestrian access. He says that this will meet goals outlined in the RFP in Feb. IN May they had 4 applicants, council let them negotiate only with JDS and come back with a proposal. There were 25 negotiating meetings, 5 BOE meetings and an approval by council in July. They have gotten 4 comprehensive reports. Two items are before the council, the subsitute resolution (read it, it has a ton of stuff in it!) and the purchase agreement.
Natalie Erdman goes through the presentation. The hotel will have 216 rooms, two office towers, one for Exact Sciences. She shows the section of the building looking towards Doty. 1250 stall parking garage, about half private for Exact Office building. They will start by digging under the Exact Sciences building and building a tray of parking, and then dig the rest of the parking, they have to get this done in 18 months and start by the end of the year for Exact Sciences timeline. She shows the future phases of the hotel, and 2nd phase office building.
Dave Schmiedicke goes through the slides, this is a $200 million project. (see the slides in the presentation for details – linked above.) He says that the second office tower might be “something else”. The 650 of private parking will support the office tower and hotel and second building will be financed by the TID. The 560 stalls for the public parking and 40 stalls for the current city staff parking. He says that the public will pay 25.9% of the costs. More details in slides. He says for public parking, the sliver of TID 25 money. The parking utility is paying the cost if it was above ground, the rest is subsidized by the TIF and land sales. If everything is built as proposed, the developer has 145M in debt in equity, the total is 180M and the 26% the public pays is what the city is paying. $46.7M, $42.5M is from TID 25. The private parking is $20.8M, jobs grant is $12M, equity grant is TID 25 (97.M and 4.2M from land sales or $13.9M) He says part of the way the developer is bringing equity is through a like-kind property transfer. City will get $13M for the land sales, but they only pay $1.1M but the difference goes back into the deal. He says the city is made whole by this transfer (don’t believe it!) He says that TID 25 will close in 2023 – he has another slide to show the details. He says there si $19.5M in there now. Between now and 2023, $38M will be added (projected from existing property value). Another 14M will come in. $10M is from the development taxes, the $4.2M is land sale proceeds, so support $13.9M grant back to the development. He also outlines the costs.
(by the way, the room added quite a few people, now standing room only.)
There are a few costs to the TID that are not attributed to the JDS project. He says that by 2023, they should be at roughly the same balance, it could be held open for another year for affordable housing purposes. He says that there are questions about the risks. The Joint Review Board will have to approve a change to the TID plan. The larger risk is about what the property values and mill rates do, they made assumptions. The $10M from the developer is from the value estimated and the timeline – assuming they do what they say they are going to do. The subsidy guarantees are unique, different than we usually see. It reflects the size of the project and is a result of the negotiations. This was a compromise and reflects what was acceptable to the developer. $28M is the parking garage, that is a property tax guarantee. $12M is a jobs guarantee. $9.7M has no guarantee on the equity return grant.
He talks about the parking guarantee slide. He says the $20.8 has two increment tests. In 2032 has to be at least $10M in the increased value and if hey don’t cover the $10M then all the parking proceeds go to the CDA. The Other $10.8M the developer has to pay 6.8M and the 4 million can be paid from the ramp. (I’m not sure that made sense when I typed it.) The developer has to keep $6.8M in the LLC during the 27 year period.
He talks about the $12M grant guarantee to create and retain jobs and not relocate. If they vacate the building and move, they have to pay some or all of the $12M but it phases down $1.5M a year, but is retired after 8 years. It is a corporate guarantee. There is a second portion to guarantee jobs in Madison (300) when the building opens. 400 in 2019, if they are short they have 6 months to solve it or they will have to pay. The money will be collected from the developer, so they have to pay additional funds through their lease to the developer.
Natalie Erdman talks about the parking. The negotiating team was directed to support the project through parking. That is common for how they do this downtown. The CDA will build the parking structure, deed the 600 to the Parking Utility and then deed the rest to JDS. See the slide for details (linked above under presentation) Two big issues were not giving Exact Sciences too much parking and renting it too cheap, so they have to rent at market rate. They have to pay $140,000 per stall per month. The outside renters will pay $170/month. That will help subsidize the below market rate rents for Exact Sciences. The parking rates for hourly parkers have to be the same as the parking utility. They have a Transportation Demand Management plan, which will be approved in the land development process. They will subsidize bus passes, pay cash if they don’t use a parking space and hire a transportation coordinator, use ride share and car pools. They will have lockers and storage for bikers and runners.
Exact Sciences workforce has 200 people in its headquarters. They think they will have 400 by 2017 at the headquarters, the guarantees don’t match that. They expect 650 in their headquarters in 7 years. They have another slide showing that. They say that they have research, operations and corporate jobs. Jobs start at $28,000, get full benefits and bonuses of – 20%, health dental and vision and 401K that matches 100% to 6% and they get paid time off. The jobs are $28,000 – 140,000. They asked about jobs for people without bachelors degrees, it was hard for them to give us information, they aren’t quite sure. Sample processors and interns, manufacturing associations, shipping and receiving, admin support, billing and data entry that might be in the downtown location.
Kevin Ramakrishna (ugh) – He says the Project Labor Agreement will be negotiated between labor and JDS, it is required before closing but the final terms will be between them, it is required, but not signed yet. The Labor Peace agreement for hotel employees is to prevent strikes. Unite HERE wrote the language in the agreement, they will negotiate the final terms prior to closing.
George Austin says if they approve this tonight they will look at the hotel issues, beyond the size of the hotel. The council will need to approve the flag, operator and room block agreement. Closing will be in December, 26 conditions are required before he closing, some are city actions (CSM, TIF plan amendment) and the development team has to get the flag, operator of hotel, labor peace agreement and some things we have to work on together – construction disbursement agreement, etc. They also have to create a redevelopment district to construct the parking by the CDA, they have to approve rezoning and land use approvals. The development team has to clear the requirements to pull the permits. Continued design progression will also happen. Final parking design and MMB will have to remove its annex. And they have to fund it in the capital budget.
(Mayor just walked in)
QUESTIONS OF THE NEGOTIATION TEAM
Marsha Rummel asks about the assumption of full build out, what happens if that doesn’t happen. Like hotel takes 10 years to build. Did you create worst case scenario slides? Schniedicke says that the blue bar in the parking ramp guarantee kind of shows it. They also used conservative projections for mill rates and property values. He says the development team could speak to this as well. He says there is a reacquisition agreement if they don’t build the hotel He says that using TID 25 instead of a new TID, they don’t have to get all the revenues out of the proposal.
Marsha Rummel asks about the 26% the city is providing, how is that impacted if the project doesn’t go forward. (It doesn’t sound like he is answering to me) he says it might be more 60-40% of support, but that doesn’t address air rights in the future.
Rummel asks why there are only two tests and not sooner and more often. Schmiedicke says that the city wanted an annual test, the developer only agreed to twice. Rummel says this seems odd. Schmiedicke says that hey will keep track, but there is not remedy until 2032. Kevin R says that it is a variation on what we normally do but it isn’t completely different.
Rummel asks about the parking utility projected revenues. Schmiedicke asks what she means. He says the developer pays $155,000 per year, they have to charge market rates, the parking utility sets the rates for hourly. Rummel says they haven’t seen details on maintenance and management. Erdman says that utility will manage and maintain their own space. They have 600 spaces and their economics should work the same as they do now. They will have the difference between 516 and 560 in new spaces.
Chris Schmidt asks about the total costs bar graphs. He asks if the numbers from the TIF applications, He says the bar graph should be different due to updated numbers.
Shiva Bidar asks about page 4 in Sept 22 memo and the CDA ownership. The assessor will determine the tax exempt issue. Erdman says they didn’t choose CDA to be tax exempt, they have just done it that way before. If the private parking structure, the payments for taxes will be made by the lessor and that will be negotiated. Bidar says that it is an attempt to be tax exempt according to the memo. She asks about the terms and conditions of the loan agreements, do they have any new information or is that next steps. They say next steps. They will see the terms of the loan agreements before they close. There will be a tri-party agreement between the lenders to be clear about what happens if there is a default.
Bidar asks about a clear commitment to build a hotel and the reaquisition – what happened that they didn’t get a better commitment. Austin says that it is the intent to build the hotel, that is clearly stated, the goal is to start May 2017 as the parking ramp is completed – that is the best way to to id (cost/efficient). There are concerns about the market at that time – so they pushed back, they wanted a grace period. City proposed 12 months, they said 36, they met for 12 hours, they ended up at 18 months. If the hotel isn’t started by then, then the city could find another developer and buy back the site for the cost the developer paid. If they can’t do it, then the developer keeps the right to still build the hotel.
Bidar asks about the below market rate ??? how did they get to 30 dollars/sq ft. Austin says this was to keep Exact Sciences in the deal. They have multiple options, they can stay where they are, go elsewhere in Madison or go to another community. Missing some of this – but I’m not sure I understood the question or that he is saying anything.
Mark Clear asks about the timing of the re-aquisition. If developer doesn’t do hotel, in 2019 city has reaquisition right. We have 18 months to get started with another hotel. Is there a reacquisition if they don’t build the second tower? No. So it could be vacant for forever? Yes.
Clear asks Erdman about selling hourly space in the private portion. Erdman says that if the utility spaces fill up, then they can overflow. The public will pay the same no matter what, they park wherever is available, the fees are split administratively. Parking Utility spaces will be used first and they are working out the details on this.
Sarah Eskrich asks what we would have if we close the TID today as opposed to 2023. What additional tax revenue could be spent. Schnedicke says if they close the TID, it gets distributed to school district, county, MATC and city. City share is $7M. The projections are that we would have $19M at the end in 2023 and they would have the same amount. Eskrich asks what the property tax revenues will be if the project is built. In 2023 it will be $10M – about $2.5M per year at full implementation. Eskrich says in 2023 we will have $2.3M more than if we close it today. Schmiedicke says this is about levy limits, so while it helps the tax base, all things being equal it keeps the tax rate lower. When you close the TID you get an advantage in that you can increase the levy limit. She says she is trying to be really simple. Without TIF you “supposedly” don’t get the value of the property and everyone else’s taxes would be higher. She asks if there is a benefit to downtown instead of elsewhere. Schmieicke says it is more efficient due to compact development. Erdman says the assessor will look at the revenues from the building. It will be assessed higher if they pay more per sq ft.
Barbara McKinney asks about the annual test and why they can’t cure until 2022, she asks the financial strategy if there needs to be a financial cure. Kevin R says that they usually have an increment schedule to show how long it takes to pay the TIF loan, its starts low and increases over time. They carry forward gains. In this case we don’t have a cure every year, we don’t have a personal guarantee and we don’t have an annual cure so they settle up in 2032. As long as the project is functioning, we don’t have any other way to get at that increment. Erdman says that in other transactions they borrow money and we need the increment to pay it back, in TID 25 we don’t have a loan on the other side. The part we want is that we get money from you if we don’t get it from taxes. We could do that due to TID 25, but that is not what we wanted.
McKinney asks about what happens if there is a problem, what is the risk factor, how do we make this up. Erdman says they have cash in the TID, so we don’t have to pay a bank. Normally we would want a personal guarantee, we couldn’t get that. They have a corporate guarantee. They tried to look at other ways to make it less risky, they can take the parking revenue.
Samba Baldeh asks about why the PLA and LPA are not final. (labor agreements). With Labor-Peace we are not involved in the agreement. We legally are pre-empted under national laws. There is nothing we can do. The Project Labor agreement is the same, that is the way these things are handled. The agreements will need to be acceptable to the labor organizations and then we can assume they will be acceptable to us.
Baldeh asks about the workforce – do we have any other info? Erdman says that the info excludes the top executives so the numbers aren’t skewed. He asks what happens if they leave after 8 years. Erdman says no payments to the city, just the developer through the lease. There is a penalty if they leave before 15 years.
Baldeh asks about the equity guarantee and why it isn’t guaranteed. Schmiedickes says that is what he developer was willing to agree to.
Amanda Hall asks about the TIF Report, she understands that the taxes generated over time don’t recover the $46M invested today over time. Shouldn’t we get more than we invest, she understands there are other externalities, but she would like to speak to the idea that we are investing more than we will get back. Schmiedicke says it is about the increment on a net present value basis. In the report it was done in the time span of TID 25 (8 – 9 years), not the 27 years we usually do a TIF run under. That is the 499% number. There is a second run that looks at a 27 year period with typical assumptions and that generates $15M. They difference is we don’t have to repay debt and have financing costs. They use very conservative numbers in the TIF run. (whoa, eyes glazed over for a moment) He goes back to the parking ramp guarantee slide and repeats himself and explains the slide again . . . Amanda re-explains it back to him to make sure she understands. She says this is a longer term investment and it will come out the way we want. He says all TIF is long term, she says ok, “longer term”.
Chris Schmidt asks about the re-aquisition. After the first 18 months, we have the right, but not obligation, to solicit other proposals for 18 months. Is it normal to reacquire the land if we don’t have a developer. Is that normal? People laugh. Austin says that this is a product of negotiation. He says that the (missed one thing), the banks are requiring equity to sit in escrow. They think the developer has incentive to move forward, but they also want to make something else happen if they can.
Matt Phair asks if we will be borrowing. Schmiedicke says that they are borrowing $10M cash to make the deal work, but they will only use it if they need the cash flow. The borrowing will be no more than 3 years. So that is better terms. Phair asks if he project costs will impact the ability to borrow for other projects. Schmiedicke says no – but there needs to be an amendment to the project plan.
Clear asks about Eskrich’s questions about the money available now and later, its the same, right? Schmiedicke says that is the forecast but the risk is the purple bar at the top. Clear asks how that impacts expenditure restraint. Schmiedicke says they are one time dollars and if they are spent on operating costs, they increase spending more than inflation and net new construction we lose $6M in state aid if we spend it on operating, but if we use it for capital we don’t risk that. He says it could be used to reduce taxes. Clear says that it will just cause problems the next year.
Mike Verveer asks about why we can’t sue the balance in the TID for other purposes. Schmiedicke says that there are specific costs allowed in law, economic development, loans or financing and some public infrastructure. He says that the expenditures have to occur in the district or within a half mile with approval of the joint review board and a project plan has to be approved by the council and the joint review board.
Verveer says they can’t use it for fire or police stations or streets. Not even MMB renovations. Right. Streets are allowed but only in the district. Schmiedicke says that up until recently they couldn’t spend it on parking.
Verveer asks why we let the money accumulate in the TID and didn’t spend it, can you explain the lease revenue bonds and how these revenues cover that. Schmiedicke says Block 89 parking was paid for by lease revenue bonds and its paid by parking revenues and TIF payments. The bonds have been paid off now, there is one outstanding through 2022 for the construction of the parking ramp under Hilton Hotel and lease in place is tied to increment generate in TID 25 in the hotel development. If they close it, they would need to amend the lease and set money aside to pay that.
Verveer says that we left it open for potential development. He asks about the bike center and how that would be funded. George Austin says that a bike center has been a key element in all the projects proposed, they studied in in 2012 and the city has a vision that it would be built with city dollars and it has TIGR funds available for it. Its 3,000 sq ft, the location is still under review with the parking utility and developer. Money comes from the TID, the city will have to find an operator and will not subsidize the operator.
Verveer asks how much money is left in the TIGER grant, the match comes from the land sale proceeds. They are appropriating it in the capital budget. The bike center is a match to the TIGER grant funds. Erdman says there is $300,000 for planning, design, bike center related items. There are some strings and we have to track it appropriately.
Larry Palm asks if they close the TID, take the money then what restrictions would be on the money. None. What happens if we close it and accumulate the income from the taxes – wouldn’t we always run into the expenditure restraints issues. Schmiedicke says that if the close the TID without a balance it isn’t an issue. Palm says they could close the TID, distribute the funds, spend it on capital projects and then could spend the new taxes on what they need. Schniedicke says that the increment will impact the levy limits. Palm says if the projects develop outside of the TID, we wouldn’t have this problem, right. Schmiedicke says all the new construction, whether in TID or not is in the calculation. It helps us to have more of an increase in the levy. Palm says that when we increase the tax base we run into trouble, Schmiedicke says the tax rate goes down, but the taxes collected only go up by a few.
(Two hours in, still on first presentation and Q&A, public starting to go home)
McKinney asks where they are in minority hiring requirements. Erdman says there will be an agreement in the future, there is a MOU to work with Urban League, they would be asking them to do more than what they do now. McKinney asks if the negotiating team talked to the Urban Leage and EEOC, or was this from Exact Science. Erdman says this is a result of more detail being requested, she did talk to Urban League, but the team has not. She asks why not, Erdman says timing.
Shari Carter asks about the Bike Center – is this part of the parking garage or separate. Schmiedicke shows where it is part of the public improvements. When will we get a vendor? When will the RFP be sent out. ERdman says they haven’t discussed that.
Rummel asks about the bike requirements in the TDM, are we working together on this, have you talked to Exact Sciences. No but good suggestion.
Rummel asks about the $10M borrowing, and the eligible costs, and she asks about the adopted plan and budget for the TID and they boath need to be approved by the Joint Review Board, they could say no go to this, can you speak to that. Schmiedicke says this is one of the many thinks on the list of 26 things that need to happen before the closing. Schmiedicke says that it needs to be amended for other things that have already happened. So we are asking for forgiveness and ask them to accept what we have already done. Schmiedicke says this is about block 89 financing. The developer dollars were not used, it was CDA tax revenue bonds, he doesn’t know the decision at the time, bu they need to go back and true up the plan and put in elements of this proposal, but there are a series of other steps that have to happen between now and project commencement.
Rummel asks about the TIF report and changes to the project and role of the bankers. What happens if a banker pulls out? ERdman says that there will be an agreement before closing, and we will see it and understand who has control. Rummel asks if there would be flags that might set off alarms, do we have a plan to deal with this. Erdman says it is like other details, they will need to bring it back to the council and they will get it as part of the closing documents.
Denise DeMarb says she will take public comment before the developer and Exact Sciences because of the amount of time they are taking.
Mayor asks about TID 25 and Block 89. If they close the TID (25), we can’t extend the TID for affordable housing, what would that do? Schmiedicke says they could extend one year and provide 3.7M for affordable housing. Schmiedicke says if they close it to get the residual then they can’t get the affordable housing money.
Mayor asks about the revenues generated byt TID 25. Schmiedicke says $37M since inception and the project costs are $27M in terms of block 89.
Questions are over!
McKinney asks for a recess. 10 minutes. It’s now 8:45.
BREAK
Plans to keep the questions short were a massive fail. Doesn’t look like a lot of lobbying of alders going on – not sure what that means. Breaks lasts til _______. At some point I may have to go to a part two, due to the size of this post . . .
PUBLIC TESTIMONY
David Waugh – went home.
Steve Breitlow – wasn’t in the room.
Laura – has concerns that the pay back is not inflation adjusted dollars. She is concerned about Exact Sciences and making investments in Biotechnology. She has seen many companies disappear, they are losing money at a great rate, highly competitive industry, successful companies are the exceptions. We need a test like this. Exact Sciences has a test that processes stool samples and they continue to lose money, what if they can’t maintain this activity. Some blood tests are developed and are being used. One test is $100 which is 1/5 of Exact Sciences test and doesn’t require a stool sample. The market will determine what happens to Exact Sciences, not what you decide. Pick a cheaper place to put this.
Steve Beitlow – President of Building Trades, they support it, members aren’t here. They have worked with Hammes all over the state. They are excited about this project, its not the largest, but it has long term potential precedence. This is what how and why private business labor and government should work together. He talks about all the elements of the building – says it is win-win-win. He likes the PLA and LPA due to cooperating between the trades and Unite Here and the developer. He says this is the first time they worked with a PLA and LPA together. Its all about the jobs. 5 years ago there was a shortage of jobs. Today there is a labor shortage.
Mark Shanan – PHD biochemist, seen companies come and go. He lists businesses that are gone, this is not a sure bet. This is in the terms of financing and the TIF report and filings they do. What should be most worrisome is if the hotel and 2nd tower don’t happen. Most troubling is the $12M in TIF, there is no gap for that. Exact has cash flow issues, the city is directly investing in this business. You won’t see this money again, they will succeed or not, but if they don’t, they won’t have the money. He thinks the previous proposal was the same amount of money, this seems like bait and switch, we were promised a hotel and now we will maybe get it.
Thomas Link – can’t understand why the city is bending over and touching its toes to bring Exact downtown, why not in other undeveloped land. This is corporate welfare. This could be valuable for other civic purposes. This isn’t about increasing the tax base, we need to consider other implementations. Perhaps the mayor forgets he got elected on the $15M to Edgewater that they didn’t get and they still built it. Build this on E. Washington Ave. – save this valuable land, don’t create more congestion. There are no assurances of the hotel and that was the impetus for the project, stop the corporate welfare.
Antonio McNeal – he works for Exact Sciences, he talks to patients, insurance and providers. He hasn’t hear a bad word about their business. We all know this is about location. Exact Sciences represents the heart of the city and should be downtown. They have a diverse staff, and represent the heart of what Madison is. He thinks this will help with brain drain. He stayed. He can donate to United Way. He can feed his daughter. People come from all over the world to work for Exact Sciences. When else will we see a development like this? They invested in him and he has been able to move up and there are many people like him that can do that as well. Stop thinking about the financial impact, this will impact generations. Think about the longevity.
Susan Schmitz – representing DMI – she reads their position. They are excited, increased density, jobs, retail and other impacts excite them. They understand this creates challenges for parking and transportation. They encourage them to consider changing demographics and work on transportation options and want to make sure temporary parking is provided. They think we need less public sector jobs to support housing and retail and schools, she thinks that the jobs are not balanced and they need to focus on high tech and biotech. They will have a multiplier effect on other businesses. This is a game changer.
Susan’s husband Gary Peterson says this will bring money into the area. It’s what we need. This is a key element to bring in money in the future. This is also a transportation issue. Bike station isn’t a big deal, but for those who do bike and will bike in the future this is really important to have a place indoors to securely store your bicycle. This is a goal to get people to ride year round.
? Perez – she has lived in Madison 8 years and worked for Exact Sciences for 1.5 years. She started as a temp, got her assoc. degree, prior to that she worked at Target. This was her first opportunity to use her skill set. She is working on her bachelors degree and they are helping pay tuition. Her work feels like a family. They help her. Downtown Madison will benefit to have a family oriented business downtown.
Teng Lee? – Supervisor of the lab. Moved here 6 years ago for higher education. He supervises customer services. He was brought in as a customer service person, he was promoted in 6 months. He likes helping save lives and didn’t imagine this change in his life path. They broke a new record today as a team. He says he not only advanced his professional career but he experienced other growth
Ana ? – Also works for Exact Sciences (for those not watching, the last 4 people were people of color). She moved here from Utah. She says nothing is more rewarding than saving lives, better than working for any other nonprofit in the world. She never wants to leave Madison now that she is here. They hold their staff accountable. They are expected to do the right thing and do it with a smile. She says they are constantly giving. Not just money, but they give to each other, they train people. She runs all the operations, they have diversity from beginning to end.
Matt Kozlowski – He’s a geek, but he is not excited about this project, what are we getting out of this. If you had $50M, what would you spend it on – innovative housing, infrastructure improvements. How many would come up with this proposal. What do we get out of this. The money in TID 25 is so much more important to get the affordable hosing money or using the money in the school district. Build affordable housing within the TID, he works with people in housing crisis. This is like having a environmental crisis and congress spending time on defunding Planned Parenthood, it just hurts.
John Jacobs – Deja vu all over again, 5 years after Edgewater, doing the same thing all over again. When Soglin came back, he got tough and reduced Edgewater TIF to $3M, now its $47M, but we keep hearing that the developer wouldn’t agree, we asked for more. Now Exact Sciences CEO wants to be downtown, they make billions but he doesn’t want to pay market rent so they can hang out downtown. He says there should be a mechanism to make sure phase 2 is built on time, what happened to the hard-nosed Mayor who was a tough negotiator, we might not get a hotel, guarantees are weak and its a sweetheart deal – city hall caves instance after instance, council, please don’t agree.
Matthew Bacham – professor at UW. Why now? There is alot of development going on , maybe we should wait and see how all this development in progress works out. Why Exact Sciences – when they are already here, why subsidize a move to another part of the city. Why should the city subsidize corporate activities in this way when they are capitalized to do otherwise.
Phil Schram – seems to not be here.
Kenton Peters – he is amazed that he has been her 3.5 hours and no one said anything about downtown and revitalizing this. This issue is about the future of downtown, not Exact Sciences. Downtown still languishes, its needs help, it isn’t all it can be. The point would be that downtown is the issue. Anything built on that property should help downtown, the city has spent a half billion dollars to do that, we should say no thank you and build somewhere else. If they build anywhere else we will have the same benefits, they don’t need to be downtown. Downtown should be vital and busy.
Ahrens asks for another minute. Peters says that there has been 38,000 minutes to come to these conclusions while we are working on this, but this office building doesn’t help revitalize downtown. Office buildings are unoccupied 69% of the time. A person working downtown that doesn’t live here has only 6.8% of their waking hours to enjoy what downtown has to offer. We need to be busy, that requires people. There are 22 big office buildings that have been here for years and one more office building wont’ do that. Build residential, let Exact Sciences go elsewhere.
Kevin Gunlach represents SCFL and reads resolution passed a year ago. They have 5 major principles. Unionized and long term sustainable jobs once the project is completed, the support Project Labor agreements, they want community input, they want programs that they support to be utilized and personal or corporate investment and accountability. They support it when those 5 conditions are met.
Nino Amato – former alder, tax payer, former chair of task force on Race Relations and founder of NAACP – this is not ready for primetime. He commends Exact for their workforce diversity compared to many companies. Those 5 conditions haven’t been met. When the Race Relations task force met, they said TIF should be used to revitalize low income neighborhoods. This is a slap in the face given the Race to Equity report. He has worked in Biotech, there are red flags, when someone says this is unique, cant answer questions based on a forecast and what are the opportunity costs lost given the racial disparities in housing jobs and other issues. Send it back to the drawing board, have Exact Sciences building it in South Madison but the bus hub. This is a high risk issue, they have one product, they are a classic take over.
QUESTIONS OF SPEAKERS
Palm had a question of Koz – but he went home.
Bidar asks how the unions are feeling about the project. Kevin says that they are excited but teh community input he can’t speak to. The first three seem met, the last tow he assumes were done.
Zach Wood asks about Big Step – he says they could have sessions set up for workers like a job fair and they are ranked according to their skills and they get linked up with where their skill sets are at.
McKinney asks how black and brown people fit into the trades plan. He says that is one of the goals of Big STep and START and that is a question for the TRades. She asks his opinion, he doesn’t answer.
David Ahrens asks if he is familiar with the PLA – he says he hasn’t seen it, but the unions are satisfied. Do you know if there is a provision to require them to only go to the union for new employees. Gundlach can’t answer, ask the Trades.
Verveer says Breitlow is here to answer Trades questions. He asks if Kevin has been in contact with Unite Here? Where are things at? Gundlach says that they are very excited about this.
Bidar asks Amato about the large number of people of color supporting this. Amato says the Trades will deliver, but the rest may be empty promises. The NAACP voted against using the TIF, a month later, the President didn’t follow the membership directives. He says if you used this money to close racial disparities you’d have a different result. The NAACP is in opposition – but they have an internal issue about the president not following through on the letter to the council.
Chris Schmidt asks about the recommendations from 199 Race Relations Task Force and how that would work for TIF – there was supposed to be a task force to work it out, they should have a standing committee to look at this. Chris Schmidt argues with him about how the money can be spent. Amato defends the recommendation and explains he understands the TIF complexities.
DeMarb asked something I missed, she cuts him off.
DeMarb asks Susan Schmidt about the downtown languishing and since her report came out this morning, could you talk about the trends. She says its not languishing. The state of the Downtown was handed out, its not a marketing piece, it has data, some numbers look great, housing is up, it talked about mix of entertainment venues vs bars and retail. The biggest job is more private sector jobs. The downtown is not languishing, we have a lot of good infrastructure and we need to bring the money in to support it. DeMarb says in the 20 years she has been here she has seen a tremendous change downtown. The languishing was troubling her. Schmitz says that there has been investment and it is not languishing.
Verveer asks Schmitz about the Downtown report and areas where we are not languishing, but the area we can do better is employment (private sector) and commercial property, could you comment further about the concerns. Also talk about Class A office space. Exact Sciences is a perfect example of a company bringing money in from around the world, it can’t just be the businesses and residents. WE can’t just move money around, we need new money downtown. That is what Epic and Exact Sciences is about. That is what will come out of Starting Block. Verveer notes the cranes are not office buildings but apartments.
Mayor takes the report from Schmitz and says we have some agreements but there is much more here we agree on.
Sorry – go to part 2, too may words in this post and the computer isn’t working well.
