Mayor is about to speak. Parts one and two here. It’s 12:30am.
MAYOR
Says the Edgewater didn’t play a role in the 2011 election, undecideds were mostly women interested in poverty and children. The polling didn’t show Edgewater being important. In the last campaign they polled on JDS, he says the voters were relying on elected officials to make up their mind for or against it. They trust the judgement and expect them to make a decision. It didn’t cost anyone their job in 2011.
He says this raises a good question about opposing Edgewater and supporting JDS. He says the size of the TIF isn’t the relevant issue. The size of the TIF and the capital investment and the projected return is the question. One number by itself tells us nothing. The most important issue is what Peters raised, but disagrees with the conclusions, this is about downtown. He talks about several studies that have been done, downtown was initially very young and very old and very low income. As the homeowners moved away, passed away and left and those numbers increased. All the reports says there has to be more housing and diversity in age, the retail has to be not only for students but also for people who live on the perimeter of the city. The observation was consistent. We have infrastructure downtown and we don’t want to close at 6pm. We don’t want the infrastructure idle. They want to maximize transportation. Three major areas are EAst Towne, WEst Towne and Downtown and downtown was most challenging.
Mayor says TIF was for older areas and blight originally. Two major changes were to address parking and the other is for affordable housing. All the other amendments undermined the original purpose of TIF. TIF was expanded to everyone and you no longer needed blight, just an increment, you can use it in cornfields and now we are competing with cornfields and its killing us due to parking. Its acres of parking. He says that we are stuck building ramps and they don’t make money. If we did what the private sector did, we could make money – renting them to long term parkers on a monthly basis. But for shoppers and others we need spaces for them. WE do make money on on-street parking.
Downtown is healthy, there is more we can do, it can be exciting. We had 15M bus riders in the 1970s, is was just a few years ago we got back to that -which is where we were when MATC left, it undermined our transit system and it took 3 decades to recover. It’s difficult to make the transit system work when major employers aren’t on a major bus routes. For the amount of land Epic needed, there was only one location on Mineral Point Rd by Theis brothers farms,imagine the excitement of those employees on a bus route, building a base for transportation.
Sustainabilty, carbon footprints – who talked about that. Someone talked about bio-sciences not being safe investments, if we abandon that we would have to abandon decades of planning, this is not new, this is in our wheelhouse and what we have been working for.
Mayor says it ironic that his clash is about budgeting with the council, they have been doing TIF for 30 or 40 years, he and George Austin worked on it, it was riskier than this and it has been nothing but good for the city. He says this is responsible, he has never founded a TIF that was less than fully viable.
He wants to make it clear that he did not direct the team on what numbers were acceptable, he listened to them, he had a great team. The city staff people are solid. We have George Austin’s experience. This is what we were working for, this is why we did Monona Terrace and committed to the bus system. Other cities want this. No one comes close to us on public transportation.
Mayor says that they didn’t envision this type of development when they wrote the TIF rules. Where have we seen a company coming downtown and adding 200, 400, 600 700 jobs, our thinking wasn’t broad enough, we have to go back.
Mayor talks about 1999 report Nino Amato talked about – the report was never showed to Finance or Economic Development staff, you can’t equate TIF dollars and money and they need to come in with realistic plans and recommendations. How about a company coming downtown and embracing values in Race to Equity Report, why don’t we deal with this. How do you get to Waunakee or DeForest if you don’t have a car or the luxury to drive to work every day. There is only one place to get maximum transportation and that is downtown. In walks a company that has been quietly and under the radar committed to a diverse workforce and committed to redoubling their commitment. If this works and it will, what happens to the next TIF, we will have leverage. We tiptoed around this in the past, they will become the poster child because we will be able to say, with confidence, Exact Science committed to it. He says its not about the building, he doesn’t want to talk about the guarantees. the last 6 hours have been focused on the criticisms of the project. The weaknesses, here is no perfect project, many haven’t been, but at some point they have to weigh the contract and the data in there and the vision of the city. This project is committed to diversity and transportation. This is what we were struggling for, and he doesn’t see how we can do anything less than approve it enthusiastically and look forward with excited to the day the buildings open and we get a new workforce down here.
Mayor says we know what is happening to state government and our inability to rely on a public sector to create a strong economy. Since the early 1980s when we started Reserach Park we attempted to diversify the workforce in terms of the type of employment.
He lists off his main points.
QUESITONS OF THE MAYOR
Bidar asks that as a supporter, after hearing all the doubt and strong feelings as a corporate giveaway and balancing that with our priorities, how do you reconcile that.
Mayor says the standard for TIF is not the walth of the company or individual involved in the contract, it has to do with meeting standards. If we are going to use the wealth of the company or individuals we would never do TIFs because developers and people who run companies are well off. Second the standard is not weather the person involved has offended us. The standard is in the statutes based on blight, cornfields and job creation. This is risky from the investor standpoint just like for us. If people want a 3 or 5% return they will go elsewhere. The fundamentals of capitalism is that there are risks that correlate with the return. Riskier stock that gets a modest return is a bad investment. We are dealing with capitalism here. Tax breaks can’t be given in Wisconsin, all we have is TIF, we can’t engage in the race to the bottom and he is grateful for that – but we have seen the reality with Epic in Verona and we saw what happened in Middleton with Spectrum Brands and others. (btw – we didn’t make an offer there, that isn’t what we were interested in.) He says he wishes he could free this money up to work on neighborhood centers and municipal building. They will continue to work to allow police and fire station in the TIF law. He thinks this is an expenditure that will create equity in this community. He thinks the minority and women owned businesses, the training, the trades work and others, this will make a difference. We can’t wait to the end of the project to review it, we have to do it daily. The contracts aren’t the issue, the vigilance of the monitoring is the issue, they will be vigilant because he won’t be embarrassed by this. He says on TIF the city does the heavy lifting, takes the risk and for us to get the benefit is fair.
Bidar asks if he is confident the hotel will be built. Mayor says yes. He says if we fail to adopt this tonight, he will look at this as the greatest disappointment imaginable, a missed opportunity. If we go out with adoption, we have turned the corner, we have changed Madison forever in the best of directions. He isn’t looking at the contract, but the incentivization in other investment downtown, what it will do for diversification of the workforce and the transportation system. If this doesn’t go through, where will we get the jobs and diversity int he jobs, it will take decades.
Palm asks about transportation – will we have the buses, and where will people come from and will they have service to where they are and how do 1200 parking stalls fit with the statements about bus services.
Mayor says that . . . .ooops . . . sorry, got distracted. New York is congested and people still go there. He doesn’t know where we will get the buses, we don’t know what the feds will do but we need the TIGER grant, he is determined to go ahead with this. We might even look at rail some day. He can’t answer he questions or guarantee additional buses, he’d rather have the crisis of to many people trying to ride the bus. WE don’t want sprawl or density, we have to deal with that, but he wants density. He says that not all bus systems converge in the center, others have a grid system. We have a peculiar situation with the lakes. He thinks that benefits us.
Palm asks about the parking. Mayor says he has mixed feelings about it, he doesn’t want to strangle downtown with the lack of parking but he doesn’t want to add too much, to bring in more congestion. He says adding the ramps we have we did a good job establishing the parking. We’ve been through this before when we rebuilt the Dayton Ramp (State St. Capital), we closed it down and we survived and it was worth it.
Smbah Baldeh says he enjoys the history and stories, but he doesn’t ant this to be lip service to minorities and he doesn’t see how this is a factor if they are doing it anyways. What about affordable housing.
Mayor says we just got notification of a project which includes affordable hosig on the Madison Dairy site. WE have something new with the REthke project, Alder Skidmore is going fantastic work on Tree Lane, we have solid inquiries for the next round of WHEDA funding and we turned the corner with them. We have a 5 year commitment and the new tool of closed TIFs, so it won’t happen over night, but in the next 5 years we have a solid commitment.
It’s not lip service because of several factors. We have solid partners in Big Step, Bill Clingan is committed. The building trades are committed and recognize we haven’t had success in the past. JDS and Exact Sciences also have proven records. With that and his commitment to monitor this and to use this as a building block. We all know what the studies say.
Baldeh asks about racial disparities and the equity report – is this the only way to talk about this, can’t we have a special session to talk about that. Mayor says they can do that. Mayor says two days ago they hired a new equity officer and the team met today. Another history lesson – this one on Affirmative Action – he says you know its success when we consider it in every action, that is our objective.
Rummel asks about how we got here and the need for a hotel. She was never a fan of the hotel, but it seems that some of the requirements of the RFP don’t seem met, she doesn’t feel we have a guarantee of a hotel. Mayor says that if you want a TIF to subsidize the hotel we can accomplish that. It is not attainable if there is no TIF subsidy for the hotel, so we need to accept another standard.
Missed a bunch . .
Rummel asks about the traffic impact report. Mayor says he hasn’t read it. She says there are drastic impacts. Mayor says yes that he has friends that refuse to come downtown on Wednesdays. Concerts on the Square has not destroyed downtown. Lets push people into the buses. Look at the football games, lots of people ride their bikes now. There is going to be congestion and there will be a headache with the parking. He hopes that there is a plaza between MMB and CCB.
PROCEDURAL THINGS
Recess council meeting and convene as committee of the whole.
Roll call, 18 people still here. Larry Palm is clearly punchy. King too.
COMMITTEE OF THE WHOLE
DeMarb says that engineering, Monona Terrace and Civil Rights staff are all here too.
Rummel mutters something about Verveer going first, lots of people laugh, and I suspect it was about Verveer talking too much.
Veveer says this was a long journey, it was a public market and a hotel. We had no idea at the time that a large public employer would be interested in moving downtown. Many people have asked how he can support this. He is the only council member endorsed by Progressive DAne supporting this this morning, but he thought about it alot. He realizes this is a difficult vote. He supports it because he feels it is one of the most important developments in history. He wishes it was easy to get to yes. That’s because of $46.7M. He asks them to look at the big picture and what we are getting. $100M in new tax base from parcels off the tax rolls, a major growing excellent employer staying in the City and moving downtown, with a minimum of 400 great jobs, a new hotel with 216 rooms, a room block agreement and 30,000 sq feet of retail space, a bike center, a new and improved government east parking garage. Nobody thought a few months ago that JDS would turn into Exact Science Square with a hotel being secondary. That’s not a bad thing. He says the hardest loss was not Epic, but Alliant Energy leaving in 2002. They took 800 good paying jobs from the heart of the downtown, 13 years ago, luckily they stayed in Madison. He hopes everyone agrees that they should stay in the city. When Alliant left, there was a negative impact, yes downtown has seen a renaissance, when he got here the square was a ghost town. Through a lot of hard work, the downtown is a vibrant space. Alliant leaving was a huge challenge. At least one retailer says they never recovered since then. The state is downsizing, it has been happening before this governor. Whole agencies will move to Hill Farms. Despite the health and vitality of downtown Madison, the addition of 100s of employees, we need to grab this opportunities and not let it slip through our fingers this morning. He reads form the report. This is a game changer, the health of the downtown helps the entire community. His colleagues that represent Research Park support the move downtown, we know Fitchburg is trying to get them there. In terms of the hotel, he sits on the Monona Terrace Board and he reads part of their letter (attached in legistar) He says that they support it with only 216 rooms instead of the 250 they wanted and that is more than they had before. This is all about location and room blocks and the new hotels can’t meet the needs of the growth potential at Monona Terrace. Absorption of the new hotel rooms were immediate and sometimes its impossible to get a hotel room. He could go on at length, he won’t, this is a once in a lifetime opportunity. He respects and admires each of his colleagues that disagree and this is a tough decision, $46.7M is the largest investment in history for private development. This isn’t easy and he respects people raising critical issues. The amount of research done by some is remarkable and they will hear more. He thanks negotiating team, he can’t imagine a better deal that they could have negotiated. If they vote no, there are no guarantees. There are two other applicants. What guarantee do we have that they can deliver anything close to what we have now. Conroy won’t work with another developer, time is of the essence. This will come down to one or two votes, consider what is next if we say no.
Clear talks about how we got here, we wanted a train station at DOA. We started to brainstorm about what might happen. We had a failure, we all agreed in the second try to negotiate with one unique opportunity. Three ligtening strikes happened, a large employer motivated to come downtown, we have land available and the third thing even more amazing, is the TIF cash, money on hand. We don’t have to include the cost of borrowing. We won’t have that opportunity again.
Anyone still awake? Mark is still talking, but . . . I”m tired. Its 1:55 am.
He talks about major employers and only 7 of the largest 100 are downtown, 650 employees at MG&E and Findorff are the largest.
Clear says the hotel was a disappointment at first, it is a disappointment because of the size, it doesn’t meet the needs, the previous version wasn’t sufficient to unlock the complete potential, so we need a different hotel. We will need another hotel to maximize Monona Terrace, that said, this has so many benefits it outweighs this. He is convinced the hotel will happen, this is about the money and his ROI is much better if he gets the hotel and second tower going quickly, he is motivated. He says this is about progressive values, infill instead of sprawl, sustainability and density downtown. Former Mayor Dave asks through traffic jams are good cuz the opposite is bad. Good paying jobs with career opportunities and we are turning up our nose at that? A company with diversity commitments, nurturing young companies. When they get to a certain size should they go elsewhere. Transit oriented development. Union jobs. Relieving property taxes through commercial development. Taxing the rich – you have to let them build stuff, he wants Bob’s money and the best way to do that is make him pay property tax. This is a value for the city and he hopes we can move forward with it and change the game of the downtown.
Phair agrees with everything Mark said, we have heard about the measurable but the un measurable that Clear and Soglin talked about is why to vote for this. He agrees that the risk is there, are we risk adverse. The corporate giveaway – yes the people doing this project have a lot of money – but the big picture is that this will help downtown. He thinks this will help transportation. Constituents say they won’t come downtown. He wants to put pressure on the system to get BRT and a regional system. That will happen with critical mass. He wants his kids to stay here, he wants them to live in a diverse city that welcomes these opportunities and businesses. Good paying jobs, and jobs that other companies will bring. This is progressive policy, it might not feel great, but it is a wise progressive policy.
Bidar says for those who are pushing to say where she is, she would personally never do that, she finds the deliberations an important part of the process, she listens to the public, the questions and deliberations. She will cast her vote, but she wants to go through the process. None of us vote for the next election, she hopes we vote not to win the next election. Her issues are about the hotel, that was one of the drivers and she wants to make sure that happens. The other driver was parking. She heard a lot of information that gives her a better assurance, the other thing all of them are weighing is the risk factor, this is not downtown vs most likely research park, so hearing more about is this so much better downtown. All of this is a risk. She is struggling with the equity issue and how we are using that, alot of it comes from white Madison and people of color are positive about this. She finds this an interesting experience. That is not what she expected. It has made her more comfortable in leaning towards the development.
Ahrens says that some of the assumptions need to be challenged. The two tax exempt properties with zero revenue or this structure valued at $100M and will bring in significant money over time. The two properties are valued at $13M as vacant land. He says this is not this or nothing. In the last RFP they got 4 responses and if they were more flexible they could have had other headquarters come forward. Most striking to him is the issue of the TIF and how much money we are spending that comes from tax payer and how much risk we are burdening them with and what the opportunity costs are. He says that on the TIF this is about a resolution that finds and determines that this is consistent with TIF law and policy and then it describes how it isn’t consistent. He reads several issues that are inconsistent and how they didn’t get information about some of the issues. He says that about half the conditions that they are saying are satisfied are actually satisfied. He says this isn’t consistent as outlined in the resolution. He says that the TIF application says $26M as a city contribution, the TIF analysis is that there is $36M not subject to a guarantee. (Sorry, he’s losing me . . . its 2:15) Will we be asked to subsidize all these other companies we want to attract. Will they turn them down? He says “bad things happen” to good cities, good companies, and they appear to be good, but bad things happen. Often out of our control, this is a new technology, that we don’t have expertise in. If there is a loss, it will be immense, not to us but to those who they represent.
No one is in the queue.
DeMarb agrees bad things happen, companies go out of business, developers don’t always fulfill their promises, she is comfortable with more answers. She has a lower risk tolerance than some people. She has been all over on this, she continues to learn. She’s not sure we will have another project like this, she hopes they don’t’. The possibility is good jobs downtown and there is stuff that goes with that. People consume, sometimes too much and hey will do that downtown. Downtown is too white, this turns public land into private land and there will be taxes and she likes that cuz she wants to do things with tax dollars. We need a new parking garage, would we get that anyways, yes. THere will be parking problems. There is a lot of misinformation out there. There will be traffic jams. We’ll have to deal with that. This is a lot of money, there is risk. And . . um, yeah. Anytime there is unanswered questions there is risk and she is ok with that. (Ok, I guess she is a yes)
McKinney doesn’t like that hiring diversity was not a priority, that there is so much money involved. One by one those most impacted support the project. She doesn’t like the risk factor. She came in not supporting this. She respects a lot of the players, she sees the vision of a more diverse work force. This has been a tale of two cities. Black and brown people people, women and homeless have not been treated well. She will be 86 in the first test, and 98 on the second. Her son Mike McKinney loved this city, she enjoys the thought of opening up jobs. She struggles with this, she is with Alder Bidar, she got a lot of phone calls and what surprised her was the calls from people of color and that is weighing heavy on her.
Esckrich echos DeMarb, she has been back and forth. She is learning towards support, but there are challenges in subsidizing parking that is less than ideal design. Long term planning, the challenge of losing opportunity there is challenging. She is having a hard time with Exact Sciences, she thinks that Conroy will do this for the city regardless of what they decide. What is persuavsive to her is the downtown. The idea that drivers will support this, is becoming persuasive to her.
Kemble says as of yesterday she knew how she would vote, we are voting on this contract, this resolution and this is what we have to count on, she has been studying this all summer long. They received a briefing last week, things still changes, to her, the risk is way out of proportion. She was excited by these jobs, but what she found was that the details is that the city is giving up everything and those subsidies aren’t giving up much. This does change things, it throws the rules out the window. The amount the city is giving up to have below market rents for customized space is not acceptable. Our negotiating team tried and they got not much, the TIF report shows how awful this is. Exact Sciences will be in our community, they will still hire a diverse workforce and whatever happens at JDS will be union jobs and we will have a PLA. We aren’t getting a hotel we need. We are paying too much for less parking that is new. This isn’t a nominal inefficiency, its huge. This is a huge problem. If the other two pieces don’t happen, we might not have a hotel for 11 years. The whole point was to support a hotel. A lot of this could happen and good things could happen without this commitment. This is still a bad deal.
Palm says that none of the deals are as bad as people think or as good as the developer says – its something in the middle. The tiny houses is an example, the proponents were clear on what they thought would happen and none of that is true. (wtf?! CLARIFICATION – he said opponents and proponents! Makes much more sense that way!!!!) He is less risk adverse, he isn’t as concerned about the finances, we have to face the facts, the numbers will get bigger. He is concerned about the downtown and that density is only good downtown. WE should have density throughout the city. We should have vitality throughout the city. There is more vitality there. Any development in downtown is creating vitality. He thinks of things more regionally as chair of the Regional Plan Commission, we benefit from development elsewhere. He has some concerns about the impact to the budget. WE should be celebrating strengths throughout Madison. He is still listening. He thinks they should be hearing the concerns about Research Park.
King says that we should listen to the public and that has gotten lost. He says that we are looking more at equity, we have come a long way, but we aren’t there yet. He says that the debate would be shorter if they all had a colonoscopy – but then he thought that they should have just done the prep.
Baldeh says government exists for public good, we are more diverse, but the discussion today has nothing to do with how they hire and they will do that no matter what. Are we justified in giving $47M to corporations, he thinks not. In his opinion this is lip service. What is the opportunity costs. We should address racial disparities in the criminal justice system, housing is hard to get for people of color without a cosigner. We need to look at these issues and address them before we give millions of dollars. He says we shouldn’t be moved by them saying they will hire minorities, they will do that, why are we giving $47M for that. They are not people.
Rummel says she doesn’t like debating important things at 3:00 in the morning. She feels like we haven’t had the standard public input, most of our meetings were in closed session. She says at some point, the Edgewater has a lot of meetings, we knew the details, we are still grappling with issues still coming up. She came in thinking she would know how she would vote, the debate was good, the company impresses her and diversity is part of who they are. She doesn’t get to yes because the assets they are trying to manage – parking and a hotel – we have several hats to wear. Dunn is persuasive. There is some logic to it, but it is not clear that they have to do anything beyond the first phase, we might get a hotel, and we might not get the 2nd tower. What does this look like if we don’t finish this. It seems risky if they don’t do the other phases. They are borrowing $10M, for all of you struggling to borrow money for police or library, think about that. She says that we didn’t understand everything when we did the TIF policy, a city employee asked her if they could change all the rules to help people when they want? No, they can’t. She isn’t there with the parking structure, it seems substandard. We’ve delayed this since 2008, so any structure they build has to serve them for 50 – 70 years. Imagine a Wednesday and Concerts on the Square, its going to be crazy. She is torn, but at some point we need a better parking structure and a guarantee of the hotel. She wants less substandard.
Carter says that she thinks about the opportunity and some of the struggles her colleagues have. She like the diversity and Dunn owes her data. She says the hotel bother her. She says when you negotiate, you have to get to something you can live with. She says they should take time to think and do this right.
Schmidt says he is glad they stuck to the issues. He doesn’t doubt the sincerity of the applicants. He thinks that they should own the ramp. That is hard to let go of. He trusts his colleagues on the labor issues and he focused on the TIF policy and the finances. Some things he is not worried about, he is worried about setting the numbers early on. He wonders if they gave sufficient guidance to the team and did we give them enough leverage to say no a the right times. If we are putting in 25% of the capital and the most we ahve done before was 15%, does that makes sense. (missed a bunch) He still doesn’t know where he is, his gut instinct is the TIF participation is too high, he appreciates the equity Dunn put in and where the banks are, but they are well covered.
Clear says taht for those concerned about the lack of public meetings, we haven’t done the land use yet. We’ve haven’t seen the last of this.
PROCESS
They move out of the committee of the whole.
They reconvene the meeting.
MOTION TO APPROVE THE SUBSTITUTE
McKinney makes an amendment to require goals, reporting and creating partnerships. (I didn’t get a copy that was handed out) This is an amendment not to the resolution but the agreement. It’s seconded.
Mike May says it would be a new resoluved clause.
No discussion, passes unanimously.
Mayor thanks everyone who participated, no matter how it turns out.
Passes 12 – 6 (Palm, Rummel, Ahrens, Baldeh, Kemble, Schmidt.)
Item 2 passes as well.
DeMarb moves adjournment at 3:15.
CONCLUSION
The Mayor, Bob Dunn and Exact Sciences did a good job and I think a few alders will have buyers remorse after some sleep. I’m only disappointed, really disappointed in one vote. The rest were pretty much somewhat predictable – except the part where people said things about how they were going to vote and then did the opposite. Good to know who you can trust and who you can’t.
