Board of Estimates had a special meeting yesterday to get an “update” on Judge Doyle Square. They give us very little information in public . . . then go into closed session. Who knows what they are talking about in all these closed session meetings (every Board of Estimates meeting has gone into closed session on this matter), but I guess we’ll find out when they finally ram this thing down the public’s throat, with little public input and about 3 days notice of the final “deal” they have worked out.
Mayor says they will do what they have normally done, they have a presentation from George Austin and any other updates, but before that they have a registration from Brad Binkowski, he is neither in support or opposition, but available to answer questions on the letter they received.
August 10, 2015
Mayor Paul R. Soglin
Mayor’s Office, City of Madison
210 Martin Luther King Jr. Blvd., Room 403
Madison, WI 53703Dear Mayor, Board of Estimates, and City Negotiating Team for Judge Doyle Square:
It’s been three months since the City announced it was fast-tracking the development of Judge Doyle Square with JDS Development and Exact Sciences. Over that time, a preliminary development agreement has been negotiated, and the parties have been working toward a fully-designed project. We believe that having Exact Sciences locate its headquarters in downtown Madison can enhance the vitality of downtown. However, we are concerned that the parking accommodations being discussed will have serious negative impacts on downtown Madison.
Our concerns about parking specifically relate to the following elements:
1. Publicly subsidizing private parking so it is essentially free to the developer.
2. Failure to maintain Government East’s parking supply during construction.
3. A parking ramp design that does not maximize the number of stalls provided and compromises the above-grade development of Block 105.Our concerns are more fully outlined below, and we offer to help address these issues to ensure the Judge Doyle Square project can be a resounding success.
Free Parking for Exact Sciences
The City paying to enable free parking for a private company is unprecedented and unsustainable. It is contrary to the City’s TIF Policy and long-standing parking and transportation policies, and it is unfair to all other parking users downtown who pay (and have paid for years) market rates to enable the parking infrastructure they require. As landlords, we would struggle to explain to our tenants why they must pay market rates for parking while another private company enjoys underground parking for which the City is covering virtually the full cost.
We remain supportive of the City using TIF and other public funding mechanisms to make construction of private underground parking feasible at market rates. But providing parking at no cost to a building bestows upon that building’s developer an unfair advantage that is not available to other developers. Additionally, we have concerns that free parking sets an unsustainable precedent that the City will not be willing or able to replicate when, in the future, another private company wishes to relocate to or remain in downtown.No Replacement for Government East
New parking in Judge Doyle Square should be designed and phased to ensure that replacement parking for Government East will be built before the existing ramp is demolished.All businesses downtown – including our tenants – rely on public parking to some degree for their employees, clients, and visitors. A few businesses may be able to absorb the loss of public parking for 17 months, some will sacrifice to adapt as best they can, and surely some will simply relocate elsewhere. Everyone in downtown will be adversely impacted by the loss of parking during construction.
A Parking Ramp that is Far Less than Optimal
While the prospect of Exact Sciences locating its headquarters downtown has been described as a “once-in-a-lifetime” opportunity, the ability to build underground parking at Judge Doyle Square is also a “once-in-a-lifetime” opportunity. The recently-adopted Downtown Plan specifically recommends that existing above-grade parking be replaced with underground parking where possible. At Judge Doyle Square underground parking is more possible than anywhere else.Judge Doyle Square is one of only two public sites in downtown where underground parking can be created. While underground parking is usually more expensive to build than above-grade parking, Judge Doyle Square enables such scale and efficiencies that underground parking on the site can be built for essentially the same cost per stall as above-grade parking.
Underground parking will allow the air-rights of Judge Doyle Square to be developed into better uses than parking, and the impact of doing so is significant. As a result of the current plan using air-rights for parking instead of hotel rooms, there is currently not enough air-rights volume to accommodate both parking and the 250 hotel rooms Monona Terrace wants. Putting parking above grade also compromises Exact Sciences’ future expansion opportunities on Block 105. Using prime real estate for above-grade parking means we are condemning the project – and ultimately the downtown – to far less potential than it can and must achieve.
Further, from what we’ve seen of the proposed parking design, it promises to function sub-optimally in terms of circulation and traffic flow. The current parking design has insufficient ingress/egress to accommodate the volume of parking users it will serve, and the design will create unnecessary traffic congestion by forcing traffic onto the streets to circulate.
We encourage the City, JDS Development, and Exact Sciences to address these design flaws so that the parking functions optimally without negatively impacting traffic throughout downtown.Because, ultimately, a new headquarters for Exact Sciences – and the jobs promised to come with it – should be a healthy addition to the downtown environment. We certainly support the idea of adding 300+ professional jobs in downtown Madison, which would bolster the retail, restaurants, and other services in downtown that depend on a critical mass of people locating here. And we welcome any private company investing in downtown and sharing our belief that Madison is a special place to do business.
Downtown Madison can benefit from the Exact Sciences project being done in a way that maximizes the development opportunity, but downtown Madison stands to be negatively impacted if we accept a flawed solution.
Let’s get it right.
Sincerely,
Brad Binkowski, Urban Land Interests
Mike Slavish, Hovde Properties
Lee Ferderer, Fiore Companies
Bradley C. Mullins, Mullins Group
Greg Rice, Executive Management Inc.cc: Common Council
No questions or comments.
They ask George Austin to go through his presentation. Natalie Erdman joins him. He has a presentation, Marsha Rummel asks for handouts, Dave Schmiedicke says it was attached to legistar (He acts like its been there all along, but its only been there for a few hours).
Judge Doyle Square Negotiating Team Check-In with the Board of Estimates
Monday, Augustl0, 2015Outline of Progress Since the July 27, 2015 Check-in with the Board of Estimates
1. The TIF Application filed by JDS Development LLC is being reviewed by City Staff. The TIF Coordinator is working on a list of additional information needed to complete the TIF analysis and a meeting between City staff including the TIF Coordinator and JDS representatives is being arranged. The TIF Analys is will be included with the Report of the Negotiating Team for the Board of Estimates meeting of August 24.
2. Debt and Equity commitment letters were submitted on July 29 and August 6 respectively.
3. A draft Parking Lease Term Sheet for the Private Parking Unit (650 stalls) was prepared and negotiation is underway, consistent with the provisions of the July 15, 2015 development Agreement.
4. The parking ramp was re-designed by the JDS Development architectural team and reviewed with TE/Parking Utility. The design increased the ingress and egress as requested. The design also identifies the Public Parking Unit (600 stalls) to be on basement level 1and the above grade floors, and the Private Parking Unit (650 stalls) to be on basement level 1through basement level TE/Parking Utility are generally satisfied with the changes in the parking plans; however, TE/Parking Utility staff have concerns regarding the proposed location of the 600 public parking stalls and are providing JDS Development’s architectural team with additional feedback .
5. Exact Sciences and JDS Development have initiated work on the transportation demand management plan.
6. a.) At the City’s urging, JDS Development LLC has worked with its 1031 exchange partner to change the properties to be used in the 1031 transaction at Judge Doyle Square. As a result of this change, there no longer needs to be an early real estate closing at the time the Amended and Restated Agreement is executed, which was set for September 15, 2015. This change will remove the need to transfer all the property to the developer prior to project commencement and will remove the need to negotiate and execute the requisite interim City ground leases and reacquisition provisions for the period prior to project commencement.
b.) The Exact Sciences timeline to have the Amended and Restated Agreement approved by the City on September 1,2015 and the execution of that agreement by September 15,2015 remains in force.
c.) The Negotiating Team has met with the City’s real estate consulting attorney on the 1031 transaction.
7. A draft Targeted Business and Workforce Diversity Program was presented by JDS Development on August 4. A meeting was held with Norman Davis in the Department of Civil Rights on August 5 to review the draft plan. A preliminary construction phase targeted business participation goal and workforce goals for racial ethnic and women participation was preliminarily recommended by Mr. Davis.
8. JDS Development LLC has initiated discussions with organized labor regarding a project labor agreement for the construction phase of the project and anticipates using such an agreement.
9. The City proposed three terms for a labor peace agreement:
o Employee preference regarding whether to be represented by a labor organization for collective bargaining, and if so, by which labor organization shall be determined based on signed authorization cards in a card check procedure conducted by a neutral third party in lieu of a formal election.
o The employer and the labor organization shall at all times refrain from the use of intimidation, reprisal or threats of reprisal, or other conduct designed to intimidate or coerce employees to influence the decision by employees whether to join or be represented by any labor organization.
o Signatory labor organizations shall forbear from taking economic action, such as striking or picketing, against the signatory employer at the worksite of an organizing drive covered by this section,so long as the employer complies with the terms of the agreement.JDS Development hasn’t agreed to this language at this time. Negotiations continue.
10. Interim Public Parking During Construction
o Government East consists of 520 parking stalls with 119 of those stalls leased to monthly parkers and the remaining 401 parking spaces used to meet hourly/transient parking demand. The Parking Utility will be moving monthly contract parkers to the mid State Street ramp.
o JDS Development expects to demolish Government East in March of 2016. o City Staff are exploring the following:
– • Access to hourly parking in the new Anchor Bank structure in November 2016,
– • Parking impact due to the potential relocation Madison Municipal Building staff and services in the summer or fall of 2016 due to building renovation.
– • Identifying a near east and near west location for shuttle service to address heavier parking demand on days when conventions or special events occur downtown.
– • Whether there is excess capacity in existing facilities for daytime, hourly parking on days when conventions and special events are not occurring.
He walks them through the memo, no copies for the audience. In addition to the info above, he says
TIF – they are working on the analysis
Equity letters – They are going through the due diligence and contacting the banks, they will report on the “veracity” of those letters.
Parking Lease Term Sheet – He says there will be a charge to all users of a reasonable rent, including all Exact Sciences spots, the issue of the free parking is under negotiation but there will be a charge of all parking to the lease.
Parking redesign has been reviewed by staff, they are continuing to work on the details. There is some interface at basement level one, but it is essentially below grade. Details will be provided in the land use approvals made later this month.
Transportation Demand Management, not much to report, will have some info on the 24th but it was required to have this information until closing in December. They suggested they begin to address this now.
Exact Science’s imposed timeline remains, but the quity from teh 1031 real estate exchange is no longer needed, so they don’t have to sell the property in September, have a ground lease and determine the reversionary issues – it simplifies things and avoids a lot of work.
Norm Davis from Affirmative Action is reviewing the plan to hire minority contractors that was submitted and he is recommending changes by the end of next week. The goal was 10% targeted business participation and for participation in the works force 6% racial/ethnic and 3% women is recommended in the workforce. (Sigh . . . )
JDS has not agreed to the labor-peace language and they continue to work on it, there has not been an agreement.
Natalie Erdman talks about the interim parking, says that is a big task to look at, they are starting but have a long way to go. Government East currently has 520 parking stalls, 107 are monthly parkers, the rest are people who are in and out, a vast majority or 78% are there for 3 hours or less so as we talk about parking solutions, its not just workers and monthly parkers, but its those who come for short periods of time. There are also peaks when Monona Terrace has events, particularly statewide events where people drive their car. They are looking for solutions for large conventions, they have the bookings for 2016 and 2017 so they know what days they will have large needs. They are looking at using Anchor Bank parking which will start this fall and be available November 2016. It might not be 17 months, it would work from March to Oct/November when we have no other additional capacity. They are looking at delaying taking down Government East to delay the gap. They have called and talked to a number of developers and property owners in the area who have apartment parkers to see if they could use those spaces during the day when they don’t have their cars there and have not been successful in that. They are looking at being very specific about the needs and some solutions but they don’t have any broad solution at this time.
Mayor asks about parking, there has been a lot of positions of criticisms and he’s not going to outline all of them, but he’s going to take the extremes, which is the parking has too much parking from the stand point of trying to get a balanced mode int he downtown to the hotel has provisions for 1/4 of the parking normally associated with a hotel, what is the response to all these numbers and criticisms? Are we developing a hotel with too few parking spaces.
Austin says the theory for the 50 parking spaces dedicated to the hotel is that we will have 1,250 parking stalls in a single ramp and through shared parking, the overall demand for the hotel can be met through the dedicated spaces and the shared management of the private unit spaces. They are in the process of verifying if those ratios can be made to work and hopefully will have that info by August 24th. Many of the hotels that are cited as having larger parking, some of the ratios are under 50%, no approach the number we are suggesting, but the hotels were built in a different era or are not in the core of the city. We continue to explore that, they think they are on the right track but hopefully will have an answer shortly. The street system will only handle so much traffic, and Judge Doyle Square isn’t the only contributor, so the scale of the ramp is a very important issue and one of the reason the negotiating team worked to drive that down from 800 to 650 parking spaces and your request that Exact Sciences work on a transportation demand management plan, they believe they are on the right track to manage the demand in a way that removes the “free parking” and can encourage multi-modes. None of this is a perfect solution, they are trying to find the right set of equations to have a ramp that works well, can be managed efficiently and meet the expectations of . . . . trailed off.
Marsha Rummel asks what if there is not enough parking, what are our options. Austin says looking a different ratios in the ramp, they don’t know the build out of the office space in terms of the number of employees, they might be able to free up additional spaces through demand management, 50 would be hotel and 600 by office users and there is some play there. That is probably the primary approach.
David Ahrens passes out parking ratios in downtown and he says the newest one, the Hampton, is 1:1. The Edgewater is 67% and Hilton is 60%, the outlier by far is the JDS hotel and in addition to the Government East ramp being down, we will have the addition of the employees for Exact Science at ta time we are most deficient. He says they missed the 300 – 400 employees that are in addition to everything else. Erdman says that at this point in time, the parking is supposed with the demolition in March, the parking should be finished in July when Exact comes downtown which is why they are looking at delaying Government East coming down and there will be some parking not used in the first phase. They says the new parking will be on-line when Exact opens. Not just one floor, but the whole structure. Austin says that the ratio is aggressive and where the market is moving, the Hampton Inn is near the campus and is a single purpose ramp to service the hotel, this hotel is integrated in a large project with 1,250 spots integrated in the development and there are increased opportunities for shared parking, he thinks its good public policy to push shared parking like they have in other cities. That is what they are trying to verify. Ahrens says this would be common in New York or Chicago downtown, not for Madison, where much of the business is for MOnona Terrace and much of their users drive to town. Not fly-ins. He says he talked to the director of the Concourse Hotel and he believes he is the largest user of the ramp across the street from it, because at .7 he doesn’t have enough parking there. What the clientele for JDS and Concourse seem to have similar needs and demand. Austin says again, they are trying to verify it.
Clear asks about TIF – but they hold off for closed session.
Mayor Paul Soglin asks about an urban setting, metropolitan area where they are trying to contain sprawl, develop a firmer base for non-automobile related utilization but are in competition with suburbs, but that tells me we want more compact design and more compact utilization of residential, commercial and that if a project like this can’t work, the economics of it, basically we should throw in the towel and acknowledge that urban sprawl, more pollution, more cornfields paved over in Verona, Middleton, and Sun Prairie is inevitable and we should just give up. (I don’t think that was a question)
Erdman says that we have a demographic right now of people who are choosing to live in more urban environment where they can access more things without driving their car, so we have seen that. If you take the downtown, its complicated and difficult and we may not get it exactly right, but in her view if they can bring major employment downtown, and we are already getting major housing downtown, if you can get that close to one another you have a higher likelihood someone will choose not to take their car to work, if you look at building this number of jobs in the suburbs or Research Park, it is less likely someone would take the bus there, cuz once they get off the bus they have to walk much farther to get to the building. This would increase the likelihood people would take the bus because it is convenient, will take their foot because they happen to live here, we can’t afford to throw in the towel, we only have so much land in the city to develop and if we can do this type of infill development, higher mixing of uses without overly taxing our roads, every parking space we have the person has to drive on the road to get into it, in the morning it is usually not an issue as Mr. Binkowski notes, but in the afternoon when nearly everyone leaves between 4:30 and 5:30, that is really the crunch time, so we need to be conscious of the building and development we are putting in and what that does, people have to drive on the road to get there.
Mayor says that since you mentioned buses, let me make the observation that if we were going to generate a site with 500-600 new jobs, we are more efficient if they are downtown and we add the bus ridership being dropped off downtown than if we have half the people riding the bus in a peripheral location.
Rummel asks how many stalls are in the Monona Terrace Ramp? 560 – Austin says he might be off on that.
Rummel says several alders are from TPC and she hears anecdotally that conversations there have a lot of questions, with the new parking utility manager there, could we talk about what comments and concerns they are hearing at TPC? Chris Schmidt says the anecdotes are probably accurate, its not dissimilar from what you are hearing here, the primary concern is protecting GE from replacing that and not being in competition with the parking utility, not enabling it. They haven’t gotten any more detail that we have here.
Rummel asks what the process to approve this at TPC is? Is that parallel to what we are doing here. Schmidt says the TPC is subservient to the council as far as the garage goes. WE make the decision over the money, its not like other transit things. What the TPC can do is relatively minor. Rummel asks about design? Schmidt says that the staff will mostly decide, they are not in the drivers seat, but they haven’t had to make decisions about design for 20 years. Rummel asks what will give comfort about competition, the lease? Schmidt says that maybe, whatever they get.
Erdman asks to speak to this issue. She says in the current design, there were comments by staff, its going through refinements, the private parking is down low and the public parking is up high. Everyone will get a ticket, there is a second gate for monthly parkers. Hourly parkers will be forced into those spaces and really they would fill that up before they go through that second gate, the current design and ticket system is designed to push into the utility spaces. Schmidt says “Hmmmm”
Mike Verveer asks about interim parking, he says there is an error in the memo, there is no mid-State St. parking ramp, so in the second sentence, he presumes that is State St. Capital Ramp. Verveer asks if they would go all the way to Lake/Francis? Verveer says the answer was that the intent was for the 107 monthly parkers go all the way to the Lake/Francis ramp which he thinks is quite a hike.
Verveer asks about the discussion about parking at Alliant Energy Center and if it might be available for shuttle service. Erdman says they haven’t asked yet because they are working on what the specific ask might be. Verveer says that the letter from the large commercial landlords downtown is the latest example of input he is getting about people asking about what will happen to customers for businesses that use GE.
Mo Cheeks asks about the ratio of parking, what is “reasonable”, does it include concerns about securing a flagship hotel? Erdman doesn’t know, but will check.
Rummel asks about the 1031 exchange and what other properties. Austin says the requirement was for the properties be exchanged in a short period of time and the properties selected in June, had to be concluded by early September and this has been an issue for the city, it put us in an uncomfortable position to sell property and lease it back before the project starts, we worked to find a way to do that, in reality the difficulty of achieving this became apparent, they have other properties that they can exchange without the penalty of the short time line.
Cheeks clarifies what Austin said about 8 and 9. Mayor tells Kevin that there is a meeting in a week or two, he will send him the details, don’t let him forget.
Clear asks about the TIF application and the level of the detail. Can you tell us about the additional information needed. Erdman says they received the TIF application and it did not have all of the information – that is not uncommon where we have lots of pieces. Staff have talked about it and requested more info on parking revenues and expenses, so they can look at how it all works together financially, we know they have the info but they haven’t gotten it. She says there are also questions about the valuation, the expenses assumed on capital and operations.
Clear asks about equity and debt participation, he also wants more info, he knows there is still due diligence going on. Is it complete, do we need more info? Austin says they are in the middle of the process, so they don’t have a lot, the got first drafts on the documents they requested, they need $43M in equity to do all phases of the development and they received the debt side, on Thursday, its debt financing for phase one, $40M. As part of the commitment letter the lender has indicated that they have provided evidence of equity to their satisfaction and all $43 in equity would have to be at the closing in September, that is a security and it will have to be in cash or marketable securities. (mumbling)
Ahrens asks about the letter from Greenwood, there is no mention of the liens on Edgewater, will it be part of the contingencies to have those cleared before? Austin doesn’t know. It did not come up today in a discussion with one of the signatories.
Schmidt asks about jobs piece, are we asking for them to demonstrate why they get a gap analysis waiver, or information for the gap analysis. Erdman says they need more time, they need a waiver or have to do the gap analysis. Schmidt says they have to justify the waiver. Erdman says “perhaps”.
Verveer seems to be the only with closed session questions, not sure that is true, but we’ll never know. They move to go into closed session. Passes unanimously. Public shut out.
