By Madison Alder David A. Ahrens — Just two months ago, Madison was on the verge of investing $47 million in a high-risk, low-return venture with a bio-tech start-up with a single product. Luckily, a week after the City Council approved the project, the stock of Exact Sciences cratered— falling from 25 to 7 in one day — and the deal collapsed.
Even with the city’s huge subsidy bankers were unwilling to plunge into the unknown of owning a 250,000 square foot office building without a tenant.
And so, the city dodged a bullet. And the bullet would have been a fiscal disaster. If the two recipients of the city’s largesse — Exact Sciences and Bob Dunn — had crashed, the city would have been just one of a number of creditors in bankruptcy court waiting decades to recover a few cents on the dollar.
The loss of $47 million in this project would change the fortunes of the school district as well as the city for years to come. It would mean not building a new library, neighborhood centers and other services.
One More Time
Rather than learn from this near-miss, the Council quickly approved going forward with a fifth proposal for JDS. Again, it retained the same consultant, who had assured us that Exact Science was a risk worth taking. Thus far, the city has paid him $245,000 for his services.
And again, we’ve asked for another giant hotel that given the hotel boom downtown will soon be surplus. And worse, we requested a huge parking garage that more than doubles the capacity of the current Government East ramp on Wilson Street. This edifice costing $40 million may be a dinosaur in 10–15 years as car-sharing and self-driving cars become the norm.
Before the proposals have even been submitted, the city has already committed $19 million in assistance in the form of TIF loans for office buildings, and a hotel. This emphasis on offices ignores a recent report from the city’s Housing Department that the city needs to build 1,000 additional rental units per year to keep up with demand.
Instead of subsidizing an unneeded hotel and office structure, the city could sell the two plots of land for $15 million for a private developer to build residences. We also need to replace the Government East ramp.
Citizen involvement is essential in creating public discussion and engagement. We were able to defeat JDS 1.0 through citizen-to-citizen contact and education. If this current proposal turns out to be as bad, we can, no we must do it again.