Madison Staff Recommends Developer for Massive Public-Private Project Downtown | local government
City of Madison staff are recommending a Minneapolis firm for a major downtown development that would replace the outdated State Street campus garage with housing, commercial space, public parking and an intercity bus garage.
While Mortenson Development got the green light, city staff said three other finalists — CA Ventures of Chicago, CRG of Chicago and Smith Gilbane of Milwaukee — could also produce a high-quality redevelopment to reimagine the premier site. plan at 415 N. Lake St., just half a block from State Street and Library Mall.
“All four development teams have completed similar, high-quality development projects elsewhere in the past,” said the city‘s director of economic development, Matt Mikolajewski.
Three other contenders — Alexander Co./CoreSpaces, of Madison and Austin, Texas; Brink Development, of Madison; and Greystar Real Estate Partners, of Chicago – proposed projects that did not meet all the criteria in a request for proposals from city developers published in April 2021.
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The city’s finance committee will discuss staff’s recommendations in a closed session at 4:30 p.m. Monday.
According to plans, the existing 510-space State Street campus garage, built in 1964, would be demolished. A separate 542-stall addition built at 430 N. Frances St. in 1982 would remain and be connected to the new project.
The main goals of the redevelopment are to replace the aging parking structure on Lake Street, create a permanent home for an intercity bus station and provide more housing, some at lower rents, Mikolajewski said.
The four finalists, whose proposals cost between $102.5 million and $140 million, would rise up to 12 stories and offer a range of amenities. In terms of scale, they resemble the first phase of the recently completed Judge Doyle Square project one block from Capitol Square.
The proposals also vary in terms of public costs, estimated property taxes that could be generated to support the additional tax financing (TIF), and net costs to the city, among others.
The city will launch a new “State and Lake” TIF district later this year, which will capture tax revenue from the private portion of the project, as well as additional private developments underway in the area, Mikolajewski said.
Tax revenue from the projects, coupled with proceeds from the sale of development rights above the project, called air rights, should cover the majority of the cost of public elements, he said. But some parking utilities and other city funding will likely be needed, he said.
Currently, the finalists, all of which offer housing, commercial space, 510 public parking spaces plus a varying number of private spaces and bus depots, are:
- , personnel selection: $140 million, including $97.3 million in private expenditure and $42.7 million in public expenditure; payment of air rights and potential TIF investment of $29 million. Net cost to the city of $13.7 million.
- $124.8 million including $102.8 million in private costs and $22 million in public costs; payment of air rights and potential TIF investment of $37.4 million. Net financial benefit to the city of $15.4 million.
- $102.5 million including $80 million in private spending and $22.5 million in public spending; payment of air rights and potential TIF investment of $31.6 million. Net financial benefit to the city of $9.1 million.
- $103 million including $69.8 million in private costs and $33.2 million in public costs; payment of air rights and potential TIF investment of $21.4 million. Net cost to the city of $11.8 million.
Overall, a city interagency team believes Mortenson is the best choice to develop air rights above the public parking lot and bus depot, a 10-page staff report says.
Mortenson offers much more affordable housing, creates a good pedestrian environment along Lake Street, masks the parking lot with housing, minimizes the need for windowless internal rooms, and has the most realistic estimates for the cost of parking spaces, says -he.
“Mortenson’s team balances delivering affordable student accommodation, good urban design, and a highly functional parking structure and bus terminal,” it says. But if the city fails to reach an agreement with Mortenson, the city should “further consider CRG, Smith Glibane and CA Ventures to develop the project.”
“Generally, I agree with the approach the city is taking to this redevelopment,” Ald said. Patrick Heck, whose 2nd arrondissement includes the site. “I am concerned about the continuing trend of gentrification of student housing in Madison, but hope that maximizing the affordable component of this particular project will improve some of that.”
All teams have indicated a willingness to work with city staff to refine their project related to affordable housing numbers, Mikolajewski said.
The redevelopment site is zoned for urban mixed use, which includes retail, offices, public parking, a bus depot and a multi-family residence. City plans also recommend mixed use of the site, with the downtown plan capping the building height at 12 stories.
In November 2019, due to congestion, traffic, and safety concerns, the city moved its intercity bus stop to Langdon Street outside of UW-Madison’s Memorial Union on the west side of the 200 block of North Lake Street . Buses currently load passengers at the North Lake Street location, which is between West Dayton and West Johnson streets adjacent to UW-Madison’s Gordon Dining and Event Center.
After Judge Doyle Square, the project would be the second in the city to include a private redevelopment above a reconstructed parking facility.
The city council is due to choose a developer on April 19, with negotiations over a development deal expected to continue until the end of the year. An agreement is expected in March 2023.
With the harsh lessons of the pandemic and the protests, Madison is looking to forge a more diverse and inviting downtown.
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