A proposed three-building project on the 800 block of East Washington Avenue received City Council approval Tuesday night over objections from those who oppose the inclusion of a music venue. The nod is one step in a series of agreements before the project is finalized.
The development, which proponents say will contribute to further revitalizing the Capitol East District corridor, is located on the former Don Miller auto dealership lot purchased for $5.8 million by the city in 2010.
“In terms of (the area’s) potential for 40 years, it has been a wasteland,” Mayor Paul Soglin said.
Project plans include office space for American Family Insurance and the collaborative entrepreneurial center StartingBlock Madison in a building called "The Spark" and a 2,500-person capacity music venue owned and operated by Frank Productions in a building called the Cosmos, owned and operated by Gebhardt Development.
Alders voted 17-2 to approve the development agreement, described as the project’s blueprint, in addition to authorizing $776,560 to complete architecture and engineering for a parking structure, slated for property currently owned by Madison Gas and Electric. Alds. David Ahrens, District 15, and Rebecca Kemble, District 18, voted against the project with Ald. Samba Baldeh, District 17, abstaining.
Three additional agreements, including land use approvals, the sale and purchase of land for the parking garage and StartingBlock’s grant, will need to be approved by the council at a later date.
Because the three project elements — the Spark and Cosmos buildings and Capitol East Garage — are mutually dependent, they must go through the city approval process on parallel tracks.
Critics of the project say it is moving through the approval process too quickly, although Ald. Marsha Rummel, who represents the area in District 6, disagrees. Because the project block is in a commercial corridor, it has generated less residential conflict, she said.
The parking ramp and how it is funded generated concern from some alders, particularly regarding tax incremental financing.
The ramp, with an estimated cost of $16 million, would add 600 parking stalls to the corridor. Funding for for the structure at the intersection of East Main and South Livingston streets would use $7 million in tax increment financing, $5 million in city general obligation borrowing, $3 million from the parking utility reserves and $1 million from the land acquisition fund.
Ahrens criticized TIF overall, calling it a system that only increases the tax base of wealthy districts, as opposed to blighted properties it was designed to reinvigorate. The Capitol East area has seen intense development of luxury apartments in the past five years, many by Gebhardt, and is near the affluent Marquette Neighborhood.
“This is TIF at its most incestual self,” Ahrens said.
However, Soglin said using TIF will keep Madison competitive with area communities like Middleton, DeForest and Waunakee.
“When you do a TIF, it’s not just about the districts, it’s about what happens when it’s closed out and the millions of dollars of tax revenues that go in the general funds of the city, hopefully forever,” Soglin said.
Gebhardt Development and American Family would lease up to 550 parking stalls for daytime use of the ramp on Mondays through Fridays at an initial rate of $56 per stall, per month, for the first five years, increasing to $68 in years six through 10 and $84 in following years. The remaining 50 stalls would be available for hourly parking during weekdays.
Parking is critical for American Family and StartingBlock employees and to accommodate concertgoers during evening hours, although the 600 spaces will not allow a spot for each employee.
“It’s essential to the end goal,” Scott Resnick, StartingBlock’s executive director, said.
During evenings and weekends, the city's parking utility would operate the entire structure for hourly and special event uses. A 20-year operating model estimates event parking at $5, making up $300,000 of its expected gross annual revenue of $369,600 if the ramp is sold out twice per week.
The proposed Frank Productions concert venue continues to divide members of Madison’s music scene. Though Charlie Goldstone, CEO of Frank Productions Concerts, said the promoter only plans to hold concerts of 1,400 and above in attendance, other Madison music scene stakeholders worry the new venue will hurt business.
“It’s the smaller and less resilient venues that are going to take the most critical hits,” said Chris Kalmbach, Knuckle Down Saloon owner.
Eve Paras, whose family owns the Orpheum Theater on State Street, has opposed the project and said her family would not have invested so much into revitalizing the historic downtown venue had they known the city would support this project.
For the first time in this public discussion, Majestic Theatre co-owner Matt Gerding added his opinion.
“The city should decide this development based on the merits of the development, not on misguided fears that a 2,500-capacity venue is going to be the demise of the 600-capacity Majestic Theatre,” Gerding said.
