Diners sit in sidewalk cafés at various businesses on East Main Street. Mayor Paul Soglin is proposing charging higher rates for downtown sidewalk cafes.

Mike DeVries/The Capital Times

Madison Mayor Paul Soglin spoke before the city’s Plan Commission Monday, asking members for their support in enacting a moratorium on new “beverage businesses” like bars and coffee shops.

The mayor has repeatedly warned against further diminishing the amount of retail space on State Street and the Capitol Square, arguing that the “vitality” of the area will be lost if action isn’t taken.

“We’ve got some real challenges and we don’t necessarily have all the answers,” Soglin said, citing the rise in online shopping and increase in beverage businesses as reasons for why retail on State Street is declining.

The city has hired a consultant to complete a retail study to guide how to maintain a healthy downtown, but Soglin has proposed an interim policy that would maintain the current business mix until the larger retail study is complete — likely not until 2018.

That mix is currently divided between retail and service establishments and bars and restaurants, but that was not the case about two decades ago.

In 1994, retail made up about 69 percent of businesses on State Street, a number that declined to 49 percent in 2014, according to a city comparison. Restaurants and bars, meanwhile, grew from 25 percent in 1994 to 48 percent in 2014.

“What I’m deeply concerned about is if we lose one retailer after the other, the consequence will be cascading,” Soglin said, giving examples of places like 6th Street in Austin, Texas, and New Orleans’ French Quarter, worrying State Street will suffer the same fate.

“More retailers strengthen everyone,” he said.

While some critics argue the free market should control the direction of business on State Street without the city’s involvement, Soglin said government has already intervened in the free market by changing the street into a pedestrian mall.

“We’ve changed the nature of the street,” he said. “We’ve changed the marketplace.”

Soglin’s interim moratorium policy

The mayor is proposing to create a Retail Preservation Overlay District that would encompass two blocks in each direction beyond State Street and the Capitol Square.

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In this newly created district, no new entertainment licenses or Class A, B or C alcohol licenses would be issued and current alcohol licensed establishments would not be allowed to expand. New food and drink licenses would not be issued to establishments that are occupying space not previously licensed through Public Health Madison and Dane County within the area.

Additionally, alcohol licenses would not be allowed to transfer to new locations within the area.

There are some exceptions outlined in the mayor’s proposal.

Alcohol licenses will be allowed for new construction that involves replacing a building within the area for comparable licensed premises that existed on the site previously.

Hotel liquor licenses, alterations to currently licensed establishments and the sale of an existing licensed establishment and subsequent new alcohol license would be allowed in the overlay area.

Soglin estimates it could take six to eight months to complete the study and could not estimate how long the city approval process could take, although the proposed expiration date on the proposed interim plan is Dec. 31, 2018.

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