Offering a vision of bigger and taller buildings and a mix of housing and commercial use, Mayor Dave Cieslewicz on Tuesday proposed the city pay $4.7 million for prime redevelopment properties on the 800 block of East Washington Avenue.

Under the mayor's plan the city would buy the full block and part of the 700 block on the north side of the street plus some property on the south side totalling 7.76 acres from auto dealer Don Miller, which is relocating enterprises on the street to the Far East Side.

The corridor, Cieslewicz said, is the city's top priority for economic development and the Don Miller properties have the potential for infill development and job creation.

"This is perhaps the biggest economic development and value-added opportunity we have in the city of Madison, outside of University Research Park," said Cieslewicz, flanked by business and neighborhood leaders, at a press conference at the site.

John McKegney, Don Miller's chief financial officer, said all current employees at the dealership's East Washington Avenue operation will keep their jobs and be transferred to new facilities to be built on the Far East Side. Don Miller is hoping to start construction "as soon as possible," McKegney said.

The purchase, Cieslewicz said, would allow the city to control key real estate and make smaller lots available to developers who may not be able to afford the larger property in a tough economic climate.

"City purchase means we can acquire the site for a reasonable price, break it into smaller parcels, and return the city's investment," he said. "This is a very, very good price for Madison taxpayers."

The property will be temporarily off the tax rolls, reducing the tax base "by just a bit," but the potential to grow the tax base is significant, Cieslewicz said.

One of two land purchase so far

The city would use land acquisition funds to buy the property.

The city began the acquisition fund with $5 million in the 2010 budget, but is poised to spend about $3.57 million of that sum on the vacant, 11.4-acre Union Corners parcel at the corner of East Washington Avenue and Milwaukee Street.

The mayor has proposed adding another $5 million to the acquisition fund in the 2011 capital budget.

The City Council must approve the budget and the purchase of the Don Miller properties.

The city has long hoped for a renaissance of the corridor, but investment has come slowly, especially in the bad economy.

In 2006, after two years of planning, developer Gary Gorman cited insufficient public financial support and dropped a $58 million Avenue 800 project on the full block now occupied by the used car dealership.

But in 2008, the University Research Park announced a small business incubator in the former Marquip Inc. offices and factory building at 1245 E. Washington Ave. Mid-decade, Curt Brink transformed the old Buy and Sell Shop building, 701 E. Washington Ave., into an entertainment venue. And the city and a nonprofit have been working for years to create a linear Central Park in the railroad corridor between East Washington Avenue and Williamson Street.

Ald. Bridget Maniaci, 2nd District, who represents the north side of the Don Miller property, said redevelopment has been a long-standing goal for surrounding neighborhoods and that residents already have a good sense of how they'd like to see the land used, especially housing along Mifflin Street.

Lindsey Lee of the Greater Williamson Street Business Association and owner of Ground Zero Coffee, 744 Williamson St., applauded the city for working with neighborhoods and businesses and predicted the city's investment will pay off "100 fold" and spur a "generational change."

The city has received inquiries about the properties and will likely seek requests for proposals from developers, Cieslewicz said.

Significant redevelopment could boost a tax incremental financing (TIF) district in the area, which could produce tax revenues to support the Central Park, he said.

The mayor also announced that the federal government has approved a $300,000 grant for the Madison Sustainability Commerce Center, which will be located in the corridor and perhaps even on the Miller properties.