The original designs for Judge Doyle Square sailed through the Madison Plan Commission in April 2017.
During that meeting, commission chair Ken Opin said that while he believed the project was “the largest single application that has ever been before the Plan Commission,” he considered it “a truly elegant solution to a truly complex set of problems.”
That “elegant solution” is changing.
Beitler Real Estate, which won approval for the large downtown project, is now suing the city of Madison over the project, which could have implications on the project’s scope and timeline. The lawsuit alleges that the city “unilaterally seized” portions of the private part of the project when the City Council approved additional funds to construct it.
“Obviously the litigation is a rock in the road for the project,” project manager George Austin said. “Development never happens in a straight line and there are things that go well and there are sometimes surprises that occur.”
Mayor Paul Soglin, who has steered major projects like Monona Terrace and the State Street mall, said he was limited in what he could say about the project due to the pending litigation.
“Litigation involving large projects is not unusual,” Soglin said. “We’re going to move forward with the project.”
This city line — that the project will go forward and be completed — was echoed by some Madison commission chairs not employed by the city. With or without Beitler, they said, there will be a well-designed project on the two city blocks.
“Judge Doyle Square will ultimately get built. It may not be with this developer, but it’ll get built. There’s no question that that will happen,” said Opin of the city Plan Commission.
The two-block area in downtown Madison encompasses the Madison Municipal Building on Block 88 and the Government East parking garage on Block 105. The square is named after Judge James E. Doyle, a federal judge in the District Court of the Western District of Wisconsin and a leader in the Democratic Party.
The major public-private partnership between the city and Chicago-based Beitler is meant to bring more hotel rooms downtown to support the Monona Terrace Convention Center, replace the current public parking ramp (built in 1958 and at the end of its useful life) with an underground facility and, ultimately, get the parcels back on the tax rolls.
Austin said the the city is still focused on the original objectives of the project, which are to take the underutilized land behind the Madison Municipal Building — what Austin calls the “hole in the donut” between Monona Terrace and the Capitol — and make it productive.
Looking back on the primary goal of replacing the aging Government East parking ramp, Ald. Mike Verveer, District 4, said it is a positive development that a replacement garage is underway and on track to be completed next year.
"Rather than just being an idea discussed on paper and in meetings over the last many, many years, there is actual construction taking place," Verveer said.
"I’m confident we can continue with either Beitler or perhaps a different developer someday constructing above the Judge Doyle parking garage and across the street," Verveer continued.
Acting on strict instructions from the city attorney's office, Verveer said he could not discuss the pending litigation.
Lawsuit stems from additional city funds
Beitler’s lawsuit stems from the City Council’s 18-0 vote May 15 that approved an additional $11 million in public funds to build 8,000 feet of retail space, two levels of above-ground public parking and a structural slab — collectively called “the podium.”
The podium will sit on top of a 560-stall underground parking ramp built behind the Municipal Building. Under Beitler’s plans, the podium will serve as the base for a nine-story apartment complex.
Beitler is also developing the block that currently holds the Government East parking garage and has plans for two towers, which will include apartments, a hotel and retail space.
The Council’s vote was in response to city staff learning in April that the developer could not complete the private portion of the development on the Municipal Building block because of increased construction costs.
Appropriating additional funding maximizes the city’s investment in the underground parking garage, ensuring development can proceed following the completion of the garage, according to city staff.
If the private project does not start when the new municipal garage is complete — scheduled for April 2019 — the city will have to build a cap on top of the garage to comply with zoning and building code regulations.
However, Beitler argues in the lawsuit, filed June 4 in U.S. District Court in Illinois, that the city “unilaterally seized, for its own financial gain,” the podium in violation of the development agreement approved in July 2016.
The developer also contends that the Council’s decision “falls into the City’s continued pattern of excluding Beitler from the development process, refusing to provide Beitler with necessary information about the project without justification, and waging a public smear campaign against Beitler, falsely blaming Beitler for the City’s request to fund the development of the above-grade parking structure.”
In the lawsuit, Beitler argues that the development agreement does not force it to start work on the Municipal Building block first. Beitler contends it has two years after the new garage is completed to secure financing for any one of the three remaining components, meaning it could begin work on the Government East block first, once the old garage is razed.
Beitler is asking the federal court to stop Madison from moving forward with construction on the podium after the public garage is complete.
City Attorney Michael May said June 5 that the city has not “breached any of its obligations to Beitler.”
“The City will vigorously defend its actions to keep the Beitler proposal at Judge Doyle Square alive,” May said. “The lawsuit does nothing to build Judge Doyle Square and is a curious response by a developer who claims to want to work with the City to see the project go forward.”
Vermilion Development was the other finalist for the Judge Doyle Square project. Dave Cocagne, president and CEO of Vermilion, said when asked about the frequency of litigation in public-private partnerships that while he didn’t want to generalize, Vermilion has never been involved in litigation in a public-private partnership.
“Generally, (litigation) means that things can’t be resolved across the negotiating table, so it’s a very significant indicator that something has clearly not met mutual expectations of the parties and the parties can’t resolve it without the intervention of a court,” Cocagne said.
A good design, with or without Beitler
Designs for the entire building on Block 88, including the podium, were originally designed to be encased in a glass facade. But glass is expensive and since the city has taken over the podium portion of the project, officials have suggested designs that would limit the glass facade to just one side of the building.
Possible new designs were presented at the Urban Design Commission’s June 6 meeting. Commissioners didn’t like any of the options and asked for a more contemporary design that could stand by itself in case plans for the upper stories change.
On Monday, UDC Chair Dick Wagner expressed confidence that the city’s architect will be able to design such a contemporary, stand-alone building.
“The guy’s a good designer, there’s no question about that,” Wagner said. “I think you could have a very nice, modern-looking, above-ground garage there while we figure out if and when something’s going to be on top of it.”
And even if the Beitler plans completely fall through, Wagner is confident there will be other exciting proposals. Opin agreed, although both noted that they are not city staff.
“On a project of this scale, of this significance to the city, anything that gets done on that site is going to be exemplary, or it simply won’t get done,” Opin said.
Both said that if needed, another developer would be eager to step into Beitler’s place.
“I am sure if this deal completely falls apart that there are other developers who would be perfectly happy to negotiate with the city to get it done,” Opin said.
In the event of the Beitler deal falling through, Cocagne didn’t rule out Vermillion getting back in on the bidding. Cocagne said he’d “really have to look at the RFP and understand what it required,” or discuss whether Vermilion’s original RFP response would satisfy the city’s needs.
Both Opin and Wagner pointed to previous major Madison projects that hit roadblocks.
“Certainly there were a lot of starts and stops for the Monona Terrace project, (it was) off and on so frequently,” Wagner said. “This is nowhere near that yet. Considering that thing, this is just at the starting gate.”
Opin pointed to the 800 block of East Washington Avenue, now home to the Galaxy apartments. Urban Land Interests proposal was originally selected through a city RFP process for the site Gebhardt took over after the plans fell through because they couldn’t generate sufficient property taxes.
“You’ve got to keep moving forward to resolve these. You can’t just sort of wait for the ideal solutions,” Wagner said.
Madison’s Judge Doyle Square project has seen several iterations over the years and has had its share of disappointment including the originally favored developer, in partnership with Exact Sciences, dropping out in November 2015.
At various points in the past 10 years, the project has included ideas for a public market and train station but ultimately ended up with a hotel and parking ramp as project priorities.
Ald. David Ahrens, District 15, who eventually came to support the city’s original agreement with Beitler, questions the necessity of a hotel since the city first started mulling the idea of a hotel to serve Monona Terrace in 2007.
The AC Hotel on North Webster Street opened last May, a hotel is slated for North Carroll Street as part of the Madison College’s Downtown Education Center redevelopment and short-term rental units like Airbnb have proliferated. Yet, Ahrens said “the drumbeat continues.”
“You set yourself on this track of we got to do this thing … and you're focused on doing it that sometimes you don’t pay attention to the fact that the whole environment in which the question was raised has changed,” Ahrens said.
However, Verveer said there is still "tremendous interest" in having more hotel rooms closer to Monona Terrace despite the hotel proposals that are in the works.
Ahrens, like many others, were surprised by Beitler’s actions. Looking back, he said Beitler’s proposal had seemed “too good to be true.”
“I think a lot of people thought that this was going to be a good partnership and we saw tremendous value in the property and doing business in Madison and for reasons I don’t know, things went south,” Ahrens said. “And it’s going to take awhile to work this out."