Madison officials mourned the loss of booming Epic Systems to Verona in the mid-2000s, but the medical software colossus is having a huge, unexpected impact on its original hometown.
Smart, young Epic employees with cash in their pockets and an affinity for Madison's culture, restaurants and nightlife are fueling demand for rental apartments in the Downtown area.
Meanwhile, tens of thousands of visitors to the Epic campus are booking Madison-area hotel rooms, boosting city room tax revenues in a tough economy.
The visitors are filling airline seats — sometimes requiring bigger planes and more flights — enjoying Madison's offerings and taking hundreds of cab rides monthly between the airport, hotels and Epic's campus in the rolling hills of Verona.
Mayor Paul Soglin, who criticized city officials for letting Epic leave when it announced plans to do so in 2001 and worked as an administrator at Epic from 2004 to 2007, didn't foresee it.
But Soglin and other city and business officials laud Epic's undeniable benefits for the city's businesses, economy and quality of life.
"It comes up all the time," said Downtown Ald. Mike Verveer, 4th District. "You can just feel it. You can see it."
Epic management declined requests for comment.
Huge boon for Verona
Initially, Madison's big loss mostly seemed Verona's big gain.
Established in 1979 by founder and chief executive officer Judith Faulkner at 2020 Old University Ave., Epic had grown from about 30 employees to 550 in 2001, when it announced it was leaving for 340 acres of undeveloped land in Verona.
Since 2002, the equalized value of the Epic site has skyrocketed from $320,400 to a jaw-dropping $263.4 million this year. Epic, with $1.2 billion in revenue in 2011, is now building a third set of office buildings and 11,000-seat auditorium, which will boost property values more.
The site is in a tax incremental financing (TIF) district created in 2002, and all the new value could be returned to Verona's tax rolls as soon as 2015 or 2016 — a hefty property tax boon Madison won't see.
Hundreds of jobs, renters
But Madison is benefiting in other ways.
Epic's mushrooming campus needs a builder, and Madison-based J.H Findorff & Son has been general contractor for the initial campus, the Farm Campus where three office building exteriors will look like a barn, a machine shed and a stable for horses, solar energy installations, and will help build more in coming years, said Jeff Tubbs, Findorff's vice president for business development.
On most days, Findorff has 250 employees and another 250 subcontractors working at the campus who live in and spend wages in Madison and throughout the region, Tubbs said.
As Epic's campus grows, so has its staff, surging from 2,050 employees when it opened in 2005 to a projected 6,200 this year, spokeswoman Barb Hernandez said.
Many choose to live in newer, upscale apartments in the capital city.
"Epic's had a significant and important impact in terms of rental housing in Downtown Madison," said Brad Binkowski, a principal of Urban land Interests, a major developer that manages or owns about 550 units in the central city. "They have the money to pay for what they want — if they can find it."
These employees want the flexibility of renting and like fine woodwork, granite counters and other high-end finishes, and amenities like Wi-Fi and business and fitness centers, said Nancy Jensen, executive director of the Apartment Association of south-central Wisconsin.
The coveted "Epic employee" is mentioned in every discussion with developers doing upscale rental projects Downtown, Verveer said.
The young, educated, professionals coming to Epic from UW-Madison and around the country add vitality to the city, he said.
"A lot of my co-workers like to live in Madison," said Epic employee Teresa Beary, who's been with the company for a year and a half and lives in an apartment near Hilldale. "There's a lot of nightlife. They're recent graduates and they can go out and socialize."
Shot in arm for Metro
Epic commuters have bolstered Metro Transit, which now has two semi-express bus routes — funded by Epic and Verona — from Downtown and the West Side to the Epic campus, General Manager Chuck Kamp said.
The West Side route had 37,000 riders from September 2011 through September 2012, 10.2 percent more than the previous 12 months, and the newer Capitol Square route drew 15,400 riders from its start in March through August.
"It growing, and it's growing rapidly," Kamp said.
On a recent weekday, Epic employees packed a morning bus at the West Transfer Point with 20- and 30-somethings, silent and tuned into electronics during the 20-minute trip.
"I save money doing it," Beary said. "I also like to be able to sit and read a bit instead of driving."
Thousands of visitors
As the company's employees rent apartments, the thousands who come to Epic for recruiting or training book hotel rooms.
About 1,000 people visit the campus each week, and far more come to advisory councils in the spring and a users group meeting in the fall, now the second-largest business conference in Dane County following the World Dairy Expo.
The spring and fall events were once held at Monona Terrace but have outgrown the facility and left after 2007, a rare negative impact on the city.
"They bring year-round business into the hotels," said Ranette Maurer, director of sales and marketing for the Downtown Hilton and Sheraton on John Nolen Drive. In that way, "UW is the only rival."
The Hilton hosts Epic recruits, and the Sheraton caters to those coming for training, Maurer said, noting that the Sheraton has a full-time concierge to serve Epic visitors and bought a 25-seat bus to transport them, Maurer said.
Other hotels also see major business.
"They're certainly our number one account," said Eric Rottier, regional director of the North Central Group, which owns nine hotels in Madison, including the Hilton Garden Inn and Courtyard by Marriott on the West Side.
Delta Airlines, a major carrier, adds flights and uses larger planes to handle peak-time passengers, spokesman Anthony Black said.
Epic's four-day users' group event drew 7,600 representatives of client companies and had an estimated $4 million impact on the local economy this past September, according to Deb Archer, president of the Greater Madison Convention and Visitors Bureau.
City officials believe Epic visitors are helping drive a projected 30 percent increase in city room tax receipts to $10 million from 2010 through 2012.
In the meantime, the hospitality industry and cab companies benefit from the visitors while sales tax receipts rise.
Green Cab of Madison alone provides 40 to 60 rides weekly — more during peaks — to Epic visitors, including many $24 rides from Downtown to Verona, general manager Phil Anderson said.
"It's a good deal of business," he said. "It never goes away. It's a wonderful thing."