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The Edgewater: The debate that just won't die

The Edgewater: The debate that just won't die

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One fall day in 2008 Bob Dunn met with Madison City Council President Tim Bruer to talk about his plan to fix up the Edgewater hotel, a faded old beauty on the shores of Lake Mendota. Dunn's folks got married there, but his interest in the place is not wholly sentimental. He works for the Hammes Co., a multibillion dollar development company that primarily builds health care facilities, but has also done work on major sports stadiums, including Lambeau Field in Green Bay. 

Dunn had been meeting with Mayor Dave Cieslewicz to lay the groundwork for an $80 million (now estimated at $98 million) renovation of the Edgewater, so he told Bruer he figured he could move the project through the necessary hoops quickly and start construction on it within a few months. 

Bruer chuckled. He wasn't about to let some hot shot developer tell him how to play in his own sandbox. "Your dog has fleas and it won't hunt," he recalls telling Dunn, whom he now knows well enough to call Bobby. (He also said something about the project sinking faster than the Titanic, he says.) "You might be great at building mega stadiums and health clinics but you don't know anything about local politics."

Bruer was right, Dunn says now. Just getting the project approved has been an arduous haul involving several major design changes and dozens of meetings in front of various commissions, committees and councils. Complaining neighbors and gadfly critics have been ever-present. And it's not over. Recently re-elected Mayor Paul Soglin's proposed budget slashes city tax incremental financing for the project to $3.3 million from $16 million, which means that City Council members will need to wade back into the controversy if they want to restore it during upcoming budget deliberations. 

It's like a horror movie character that just won't die. "I didn't sign up for this," groans rookie Ald. Lisa Subeck.

So why won't the Edgewater stop haunting us? 

I like Landmarks Commission Chairman Stu Levitan's answer the best: "Because it hasn't been built yet." Hard to argue with that.

But this is Madison, where we like to ponder our development projects, so I'll dig into the city's psyche. Lots of interesting theories there about how the hotel represents aspects of our past that we don't want to let go of. The original 1948 structure is one of the city's most beloved landmarks, except for its unfortunate 1970s addition, which like so much else built in Madison during that decade is downright ugly. Bob Dylan, Elvis Presley and Elton John hung out at the Rigadoon Room and big bands played on the roof as the sun set. 

Little people were welcome, too. Ald. Mark Clear still remembers the times his dad would dock the boat at the pier and buy him a soda. It was the pinnacle of excitement for a kid back then, he says. 

Many of us have such fond memories of the place, which might explain why so many of us are so emotional about it. Also, it has become a harbinger of the direction of development in Madison, where we have been experiencing a sort of identity crisis. People like former Mayor Cieslewicz argue that our stodgy city needs to get over what he calls its "fear of heights" and literally grow up with bigger, taller buildings. Others like Levitan argue that we need to preserve the lovely old buildings and character that make Madison Madison.

You can also point to a perfect storm of political factors that have made this debate so contentious, including big-money backing, an ambitious former mayor, and the resistance of a strangely effective rag-tag group of opponents that now has critical support from the current mayor.

A trove of city documents including lobbying records kept by the city clerk and a box stuffed with notes handwritten by Cieslewicz aide Mario Mendoza offer a new look at some of the dynamics and the behind-the-scenes maneuvering that led to this deal. (Mayor Paul Soglin's office allowed me to look through the box after I started asking about Edgewater's unusual tax incremental financing arrangement.) 

Interviews with more than two dozen key players in this drama complete a picture of a mayor and an administration that — far earlier than most people knew — formed an alliance with the developer to push this project through, and in some cases around, the city's approval processes. 

"To have such involvement was unusual," concedes Clear, an early supporter of the project. "You think gosh, it's just a hotel. But it took on a life and personality of its own that came to be uniquely Madison. And as it took on that life, more and more people spent more and more time and energy on it. It became this giant vortex."

It was a vortex that spit Cieslewicz out and sucked Soglin in. Many election observers say it was neighborhood opposition to the Edgewater deal that caused Cieslewicz to lose ground in vote-rich downtown wards nearest the hotel, leading to his narrow defeat in April. 

Dunn says, however, that Cieslewicz should have been even more "involved" in the fight. He certainly seemed plenty involved to me. The internal memos detail conversations the mayor and his aide Mendoza had with Dunn, project coordinator Amy Supple, Dunn's sister Sarah Carpenter and other Hammes representatives about how to navigate flak the project was encountering from neighborhood opponents. 

They show the mayor meeting one day with chief critic Fred Mohs, who warned that there would be a "heck of a fight," while meeting another day with the developer to discuss creating an alternative neighborhood group more sympathetic to the project. They depict efforts to get city staff to help build a case for the project and strategies for wooing alders for excruciatingly close votes. The mayor's office kept a running tally on score sheets of where alders stood on the various issues and whether they were "yes" or "no" votes.

In many ways, in fact, this battle resembled a political campaign more than a local development matter. Landmark X, the limited liability company Dunn set up to oversee the hotel project, spent $331,000 on lobbying in 2009, 2010 and the first half of this year — an "eyebrow raising amount," says Mike McCabe of the Wisconsin Democracy Campaign, which tracks the influence of money in state politics. 

City affairs blogger and former Ald. Brenda Konkel says the most she can remember being spent on lobbying for a single project before is $100,000 on the Hilldale Shopping Center. "A lot of people are under the impression that Madison is good, clean government and that money doesn't impact decisions here. But clearly if you have one side that can spend millions of dollars against another side that is just regular old citizens, they will get drowned out," Konkel says.

Dunn, however, says he considers the hundreds of meetings and phone conversations with city officials and staff documented in these records "project development," not lobbying. 

Then, when Paul Soglin took office in mid-April, the lobbying stopped. The reports show nothing but white space. As the big bucks lobbying halted, though, a band of regular critics dubbed "frequent fliers" by alders for their relentless appearances at council meetings got a second wind. The best known of the bunch is Fred Mohs, the wealthy local developer noted for his dapper suits and for trotting around with an enormous architect's model he had made of the project for $17,000. Mohs has spent $100,000 on a lawsuit that is holding the project up in the courts right now, and he has fought the renovation ferociously from the start. 

In September 2008, he invited Bruer to his mansion on the hill for a little lamb chop lobbying. His wife, Mary's, day book lists the menu: "toast points with cream cheese and tomatoes, lamb chops, fresh asparagus, and parsley buttered potatoes and peach sundaes." Mohs recalls that Bruer was about an hour late, stayed for three hours, and ate four lamb chops. He also recalls that Bruer told him that Mayor Cieslewicz had promised the Edgewater would be fast-tracked, avoiding the necessity of approvals from several city commissions and committees. (Cieslewicz strongly denies this.)

Edgewater backers including Clear and Bruer like to portray the battle as what they call the "Bob and Fred Show," the clash of two very different but very stubborn developers, one old school and the other young and brash. 

But others have been fighting the project hard, too. 

A handful of them regularly meets at the east side home of local historian Dave Mollenhoff and his real estate agent wife, Leigh, or at cafés to share the latest documents they have dug up. They have been firing off missives to alders trying to get them to oppose what Mollenhoff calls a "sweetheart deal." 

One of the latest missives from Mollenhoff is called the Edgewater's "list of shame." Phil Ball, an aide to Soglin decades ago and a Vietnam vet, spends hours on the phone trying to prod reporters into covering various aspects of the deal because he is outraged by its use of public tax dollars that he feels should be going to the public schools instead. Peter Ostlind, a preservationist, and Susanne Voeltz, a downtown public relations consultant have spent hours fighting the plan. 

And then there is Ledell Zellers, a Mansion Hill neighbor and preservationist; Paul Reilly, a former city comptroller; and John Jacobs, a state worker who sneaks downstairs to pore over city records while his wife is sleeping. John Martens, who served on the Madison Zoning Board of Appeals, is an architect who got involved after he scrutinized the renderings of the project given to the public. He took a tape measure and went to the Edgewater and discovered, he says, that the much "ballyhooed public access" grand staircase being depicted in the drawings was twice as wide as it actually would be when built. 

And of course now there is Soglin, whose early support for the project soured once he learned more about the way it was awarded $16 million in tax incremental financing (TIF), an extraordinarily high allocation that required several exceptions to usual city policy. Under TIF, cities lend money for developments and then recoup the loan over time with increased property tax payments generated by the improvements.

Shortly after becoming mayor, Soglin met with staff to ask them about the Edgewater. "It was even worse than I thought," he told me during a recent interview. "I was distressed because the staff had been directed to arrive at a conclusion. They were directed to devise a city TIF project that provided the developer the necessary $16 million because Bob Dunn walked into this office and said 'I want $16 million.' That is unprecedented." (Dunn confirms that he told the city he needed $16.8 million to make the project work right from the start.)

When he was mayor in previous years, staff called the shots, Soglin said, not the developer, and that's how he intends the process to work again. "We're going back to the old ways of doing things around here," he says.

It's clear from Mendoza's handwritten memos that Dunn focused his attention on the mayor's office. Reading the first of those notes, from July 30, 2008, it was clear to everybody that the project had the potential to be big at this first meeting with the mayor. 

Mendoza writes Bob Dunn's name and then the word "destination" on his stationery, with notes that the hotel project would cost $80 million to $85 million and that Hammes has $4.5 billion to $5.5 billion in current projects. Also noted is the developer's plan to increase the 107 rooms at the hotel to 200 and to nearly double parking stalls owned by neighboring National Guardian Life. (That company, by the way, also stands to profit from the Edgewater renovation, since it owns a third of the hotel and will be paid several million dollars for that share and a portion of land needed for the expansion.)

By the time plans for the Edgewater publicly debuted on the front page of the Wisconsin State Journal on June 28, 2009, as "a new city living room," Dunn and the mayor had already joined forces. The mayor met the developers at least 10 times in 2009, according to lobbying records (none were filed for 2008 despite Mendoza's notes showing contacts had been made), and Mendoza talked with them on at least nine occasions. The records also note many other meetings the developer had with council members or city staff. 

Several sources who asked not to be identified told me that as the process unfolded, great pressure was put on members of city commissions and committees, on alders, and on city staff to get the project moving. Ald. Mike Verveer even claims to have seen staff "bullied" into bending rules for the project. "And when I say bullied I mean in an insulting way told by political staff in city hall that the professional staff needed to interpret ordinances in particular ways and policies in particular ways and to grease the wheels for this proposal," he says. "Many city staff and alders have battle scars from Edgewater. In my 16 years I've never seen anything like it."

One of those battle-scarred employees describes getting calls from the mayor's office, from alders, and from angry neighbors and opponents of the project. "It was just chaos. It was like having 15 chefs in the kitchen throwing crap in the pot and it tasted like crap," this person recalls.

The degree to which the mayor and Mendoza were involved at the front end of working on the Edgewater with the developer was unusual, according to Brad Murphy, who was and remains head of the city's planning department. "The more active involvement of the developer working directly through the mayor's office and meeting with the mayor was just very different," he said. "Most of the projects' developers work through the agencies that are reviewing the project."

Murphy says there was no "directive" from the mayor to do anything in particular on the project, but adds that "we certainly knew the mayor was supportive of the project and wanted to see the project get to the point where it was approved." 

Cieslewicz defends his active role in pushing the project forward and his close work with the Edgewater developers, saying the project was "beautiful" and that the city desperately needs to create more jobs and pump up its tax base. 

"So I was strategizing with other supporters of the project. How does that make me a bad guy? The mayor is not a judge. He is not supposed to be unbiased. Why is it wrong for a leader to take a strong position? I did do everything I could to make the project happen. That is what leaders are supposed to do."

Leadership also means getting staff to back his decision, Cieslewicz says. "Compared to the way Paul pushes people around," he says, "I'm little Orphan Annie."

The mayor's office fought side by side with the developer for the project right up until the last moment. On the Friday before the City Council's pivotal vote on May 19, 2010, Mendoza hired two consulting firms for $5,000 each to quickly put together reports for the Tuesday council meeting. The report by Hunden Strategic Partners sent to alders concludes: "The project is very worthy and it will add to the destination appeal of downtown Madison."

Meanwhile, emails from alders right before the vote made it clear they were overwhelmed and confused and depending on staff for guidance. One sent a Blackberry phone message to Comptroller Dean Brasser asking for financial information: "Boy there is nothing simple about this one, eh?" the message asks. "You are correct," Brasser replies, sending the alder details about the TIF request. "It is anything but simple."

More than a year later, it still is anything but simple. About the only thing that is certain is that the key players in this drama do not intend to back down. Dunn says he has already invested millions of dollars into the project, that he has never walked away from a deal before or given up such a battle before, and he does not intend to now. 

"I have just one focus," he says, thumping the table with his hand for emphasis. 

"I don't spend my time worrying about b —  — - like lawsuits. We will see this problem through to a conclusion." 

Mohs says he will continue to fight the project in the courts as well. And Soglin says he is determined to hold his ground, too. 

"I'm not popular with this decision but it's the right decision," he says. "I was not elected to this office to be a potted palm." 

His old friend Levitan predicts Soglin will veto the entire budget if council members defy him and restore the TIF funds. "Let's put it this way," Levitan says. "If there is a $16 million TIF in the 2012 budget for Edgewater we should just put out an all-points bulletin because we will have a mayor missing in action."

One thing that might chase this monster away is an even bigger development battle, and one appears to be brewing. Several people predict that the $10 million plan by Jerry Frautschi and Pleasant Rowland to redo a stretch of State Street might end up an even more emotional and complicated mess. It also involves the ambitions of big players in town, big bucks, big preservation issues, and a debate about what we want the heart and soul of our city to be. 

Ald. Larry Palm says he is ready, even if his colleagues are not. 

"Sometimes I wonder if my fellow council members realize they are politicians," he told me recently. "They want to think that they are just good citizens of Madison helping out. No, this is politics." 

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