Madison staff are recommending a Milwaukee-based developer to build a grocery store and rental housing, including some affordable units, at a vacant lot on South Park Street.
The new development is slated for the former Truman Olson United States Army Reserve facility located at 1402 S. Park St. It is also connected to the fight to keep a grocery store on Madison’s south side.
South Madison Unite, a group that rose up to advocate for preserving food access on the south side, says the community wants a grocery store with a firm commitment to serving the needs of the neighborhood, to employ area residents, work with SSM Health and nonprofits to promote nutrition education and meet periodically with the community.
“This must succeed,” said Carrie Rothburd, a member of South Madison Unite. “There’s no option of failure.”
City staff recommend moving forward with Rule Enterprises’ proposal for a 30,000-square-foot grocery store, a 345-space parking garage and 150 units of rental housing. Some units would be reserved for residents with incomes between 30% and 60% of the area median income, with the remaining units for households with incomes between 60% and 80%.
A second phase would include 80 rental units that would sit on top of the structured parking.
“It provides the city with an opportunity to work with a new developer on a new product: affordable housing with a grocery and structured parking,” said Dan Rolfs, city community development project manager.
A resolution to begin negotiations with Rule Enterprises will be introduced to the City Council Tuesday for a potential decision from alders Dec. 3, following a review from the Finance Committee.
Staff recommended Rule Enterprises’ $41.3 million project over proposals from Baehr Inc., Valeo and McShane Construction, Welton Enterprises and Gorman & Co. These developers responded to a request for proposal that required applicants to include a plan for a full-service grocery and extend Cedar Street through the Truman Olson site.
Half of the developers applied with an identified grocer. Gorman proposed collaborating with Maurer’s Market and Valeo proposed working with Capitol Centre Foods.
City staff recommend that Rule Enterprises secure a grocer by Jan. 16. If the developer does not, then the city would begin negotiations with Gorman & Co.
“We have a strong fall back option with Gorman,” Rolfs said.
The Madison-based developer proposed a $22.8 million, five-story project that would offer 93 units for households making between 30% and 60% of the area median income. Gorman would also work with Maurer’s Market to build a 24,000-square-foot grocery store.
South Madison Unite’s primary concern is Rule Enterprises’ lack of a secured grocer partner.
“We favor a developer that has a firm commitment from a grocer who pledges to do everything reasonably possible to meet the varied needs of the diverse South Madison community,” a statement from the group said. “This grocer should have a demonstrated commitment to building a grocery store in South Madison.”
Rule Enterprises' project would require subsidies from the Wisconsin Housing and Economic Development Authority and proposes to pay the city $1.5 million for the property while also requesting $2 million in city affordable housing funds. Gorman’s project would also require WHEDA funding, pay the city $1 for the land and request $2.98 million of total city financial assistance, including land costs and affordable housing funds.
The city began seeking proposals for the vacant site about two years ago and reissued the call for projects in May.
In late March, SSM Health planned to purchase and demolish the Pick ‘n Save grocery store at 1312 S. Park St. to make way for a new clinic. After community members expressed concern, SSM decided to change course in May and build a replacement clinic on its existing property on Fish Hatchery Road.
The Pick ‘n Save’s lease ends in 2022. Rule’s first phase, which includes the grocery store component, is estimated to be complete in early 2022 while Gorman’s project is estimated to be complete in late 2022.
Ald. Tag Evers, District 13, said the primary goal is to avoid a grocery gap in south Madison. He said Rule Enterprises’ proposal is the “best chance” to achieve that goal. He also credits SSM Health for relocating its new clinic, which he called a “big piece of the puzzle.”
“What we need to do is make sure Pick ‘n Save stays open all the way up until the time we open the doors of the new store,” Evers said.