Plans for city-owned property on South Park Street are shifting once again, and they’re getting smaller. From the city’s standpoint, the changes seem to bring the project closer to reality.
Two potential developers were competing for the chance to build on the space at 1402 S. Park St., but later combined their ideas into a joint proposal. Then one developer dropped out of the bid. In the latest news, the other developer, Welton Enterprises, just downsized their plans for the site.
Madison owns the 3.5-acre property on South Park Street, formerly the Truman Olson United States Army Reserve Center, next to a Pick 'n Save grocery store.
Welton Enterprises downsized its proposed project, named Truman Commons, from a $24.8 million development to about $17.9 million, cutting some square footage and parking space to make the project more feasible.
SCALED BACK PROPOSAL
In January, Welton proposed an over 40,000 square-foot grocery store on Park Street and a five story, 69-unit housing complex with market-rate units, affordable units and townhomes. Plans called for 119 stalls of surface parking for the grocery store and 81 stalls of parking, some underground, for the housing.
New plans call for a 30,000 square-foot grocery store and a four-story, 52-unit housing complex. There would be 90 surface parking stalls for the grocery store and 70 stalls for housing, again with some underground.
The first project called for a $15.8 million affordable housing with a $500,000 TIF request and a $9 million grocery store with a $1.75 million TIF request.
Updated plans say the $6.6 million grocery store would need a smaller TIF request of $775,000, and the $11.3 million affordable housing would need just $200,000 in TIF funds.
These adjustments were made in response to several concerns, revised plans from the developer say.
Welton scaled the grocery store down to 30,000 square feet after deciding a larger store was “potentially cost prohibitive and larger than necessary to … meet the needs of the neighborhood.” The current Pick ‘n Save is 26,000 square feet, said Welton Vice President Paul Molinaro.
Originally, Welton planned to break ground on both the grocery store and housing after receiving crucial affordable housing tax credits. They would have had to wait for credits before starting work on the grocery store because of the way underground parking was planned, Molinaro said.
But the tax credit application and approval process is long, and are no guarantees Welton would receive them, potentially leaving the neighborhood without a grocery store for an extended period of time. In the new plans with less underground parking, the grocery store would begin independently of the affordable housing, “as soon as approvals can be granted from the City,” the revised plans say.
That’s particularly important for the neighborhood. Previously, Carrie Rothburd, a member of the Bay Creek Neighborhood Association’s planning and economic development committee, called Pick ‘n Save the only grocery store “of any significance” in south Madison.
“We see this as an important issue, certainly looking toward revitalizing Park Street and making it more of a community street,” Rothburd said in June.
Welton just re-signed Pick ‘n Save to a three-year lease renewal, but either party could pull out with six months notice, Molinaro said in January.
From the city’s standpoint, these appear to be changes in the right direction.
Welton was scheduled to present before the Truman Olson Selection Committee with revised plans last Tuesday night, but the meeting was cancelled. Dan Rolfs, community development project manager for the city, said this was due to snow and to allow more time for city staff to offer meaningful feedback on the changes.
City staff just received the updated plans last Monday, and it would be difficult to provide an accurate staff report on the plans so quickly, Rolfs said, adding the meeting may be postponed for a “couple of weeks.”
“I thought the changes would be relatively minor; the changes that they made are more substantive,” Rolfs said, adding, “I don’t think it’s a bad different, I think it’s progress in the right direction.”
One of the city’s primary concerns through different proposed plans has been the high level of city support needed for the projects, Rolfs said.
“The most recent proposal that they gave us yesterday seems to move things closer to where there’s a possible deal,” Rolfs said.
One of Welton’s earlier proposals included a TIF request of over $7 million. In the newest plans, Welton’s total TIF request is under $1 million.
In other city support, Welton is asking for $1.2 million from the city’s Affordable Housing Fund, and proposed purchasing the land for $900,000, though the appraised value is between $1,875,000 and $2,125,000.
The plans for the Truman Olson site have already gone through several iterations. Originally, the city issued a request for proposals to develop the vacant property, listing goals like connecting Cedar Street to Appleton Road, increasing the tax base, developing workforce housing and keeping a grocery store in the area.
Welton Enterprises and a Hovde Properties/SSM Health team responded to the RFP. Welton also owns the Pick ‘n Save next door at 1312 S. Park St., and SSM Health owns about 13 acres in the area that include an existing clinic at 1313 Fish Hatchery Road, which SSM has been planning to replace.
But in May, the two teams asked for a hold on proceedings after deciding to combine their proposals for the site.
By combining their plans for those properties, instead of focusing on just the 3.5-acre Truman Olson site, the two development teams could create a master plan for approximately 20-acres, Brandon King, director of facilities management at SSM Health Dean Medical Group, said at the time. That could mean a “more seamless and meaningful neighborhood review and city approval process."
Then in January, the Wisconsin State Journal reported that SSM Health was dropping out of the bid for Truman Olson, but still plans to work with Welton and build a 176,000 square-foot clinic in the area. According to meeting minutes from a Jan. 15 Truman Olson Selection Committee meeting, King said SSM Health was working to acquire the Pick ‘n Save site from Welton for the clinic.