Tracy Ballweg has lived in the Prairie du Sac area much of her life, but with her daughter heading to UW-River Falls for college, the time was right for a move to Madison.
So the co-owner of Velvet Waxing Studio on West Johnson Street started hunting for an apartment.
“I wanted to be near downtown but I really didn’t want to live next door to students,” says Ballweg, whose credits include doing makeup for Katherine Heigl of "Grey's Anatomy" fame when the actress was in Madison for an independent film.
Ballweg first looked near Hilldale and then along Monroe Street before signing a lease for a sparkling new two-bedroom apartment at the Constellation, the much anticipated 12-story mixed-use building on the 700 block of East Washington Avenue.
“It’s got a great urban feel and is close to everything without being right on campus,” says Ballweg, who also likes riding her bike with a front basket the 10 blocks to the waxing studio.
Towering over any other building east of the Square, the Constellation is an impressive development on many fronts. The project includes 220 apartment units and 32,500 square feet of commercial space on the first three floors built around a 275-stall parking structure.
The view from the rooftop rivals any in Madison, with unobstructed looks at both lakes Mendota and Monona, not to mention the State Capitol. One can peer down on the green grass playing field at nearby Breese Stevens Field to a watch a soccer or ultimate Frisbee match.
And the location has proven an easy sell: all the apartments were rented before the building opened on Aug. 1.
“Even with our most optimistic projections, we had no idea it would fill that fast,” says developer Otto Gebhardt. “I thought it would take at least six months.”
The Constellation is benefiting from the 6,000-plus employees who work at Epic Systems in Verona but prefer to live in downtown Madison. The project was marketed directly to Epic workers during construction, with Gebhardt estimating that 35 percent of the units are being rented by employees of the electronic medical records giant.
But Gebhardt is actually more impressed with how the project is attracting a variety of tenants, including empty-nesters, young professionals and even a handful of families. Rents range from $2,200 for three-bedroom units to $900 for efficiencies, with one-bedroom units priced at $1,000 to $1,400 depending on the views.
“We’ve got a real nice tenant mix,” says Gebhardt, 45, a Madison native who attended East High School and has been active on the local real estate scene since purchasing and refurbishing the 26-unit Colonial Corner apartment building at 2617 E. Johnson St. in 1995.
The East Washington Avenue corridor has long been identified as ripe for development but progress has been slow, in part because of the housing bust and the economic downturn that followed.
Gebhardt’s group was finally able to put everything together for the $39 million project using a combination of $3.4 million in city tax incremental financing, borrowing from BMO Financial, New Markets Tax Credits, Midwest Disaster Bonds and private equity.
“You use what’s out there,” says project architect Chris Gosch of Bark Design.
Calling the Constellation a transformational project for Madison might prove a stretch but city officials and downtown advocates are clearly excited about the potential for the long underutilized corridor.
“There is momentum for large-scale development projects such as these — and the Constellation will definitely have developers, brokers and residents sitting up and taking notice,” says Steve Cover, director of Planning and Community and Economic Development for the city.
Troy Thiel, a Realtor with Keller Williams and past chairman of the city’s Downtown Coordinating Committee is also impressed.
“Simply put, it is the next biggest economic development corridor in the future of Madison, if not the state,” he says.
Adding to the excitement is the signing of Google to a 7-year lease for 8,000 square feet of office space on the second floor. The Internet firm currently has about 30 workers in rented space four blocks away on South Blount Street but was looking for more room in anticipation of future hiring here, says Google spokeswoman Katelin Jabbari.
First floor retail space in the Constellation is being leased by Cargo Coffee, the third location for that business, and Star Bar, a cocktail and craft beer bar. Anderson Dental is renting space on the third floor.
Still, Thiel says encouraging more employers to locate in the corridor will be the key to long-term success. The other side of the Avenue is identified in the Capitol Gateway Corridor Plan for commercial uses but development has been slow to come there.
“My hope is that other entities, including Trek, Epic or Madison College reconsider the corridor location for their expansions,” he says. “It makes a lot of sense and the city should start that discussion.”
Ald. Marsha Rummel has been a supporter of the project from the beginning, despite some grumbling from affordable housing advocates over the rents in the new building. The Constellation includes two dozen units priced lower so the project would qualify for government financing help.
“Affordability has been a city-wide concern and the real estate crash made it worse,” says Rummel. “To make units affordable will require subsidies from local, state and federal funders.”
But Rummel is encouraged, nonetheless.
“Otto Gebhardt had the resources, timing and the vision to be the transformational pioneer,” she says, noting he was successful in getting city permission to exceed building height limits.
Meanwhile, plans continue to move forward for development of the 800 block of East Washington Avenue. That site, along with the Constellation site, were part of the city’s 2010 purchase of the old Don Miller car dealership for $5.8 million with an eye toward revitalizing the corridor.
A team led by Gebhardt and Metcalfe’s Market have gotten the initial city OK for a $65 million project that includes a mix of office space, apartments and a grocery store aimed at serving both the existing Tenney-Lapham neighborhood and attracting new businesses.
Earlier plans for an office/commercial building on the 800 block site from Urban Land Interests failed to materialize last year when the developer and city couldn’t reach an agreement on tax incremental financing. ULI was also having difficulty finding anchor business tenants for the site.
But Gebhardt is optimistic that project will come together. He says discussions with the city over TIF assistance are moving forward and BMO Financial is again interested in providing bank lending.
“We’d like to start work there before the end of the year,” he says.