It’s taken a decade, but the Alexander Co. has survived the Great Recession, a saturated condo market, a demanding but now defunct affordable housing ordinance and even a hurricane to finish a much-anticipated redevelopment of a prized block just west of Capitol Square.
The roughly $150 million, multiphase project is now complete with the opening of the last piece, the 11-story 306 West apartments at the corner of South Henry and West Main streets.
All told, a nearly full block once home to Meriter’s original hospital is now a modernistic complex with 164 condos, 172 apartments, a 151-room Hyatt Place hotel, 80,000 square feet of commercial and 9,500 square feet of retail space, and 970 parking spaces.
The project marked the developer’s return to building in Madison after doing projects outside the city between the early 1990s and 2000s over frustrations with city officials and other reasons.
Alexander celebrated the completion with an open house at the new apartments on Thursday.
“I’m very, very proud,” company president Joe Alexander said. “It was an ambitious plan to start with. It did evolve in the type of housing. But we’re relieved to be done. I think we’ve completed a really unique project for Downtown Madison.”
Ald. Mike Verveer, 4th District, said, “It’s hard to believe it’s been 10 years. When you think of all the various hurdles that had to be crossed by the Alexander Co. and its partners, it’s really remarkable how the block has transformed.”
A site with promise
A specialist in historic rehabilitation and long one of Dane County’s high-profile developers, the Alexander Co. is responsible for the rebirth of the Regent Street rail corridor near West Washington Avenue and many other projects.
But by the early 2000s, Alexander had become frustrated with the administration of former Mayor Sue Bauman and for more than a decade built in the town of Madison, Middleton, Verona and outside the county.
Meanwhile, Meriter was studying uses for its property and eventually sought developer proposals for the site. At the time, the block was home to the hospital, Jackson Clinic, administrative and nurses dorm space, and a parking garage, all vacant or underused.
In January 2004, Alexander returned to the city with flair, with then-Mayor Dave Cieslewicz and Alexander, selected by Meriter from among a half-dozen applicants, announcing the project at a press conference.
“It’s good to be back,” Randy Alexander, Joe’s father, then president of the company and now its chief executive officer, said at the time. “We really, really look forward to this challenge.”
Little did he know what lay ahead.
The Alexander Co. returned for one big reason, Joe Alexander said. “It’s extremely rare in any Downtown environment to reimagine an entire city block,” he said. “It was the magnitude of the opportunity.”
The original concept called for all condominiums, office and retail space. Some buildings were demolished. The hospital building’s bones were preserved and the building made wider and taller for condos. The clinic that had been converted to offices and the parking garage were reused.
It was a time of great optimism for ambitious projects.
Later in 2004, McGrath and Associates announced a major mixed-use project for the Union Corners site at the corner of East Washington Avenue and Milwaukee Street, and Gorman & Co. proposed another for the 800 block of East Washington Avenue. In early 2005, Curt Brink rocked the city with a plan for the 27-story, $250 million Archipelago Village on the 900 block of East Washington Avenue.
But the recession eventually took hold and the condo market dried. Of the big projects offered in the early 2000s, only Alexander has brought vision to reality.
“A lot of it is confidence and perseverance,” Joe Alexander said. “We had a lender and investors who shared that confidence. We got great leadership from Dave Cieslewicz when we started the project and were lucky to continue to get great leadership from Mayor (Paul) Soglin.”
But it wasn’t easy.
Alexander started the redevelopment in 2006, but it stalled in mid-year, with the developer citing high construction costs. The stoppage left the former hospital building looking like a stripped, abandoned skeleton. The higher costs were driven by Hurricane Katrina, which struck the Gulf of Mexico in the late summer of 2005, drawing construction resources nationwide to the region and causing building prices to soar nationwide, Joe Alexander said.
But the company revised plans, navigated a second city review process, and moved forward.
“There were times our relationship was a little rocky,” said Jonathan Cooper, chairman of the Bassett District of Capitol Neighborhoods Inc. “But overall, the Alexander Co. has been pretty good to work with.”
The project also came during the infancy of a new city law called inclusionary zoning, dubbed IZ, that made developers include low-cost housing in projects.
In November 2006, the city gave Alexander $4.27 million in tax increment financing (TIF) for the first phase of the project to help cover the cost of selling 18 condos far below market prices to comply with IZ. The TIF money came with strings requiring Alexander to sell condos by certain deadlines.
As the recession deepened and the condo market withered, Alexander failed to meet sales deadlines and twice needed extensions from the city. Alexander, facing repayment of millions of dollars, eventually met targets and the condos are now sold. The TIF loan is repaid and no other piece of the project needed public support.
As the project progressed, IZ collapsed. The courts struck down rules for rentals in 2006 and the city abandoned them for owner-occupied units in 2009.
In the meantime, Hyatt approached Alexander about buying land on the block and the city approved a hotel rather than planned condos. Alexander then won permission to build apartments rather than condos in the final phase.
Rather than a monolithic hulk, the project has multiple structures and entrances on the exterior and interior of the block, which is bisected by a walkway and a small street. “We wanted it to open to the Downtown and the neighborhood,” Joe Alexander said. “We wanted to knit it to the city.”
The architecture has a broad “international style” theme, but the buildings have unique colors and identities.
“You can always argue about architecture in Madison, whether or not it reaches the heights it really could,” Cooper said. “But the ensemble of buildings work well together.”
‘A 24/7 block’
Despite the challenges, the four-story Broom Street Lofts condos designed to blend into the scale of the Bassett neighborhood were completed in 2007. The 11-story Capitol West condo building facing West Washington Avenue was done in 2008. The 11-story Hyatt Place, also on the main thoroughfare, was finished in 2010. The apartment building, also 11 stories, opened in May.
As it turns out, Capitol West was the last major condo project built Downtown, which is now amid a flood of tony apartment buildings.
Alexander’s rentals, with upscale finishes, wood or concrete floors, Internet connections and gas hookups for balcony grills, are already about 65 percent leased. The office space, now home to Alexander’s offices and a Meriter clinic, should be leased by the end of the year.
“In the end, I think it all turned out better,” Joe Alexander said. “It’s more diverse in terms of housing. It’s a 24/7 block in terms of activity.”
Cooper said, “I’m sorry the original plan didn’t come to fruition. But it is what it is, and it’s pretty good.”
The company came close to quitting, Joe Alexander said.
“There were a few years when people were banging their heads, but we never gave up or sacrificed our overall plan,” he said. “It was far too great an opportunity for Downtown Madison to pass up or screw up.”