After a spring and summer of quarrels and talks, Mayor Paul Soglin is proposing to revise a deal with a developer — including the city making a $600,000 payment — to help move forward the massive, $186 million Judge Doyle Square project south of Capitol Square.
The project — slated to bring a hotel, apartments, retail and commercial space, and more than 1,000 parking spaces to the two Downtown blocks where the Madison Municipal Building and Government East parking garage are located — has been complicated by disputes between the city and developer Beitler Real Estate Services, of Chicago.
Soglin and others introduced a resolution to the City Council Tuesday night that would amend the development agreement with Beitler to help mend strained relations and keep construction moving.
“It’s an approach that keeps the time lines moving toward a finished product,” said David Schmiedicke, city finance director.
The city is currently building a $50 million, 560-stall underground parking garage on space behind the Municipal Building, but Beitler informed the city in April that, due to rising construction costs, it would not be able to build private elements above the parking garage.
Beitler asked the city to consider leasing space in the public parking garage or funding first-floor retail space, two floors of private parking and a structural slab — collectively known as “the podium” — that would then be able to support further development on the block.
The developer hoped to build nine floors of apartments above the podium and intends to construct the hotel to serve Monona Terrace and more apartments in two towers on the Government East property once the garage there is demolished.
In May, the City Council allocated $11 million in funding to build the podium. But in June, Beitler filed a lawsuit in U.S. District Court in Illinois alleging the city “unilaterally seized, for its own financial gain, the development of an above-grade parking structure and retail assigned to Beitler.” The developer, however, dropped the lawsuit the following month.
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The big continuing questions are the pacing and order of development after the public garage and podium are completed.
The city anticipated Beitler would build the apartments above the podium next, but the original development agreement allows Beitler two years after the public garage is completed to secure financing for any one of the three major private components, which lets Beitler first begin work on the hotel on the Government East block.
For the past two months, the city and Beitler have continued negotiations to resolve disputes, leading to a resolution to amend the development agreement introduced Tuesday by Soglin, council President Samba Baldeh and Downtown Ald. Mike Verveer, 4th District. The resolution will be considered by committees, with a council decision anticipated on Oct. 30.
“I’m not enthusiastic about the resolution I’m sponsoring with the mayor,” Verveer said. “(But) it’s the best and most realistic way forward with Beitler Real Estate Services.”
Under the resolution, Beitler would transfer the development rights to the podium to the city for $600,000, which is Beitler’s estimate of the cost of the delay in starting construction of its hotel on the Government East block due to the city’s delay in completing the Municipal Building block parking garage because of the podium construction.
The resolution has the city making the $600,000 payment in eight monthly installments with mutually agreeable terms for Beitler using parking in the podium.
In addition, the resolution would have the city approve a room block agreement for Monona Terrace in the roughly 250-room Hilton Embassy Suites hotel to be built on the Government East block. That agreement would secure a minimum block of 210 rooms for convention center events booked at least 24 months in advance.
Also Tuesday, the council approved a major alteration to the planned development to allow the podium to be built.