In the latest turn of a winding saga, the developer chosen to do the massive $175 million Judge Doyle Square project Downtown is now seeking to step aside from another major piece of the redevelopment — the centerpiece hotel to serve Monona Terrace.
Beitler Real Estate Services, of Chicago, is looking to transfer its development rights for a nine-story, 260-room hotel on the 200 block of South Pinckney Street to Minneapolis-based Mortenson Development. The change of hands — and several City Council actions needed to make it happen — is inching up on a December deadline to secure financing for the hotel.
Additionally, the proposal would have Mortenson buy the land from the city instead of lease it and changes how many parking spaces would be leased in public garages for hotel guests, said city finance director Dave Schmiedicke.
Downtown Ald. Mike Verveer, 4th District, said it’s “quite possible” Mortenson will partner with another owner on the hotel. Despite another shakeup in the two-block, public-private project, Verveer said he’s optimistic ground will soon be broken on the hotel, which is slated to be an Embassy Suites.
“I’m very pleased that we have seen significant progress to our long-term goal of providing additional rooms to primarily serve the long-term needs of Monona Terrace after considerable delay and several false starts,” he said.
On Monday, the city Finance Committee will be briefed by staff on the proposed transfer of development rights and the associated changes. One of the changes, according to a presentation for the meeting, would have Mortenson buy the hotel land from the city for $4 million instead of moving forward with a long-term ground lease included in a development agreement with Beitler.
Mortenson is also seeking to lease up to 200 stalls in public garages, including the Wilson Street Garage across Pinckney Street from the hotel site, for an initial term of 40 years, according to the presentation. It’s a significant increase from the 40-stall, 10-year agreement the city struck with Beitler.
Schmiedicke said Mortenson will need to demonstrate by December it has financing for the hotel — a deadline that’s included in the existing development agreement, which would need to be amended to reflect the change in ownership.
Verveer said he expects the City Council to take action on several items, including an amended development agreement, sale of the land and change to the parking lease, within the next couple of months.
Having already cut a deal with the city to exit a housing element under construction on the other side of South Pinckney Street, Beitler remains the selected developer for a final housing phase of the Judge Doyle Square project. That housing component would sit behind the hotel on the block that formerly held the Government East parking garage.
Representatives of Beitler and Mortenson did not respond to requests for comment Friday.
In 2016 — after failed attempts to advance a project — the city chose Beitler to do a redevelopment that would include a hotel to serve Monona Terrace, apartments, commercial space and parking on blocks that hold the landmark Madison Municipal Building and now-demolished Government East parking garage.
Beitler then unveiled a bold design with curved, glass-sheathed towers on each side of Pinckney Street. But the city and Beitler had legal disputes, and in January 2019 the City Council approved paying Beitler $700,000 to give up rights on the Municipal Building block.
The city then issued a new request for proposals and eventually chose Stone House Development to build the $40 million apartment building above a $50.4 million city-owned structure with an underground parking garage, first-floor commercial space and bike center, and two floors of parking above the commercial space on that block.
After the underground Wilson Street Garage opened in June 2020, the city proceeded with demolition of the aging Government East parking garage, which would pave the way for Beitler’s two projects on that block — construction of the hotel and potential apartments.
In October, Beitler, which initially proposed a shimmering, 12-story glass-sheathed hotel, announced it would build a nine-story structure that retains the curved shape facing the street but abandons the dominant glass appearance for a mix of metal panels and glass and some masonry at the base.
Despite the reduced height, the hotel would still have roughly 260 rooms and other amenities including a first-floor lobby with bar, restaurant and meeting spaces.
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