Terrence Wall
Madison progressives really dislike Madison developer Terrence Wall. Time and again, Wall has tried to rally the business community to battle Progressive Dane's agenda -- sick leave, minimum wage, city-lobbying registration, the whole PD kit and caboodle.
At times, even his fellow business executives wish that Wall would shut up. Off the record, they will tell you that his obstreperousness threatens the deal-making that always goes on quietly between Madison's liberal-minded leadership and the local bizzers.
So how tempting, then, for the city's left-of-center majority to ignore what Wall says or to dismiss his message as mere political posturing. Can I suggest that folks hear him out?
After writing this week's story on Tax Increment Financing and interviewing way too many people, I found myself bulging with unused notes. None perhaps more interesting than my interview with Terrence Wall, Dane County' largest office developer.
Basically, his story is this: Wall was a Madison-focused developer of mostly office and commercial space (High Crossing on the east side, City Center West on the west side, the Center for Industry & Commerce by the airport) who decided he had to move heavily into suburban development.
His real estate holding company, T. Wall Properties, now has major "urban village" proposals -- Tribeca, West End, and Harvard Square -- pending, respectively, in Middleton, Verona and Fitchburg. In addition, Wall Properties bought eight office buildingx in Greenway Center, in Middleton, last spring for a reported $150 million.
Why? Because he says that's where his customers want to locate.
Personally, I think Wall exaggerates the importance of Progressive Dane's city council agenda in prompting this flight to the suburbs (economics and location are bigger factors, I'd wager), but the shift itself should be worrisome for anyone concerned about Madison's future.
Basically, the flight of jobs and the middle class families that follow them to the suburbs threatens the economic and social health of Madison. And I have to ask: Is the city doing enough to keep it from happening?
Here is an edited transcript of my interview with Terrence Wall.
Isthmus: How has your business strategy changed?
Wall: We have made a concerted effort over the past year and a half to get into Middleton, Verona and Fitchburg. We see tremendous potential there -- a lot of growth there, a very pro-business environment.
Our customers were starting to tell us that they wanted to go, that they wanted get out of Madison. Where can we go? What are our choices? We had never heard that until about 18 months ago. So we saw the writing on the wall, and stared looking for property. We have sites in all three jurisdictions as well as in Sun Prairie.
What were your customers saying?
I had the manager of a tech company tell me that the national headquarters would require him to move from Madison if the sick-leave ordinance passed, because headquarters was not prepared to have a separate sick-leave policy for Madison that was different from the policy for the rest of the nation.
Business has enough problems to face without having to deal with Madison and sick-leave and minimum-wage proposals. They don't need the aggravation.
Isn't it self-serving for your political agenda for you to say this?
I can totally understand the question. That's why I don't want it to sound like the usual rhetoric, but I'm not an idiot. I'm very in tune to the marketplace. I listen to my customers very carefully. When my customers start saying something, I'm going to try to put my thumb in front of the tidal wave and enjoy the ride -- as opposed to swimming against the tidal wave. You would not have heard this from me 18 months ago.
Three years ago, business people in this community were apathetic. They weren't in tune with what was happening politically. Really, you couldn't get them interested.
It's the stuff that came down the pipe he last three years that woke a lot of them up. Suddenly they realized this stuff was impacting their business. Their corporate headquarters were telling them: 'We're not going to have separate policies for Madison. So you, Mr. Manager, figure it out. If that means moving from Madison, then move.'
I must have had five or six managers tell me this over the last 12 months. And I know there are a lot more I haven't talked to.
Up until January 2006, we had no interest in Verona, Fitchburg or Middleton. For anyone to say [our shift] is politically self-serving, they're wrong. We got the message from our customers, and we're responding. Frankly, I've been competing against Middleton in particular, for the last 15 years, and I'm tired of it.
Between our Middleton, Verona and Fitchburg properties, we can build 3 million square feet over the next ten to 20 years. We actually have more building square footage in Middleton now than in Madison. All of that happened in the last 12 months.
But isn't it inevitable that development will sprawl out to the cheaper land in the suburbs? That's the way it's always seemed to go.
I can see that argument: Bedroom communities do become commercial centers and retail centers. I see the natural evolution. But I don't think it's inevitable.
You know me, I've been invested on Madison's eastside since 1990. We didn't start on Madison's west side until 2000. I was one of the few developers to have his assets wholly in the city of Madison. I had all the reasons in the world to promote Madison. But I saw my lunch being eaten.
I don't think it's inevitable. Look at East Washington Avenue. If Gary Gorman had gotten a TIF, his [Avenue 800] project would have kick-started the entire redevelopment of that corridor. It would have been Gary's project and the Capitol anchoring one end and the McGrath property, Union Corners, anchoring the other.
The entire corridor, between the Capitol and Union Corners, could have been redeveloped over maybe ten years with a million-square feet of office space. But the city did not have the commitment to get it done, so they weren't willing to give a few more bucks in TIF.
The result is that Gorman's project isn't going ahead. So the area is languishing. The city could have captured that million square feet of office space rather than seeing it move west to the suburbs.
You don't think that sort of new development is headed there anyway?
The best argument I can make against it being a natural evolution is that greater Madison is an anomaly compared to how other cities have evolved. We are pushing further and further west into farmland when other cities normally evolve towards their infrastructure -- major highways, the interstate and the airport.
All of those assets are on Madison's east side. While there is growth on the east side, it's not at the same rate as we see on the west side. So it's an anomaly. And it's clearly being driving by Madison's politics.
These other cities [Middleton, Verona and Fitchburg] see the demand. They have companies coming them saying they want to be there.
I'm not making those site decisions, the companies are. When we offer them space, we offer them space in any of our properties in Madison, Middleton east, west. We let them chose. They decide where they want to go. Not us.
Let's step back for a moment. What will happen to the city of Madison if these economic trends continue? The city, as you know, is nearing the end of its ability to annex new land for expansion.
There are two possible paths. Right now, it looks like we're taking the path that Milwaukee took. First the wealth leaves, then the middle class leaves because of the schools aren't good anymore. You see them fleeing to the suburbs.
First, they take their homes. Then they think, 'Hey, I could work just as easily in the suburbs.' As a result, you see these little suburban centers develop that are cities until themselves. But traffic usually increases a lot too. There's a ton more traffic and air pollution. None of which has to occur if we capture those businesses in the city.
The other path is to become like Portland and Seattle where people do stay, employment continues to grow in the city core, and values go up. You continue to see good value. People continue to move downtown. Everybody's tide is rising. You don't have the hole in the donut like Milwaukee had in the 1970s and 1980s.
What were you doing for Madison-Kipp when it was looking to expand?
We worked with Kipp for about a year looking for options and locations. We tried to capture them at our industrial park, the Center for Industry & Commerce, which we operate as a joint venture with the city of Madison. Kipp would have actually relocated from its current neighborhood on the near east side.
You can imagine how happy that would have made Kipp's neighbors. The whole property could have been redeveloped into a mixed-use project, mostly residential. It would have been a phenomenal redevelopment opportunity for the city of Madison. But they really blew it.
First of all, it took forever for the city to make a decision. Meanwhile, Sun Prairie, Lake Mills and Columbus were courting Kipp. It took us more than six months to get a commitment from Madison for the project concept at our industrial park. By them, Madison-Kipp had already found a spot in an industrial park in Sun Prairie and expanded there, but didn't relocate.
What the city didn't understand is that Kipp had contracts to deliver products to its customers. In those contracts, they specify a timeframe for delivery. That meant they had to have the plant up and running by a certain date.
Businesspeople operate under deadlines. That's what the city of Madison doesn't understand. Businesspeople need action. Too much talk, too much ongoing dialogue is not a solution. Talk doesn't fix anything. Action fixes things.
A Tommy Thompson or a Paul Soglin might have made the Kipp relocation happen.
