A rendering of the “Cosmos” project, which includes the Frank Productions’ music venue as an anchor tenant.
A major mixed-use development proposed for the 800 block of East Washington Avenue is stirring up controversy over a 2,500-person music venue from Frank Productions which some say could harm business at existing concert halls.
But there’s another aspect of the plan that’s also concerning, at least for Ald. David Ahrens: a $16 million, approximately 600-stall parking ramp, known as the Capitol East Garage, to be constructed using city funds, including $7 million in tax incremental financing (TIF) money.
The parking ramp is a key element of the overall development, known as the “800 Block Project.” The “Cosmos,” from Gebhardt Development, will house 60,000 square feet of office space along with the Frank Productions venue. The “Spark,” from American Family Insurance, will be home to entrepreneurial hub StartingBlock Madison and American Family office space.
“The individual elements of the 800 Block Project are all mutually dependent,” the city’s development agreement reads. As part of the agreement, approved last week by the city’s Transit and Parking Committee and the Board of Estimates, the city’s parking utility will lease up to 550 stalls to American Family Insurance and Gebhart Development for the employees in the Spark and Cosmos buildings at an initial rate of $56 per stall per month for the first five years — a rate much lower than Capitol-area ramps. The remaining stalls will be available for public use, and the entire structure will be publically available on nights and weekends.
The Common Council is scheduled to take up the proposal Nov. 1.
Supporters of the agreement argue that the lower rate is appropriate because demand for parking is much lower in the Capitol East district than it is close to the Capitol square. Supporters also say the Capitol East Garage — and the American Family office building it serves — will be a key driver for further development and economic growth in the area. But Ahrens says the agreement amounts to the city subsidizing parking for the parties involved in the development.
“We’re building something for Frank Productions and AmFam and Gebhardt, and we could very easily lose money on it,” Ahrens says. “We’re providing parking at a loss to the city for three entities that could afford to pay the full rate.”
By keeping the rates so low, Ahrens argues, it is forcing people who use other city ramps to subsidize the Capitol East ramp. “Here you have American Family whose revenue was $7 billion last year, and whose profit was maybe $900 million,” he says. “So our people downtown are subsidizing the American Family operation. That’s outrageous.”
He also notes that cheap parking goes against city policies, which have been geared to encourage people to use alternative modes of transportation. “We’re incentivizing people to drive. It’s about $2 a day that we’re charging [American Family]. A downtown meter is like $1.50 an hour and here we’re charging $2 a day.”
Linda Wagener, spokeswoman for American Family, says the parking ramp is an “integral and necessary” component of the Spark development and the jobs the new office building will bring to the neighborhood.
The Capitol East Garage project will be the first time the city uses TIF money to fund a public parking structure. Until recently, state law prevented such a funding arrangement, but Madison officials lobbied to change the law. The Judge Doyle Square parking structure will be funded using a similar approach.
The city has previously used TIF money to fund private parking for other developments in the Capitol East area, including the Constellation, the Galaxie and the forthcoming Stone House development. As the development boom continued, city officials began to consider the benefit of a publicly owned parking structure that could serve the neighborhood, especially during evening and weekend hours, says Matt Mikolajewski, director of the city’s economic development division. These conversations came around the same time the state law was changed, leading city staff to float the idea to Gebhardt and American Family.
Mikolajewski admits that because it’s the first agreement of its kind and because there are no other major employers in the neighborhood, “[the city doesn’t] have a very good barometer for exactly what the market rate is” in the area. But he points out that the development agreement allows the city to renegotiate the rate after 16 years.
“[We] can ramp up that rate over time, and by year 16, once the neighborhood has more come into its own from an employment standpoint, then we can give the option to set the rate,” he says.
Ald. Ledell Zellers, who represents the district directly across East Washington Avenue from the proposed development, is also supportive of the project. She says a public parking structure will be a benefit to the neighborhood, which has seen increased activity due to events at Breese Stevens Field and Central Park.
“Of course you cannot predict the future, but I think it’s pretty clear that there are increasing parking needs in the district,” she says.
One projected use at night will be by concertgoers at the Frank Productions venue. Gus Paras, owner of the Orpheum Theater, fears that the new venue will put his theater and others like it out of business — not only because there will be increased competition for booking musical acts, but because the special event parking rate at the Capitol East Garage is only $5 compared to $8 to $10 at downtown ramps.
Ahrens, too, shares that concern. He notes that Frank Productions is projected by the city to host 100 shows a year, with an average attendance of 1,500 at each. But, that’s more shows than the Barrymore and Orpheum theaters have done combined, in each of the past four years.
An email from Frank Production's Charlie Goldstone disputes that his company is expecting that many shows, writing "My company has only claimed to target 75 shows per year plus private event rentals." However, a spreadsheet on the project from the city anticipates 100 events per year with an average attendance of 1,500.
Ahrens says the problem is more complicated because many of the shows at those other theaters have been booked by Frank Productions. But with its own venue, it will be less likely to give competitors shows in the future. “Why should they distribute their products to their competitors?” he says. “It would be self-defeating.”
He worries that the city may be hastening the demise of one or more of its historic theaters. “It’s just a willful disregard for what the business reality is for the Majestic, the Orpheum and the Barrymore. Those are three iconic historical buildings,” he says. “We spend an awful lot of time and money and attention preserving what’s left of our heritage here. This is our entertainment heritage. I think within a not so distant future, we’ll have empty buildings there. And there won’t be anyone to fill them. And that only means one thing, they’re going to go.”
Fred Frank, president of Frank Productions, says the new venue won’t be competing with local theaters. Instead, he hopes to draw artists to Madison who are currently booking shows in places like Milwaukee and Minneapolis. He believes the new venue will help bring the Capitol East corridor into the next decade as populations continue to grow.
“This will be a very artist-friendly venue,” he says. “We’re building 2,500 seats, which are being built for today and for tomorrow.”
Editor's note: This article has been updated to correct a quote from David Ahrens and include a comment from Frank Productions about the number of shows projected at the proposed club, as well as a link to a spreadsheet from the city on anticipated parking.