Is Madison building a hotel for Monona Terrace or Epic Systems?
That question was raised during Tuesday night's long Common Council debate over the controversial Judge Doyle Square project.
Ald. David Ahrens, an opponent of the project, raised the question with his colleagues and added: "It'd be an incredibly unpopular thing to say, that we're building a hotel for a corporation that has billions of dollars in profit."
The accusation did not prevent the council from moving forward on the project. It voted shortly after 2 a.m. to begin negotiating with a development team headed by Bob Dunn for the Judge Doyle Square project, the most expensive development in the city’s history.
The roughly $200-million project includes a hotel, a new parking ramp, offices, retail and residential on two blocks next to Monona Terrace. But the most controversial element has been the hotel, which many city officials and tourism boosters say is needed to bring more conventions to the city. Opponents argue the heavily subsidized hotel won't make much difference because the convention industry has been stagnant for more than a decade and Madison's convention center is relatively small.
Before the vote, managers from several Madison hotel urged the council to not subsidize their competition and disputed claims that a new hotel will help Monona Terrace.
Jason Salus, general manager of the Radisson Hotel Madison and president of the Greater Madison Hotel & Lodging Association, said the Madison hotel market is so strong because Verona-based Epic Systems puts about 1,000 people in Madison hotels 40 weeks out of the year.
"I believe that single business is the reason a couple of hotels were built," Salus said. "We love [Epic]. We don't want them to go anywhere."
For Ahrens, the comments were a revelation. "The veil has been lifted," he said Wednesday. "There are 1,000 people a day being transported back and forth to Verona, five days a week. That's more than 10 times what Monona Terrace creates in room nights."
He noted that Epic's guests are much more likely to want to stay in a downtown hotel than "out on Odana Road without a car."
Ahrens notes that proponents of a new hotel say that convention guests don't want to have to walk more than two blocks from their hotels to the convention center. Yet, he adds, "We can put people in downtown hotels and bus them to Verona, but we can't bus them around Capitol Square."
A spokesman for Epic could not immediately answer whether the company has any interest in the project. Shawn Kiesau said Epic is in the middle of its biggest trade show, in Orlando, this week, and company officials are hard to reach. In general, the company does not respond to press inquiries.
Ald. Mark Clear, who supports the project and sits on the board of the Greater Madison Convention & Visitors Bureau (CVB), dismissed the idea that Epic is driving the project.
"I certainly have not had contact with Epic in any way," he said Wednesday. "Being on the CVB board, if Epic had an interest in this, I would be one of the ones they contacted."
"Is Epic a big driver of hotel rooms in this city? Absolutely," Clear adds. "But it's not prompting the need for this project. Epic doesn't even do any business at Monona Terrace anymore."
The hotel managers who spoke at Tuesday night's meeting made other arguments against the project.
Susan Springman, senior project manager of the Mullins Group, which owns Inn on the Park, doubted the city would get what it wants from the hotel -- a guaranteed 250-room block that Monona Terrace can rely on to book conventions.
"An ironclad room block, I don't think you could ever get one," Springman said. "The lender's not going to agree to it. I don't know why a hotel would, because they're constraining their revenue. They're putting themselves at risk."
Charlie Eggen, vice president of Greater Madison Hotel & Lodging Association, and Steve Zanoni, general manager and CEO of the Madison Concourse Hotel, both commented that a new hotel wouldn’t necessarily boost conventions at Monona Terrace. They suggested that Madison give more money to the Greater Madison Convention & Visitors Bureau to lure conventions.
“Cities are buying conventions right now," Zanoni said. "If we build a hotel it does not mean conferences are going to come to Madison, because [other cities] are buying them with free room rentals in the convention center.... We can't compete with that even with a new hotel."
Madison does give cash incentives for some conventions now, but both men say it could invest much more.
Ald. Lauren Cnare asked Salus -- who runs a west-side hotel -- why he's worried about competing with a downtown inn.
He said he didn't believe that the majority of guests at the new hotel would be conventioneers. "I believe the majority of the business will go to the general city," he said. That means he'd be competing with a hotel that is subsidized by the city.
At Tuesday's meeting, alders proposed numerous amendments. Some wanted to require the hotel pay living wages, guarantee an affordable room-block for Monona Terrace, and keep the negotiation process open to the public. Most of the amendments were defeated.
Clear said the conditions were unnecessary. "Many of the amendments were about making sure the negotiating team is on our side, which is sort of ridiculous because that's what they're charged with doing," he said. "It's completely unnecessary to tie their hands."
Some alders also tried to refer the motion until after an informal lunch meeting scheduled Friday with Mayor Soglin and city staff. Staff is scheduled to outline options for how to finance the project. Some wanted to learn more about this before pushing ahead with negotiations.
"After this meeting, we're going to learn more about our options and that seems backwards," said Ald. Marsha Rummel. "My analogy is I want to go buy a new house. What do I do first? I go to the bank and say 'How much money can I afford?' We're looking for the house before we've gone to the bank."
But the majority of the council pushed ahead. "I urge us not to refer this. This is when things get ridiculous in our process," said Ald. Shiva Bidar-Sielaff. "In one hour-long meeting with the mayor we're not going to move that much forward. We're not going to have clarity. That's a conversation that is going to happen in parallel [with negotiations]."
The council eventually approved -- in a voice vote -- to begin negotiations.
City staff, working under the direction of Soglin, now have until Aug. 15 to bring back a concrete proposal to the council. The Board of Estimates is expected to get regular updates on the negotiations, mostly likely in closed sessions in the coming months.
[Editor's note: This article was corrected to attribute a quote to Steve Zanoni.]
