Judith Davidoff
The buildings on the 100 block of State Street once destined for redevelopment into a boutique hotel have been vacant for several years.
About 25 people are gathered in a windowless meeting room in the City County Building waiting for the sheriff’s sale to begin. Lt. Matt Karls kicks off the proceedings with a warning: “If you do not have the appropriate funds available for payment immediately following the sale, do not bid.”
Sheriff’s sales on foreclosed properties are typically held every Tuesday though sales have slowed down because of the pandemic, says Elise Schaffer, public information officer for the Dane County Sheriff’s Office. “Appropriate funds” are 10 percent of the bid price.
The first property for sale on June 29 is a house in Stoughton. The opening bid is $179,800. Two people are interested, bidding against each other in small increments, sometimes by just $500. The winning bid comes in at $186,000 and the gentleman pays the down payment in cash; Sgt. Chris Reynolds, sitting next to Karls at a table in the front of the room, counts out the bills by hand.
Next up is 122 State St. The plaintiffs are Park Bank, represented by Murphy Desmond S.C., and the defendants are 122 State Street Group LLC. The principals involved in the State Street Group once had big dreams to redevelop up to half of the 100 block of State Street into a boutique hotel.
An attorney for Park Bank waives the reading of the legal description of the property, which, judging by length of the newspaper notice, could take about five minutes. Karls then announces Park Bank’s opening bid, which is under the assessed value, according to city assessor records.
“I have an opening bid of $2 million dollars,” he says. “Do I have another?”
Silence.
“I have a bid of $2 million going once.”
More silence.
“I have a bid of $2 million going twice.”
“I have a bid of 2 million dollars sustained by the plaintiff.”
The exact same scenario unfolds for 124-126 State Street, with no bidders other than Park Bank, whose attorney offers an opening (and winning) bid of $1 million for the properties.
Given the hot real estate market in Madison, there was some expectation there would be more interest in property on a prime block of downtown Madison. It was a disappointing footnote to an ambitious redevelopment project that sadly never got off the ground.
In spring 2018, Eric Nordeen of Ascendant Holdings, the developer of the property, took Isthmus on a tour of the buildings on the 100 block of State Street that his company had acquired. Nordeen and his partners had big dreams. The development was slated to include a nine-story hotel, shops and a restaurant. Even the hotel lobby would be special, with Nordeen promising that it would “be a place you’d love to hang out, whether you’re a guest of the hotel or not.”
Judith Davidoff
Sgt. Chris Reynolds, sitting next to Lt. Matt Karls, counts out bills for the down payment on a property sold June 29 at a Dane County sheriff's sale in the City County Building.
Despite some concerns about the height of the project, supporters argued the redevelopment would give the underutilized block a new lease on life. But the developers were never able to land the needed financing and in fall 2019 Park Bank foreclosed on the properties.
Nordeen could not be reached for comment and Bob Pasch, Park Bank’s attorney, said he could not comment on the sheriff’s sale or anything related to the State Street properties.
It turns out there was at least one party, a local family, at the sheriff’s sale interested in the State Street properties, says longtime downtown alderman Mike Verveer. They decided not to bid at the time but are now talking to Park Bank, says Verveer. They want to do a historical rehab and turn the properties into apartments, he adds.
“They are not interested in lodging or hospitality,” says Verveer.
The buildings slated for redevelopment have now been empty for several years. Verveer is especially disappointed that 122 State St., which once provided affordable rent for a variety of nonprofits and other groups, was emptied before it was necessary.
But he credits Ascendant Holdings for not giving up without a fight. “They definitely kept trying,” he says. “They just kept representing that they could secure the financing. They had a lot of support generally from the downtown community…and recruited a lot of downtown stakeholders to rally support.
“It’s quite a letdown.”
Assessed value 122 State St.:
$2.61 million
Assessed value 124-126 State St.:
$1.09 million
Date project was first announced:
October 2016
Proposed cost of redevelopment:
$43 million
Number of proposed rooms for hotel:
130
