Very confused, when my dvr started recording there just did item 11, not sure what they did with it . . . they passed the rest of the agenda except items 12 & 13. They adopted items 1 – 10. Then went on to the James Doyle Square and the budget.
JUDGE DOYLE SQUARE – ITEM 12 (Memo)
George Austin explains that the council extended the time for them to negotiate with the developer to reduce city participation in the project and more parking was needed. They were supposed to report back by Nov 1 and this is an update. They have met 4 times. The major driver is the hotel and that is where they spent their time to reduce the costs but still have a placemaking project, Pinckney St. more pedestrian friendly and add a hotel, retail, bicycle center, parking and commercial development. The hotel tower will be moved away from the east side of the municipal building, they are looking at reducing the hotel rooms “to a number the market will justify” which is between 200 and 250 and to design the tower so it can be expanded in the future. The room block with Monona Terrace would be moved down in size. They are removing the meeting rooms and reducing the civic space, the pre-fuction area is gone. It will be an urban mixed use hotel, not a full service hotel. Loading dock is reduced. They think if they can move in this direction they can meet the goals of the project. They are analyzing two strategies for November 1 to reduce the city financial participation. The first is urban style mixed use hotel – they are focused on style, technology and engagement, common spaces and innovative architecture and design and provide opportunity for good dining and engaging spaces. They would have a limited service hotel approach for the second approach, it is not the preferred approach of the negotiating team, there are limited services and only basic accommodations. They often lack an on-site restaurant but have continental breakfast. Between now and the end of the month they will look at these two options for them to consider.
Larry Palm asks why the two hotel types are at such extremes? Austin says because they are at extremes because the first hotel was too expensive. An urban style hotel is mid-range, without the meeting spaces, not at the top end. The limited service hotel is the other end of the extreme but the felt that was what they should provide to compare to the full service. Palm asks if the urban style hotel will be at a lower cost, Austin says yes.
Denise DeMarb asks Gregg McManners from the Monona Terrace about how she just heard something that goes against what she has heard for the last few years and she wants to know how this serves the Monona Terrace – specifically needing a full service hotel and a bigger hotel block. McManners says this is the first he has heard of it, neither he or deb Archer recommended this, this came from their consultants. We’ve been taking their words for it. DeMarb asks what they didn’t recommend, he says the style of hotel was recommended from their consultants. DeMarb asks if they don’t support their consultants, they say that they did, but it wasn’t their recommendation, it came from the consultants. In regards to the recommendations Austin talked about he wants more time to look into it. They want to see what a room block size would support and who they could market it to. DeMarb says this is surprising, it is very different than what she was hearing and different than what she expected, she didn’t think they would be going to a Hampton Inn. She knows Archer felt they needed a full service hotel and hopes she will be here next time to speak to it. McManners says that the lower end hotels are not demand producers, full service hotel sell their spaces to create demand. We would be sacrificing that part of the business model to create demand and that will fall to Monona Terrace and the Convention and Visitors Bureau, they won’t have their sales people. When you have a lesser product, all you are doing is adding room inventory that the convention bureau has to sell. He would have a tough time supporting limited service. DeMarb says that what they have been hearing they need a full service hotel and something as far away as the Edgewater or Concourse won’t do it and now what she is hearing is that they are not getting a full service hotel, does that mean we need to come up with something different.
Mayor Paul Soglin says that first there are two options, one urban mixed use and limited service hotel. Mayor says he would not support a limited service hotel but he would look at an urban mixed use hotel. He doesn’t want to speak for Deb Archer but he can tell you what she has said, she supports a full service hotel for the two reasons Gregg outlined, additional meeting space and sales staff to complement what others are doing in selling and marketing Madison for convention. He says there are several advantages and it has to be within 2 blocks of Monona Terrace if it is going to serve Monona Terrace as part of the sale to a convention. When we get to questions of what the new hotel does for the city of Madison, it was supposed to provide additional meeting space for larger conventions and quality of rooms that were demanded by those that book the conventions and we don’t have a sufficient block at the Hilton which could have been built larger. What the urban mixed use hotel provides additional rooms to package additional blocks for the terrace, but not the meeting space. In regards to where the hotel market is going, the urban mixes use hotel is where the market is going, it is the kind of hotel that is being built along with the pod hotel. This has significant common space to meet after hours, it used to be dining and lounge space but areas to meet with laptops to meet after the conference. We will have to make a decision as to whether or not the cut back in cost and the type of hotel is worth is.
Joe Clausius asks about the Hotel Red on Monroe St., Austin says that is a botique hotel, not urban mixed. He thought something like that might work well in this area. He asks McManners if there is something besides the meeting space or the socializing space. McManners says it is the whole package, the meeting space, the technology, the food and beverage, the spa and health services, it is all part of the programming, but when you go to the next level you may find some of it, but not all of it. The full service hotels have national sales teams and for headquarter hotels they have full service.
Mike Verveer asks Austin who is analyzing the two styles of hotels? Austin says the negotiating team sat with their partner JDS and they sorted through how to reduce the cost and these were the suggestions they came up with, they were trying to take the costs out. We’ll be the ultimate judge but this is where we are now. Verveer asks if it was his sense that they are actively pursuing each of these scenarios. Austin says the Urban Mixed Use is the strong preference, but they feel like they need to show what is the other option. McManners says that if full service is not financially viable, then they need to look at this other option. Verveer asks if half a loaf is better than nothing, McManners says he hasn’t had a chance to look at it. If they can get a block of rooms at 200, they would only be losing 50 rooms and then they are looking at alternatives for their space to create more flexibility. Verveer asks if they have more meetings scheduled, Austin says they are working on it. They will prepare a report by November 1st. Verveer asks when they are coming back, November 3rd. Austin says since this was a closed session item the memo (linked above) couldn’t be in legistar.
Mayor asks Dave Schmiedicke (Finance Department) if he has anything to add, he says the issues have been laid out and the report will give you a sense of the options.
David Ahrens is concerned that the RFP went out at a 350 block of room and now is entirely different and others might not have applied or might have been rejected but we are still dealing with this entity, he wonders about the ethics and legality of doing this switch. We could be dealing with a whole raft of other entities that might be more able to do this.
Austin says that the RFP was carefully crafted and it did not require a full service hotel and they did not have a number of rooms they required, they required a room block of 250 and a national flag. This is not a bait and switch, they are not changing mid-stream, they did not kick any bidders out of the process. They received two qualifying proposers that competed in the second phase with the same level and quality of service. He doesn’t think there is an ethics issue, they were careful not to predetermine the size of the hotel. Yes there is a change in direction we are going to meet the goals, it is not a half a loaf, it is sizeably better than a half a loaf. It will be different but not different to the point where it is unfair, that is her opinion.
Michael May says there is no legal issues, this is not a public works contract, the rfp left various options, to choose on or the other or none and there are no legal concerns.
Ahrens asks how we ended up with two full service hotels, there must have been something that indicated to developers that this was what we were looking for. Austin says that was a very good point, they were careful in the rfp not to predetermine, we wanted the private sector to analyze the studies that had been done apply the private sector knowledge, the knowledge of the city and propose what they thought would work. We have two studies the city paid for over the past 5 years that indicate that the full service concept convention headquarters hotel was the most appropriate way to proceed, and we asked the developer to justify the approach they were taking. Each approach decied on the full service hotel. Ahrens asked if the Pahl Tire hotel proposal was mixed use, Austin wasn’t sure.
Mark Clear says he’s confused, he thought the basic goal of the project, as presented to the Convention and Visitors Bureau Board 2 years ago and that the basic goal was to increase business at Monona Terrace not incrementally, but a big leap, increasing customers that we couldn’t get to now because we didn’t qualify and there were three ingredients, a full service hotel, a 250 room block of hotel rooms and meeting space in the hotel and if you didn’t have the whole loaf, then you couldn’t compete for that other set of business and now what I am hearing is you hedging on all three things and that even if we have none of those things we can still accomplish the goals. McManners says he hasn’t been able to analyze it yet, he has to have conversations with Deb and analyze that. All of this will have some effect on our ability to sell the facility, what we really believe we need, as recommended by 2 consultants and a third, is a full service hotel, to some extent we are being led down this road by how much it is going to cost. 20 years form now we will be asking if this was the best decision based on the cost, not on the value of what it is bringing to Madison. Clear says he doesn’t disagree, when we embarked on the process Austin said if you want these things this is what it will cost and then were shocked that is what it costs and then we decided it wasn’t what we want and gave you different marching orders. What he wants to know if we can’t do those things, not any of them, should we bother? McManners says until they analyze it more he can’t answer that question.
RECONSIDERATION OF NUMBER 6
Mike Verveer moves the substitute instead of what they passed, they passed the correct version.
Budget presentations will be in additional blog posts following this one.
