What can be learned if you actually read it? [Comments included.]
WHERE CAN YOU GET A COPY OF THE REPORT?
I dunno.
I tried Legistar, and I searched for “Hunden”, the company who did the study, “hotel study” and “hotel proposal review” and found nothing. I also did a general search on the city’s website for all three of those words, also found nothing.
Several alders emailed it to me, so that’s how I got it . . . but that hardly seems like the way we should get information from the city.
HOW’D THE STUDY GET APPROVED?
The city has very specific purchasing requirements. (Read page 3, bottom of first column, top of second column)
The Mayor’s own APM (Administrative Procedure Manual) states, on page 1 as follows:
1. General: All contracts must be properly authorized by the Common Council or through an official procedure. Sec. 4.26, Madison General Ordinances (MGO), establishes the general procedure to authorize contracts, except for public works contracts required to be bid under Wis. Stats. sec. 62.15. The primary method to authorize all contracts is through a resolution of the Common Council, but some contracts may be authorized without resolution: by the Comptroller as permitted by MGO sec. 4.26, as part of the approved city budget (e.g. CDBG and Community Services), by other ordinance (e.g. MGO sec. 33.21, Monona Terrace), or by a resolution establishing an alternate procedure (e.g. police special duty contracts.) Unless specifically authorized through one of the above methods, all contracts and contract amendments must be individually authorized by Council resolution. (See par. L. for amendments.) Department and division heads, City employees, boards, committees and commissions do NOT have authority to enter into contracts, unless specifically authorized by the Common Council.
However, nothing was approved by the city council. Did it meet an exception?
3. Exceptions: The Monona Terrace Board, the Library Board, and the Board of Public Health for Madison and Dane County have the power to authorize certain contracts on behalf of the City of Madison without Council authorization. These bodies must follow any other rules governing contract execution. Certain other bodies, such as Community Development Authority (CDA), Madison Cultural Arts District (MCAD or Overture), and others that may be created in the future are separate legal entities with authority to enter into contracts in their own name, and are not subject to this APM or City purchasing ordinances, unless they elect to be.
Did the Monona Terrace Board Authorize it? In August, here is what they had to say about the downtown hotels:
Mr. Bartell and Mr. Hess reported that negotiations between the City of Madison and the Marcus Corporation to build a convention hotel to serve Monona Terrace and the City have stalled due to the economy and its effect on the hospitality industry. However, Mayor Cieslewicz is committed to the concept of a convention hotel in the downtown area.
Apex Property Management Inc. has proposed a hotel also, and the team working on the project has met with the Mayor (Bruce Bosben, Apex Chairman; Steve Yoder, VP of Development; Paul Soglin, Assistant to Apex; Bill White, Assistant to Apex). The company wants to build a 300-room hotel approximately 400+ feet from Monona Terrace that would also include a grocery store, health club, residential units, etc. The company would need TIF funding for a skywalk, but not for the hotel itself.
The project to renovate and expand the Edgewater will most likely move forward.
[Quiz: How many of the Apex folks are registered as lobbyists?]
Anyways, it doesn’t look like this went through the proper purchasing generally, and didn’t comply with local purchasing preferences (they’re not local and I don’t see any attempts to find anyone local) and ignored the procedure for using a “sole source”.
WHO PAID FOR THE STUDY?
I dunno.
I asked an alder about it, they said they asked and got two different answers and it was unclear.
So, then I just asked the Comptroller. And this is what I was told:
We entered a City purchase of services contract with Hunden in the amount of $11,000, charged to P&D’s Preliminary Planning account. $5,000 has been paid so far.
{Hmmm . . . so it was a contract not approved by the council . . . and . . . I wonder what other “informal bids” they got?]
WHAT CAN YOU LEARN FROM THE STUDY? – GENERAL
– The letter with the report was written to Mario Mendoza
– There were several assumptions – this one I find interesting. “The findings presented herein reflect analysis of primary and secondary sources of information. HSP utilized sources deemed to be reliable but cannot guarantee their accuracy.” Hmmm, that doesn’t give me much comfort.
– The other assumption I like is “Responsible ownership, competent property management, and professional marketing are assumed.” Shouldn’t that be one of the items assessed when reviewing proposals?
– No proposals meet the minimum standards recommended for a downtown/convention hotel
– The convention hotel effort should be tabled until public leverage improves for better options adjacent to Monona Terrace
– City should move forward with plans for parking on the Madison Municipal Building site
– A convention hotel of 300 – 400 rooms should be the first priority once the right of first refusal expires but should open no sooner than 18 months from the opening of any other hotel such as the edgewater – so 2014 [Note: 5 years from now]
– They state the following in reference to the Edgewater “The subsidy requested passes the “but for” test, is not excessive and the project deserves political and financial support” [I’d love to see the basis for this seemingly random statment]
APEX PROPOSAL
– Madison based company
– Primarily manages rental property
– First hotel project, little or no prior experience developing hotels
– Teamed with Iconica to be the project architects and contract administrators
– Project located at the intersection of Wilson, Henry, Hamilton
– 300 Hotel rooms
– 12,000 square feet meeting space (7,000 sq ft ballroom)
– 90,000 square feet office space
– 550 parkings stalls
– 50,000 square feet condo space (residential)
– Has restaurants
– Has a grocery store
– Has quality rooms withing 1,200 feet of Monona Terrace
– Not seeking “assistance” from the city to develop
– Would seek assistance if they added a pedestrian connection to Monona Terrace, access to Lake Monona and public space [Just like the Edgewater]
– Cost of hotel would be $60M, but authors of the study say it would more likely be $68 – 72M plus parking
– Current market would only support $45 – 50M, gap would need to be filled by city or others
– Financing is not yet secured
– Downtown grocery is not feasible without significant assistance from the city
– Upscale full-service hotel
– Amenities include – lakefront access, public space, office, residential, parking
– Total development budget $100M
– No TIF currently requested
– Estimated Hotel Budget $64,500,000
– Estimated Gap $24M
– Conclusions of the study:
– – Would benefit Monona Terrace but will not have as large of an impact as a “headquarter hotel” as previous recommended by the authors of the study.
– – It has enough rooms to provide room block benefit
– – Not enough meeting and ballroom space (should have 75 sq ft per room or 22,500)
– – Grand ballroom should be 10,000 sq ft
– – Needs a 4,000 sq ft junior ballroom and 10 other meeting rooms
– – “Overall, there is much to like about the project in concept, but the reality becomes very expensive and not feasible without public support. If this is to be a potential convention hotel project, the developer should adjust its plans to propose a true convention hotel and should align itself with partners with some hotel experience. Otherwise, we do not see the project moving forward with or without public participation”
– – Developer should “refine their approach to match the city’s needs for a convention hotel and pitch it when the city formally moves into a competitive situation for a convention hotel project on one of multiple potential sites.”
MARCUS HOTEL PROJECT
– Milwaukee company
– Has the right of first refusal to develop a hotel on the current block of the Madison Municipal Building
– Has released a preliminary plan to redevelop the existing structure
– 275 hotel rooms
– 27,500 Meeting and Banquet Space
– Will connect to the Hilton via pedestrian walkway
– 9,000 square feet retail on Pinckney, Wilson and Doty
– 700 parking stalls, 150 for hotel use, 50 for Hilton overflow
– Development Budget not available
– “Requests to Marcus for information about the proposed project, the proposed subsidy, budget, size, etc were not able to be answered”
– Estimated hotel budget $66M [?? How’d they know that?]
– Estimated gap $25M [?? How’d they know that?]
– Upscale, full service rooms
– Conclusions:
– – “All projects and financing opportunity being equal, this project, if still in play and if it met some of the minimum requirements for size (300 rooms minimum and up to 400 optimally), would likely be at the top of our list of recommended projects.”
– – Key advantage is connectivity to Monona Terrace and function space
– – City has alot of leverage because any convention hotel will need public participation
– – Convention hotel should be top priority for the City
– – City should not induce a hotel project opening any sooner than 18 months after another hotel project opens – to allow time for absorption into the market
EDGEWATER HOTEL
– Currently 127 rooms, will be 227 rooms, only adds 100 rooms
– 12,500 sq ft function space
– The quality level of the rooms is to be higher than any current property in Madison
– Independent name project
– 2 restaurants
– Retail space
– 47,000 square feet of public space
– Pier on Lake Mondota
– 364 parking stalls [doesn’t say how many are there now]
– $109M development budget ($74M for hotel, $35M for public space)
– $16.8M subsidy requested
– Additional development attributes – lakefront access, retail, public space, parking
– TIF Requested $35M [??]
– Estimated hotel budget $59M
– Estimated gap in Hotel Feasibility $22,520,000
– Requested TIF $16.8M [Note: why is that different than noted above as $35M?]
– Conclusions:
– – It’s the most advanced project
– – It’s not a headquarter’s hotel
– – It’s beyond the 1200 feet from Monona Terrace
– – Would still provide a block of new, high quality rooms for downtown
– – “Adds an element that is lacking from Madison’s attractiveness as a destination, a very high-quality full-service destination hotel (where the hotel is part of the draw, not just a place to sleep)”
– – “Edgewater plans to use Lake Mendota as a major destination sales element of its project, which no other hotel, public building, or mixed property in Madison does (outside the University campus). This is perhaps the largest selling point beyond the high quality accommodations and service proposed.”
– – “While Madison prides itself on its outdoor amenities, unless a visitor is an avid outdoors person, they have little to no opportunity to enjoy they two lakes bordering downtown. This proposal changes that reality and opens up the water to those who want to dine on the lake, look at it from their hotel window, or simply walk by. They could even boat to the project from the lake.” [Yeah, cuz James Madison, Tenney, Olin, Burrows and Law Park require you to be an avid outdoor person?]
– – After reviewing the benefits of the project to the community and destination, as well as the public investment requested, it appears the project is worthy of approval by the City as proposed. But for the incentives requested, the project would not be feasible, suggesting that the developer will not profit off the city incentives” [Ok, if they hadn’t already they just lost all credibility.]
– – “If a feasible, achievable and smart headquarters hotel development were ready to be developed and agreed to in principle near Monona Terrace, its timing and investment would take priority over other projects, as it would increase the demand for the City more than any other project.”
– – “Given that such a project does not currently exist, the Edgewater project has the most transformative power for the destination, and should stretch the quality offerings beyond what Madison provides today.”
– – “Edgewater is worthy of priority amongst the projects.”
Note: Unlike the analysis of the other projects, this section does not note the following:
– Where is the company from
– What the company normally does
– Experience with building and managing hotels
– If financing is obtained or obtainable or what the market would support
– Who they are teamed with for architecture
– What is feasible without city assistance
– If it would “siphon demand” from other hotels after the recession
They also don’t address the fact that there is still a gap in feasibility beyond the TIF.
CENTRAL LIBRARY REDEVELOPMENT
– Fiore is “a strong local real estate development and management company”
– Collaboration with Ingrens (a development firm with offices in Milwaukee, Phoenix and Chicago)
– Hotel is secondary to the Madison Central Library Redevelopment
– 140 – 270 Rooms or in another chart it says 160
– 800 – 5000 square feet of function space
– Commercial space
– $88.6M development budget
– Subsidy may be requested for parking [I thought the RFP said no subsidy]
– Limited service, all-suite extended-stay property
– This would satisfy current demand and not create new demand
– Hotel wouldn’t open for 4 years
– Additional Development Attributes – library, public space, parking
– Parking is listed as N/A
– Estimated Hotel budget – $26.4M
– Estimated gap $3.9M
– TIF may be requested for parking
– Conclusions:
– – “Would be an asset to the community, but would do little to add depth to Madison’s appeal as a destination”
– – “The effect on Monona Terrace and Madison overall would not be material”
– – “The project may, if timed poorly, siphon demand from new and existing hotels that are establishing themselves after the recession (and for one or two after opening)” [This seems to conflict with the previous statement]
– – “The hotel portion of the project should not be a priority for the city at this time”
– – “Providing TIF funds to the project, even for parking, in essence subsidizes the hotel and creates a cycle of additional funding needs for both”
In short, I can’t believe we paid $11,000 for this! It’s a 13 page report with 2.5 pages filled with pictures. It has conflicting information sometimes within the same charts. And, it doesn’t consistently evaluate the projects. Whoever authorized the waste money on the Edgewater propaganda piece should be held accountable.
