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MG&E Talks Business, Energy-Related News, March 2014

The past 12 months were a busy time for East Washington  Avenue. It made headlines almost weekly throughout 2013. Developers, city leaders  and businesses are cautiously optimistic that “East Wash” is coming  back into its own.

In this first of a multi-article series, we’ll introduce you  to some of the key players who are working to help East Washington regain its  “corridor to the city” status.

The City of Madison

Aaron Olver, director of economic development for the City  of Madison, believes two city programs have been critical to corridor  development efforts:

  • The East Washington  Avenue Gateway BUILD Plan. “The city and community were engaged in a  long-term planning effort that resulted in the BUILD Plan,” Olver said.  “It thought through key issues around development, land use, zoning and  density and laid the foundation for what’s happening now. This plan helped us  to build in a smart, planned and consistent way.”
  • The Land Banking  Program. “We’ve had situations where available lots were too big for  any one developer to hold on a speculative basis,” Olver said. “For  instance, when Don Miller wanted to sell the car dealership, there were about  eight acres spread over three blocks. The city bought the lot and made it  available in smaller pieces. That’s what helped launch The Constellation.”

“This type of growth avoids some of the environmental  and social costs that happen with development on the periphery,” added  Olver. “You’re breathing new life into an area that isn’t producing as  much as it could be, plus there are the social benefits of density. This level  of compression drives connections, innovation and entrepreneurship.”
The Mullins Group

To Brad Mullins, COO of The Mullins Group, the East  Washington of his childhood was “quite the place. Anything we needed was  there—car dealers, Sears, places to buy groceries, schools, church.”

The Mullins Group’s history on East Washington goes back to  roughly 1971 when Mullins’ parents, the founders of the company, purchased  almost the entire 1400 block of East Washington. “They had the foresight  to recognize the value of the area,” Mullins said.

Today the company owns property on the 200, 1000, 1200, 1300  and 1400 blocks. “We ramped up our efforts about five years ago when the  University approached us,” Mullins said. “They wanted to create a  downtown space that would support university-affiliated technology efforts—a  place that could be an incubator for innovation.”

The result was the University Research Park’s Metro Innovation  Center, located at 1245 E. Washington (which will be profiled in a future  article). Two years ago, another innovator connected with the Mullins  Group—ShopBop, the upscale, online retailer. “They recognized the synergy  of the Avenue and wanted to be part of it,” Mullins said. “They saw  the benefits of this location—access to the bike path and mass transit,  eclectic shops and restaurants, entertainment—and believed these would attract  the employees they were looking for.”

Now housed in two facilities at 1245 and 1301 E. Washington,  ShopBop employs roughly 300 people, a 50% jump in the last two years.

“Developing property on East Washington isn’t without  its challenges—whether it’s the time it takes to rehab a building or working  through site plans with the City and the neighborhoods,” said Mullins.  “But in my experience the end result is worth it, and a growing number of  businesses and people seem to agree.”

Gebhardt Development

Otto Gebhardt, owner of Gebhardt Development, LLC, has East Washington  ties that go back to childhood. “My dad’s office was right across from  Sears and Roebuck, what’s now the bus barns.”

Gebhardt kept his eye on the corridor over the last decade. “I  was dumbfounded by the lack of development in the area and always looking for  opportunities here, he said. In 2012 he started construction on The  Constellation on the 700 block of East Washington. This 12-story, $39 million  building includes 220 apartments, over 32,500 square feet of commercial space  and a 275-stall parking garage. To date, rental has been robust. All apartments  were rented before the building opened on Aug. 1, 2013, and commercial tenants  include Star Bar, Andersen Dental, Cargo Coffee and the Madison offices of  Google.

The building was constructed with an eye to increase urban  density—for instance, the current parking structure, which is in the center of  the building, could be repurposed if the level of car ownership dropped among  building tenants—and 24/7 vibrancy. “You need the right mix of housing,  commercial and retail so there are reasons to be here any time of day,”  Gebhardt said. “You don’t want to be a ghost town at 5 p.m.”

Throughout 2013, Gebhardt has been shepherding a two-phase  building development project for the 800 block through the City of Madison  review process. At present, Phase 1 will include a mixed-use complex with  residential units, a parking garage and a 50,000-square-foot grocery store. Phase  2 will feature both rental and condominium townhouses, commercial space and  additional parking. Groundbreaking is anticipated in February/March 2014.

Key to both current and proposed development is local  businesses. “We want to create a destination area in the corridor, not  just duplicate what you could find in any strip mall,” Gebhardt said.  “The right mix gives people a reason to live and work here, to spend their  entertainment dollars here. It also helps strengthen the area so it’s resilient  over the long haul.”

Gorman & Company,  Inc.

Gary Gorman may not have grown up right on East Washington,  but his stomping grounds were in nearby Monona and he’s excited to be part of the  east side revitalization efforts. President of Gorman & Co. Inc.,  Gorman is a nationally known developer with a reputation for effectively  managing downtown revitalization projects. He recently executed a purchase  agreement with the City of Madison to develop the 11.4-acre site at East  Washington and Milwaukee Street that’s known as Union Corners. This site has  experienced a number of ups and downs over the past decade—including the  collapse of another developer’s proposal during the recession—but the project  appears to be back on track.

The site is likely to be home to a UW Health clinic; other  site elements could include apartments and retail.

“At this point we’re anticipating a five-year rollout  period,” Gorman said. “It will depend on the marketplace.”

Gorman is pleased to see the level of development happening  in the various stretches of East Washington. “Otto (Gebhardt) has been an  important factor and his efforts are encouraging others to invest,” Gorman  said. “We’re seeing more young people in the area—that’s what’s driving  the apartment market—and this has been a great catalyst for the area. Of  course, there has to be the right mix of residential and commercial development  and all the developers understand that.”

Creating a  sustainable avenue

What will it take for the Avenue to thrive over the long  haul?

“There isn’t any one thing that’s going to make these  efforts a success—it’s the combination of everything,” Mullins said.  “Right now we’re seeing the housing mass, the places of employment and the  support services that make an area a neighborhood. There’s a dentist in the Constellation  building! I think 1975 was the last time we had a dentist in this area. This  isn’t just a place for young professionals or an area that’s only geared to IT.  It has something to offer people of all ages.”

Olver agreed. “We want the downtown and East Isthmus areas to be  perceived as desirable places for a diverse variety of people to live. Recent  college grads, people with families, professionals and empty nesters should all  find what they’re looking for here. This means having a variety of housing  options and cementing amenities that support a wide range of lifestyles and  ages. Employers are thinking hard about what it takes to attract and retain  employees and for many this urban vibe is a good fit.”