Beitler Real Estate Services proposes hotel, apartments for Madison’s Judge Doyle Square
By: Bryna Godar | The Capital Times December 18, 2015
A month ahead of the deadline, one of three developers still in the running to build downtown Madison’s Judge Doyle Square project is already submitting its plans for a hotel, apartments, parking and retail on the site.
Chicago-based Beitler Real Estate Services is proposing a glass-enclosed, 610-stall, above-ground parking facility with retail next to the Madison Municipal Building on Block 88. Across South Pinckney Street on Block 105, where the Government East parking ramp currently, Beitler is proposing a 252-room EVEN Hotel and a 210-unit apartment building, with additional retail and 289 parking spaces.
The hotel and apartments would rise in two separate, curved, glass towers, mirroring the curved parking facility across the street.
“We wanted to get it in right away,” president J. Paul Beitler said of the early submission. “We want to send a message to the city that there’s a solution to the problem that is a phenomenal opportunity for the city, that there is hope, that this hasn’t been a broken transaction by any stretch of the imagination and that the city can have its cake and eat it too.”
Beitler originally submitted a proposal for the site in May in response to a city request for proposals, along with JDS Development, Doyle Square Development and Vermilion Enterprises.
The city quickly entered into sole negotiations with JDS Development due to the inclusion of headquarters for biotech company Exact Sciences Corp. in JDS Development’s proposal. After those negotiations fell through, the city returned to the other three developers for revised proposals. Doyle Square Development, which consists of Madison-based Urban Land Interests and North Central Group, has said it is still interested. Vermilion Enterprises has not definitively said whether it will submit a revised proposal.
“This is a defining moment for the city,” Beitler said. “They’re grappling at: how do I make this happen? We’ve been sitting back watching it, obviously frustrated, because we thought that last time around our proposal would capture their imagination and attention, and it was sidetracked by an opportunity that the city saw and aggressively went after.”
The financing structure for Beitler’s proposal differs significantly from the deal drawn up with Exact Sciences. In that proposal, the city would have contributed $67.1 million total to the project, with $46.7 million of that going to private elements of the project.
Under Beitler’s proposal, the $99 million hotel and apartment project on Block 105 would involve no public financing. The city would still own the land and the hotel and apartments would enter into a 99-year ground lease with the city. The plan would include the option to sell the ground lease at any time and would start with an annual total payment of $575,000, increasing 5 percent every five years. Under the developer’s estimates, that would translate to a total $27 million in cash flow over 30 years, with the option to sell the ground lease at that point for almost $16 million.
“It allows them to get the maximum amount of value for the land,” said the firm’s vice president, J.P. Beitler.
The city would then pay for construction of the parking, retail and a bicycle center on Block 88, an estimated $26 million. The city would own the retail, leasing it out at an estimated $620,000 the first year, increasing each year with lease estimates.