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Madison reserves decisions on hotel proposals

Paul Snyder
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A city-commissioned market survey calling for a 400-room hotel near the Monona Terrace Community and Convention Center in Madison is not enough to convince officials to charge forward with plans.

“I trust the experts who’ve been saying for years that we do need additional first-class hotels near Monona Terrace,” said Alderman Michael Verveer. “But there are still tons of details we need to approve.”

Milwaukee-based Marcus Corp. has negotiated with the city for more than a year and plans to buy Madison’s municipal building, which is across the street from Monona Terrace, and convert the city structure into a hotel.

The company’s preliminary term sheet, which was submitted to the city last week, called for a hotel that could include fewer than 300 rooms. David Merritt, Marcus’ senior vice president of development, declined to comment on specifics of the company’s negotiations with the city.

Jim Hess, Monona Terrace’s executive director, said the center averages 71 conventions per year. Although business is good, he said, it will stay at that average until more nearby hotel rooms become available.

“The numbers could be better,” he said. “We have the capacity to do much more. We’d love the 400 rooms the report suggested. But even if Marcus’ proposal is scaled back, that’s still a major step forward.”

That step might take some time, Verveer said. Before Madison hands over its municipal building, city leaders must first iron out logistics such as relocating several city offices and the downtown post office. The city also would need to find new parking if Marcus demolishes the nearby Government East parking ramp to make room for the hotel.

“They also want city financial assistance in addition to the building and land,” Verveer said. “It is quite an undertaking.”

Meanwhile, J.H. Findorff & Son Inc. is the general contractor on a new Hyatt Place Hotel near downtown on West Washington Avenue. Additionally, Brookfield-based Hammes Co. is close to buying the Edgewater Hotel on the north side of the isthmus with plans for expansion. Various hotel proposals for John Nolen Drive, which feeds into downtown Madison, are working their way through city approvals.

Verveer said the Common Council has not discussed whether the city might be considering too much hotel space, but he said the development shift to hotels in the wake of the housing and condo market downturn is noticeable.

But unless those projects are across the street or connected to Monona Terrace, Hess said, they will not increase convention numbers.

“The one thing we always hear is there are not enough rooms in the immediate area,” he said. “When the Hilton opened next door in 2001, our business virtually doubled. But if a hotel is more than one or two blocks away, meeting planners automatically rule it out.

“How can we get people to the building if they refuse to even come to the city in the first place?”

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