Madison planners envision the 26-acre Royster-Clark property redeveloped as a mix of commercial, retail and residential projects. But developers warn that such projects could require years — and a much stronger real estate market — to complete.
“When we looked at redeveloping that site, the real estate economy was still strong,” said Tom Sather, president of Silverstone Partners Inc., a Middleton-based real estate firm. “Even then, we still knew it was a long shot. Without a strong economic wind at your back, it’s just going to be a tremendous challenge.”
In 2007, Sather teamed with Michael Hershberger, president of Madison-based Urban Solutions Inc., to lead redevelopment of the site, which contains a vacant fertilizer plant that Canada-based Agrium Inc. closed in 2006. When the real-estate market stalled in 2008, Sather and Hershberger pulled the plug on their plans.
Since the plant closed, Madison has worked to relieve the Lake Edge neighborhood of the plant.
Because the city neither owns the site nor has the money to buy or redevelop it, Alderman Larry Palm said the next best thing Madison can do is prepare a plan for its future development.
The Madison Long Range Transportation Planning Committee on Thursday approved the plan, which calls for a mix of commercial, retail and residential development.
The plan is a tool for the city to have in place when development interest resurfaces, Palm said, but the largest challenge is uncertainty about who will buy the site and what development will be proposed.
Sather said any potential buyer will have to deal with numerous issues. In addition to high demolition and soil remediation costs, which he said helped make his and Hershberger’s project financially unfeasible, the site also contains a storm pond, so environmental issues will be a major factor.
“Infill redevelopment is always very difficult,” he said. “Realistically, that project for any developer is going to be very hard in the best of times, but now you’ve got a market in which residential lots are difficult to come by, condos are difficult and getting financing is difficult.”
Palm said Agrium has an interested buyer examining the site, but he declined to provide details.
Paul Poister, Agrium spokesman, said the company is optimistic it will find a buyer, but has no timeline for selling the property.
“We’ve always wanted to move quickly,” he said. “It’s a challenge.”
It likely will stay that way, Hershberger said. The city wants mixed-use development, but the market is forcing several developers to look at small projects piece by piece. To have someone buy and clean up the site is difficult enough, he said. Expecting major mixed-use projects thereafter could mean a long wait for neighborhood residents.
“I really think city financing is going to be the catalyst,” Hershberger said. “They need to take a greater role in developments.”
At this point, Palm said, the site development plan is the extent of city involvement.
Hershberger said the city’s big-box ordinance might also hamper immediate development.
“If you’re competing against places like Monona or McFarland that don’t have big-box ordinances, it becomes hard enough to get those developers,” he said. “But in terms of financial feasibility, that might be one of the first projects you think of for a site that size.”
Palm said neither the neighborhood nor the city will accept any development proposal for development’s sake, but the wait cannot last indefinitely.
“We’re looking for reassurance and consistency,” he said. “There’s a lot of opportunities in this site that people are looking for.”