Developer proposes final phase of $80 million Union Corners project

February 21, 2019 GMT

After 15 years of start-and-stop work, and following several rounds of city and neighborhood input, a developer is proposing the final piece of the $80 million, multi-phase Union Corners mixed-use project that’s been slowly rising on the East Side.

Developer Gorman & Co. is offering a $24 million, four-story building — to be called The Nexus — with 90 apartments, 17,000 square feet of retail space and 91 parking stalls behind the structure at the corner of East Washington Avenue and Milwaukee Street.

“It will be the last piece of the puzzle,” said Ted Matkom, Gorman’s Wisconsin market president. “Gorman & Co. is grateful to the city of Madison and the (Schenk-Atwood-Starkweather-Yahara) neighborhood for working with us to develop Union Corners into what will become a valuable and sustainable neighborhood asset.”

Matt Mikolajewski, the city’s economic development director, said the project is “definitely exciting.”

“It’s a very high-visibility site,” Mikolajewski said. “It’s an area neighboring residents have been very interested in.”

The proposal, however, is getting a mixed, first-blush reaction from neighborhood leaders, who were pleased by earlier phases of the project and relieved the long-sought redevelopment is coming to a conclusion, but worry the crowning piece may not live up to expectations.

“The Milwaukee/East Washington corner was intended to be the commanding presence of the entire planned development,” said Brad Hinkfuss, president of the Schenk-Atwood-Starkweather-Yahara (SASY) Neighborhood Association. “What’s on the table now is much pared down from the original.”

But overall, “I think there’s a general sense of relief,” he said. “Much of this is infill development done right. It’s also place making. It’s higher density, but done in a way that doesn’t encroach on immediate neighbors. It also brings new amenities to the neighborhood.”

Ald. Marsha Rummel, 6th District, where the project is located, could not be reached for comment. A neighborhood meeting is set for Thursday.

A long journey

It’s been a long, winding journey to complete the project.

McGrath Associates, the former property owner, proposed a huge mixed-use project in 2004 that won broad support from city officials and residents and $4.9 million in tax incremental financing (TIF) support for a first phase. But the project stalled in a faltering economy in 2007.

The city, which opened a TIF district in the area in 2006, made $2.5 million in infrastructure improvements at the site and acquired it for $3.57 million in 2010. The city later launched a process to pick a new developer, choosing Gorman from among five respondents in late 2012.

As that all unfolded, the site stood for a decade as a sad, empty field of scruffy grass, litter and a refuge for people living out of beaten campers and other vehicles along the newly built section of Winnebago Street.

It took nearly a year for the city and Gorman to sign a deal in October 2013 under which the city would convey the property for $1 to the developer, who would repay the city’s $6 million investment through higher property taxes generated by the project.

In January 2014, Gorman offered plans that got a cool reception, calling for a less dense development, with more parking lots, less public space and four-story apartment buildings near existing single-family homes.

The company worked with the city and neighbors and won support for revised plans that called for moving a two-story health clinic to the west and erecting a taller structure with commercial space and housing at the corner. The city approved a general development plan for a multi-phase project in 2014.

The redevelopment launched with the $20 million UW Health Union Corners, a two-story, 60,000-square-foot medical clinic with underground parking completed in December 2016.

Next came Carbon at Union Corners, a $20.5 million, four-story mixed-use project with 90 apartments, 19,000 square feet of first-floor retail and underground parking completed in September 2017.

After that began Generations at Union Corners, a $15 million, three-story residential building with 60 mixed-income apartments targeted to “grandfamilies” — families with grandparents serving as primary caregivers of their grandchildren — and “kinship families,” which include children who live with other members of their extended family. That segment, which includes underground parking, started in September 2018 and has an anticipated opening date in December.

The final piece

The Nexus is intended to be the cornerstone, offering a significant, four-story presence at the busy intersection of East Washington Avenue and Milwaukee Street, Matkom said. It needs only a specific site plan approval from the Plan Commission.

“Speaking for SASY, at least, we’ve been supportive of that each step of the way,” Hinkfuss said. “The only potential disappointment at this time is Nexus. It’s much smaller. There’s no grocery store. The surface parking has increased and the underground parking decreased. There’s far less attention to pedestrian-level details and common areas, as well as interaction with other parts of Union Corners.”

Gorman understands the desire for a structure with a scale and footprint to create a grand entry on East Washington Avenue to the state Capitol, Matkom said. The developer has also tried to lure a grocery store to the retail space, but it hasn’t worked out, he said, noting there has been significant interest from other potential users and that Gorman remains open to a grocery in the space.

The city has provided no additional TIF support to the various phases of the project and is expected to fully recover all public investments for Union Corners and the rest of the TIF district, assuming no further funds are spent, in about three years, Mikolajewski said.