A city committee heard presentations at a meeting Monday of plans to redevelop a two-block area in downtown Madison known as Judge Doyle Square, which could include a full-purpose hotel, commercial and residential units and a bike service center.
Judge Doyle Square is on the north side of the Capitol south of Doty Street.
The city began planning the project in 2010, and it gained momentum in July 2012 when the Madison Common Council approved a new Downtown Plan, which outlines a vision for the next 20 years of the downtown and a set of recommendations to achieve the vision, including the redevelopment.
City consultant Tom Hazinski, who specializes in convention, sports and entertainments facilities consulting, provided a situational analysis of the hotel market. He compared four primary competitor hotels and explained how a JDS hotel would impact the market.
Hazinski said the average occupancy in the competitor hotels in Madison was 70 percent in 2012 and projected it will increase to 75 percent next year.
“The good news here is you’re in a rising market, and it’s a strong market,” Hazinski said. “It’s a really great backdrop to be doing this type of project in.”
Hazinski predicted the occupancy rate will be approximately 66 percent when the hotel opens but will return to 70 percent occupancy within three years.
Judge Doyle Square City Staff Team member Aaron Olver compared proposals from two potential developers, one of which is Madison-based and the other based in Austin, Texas, based on their cost distributions and funding models.
Olver said the developers would spend almost the exact same amount of money on the hotel, but the proposal from the Austin-based developer costs more in total because it devotes more funding to parking, commercial and residential units, and the bike center.
Ald. David Ahrens, District 15, questioned whether building another hotel is in the city’s economic interest.
Ahrens noted the hotel and restaurant industry accounts for only 4 percent of all economic activity in the city, and demand for hotel rooms in the city is not enough to warrant a new development.
“It’s questionable whether there is demand that will meet this vast new supply,” Ahrens said.
