The changing face of State Street

A large housing developer has proposed a plan to build a ten-story apartment complex on the 300 block of State Street, which would displace a number of downtown businesses already hit hard by the COVID-19 pandemic. 

The Chicago-based developer and college housing projects specialist Core Spaces already owns two major housing structures in the downtown Madison area, The Hub and The James. This plan, if passed by the city, would become the largest project yet for the company. 

The project, which would cost an estimated $100 million, requires the demolition of a number of buildings and the displacement of ten businesses, including A Room of One’s Own bookstore, the Canterbury Inn, Casa De Lara and Community Pharmacy. 

These businesses now face the decision of whether to shut down or relocate. 

“We’re hoping the move won’t interrupt people’s wellness and access to care,” Co-op member and Community Pharmacy employee Rose Spolar said. “Several people have been working here for 10 or 15 years, and they’ve developed long-lasting relationships with customers.”

Spolar grew up in Madison. She remembers visiting a Room of One’s Own bookstore when she was young, and she said this feeling of change caused surprise, grief and frustration for customers and employees alike. 

As the holistic health store and pharmacy looks for a new lease near the East side, Spolar believes the financial and logistic impact of the move is not as big of a concern as the potential that the move will sever ties between the shop and the community. 

“There’s an emotional impact that comes along with seeing these historic businesses change,” Spolar said. “It’s not like when the McDonald’s changes.”

The most recent development plan is just one in a series of large, luxury apartment buildings in the past decade. Steve Brown’s Lucky complex went up in 2011 as part of the development of University Square, which also holds several University of Wisconsin-Madison administration offices. The luxury Ovation apartments were completed in 2015; Core Spaces built The Hub in 2015 and The James in 2017. 

Core Spaces Senior Development Manager Mark Goehausen said that the central location of the new development would bring both students and young professionals to the luxury units and that its amenities will be comparable to the existing buildings owned by the company. 

“We are strong believers in Madison, and even though State Street is suffering as a result of the pandemic and social unrest, we know that it will come back better than ever,” Goehausen said.

Plans include integrating some of the existing building facades into the design to preserve some element of their history. There is also potential for displaced businesses to opt to move back into the retail spaces after construction is complete. 

The proposal also includes plans to include “affordable workforce” housing units, something that District 4 Alder Mike Verveer encouraged in correspondence with the developer, according to the Wisconsin State Journal. The building will be in a location designated by the city as a “super preferred area” for affordable housing.

However, only 77 out of the 481 units have been designated to be “affordable” — which comes in at just over 16 percent. In a city with a vacancy rate of three percent that is experiencing rising costs associated with rent, this may prove to be a serious problem. 

For City of Madison Director of Planning, Community and Economic Development Matthew Wachter, the plan, like any other city development project, has its pros and cons. On one hand, the city desperately needs housing, but building high-end high rises downtown may be further contributing to a larger trend of displacing working-class communities over the past few years. 

According to Wachter, a healthy vacancy rate in any city is around five percent, which is important to keeping an equal playing field between tenants and landlords. When the vacancy rate drops, landlords have an advantage in decision-making over tenants who are lining up for housing. 

The city does what it can to incentivize the development of affordable housing by offering financial subsidies, but it cannot mandate the construction of a specific type of housing. This has caused a perfect storm for a slow-moving trend of displacement for working-class tenants and businesses. 

“Displacement is what we worry about as a city — someone who was stable and had housing or commercial space they could afford [and] no longer does [have a home] because of prices that have gone up,” Wachter said. “Downtown has been seeing pretty rapid change for decades now.”

Spolar said that she has noticed more and more retail franchises and chains pop up in the city as it became less affordable. She concluded that Madison’s downtown area is becoming more sterile and privileged as a result.

“The only people who can afford to be here are people who carry a lot of privilege,” Spolar said. “By sterilization, I mean the inherent exclusion of a lot of people. What matters? Money. That’s it.” 

While many businesses have decided to move as a result of the new development plan, including the historic Room of One’s Own Bookstore — which has been doing business in the downtown area since 1975 — other businesses will not be able to reopen elsewhere. Owner of the Canterbury Inn David Waugh said that if the plan goes through, the hotel will most likely close for good. 

The six-room boutique hotel won’t be able to find a similarly-sized space that could accommodate the move. 

The property has been run as a hotel since the early 90s, and Waugh has been operating the Canterbury for the past three years. He said that one of the charms that would be lost if the building were to be demolished is the unique artwork and murals painted on the walls of each of the hotel rooms. Maintaining the character and history of State Street has been one of his priorities as an owner and operator of multiple downtown businesses. 

“I think it’s very important that any development respects the character and the fabric of state street, and a lot of that is the historic buildings,” Waugh said. “We do need development and affordable housing, but I hope the developer does a good job of respecting the character of the State Street area. I think in order for retail in the area to have any chance of survival, housing is part of the equation.”

For many retail businesses, the pandemic was the nail in the coffin that followed years of shrinking retail popularity. Wachter said that bringing more housing options and more income into the neighborhood might be a good way to invigorate the area and bring much-needed traffic to local businesses. 

“There’s a question of what exactly is going to come back into these places that have been hit the past year,” Wachter said. “There is that bigger conversation about what is that longer-term vision for State Street.”