Madison approves major housing redevelopment on gateway to Capitol Square | Local Government

But due to the economy, the project will be delayed for a year.

On Monday, the city’s Plan Commission unanimously approved a proposal from Virtue LLC to demolish the nine buildings used for student housing between 519 and 547 W. Washington Ave. for the W-shaped, six-story building with 140 apartments and 168 underground parking spaces.

But due to rising interest rates and construction costs, Virtue intends to renew rental leases for another year before moving forward with the redevelopment in the fall of 2023, said Jim Stopple, one of the owners. Most of the housing projects now under construction locked in loans and construction bids before costs surged, he said.

“I would much rather start this fall,” he said. “It just seems prudent to hold off.”

The City Council member representing the site and the director of the city Planning Division can extend the project approval for up to 24 months without further Plan Commission action.

The buildings have been student housing for a long time, but the new development will likely attract some students and many young professionals who want to live in the Downtown area but not in the most bustling areas like Capitol Square or State Street, Stopple said. Many students are shifting from neighborhoods to the high-rises going up closer to UW-Madison, he said.

Downtown Ald. Mike Verveer, 4th District, said he laments the loss of lower-cost housing — and the lack of lower-cost apartments in the redevelopment — but supports the project because it will bring much-needed housing to the area.

“We need the additional density, specifically in the Downtown,” he said. “We just don’t have the stock to meet the demand.”

Verveer said he isn’t sure if the delay in construction is due to extreme caution or a sign of things to come. “This might be the beginning of some developers holding off because of the economy,” he said.

The project is another early test of the city’s new neighborhood plan and zoning for the corridor of two- and three-story houses — converted to student dwellings long ago — that tie together the Bassett and Mifflin neighborhoods that meet along the 400 and 500 blocks of West Washington Avenue.

The city’s 2012 Downtown Plan singled out the area between West Dayton and West Main streets and North and South Bedford and Broom streets — playfully dubbed “Mifflandia” — as a place meriting special attention and a separate process for a detailed development concept plan, design standards and implementation strategy. The City Council adopted the plan in late 2019.

Already, Keller Real Estate Group has demolished six houses between 504 and 516 W. Washington Ave. and three more houses between 8 and 14 N. Bassett St. for a $22 million, six-story structure now nearing completion that will offer 2,300 square feet of first-floor commercial space, 103 apartments and parking for 98 vehicles.

Both the Keller project and Madison Property Management’s redevelopment “meet the letter and spirit of the adopted Mifflandia Plan,” Verveer said. “It meets the huge demand for Downtown housing, which is a good thing,” he said.

The main facade of Virtue’s project will be four stories and broken into three separate masses with outdoor courtyard spaces in between facing West Washington Avenue. On the fifth floor, the structure will step up to six stories.

The building will offer 22 studios, 62 one-bedroom units, four one-bedroom units plus den, 30 two-bedroom units and 22 three-bedroom units. It will feature a lobby, office and exercise space on the first floor, a community space and deck on the sixth floor, and rooftop access for residents.

The city has files that document the history of many properties in Madison but has them on only three of the buildings at the redevelopment site: 525, 527-529, and 541 W. Washington Ave., city preservation planner Heather Bailey has said.

“The history that we have for these three structures is indicative of the history of development along this stretch of West Washington Avenue,” Bailey said when the project was proposed in November. “From the 1890s to the 1920s, there was a housing boom and this route to the heart of the city was lined with working-class and professional rental housing. There does not appear to be anything particularly historically or architecturally significant about any of these properties, but they are a part of the vernacular architectural history of Downtown Madison.”

Vernacular architecture is a style that is designed based on local needs, availability of construction materials, and reflecting local traditions.

The Landmarks Commission has noted the loss of the existing vernacular housing for the project.

Virtue is open to entities that might want to relocate any of the existing structures, as well as those looking to repurpose materials from the structures that are eventually demolished, Stopple said.