A well-rounded University Square -- almost

Economic jitters have resulted in some vacancies, but grand project mostly ready for students' arrival

Mike Ivey  —  8/27/2008 9:39 am

Greg Rice is scurrying about like the owner of a brand-new home, checking all the details and looking for any signs of shoddy workmanship.

"I wonder what happened here?" asked Rice, noting a small chip in the corner of a concrete planter on the massive, fourth-floor rain garden that captures stormwater from the new University Square.

Upstairs on the top floor of the Lucky Apartments portion of the project, Rice is curious about an 18-inch-ring stain on the hallway carpet.

"Somebody will have to get that cleaned up," said Rice, CEO of Executive Management Inc.

But you can excuse Rice, 53, for being a little nervous. He's overseeing the final phase of the largest mixed-use project ever built in downtown Madison just as some 40,000 students start pouring onto the UW campus and the U.S. economy teeters on the brink of recession.

Encompassing 3.4 acres of land bordered by University Avenue, Lake Street, West Johnson Street and the newly created East Campus Mall, University Square is a $190 million development with a combined 1.1 million square feet of office, commercial and residential space.

More than a decade in the making, the project was developed in a unique public-private partnership that includes Rice, the University of Wisconsin and Steve Brown Apartments. It combines UW offices, private-sector apartments and some 130,000 square feet of retail space in a single L-shaped, 12-story building.

The Lucky Apartments are now open, as is the second-floor food court. Walgreens and Name of the Game, which sells sports merchandise, are open on the first floor. The UW will begin moving into its new office spaces in December.

Backed with some $12 million in public funding, the project aims to turn the blighted, 1970s-era University Square retail strip into what the owners see as an shopping and eating destination for both students and the general public.

"Honestly, I don't think we could do it today," said Rice, noting the soaring construction costs and tightening credit markets that have thrown other mixed-use projects into disarray, including the stalled Union Corners project off East Washington Avenue and the second phase of the Hilldale Shopping Center redevelopment on the west side.

University Square itself has presented some challenges and forced the developers to shift gears more than once.

Initially, Rice had hoped to convince Minneapolis-based Target to open an urban department store to anchor the second floor of the project. But when that failed to materialize, Rice decided to reconfigure plans and move the entire food court to the second floor.

"That will either be Greg's folly or Greg's brilliance," Rice said during a tour of the project last week.

The developers were also hoping to land a grocery store and had discussions with Milwaukee-based Roundy's before that deal fell through earlier this summer.

Most recently, local businessman Curt Brink backed out of a $4 million plan to build the Field Pass sports bar, restaurant and nightclub at the high-profile first-floor corner facing the Kohl Center. Brink was unable to land financing for his venture, and Rice is now looking at other operators for that spot.

But despite those challenges, the project is striking, both in its big-city feel and views of the downtown from the upper floors.

The new development combines the former strip-style retail site with a portion of UW-Madison land that comprises the pedestrian-oriented East Campus Mall connecting Regent Street with Lake Mendota. It has two levels of shopping space served by a 265-car public parking garage owned by Rice and his father, Gordon, who founded Executive Management Inc. in 1965.

Steve Brown owns and manages the 359-unit Lucky Apartments, which has a separate 180-vehicle parking garage and is built to condominium quality, with high rents to match. The apartments are aimed at both students and downtown professionals.

"It's really, really nice -- a lot nicer than the dorms," said Matt O'Brien, a UW senior who is renting a two-bedroom unit in Lucky with his sister.

The final piece of the project is 250,000 square feet of space for UW-Madison. That includes the new home for University Health Services that serves students; a student activity center; and the registrar, bursar and financial aid office, replacing the now razed Peterson Office Building. More than 600 students and staff will eventually occupy the UW portion of the 12-story tower.

"The building has more than met our expectations," said Julie Grove, an architect with the UW facilities division who has been working with the developers.

Perhaps the most dramatic public space is the second-floor food court, encompassing 20,000 square feet and featuring eight different food vendors. Windows 18 feet tall open to a terrace, creating an indoor-outdoor feel for those eating lunch, taking advantage of the wireless Internet or watching one of the big-screen TVs.

"It's almost like a mini Union up here," said Sue Springman, past director of Downtown Madison Inc. and vice president of development at the Munz Corp. She joined Executive Management Inc. in 2002 to help Rice guide the University Square project.

The company already owned a majority of the land prior to construction. It was assembled by the city of Madison as a redevelopment site and sold in the l970s to Executive Management Inc. to construct the single-story, 60,000-square-foot center that once housed University Square cinemas and the popular Paisan's restaurant, now located at 131 W. Wilson St.

But hindered by a lack of both parking and big-name retail tenants, the center started to slide by the 1990s. That's when Rice began talking with city, state and university officials about potentially redeveloping the site in some sort of public-private venture. It then took years to get all the needed approvals from the Board of Regents, the state Building Commission, the state Legislature and the city.

Private financing was secured through M&I Bank. The city of Madison provided $3 million in tax incremental financing, with $7 million in New Markets Tax Credits from Johnson Bank and another $2 million in tax credits from M&I.

Finally, ground was broken in 2006.

"One of the reasons it took so long is I wanted to make sure the university was involved," said Rice, a Madison native and 1977 graduate of the UW, where he studied real estate under the late Professor James Graaskamp.

By consolidating offices in a high-rise building, the UW has been able to use the Peterson Office Building site and adjacent land for the planned expansion of the Chazen Museum of Art and a future music performance hall.

"Going vertical has created a lot more open space on campus," said Rice, referring to Graaskamp's oft-quoted line, "They quit making land a long time ago."

Personally, Rice is hoping to eventually put the University Square project behind him so he can get his golf game back in shape. He helped develop and is an owner of the Bridges Golf Course on Madison's east side near the Dane County Regional Airport.

"I haven't had much time to play this summer," he said.

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UNIVERSITY SQUARE BUSINESSES

Here are retail tenants who have signed leases:

Walgreens*

Name of the Game* -- sports merchandise

Cuppy's Coffee 

VICI Beauty School

VICI Capilli Salon & Spa

Pitaya -- women's casual apparel


In the food court:

Sbarro* -- pizza and Italian cuisine

Quizno's* -- subs, salads

Stir Fry 88* -- Chinese cuisine

Nori Japan* -- Japanese cuisine

Bubble Island 

Varsity Grill

Fattoush -- Mediterranean cuisine

Mike Ivey  —  8/27/2008 9:39 am