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Business Beat: When will Whole Foods finish what it started at Hilldale?

Mike Ivey  —  9/03/2008 2:56 pm

Editor's note: An incorrect version of this column, which did not run in Wednesday's print edition of the Cap Times, was inadvertently posted online for several hours Wednesday morning.

It's anybody's guess when developers might start filling that big hole in the ground behind the Hilldale Shopping Center.

Officials with Joseph Freed and Associates, the Chicago-based firm heading Hilldale's redevelopment, are meeting Wednesday, Sept. 3, with Mayor Dave Cieslewicz and staff about where to go next.

"These things take a long time to work themselves through, but we hope to know more after we meet with the city," said Dennis Harder, vice president of development at Freed, in an interview last week. "Obviously there are a lot of implications."

The initial plan was for Whole Foods to open a new, 65,000-square-foot store at Hilldale with structured parking. But earlier this summer, Whole Foods CEO John Mackey said the company was cutting back on the number of stores expected to open in 2009.

Since then, everything has been up in the air. The Austin, Texas-based grocer has been mum on details, leading to rampant speculation about the site's future. The new store was to have replaced the existing Whole Foods at 3313 University Ave., just several blocks east.

Both Freed and Whole Foods are saying the deal is still on -- although no one can come up with a construction start date.

"Neither Whole Foods Market, nor Freed, has any intent to cancel this project," says Kate Klotz, Midwest spokeswoman for the grocery chain. "We have yet to announce the timing for construction but are still planning a location at Hilldale."

Freed bought the property in 2004 and originally planned to have a Whole Foods open by the end of 2006 as part of its mixed-use housing and retail development.

However, over the past two years, the project has undergone several redesigns as the market for condominiums softened and retail sales slumped. At the same time, Metcalfe's Sentry has continued to thrive at Hilldale, leaving some to wonder if the area could actually support three full-service grocery stores. A Copps Food Center is also located across Midvale Boulevard in Shorewood Hills.

The new Whole Foods was to have anchored Phase II of the project, which also includes Hotel Indigo, an eight-story, 150-room boutique hotel.

An 11-story condominium building with office and retail space was also part of the original plans for the property but was scrapped in favor of a smaller building fronting University Avenue.

Developers did move forward this spring on demolishing several vacant buildings behind the shopping center, including the old Hilldale Theatre and former Humana office complex.

But neighbors living near the site are now complaining about the lack of progress, as has developer Peter Frautschi, who is trying to sell remaining units in the Weston Place condo project that overlooks the Hilldale property.

"It's a pretty desolate landscape over there right now," Harder admitted.

Still, the massive crater at the corner of Segoe Road and University Avenue has a long way to go before it can claim the title of Madison's Grandest Canyon.

That dubious honor rests with the old Central YMCA at 201 W. Washington Ave.

The site was vacant for nearly a decade beginning in 1987 when the YMCA, beset by financial crisis, was torn down, leaving a gaping hole just one block west of the State Capitol.

In 1993, the late Madison developer Jerome Mullins purchased the land and paved it over to provide extra parking space for his nearby Inn on the Park hotel.

Finally, in 1995 the state stepped in and secured the site for a new office building that now stands there bearing the name of former Gov. Tommy Thompson.

One can only hope it doesn't take a return of Tommy to get the Hilldale hole filled.

Stadium hotel on track

While Hilldale remains on hold, developer Bob Sieger maintains everything is a go for a new $10 million, four-story, 48-room hotel slated for the corner of Monroe and Regent streets.

Rumors have circulated that Sieger was having trouble lining up financing amid the tightening credit markets in the wake of the nation's mortgage crisis.

But Sieger says he has financing lined up, although he declined to share the name of a lender.

"As what seems to be typical with this project, the word on the street is all derogatory and wrong," he says.

Sieger says he is working toward a Sept. 22 groundbreaking, with an August 2009 opening.

As a condition of approval, though, Sieger must provide proof of financing to the city before a demolition permit can be issued.

City planner Tim Parks said nothing had been submitted yet.

"Mr. Sieger still has to go through final site plan approval to verify that he has met all of the conditions of the Plan Commission approval," Parks says. "Provided that he does resubmit for staff review his final plans and complies with all of the stated conditions, he would be able to pull permits to demolish the existing buildings and construct the new hotel."

There you have it.

Mike Ivey  —  9/03/2008 2:56 pm