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New Whole Foods market on course, say developers

Mike Ivey  —  6/11/2008 9:17 am

Instead of a brand-spanking new Whole Foods Market, those passing by the Hilldale Shopping Center these days see a big hole in the ground.

Demolition of the site is complete, including removal of the old Hilldale theater and vacant Humana office building at the corner of University Avenue and Segoe Road.

But all the equipment has been pulled off, leaving questions about what might come next. Given the previous setbacks and the slumping real estate scene, one can understand the hand-wringing from neighbors.

"Will we be looking at this back of the moon landscape for months and possibly years?" asks George Olson, a Hilldale shopper.

Not at all, says Bob Fink of Joseph Freed & Associates, the Palatine, Ill.-based firm heading the $175 million makeover of the 1960s-era mall into a "lifestyle center," with shopping, restaurants, entertainment and housing.

Fink maintains everything is on schedule to have Whole Foods open by next year. Two other tenants have been secured too, he says.

"We appreciate everyone's concern but Freed is not in any trouble and we plan to be building later this summer," he says.

Freed purchased the aging center in 2004 and announced a short time later it had booked Whole Foods Market as an anchor tenant and planned to open a new store there by fall 2006.

But the initial layout for a 50,000-square-foot store with 230 surface parking spaces was twice rejected by the Madison Plan Commission because it resembled a big-box project.

Eventually, Freed came back with designs for a state-of-the-art, 65,000-square-foot Whole Foods with escalators, a parking ramp and a green roof. That plan was finally approved in late 2006.

Freed is now looking at a fall 2009 opening for Whole Foods Market -- nearly three years later than initially planned. The developer is scheduled to appear before the Plan Commission June 16 for final approval of modified plans.

Fink says once these approvals are secured, work will begin again.

"We want to be the good news story in this admittedly difficult environment," he says.

Riding a wave

The biggest news in months on the local high-tech scene came Monday when biotech darling Third Wave Technologies was sold to Hologic Inc. of Bedford, Mass.

With 2007 revenues of $738 million and net income of $94 million, Hologic is way larger than Third Wave, which had revenues of just $31 million last year and booked losses of nearly $17 million.

Given that, the deal looks like a winner for Third Wave, which has struggled to reach profitability since making a public stock offering in 2001. Third Wave owners will be paid $11.25 per share, a 25 percent premium over the stock's recent trading range.

At one point, Third Wave had nearly 300 employees at three different locations in the Madison area. But it went through a major restructuring in 2002 after its share price fell below $3 from an initial price of $11. Today, the company has 143 employees left at its headquarters in the University Research Park.

Third Wave became an attractive takeover target in March after its test for an indicator of cervical cancer scored well in clinical trials. It is expecting FDA approval in 2009, which Hologic said was a key factor in its decision.

Analysts have said the market for testing for human papillomavirus (HPV) is about $250 million annually in North America and is growing at a rate of 25 percent a year.

"I'm hoping all of this will eventually mean more jobs in Madison," said Third Wave CEO Kevin Conroy.

Conroy is also hoping Hologic doesn't decide to move Third Wave management to Boston. He's got three daughters here, ages 4, 17 and 10.

Wingra Creek cleanup

A lot of companies tout their environmental commitment but few are backing it up like Strand Associates Inc., which is heading a cleanup Saturday June 14 of Wingra Creek as part of "Take a Stake in the Lakes" week.

Strand is expanding its headquarters at Fish Hatchery and Wingra Drive and is working to keep the creek free of trash and debris. It is teaming with the Friends of Lake Wingra and MadCity Paddlers on the cleanup, which goes from 9 a.m. to noon.

Volunteers should meet at 9 a.m. at the pedestrian overpass bridge across from Strand Associates at 910 W. Wingra Drive. The author of the Business Beat column plans to help, too.

Mike Ivey  —  6/11/2008 9:17 am