The city and Gebhardt Development took a key step Tuesday toward another major redevelopment on booming East Washington Avenue.

After seeing new details, a special city committee on a voice vote authorized staff to negotiate the sale of property to Gebhardt Development for a $69 million mixed-use project offering office and retail space, a 2,300-seat performing arts venue, culinary center and parking on the 800 block of the thoroughfare.

Gebhardt presented changes and new details to the Capitol East District Committee for the “Cosmos” redevelopment, which now includes:

  • $45.5 million in Gebhardt building featuring 104,000 square feet of offices and a 2,300-seat, 35,000-square-foot performing arts venue at the corner of East Washington Avenue and Livingston Street. Facades offering 12,000 square feet of retail space and a 6,000-square-foot culinary center will face East Main Street.
  • A $10 million American Family Insurance building with up to 50,000 square feet of space for the entrepreneurial hub StartingBlock Madison, another 50,000 square feet of office space for American Family, and 4,000 square feet of retail space facing East Washington Avenue.
  • A potential $12 million structure built by the city on Madison Gas and Electric property across East Main Street with 600 parking stalls and 15,000 square feet of commercial space.

Under the proposal, Gebhardt would act as master developer for the site but would convey a parcel to American Family Insurance for its piece of the project.

The city, MG&E and Gebhardt are discussing the parking structure that would be owned and operated by the city parking utility and serve the project during weekdays and other needs on evenings and weekends.

“It’s a great project,” city economic development director Matt Mikolajewski said. “StartingBlock is going to be a tremendous asset to the entrepreneurial community and a real shot for the Capitol East District.” American Family’s decision to locate in the area “is huge.”

The sides will now negotiate a letter of intent that will later become the basis for a purchase and sale agreement to be considered by the City Council. When that’s done, Gebhardt would submit applications for land use and any city financial support.

A preliminary schedule shows construction starting in December with StartingBlock moving in late 2016 and the project complete in spring 2017.

The committee’s approval, however, came amid strong protests from music promoter T-Presents, which until recently had been teaming with Gebhardt on the performance venue part of the project.

Attorney Michael Christopher, representing T-Presents, said his client had been working with Gebhardt on a 1,500-seat, 18,000-square-foot facility — a scale that had been previously shared with the committee — and that Gebhardt’s recent decision to team with another promoter on a larger venue is an “unethical business practice” that will produce a venue that will have a negative impact on the Overture Center and Orpheum Theatre.

Frank Productions is “providing the exact project that didn’t get past first base when it was on the other side of the street,” Christopher told the committee, referring to a previous proposal for a similar-sized venue on the north side of East Washington Avenue’s 1000 block.

The city rejected that proposal in November, citing concerns over traffic and parking in the largely residential area.

But Frank’s new proposal on the south side of the thoroughfare with parking on-site is much more acceptable, said David Waugh, a Tenney-Lapham Neighborhood Association member on the committee.

T-Presents asked the committee to reject Gebhardt’s redevelopment proposal and direct city staff to issue a new request for developer proposals for the project.

Gus Paras, owner of the Orpheum, joined T-Presents in opposing the venue, but his claims that city dollars would be used to help finance the music venue portion of the project were refuted by Gebhardt’s development team and city staff.

Mayor Paul Soglin included money for StartingBlock in the city’s 2015 capital budget, but those dollars would go specifically for that purpose. Gebhardt’s team said it does not plan to request tax increment financing “unless something extraordinary happens.”

The site is part of the former Don Miller auto dealership on East Washington Avenue that the city bought for $5.8 million in 2010. Gebhardt has already acquired two sites from the city for projects.

Gebhardt opened the $39 million Constellation mixed-use project with 220 apartments on the 700 block of East Washington Avenue in August 2013, and is building the $90 million Galaxie with about 246 housing units, a Festival Foods grocery store and offices on the north side of the 800 block.

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