Cope & pray

With Verona Road construction getting worse before it gets better, and a possible two-year delay looming, area businesses carry on with eye to future.

From the pages of In Business magazine.

When Gov. Scott Walker announced his proposed transportation budget for 2017–2019, including a possible two-year delay on the Verona Road project that cuts through Madison and connects the state to Iowa, the alarm it sounded could be heard all the way to the Capitol.

Verona Road is just one of several projects Walker would delay, including an expansion of Interstate 94 North-South in Racine and Kenosha counties and the north leg of the Zoo interchange in Milwaukee, although much of that project would still be completed by 2019. Surviving projects would include Interstate 39-90 south to the Illinois line, and Highway 10-441 in the Fox Valley.

However, the state needs $939 million to avoid a deficit in the next transportation budget, and this has impacted both the pace of road projects and the condition of roads. To address the transportation deficit, Walker wants to reduce the transportation budget by $447 million and borrow $500 million through bonding to fill the gap, but the resulting delays have drawn fire from both sides of the political aisle, motorists, and businesses.

Just how bad are Wisconsin’s roads? TRIP, a Washington, D.C.-based nonprofit that researches, evaluates, and distributes economic and technical data on surface transportation issues, recently determined that 42% of the state’s major local- and state-maintained roads were in mediocre to poor condition. In Madison, 68% of roads were found to be in mediocre to poor condition, 25% were found to be fair and only 7% were considered excellent. The governor’s office states it a different way: more than 90% of the state’s most heavily traveled highways are rated fair or better.

So is the glass half empty or half full?

In the past, gas taxes bolstered a large part of the transportation budget, but with more fuel-efficient vehicles on the roads and lower gas prices, the current tax has remained largely stagnant, and Walker has little interest in raising it.

While the governor is holding true to a promise he made not to raise taxes, some legislative leaders are reportedly calling it his presidential budget, claiming Walker won’t raise taxes because he’s headed for a 2020 presidential run.

In its current form, which will be intensely debated, the transportation budget provides more than $672 million in general transportation aid for municipalities, $212 million for counties, and $1.7 billion in funding for the State Highway Rehabilitation Program. That’s not chump change. But from a local business perspective, could an additional two-year delay on Verona Road prove too much to handle?

State Rep. Therese Berceau, D-Madison, represents the 77th Assembly District. She was surprised when Walker’s transportation plan was announced. “I thought we finally had clear sailing,” she says, after a previous two-year delay. “His own party is a little upset right now.”

The Verona Road corridor has always been problematic, Berceau notes. Cub Foods and Walgreens pulled up stakes unrelated to construction, which hasn’t helped matters, she says. “I know the Republicans want to do something on the transportation budget. We first have to see if they can get an agreement in their caucus.” Nobody wants to raise taxes, she says. “We’re not going to agree on priorities in terms of spending, but I do think we all agree on [improving] transportation and the infrastructure.”

Even Assembly Speaker Robin Voss, R-Rochester, argues the plan doesn’t provide a long-term funding solution for the state’s highways, and while Walker says he’ll consider alternative plans, he also promises to veto anything placing more burdens on state taxpayers.

If anything is certain, it’s the promise of a contentious debate as the transportation budget is argued, beginning early next year.

Pain and gains

The Verona Road project has been discussed since the early 2000s and finally passed in 2011 with the intent of improving safety, efficiency, and mobility from the Beltline to Hwy. PD/McKee Road. Some traffic signals will be eliminated as Verona Road travels under Williamsburg Way and over Hwy. PD. Three lanes of traffic in either direction will run between Raymond Road and Hwy. PD.

Caught in the middle of the state’s transportation budget decisions are Madison, the city of Fitchburg, and the city of Verona, and all corridor businesses in between. The work being conducted currently is part of the current budget and paid for, but what lies ahead?

“If this budget were to pass then it’s my understanding that the work scheduled for two to three years from now would be moved to 2021 and 2022,” notes Fitchburg Mayor Steve Arnold. “If a three-year project goes to five years, you’ve got 66% more inconvenience and hassle with all the benefits delayed. It’s always cheapest to do a project quickly. I think Mr. Walker is making his point and that he’ll be overruled.”

Michael Zimmerman, economic development director for the city of Fitchburg, worries that businesses looking to make location and investment decisions may be put off by an extended road construction project. “These constant delays and this open-ended environment causes uncertainty and causes people to hold back. We’ve been fortunate and able to work with people, including the new hotel in Orchard Pointe, but now headlines are saying another two years, perhaps. That could change their projections. The good news is traffic will always be moving on Verona Road.”

Early on, the Verona Road Business Coalition (VRBC) formed to assist businesses affected by looming construction. Phase I included work between Nakoma Road and Raymond Road. Phase II includes the stretch between Raymond Road and Hwy. PD/McKee Road. “The latest phase just started Sept. 6,” notes Cindy Jaggi, project manager for the Verona Road Business Coalition. It is improving access roads to help divert traffic once the main Verona Road work begins and should be completed by Thanksgiving, but it’s just a part of the whole project.

“Let’s be assured that we can take this to completion,” Jaggi adds, “and that the state has adequate funding. Last year we were told the full project would be delayed one year to 2019, now it could go on until possibly 2021.”

The Transportation Development Association together with the Fiscal and Economic Research Center at the University of Wisconsin–Whitewater conducted a study last year to look at the benefits of improvements on four major state road projects. It concluded the short-term construction impact of the Verona Road project would result in over $250 million and nearly 500 jobs. Meanwhile, the business impact would total almost $16 million annually and support over 150 jobs.

Delays, in contrast, create uncertainty in attracting new business to the area, Jaggi explains. “We have businesses with commercial buildings that are already having trouble finding tenants.”

There really are two issues, she notes. First, how to support local businesses affected by construction particularly if the process is dragged out to five years or more, and second, finding a sustainable way to fund transportation projects. “It’s kicking the can down the road,” she says of Walker’s budget. “Any business can hang in for four to five months, but we’re looking at four to five years. That has a tremendous impact on business, and we will likely see other businesses close their doors. It will affect the local area.”

(Continued)

 

Cause and effect

Business owners generally understand the need to upgrade roads and bridges, but funding them is an ongoing struggle that has been argued on the Capitol floor each biennium. If raising the state’s gas tax is off the table, other options could include increasing vehicle registration fees or instituting toll roads, an idea that has been floated before but would require federal input, notes Berceau.

Phase I of the Verona Road project started in 2014 and impacted more than the Beltline and Verona Road interchanges. “Feiler’s closed (the owners retired), Home Depot was down 12%, and McDonald’s reported a decrease in business of 35% to 40%,” Jaggi reports.

Next spring, the Design Mart businesses will be affected as the project moves further south. Then it will begin impacting larger employers such as Saris, Placon, Sub-Zero, Certco, and Thermo Fisher, as well as hundreds — if not thousands — of Epic commuters who make the trek every day.

The VRBC, which represents 140 businesses, has been providing daily construction updates as necessary, advocating for businesses, lobbying the state for more money, and mobilizing letter-writing campaigns in an effort to keep the project on track. “We were there when the Joint Finance Committee met to discuss $350 million in contingency funding and asked that Verona Road be included in that with the other major projects. They heard us. We believe in part that’s why the funding was released. I can’t say enough about the Department of Transportation (DOT),” notes Jaggi, “but we just need the funding without delays and impacts to businesses.”

Steve Theisen is the project communications manager for the DOT. “If the Verona Road project gets delayed, the project would still continue, but it would take longer,” he explains, noting that the design phase originally targeted for completion by 2019 has been pushed to 2020. “We’re very early in this budget cycle. If there are delays, that would extend completion to 2021, or two years past 2019. But for us, the current completion date is still 2020 unless there are delays.”

In other words, if funding is delayed, the pace slows. “As an analogy,” Theisen explains, “if it takes $70 million dollars to complete a part of a project and in the first fiscal year we only get $50 million, we have to modify our schedules until we get the extra money, so it’s really about reallocating the funds we get.”

Businesses weigh in

The lengthy discussions about the Verona Road construction project have provided business owners years to plan and strategize.

New concrete was poured along the Beltline between Seminole Highway and Whitney Way. This work has already been budgeted for as part of Phase I of the interchange project.

Deidre Garton is co-owner of Quivey’s Grove and co-chair of the VRBC. Construction in and around Nesbitt Road has definitely affected the restaurant, she says. “Our lunches are down significantly, maybe 30% to 40%, but our dinners are holding steady. Weddings, which are an important part of our business, are still not full for next year. Usually we’re booked up by this time.”

A year and a half ago, in anticipation of construction, Garton says Quivey’s increased its marketing efforts including social media. “This is just the first phase,” she says. “It’s just taking so long. This has been affecting us since 2014.”

A lot of people have experienced the woes of construction, she concedes — Monroe Street, East Washington Avenue, Cambridge, Waunakee. “The city of Fitchburg has been terrific, as have the mayors and Mike Zimmerman. We feel supported by the city and the DOT. Outages get repaired very quickly and they’re open to conversation, calls, and comments.”

Garton looks forward to completion, whenever that is. “We’ve gone from Verona Road being a two-lane country road to a major highway. That just means more people will be driving by and seeing us so the potential for more customers is there. Ultimately, it will be great.”

Abbey Weiss is the creative director at Bella Domicile, also on Nesbitt Road.

The remodeling firm updated its website, posted Facebook live videos, and worked proactively to inform customers about construction.

Thus far, they’ve seen a decrease in Saturday walk-in traffic, she notes. “In August, before construction started, we’d have six or seven people come in on any Saturday. Over the last three weeks we had two each week.” The company, she says, is weathering the storm and anxious for work to be completed later this month.

At Waggin’ Tails Doggie Dude Ranch & Pet Lodge and the adjoining Fitchburg Veterinary Hospital on Nesbitt Road, Jeff Weber understands that any inconveniences they may endure will be short-lived. “I understand the reasoning behind the work and I also see the congestion,” says Weber, executive vice president of marketing and IT. “We’re fortunate that we’re in a supply and demand business and we have waiting lists. Our concern is if the larger Verona Road project gets delayed, will our clients choose to go elsewhere to avoid the hassles?”

Kim McLaughlin, banking center manager at Wisconsin Bank & Trust, is new to her position but not new to the area. Thus far, she says, construction has been somewhat of a challenge. “Luckily our customers are very local and patient.” Lobby traffic is down slightly, but the bank is still holds regular business hours.

“We’re concerned about access to the roads and signage,” she says. “We’ve been offering free chocolate chip cookies every day to lobby and drive-through customers to thank them for stopping by. We’ve also found that most customers are cheerful and sympathetic to our situation. This is only temporary and will definitely be worth it in the end.”

For some, the massive project is a mere blip on the scale of economic progress.

Tony Millonig, business and property owner at Chalet Ski & Patio at the corner of Anton Drive and Williamsburg Way, is surrounded by activity, including a roundabout installation at the corner, but he maintains a positive attitude. “The DOT has done a really good job of communicating their intentions and providing plenty of notice,” he reports.

“This is all about communication. We’re not impossible to get to. We’re not even hard to get to. We’ve posted maps on our website for the past two years about how to find us.”

While the business has not been affected thus far, Millonig admits things could change next year. Still, he insists the “we’re open for business” message is a wasted one. “Of course we’re open for business!” he says.

“I think the long-term effects will be extremely good. [Construction] will just open up the opportunity for more development in this part of Madison, and managing the high volume of traffic is a good thing. It will get a little messy for a year or two, but long term I think things look really super.”

It’s all a matter of perspective, he suggests. “We’re in a healthy economy and in a healthy market. It’s a little muddy outside and we have some barrels out there but it’s not that bad. This is an exploding area. Let it go, let it grow, and develop,” he advises. “Let’s not hold it back. If there’s a short-term inconvenience, that’s just how it is, but we have no intention of moving or selling. We’re here for the duration and committed to our property and the business, but when it gets done we’ll all be better off.”

(Continued)

 

A tale of two businesses

Thrust into the world of eminent domain

Arguably, no two businesses have been impacted more by the Verona Road construction project than General Beverage Corp. and Benjamin Plumbing. Both are located at ground zero, the intersection of Hwy. PD/McKee Road and Verona Road.

Benjamin Plumbing has 28 employees. General Beverage has 225, but hundreds more around the state. Joel Minkoff, executive vice president of operations at General Beverage, describes his business interruption as “pretty severe” thus far.

The beer, wine, and spirits wholesaler launched an eight-stage growth and development strategy in 2010. “We added a large addition, fuel pumps, and expanded parking,” he said. “I was reassured many times by DOT that they had taken all the land they needed from us before we started. We wanted to get things going before road construction began.”

In October 2012, the DOT informed Minkoff that it would need land that would impact the employee parking lot, and this past spring, it condemned and took another piece, reducing the company’s eight acres to about five. Minkoff is particularly concerned about parking and the traffic pattern on PD, saying it’s a challenge getting in and out of the business  and impacts the safety of bikers on a nearby bike path.

“But when DOT comes in and takes more, we have no say. It’s all in eminent domain. Had I known they would come back, we wouldn’t have spent $5 million on our improvements. We were short parking to begin with and now we’ll lose more.” Still, he credits the Department of Natural Resources, the DOT, and the City of Fitchburg for working with the company to  make the best of a challenging situation.

While General Beverage’s expansion plans stopped after Phase III, the business continued to grow. “People are working on top of each other. We worry about morale and losing employees. We want the working conditions to be better for everyone.” Moving doesn’t make financial sense, and Minkoff’s hopes that the DOT would buy the building didn’t pan out.

The current plan is to muscle through construction so the company’s fourth generation won’t have to fight the same battles.

“Our job is to get along with everybody and try to mitigate any issues that would create hard feelings,” Minkoff says. “Contractors have a job to do and we have to try to work together to minimize disruptions, but traffic will continue to be a nightmare. We have employees that drive in from Dodgeville and Columbus and I don’t want to lose them or any valuable employees. That’s why it would be nice if the state could stick to the schedule.

“If this gets resolved by 2021, we will have been at this for 11 years!”

Across the intersection, Dale Benjamin had to move the Benjamin Plumbing business by the end of the year or face an eminent domain situation. “Discussions go back five or six years. We knew it was coming,” he says.

At first, road plans targeted the building Benjamin Investments owns next door on the corner of Verona Road and Hwy PD. Proactively, Benjamin removed about $80,000 in improvements and rented the space to short-term businesses, including a Halloween store. “To be fair, at that point the engineers didn’t know what was going to happen here either, but they assured me they did not want to buy Benjamin Plumbing,” he said. Then, a revised plan saved the corner building and took the Benjamin Plumbing building instead. “I had just spent all that money gutting that corner building,” Benjamin says. “That was a bummer.”

That morning he had just installed a $6,000 air conditioning unit at Benjamin Plumbing. “It was an expensive day for me,” he recalls. In the end, DOT purchased the building and in December, Benjamin Plumbing will move to its new location at 2870 Commerce Park Drive. It wasn’t his first location choice, he admits, but that deal fell through.

Benjamin doesn’t blame the DOT. “I understand that the project needs to be done and I think the engineers did the best they could, but now I’m going from the busiest intersection in the city where I get 60,000 to 70,000 drive-bys a day to an industrial park where I might get 15. That will cost me more in marketing each year.”

Meanwhile, at the corner of PD and Verona Road, a three-story Class A office building is replacing the former Halloween store. “It’s a valuable corner and the first tenant will be in next spring,” Benjamin says. “There’s a lot of activity going up in Orchard Pointe across the street, so we’ll be part of the solution rather than part of the problem.” — Jan Wilson

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