Great State?

Amid vacant storefronts on Madison’s famous street, hope abounds.
0622 Editorialcontent Final Statest Feature
Photo by Crimson Sun Studios

Standing at the top of State Street on a chilly Thursday afternoon, I was dreading a walk toward campus. Admittedly, I hadn’t visited or shopped State Street since the unrest and the pandemic took hold in 2020, and gauging from conversations with many people since then, I’m not alone.

It’s 3:00 as I head down the city’s most famous street.

In the 100 block, a smattering of businesses are open — Tobacco Mart, the Wisconsin Cheese Mart, and Clary’s Gourmet Popcorn among them — but they are surrounded by empty storefronts, many with For Lease signs in the windows. Across the street, plans for a boutique hotel at 122 State fell through long before COVID, yet Ian’s Pizza and Michelangelo’s Coffee House are serving customers.

The Orpheum Theater sign provides steadfast reassurance. Goodman’s Jewelers is still there, as is Little Luxuries, Nick’s Restaurant, Paul’s Club (including the tree), and many others. The Overture Center is planning for an exciting summer and year ahead, and Comedy on State continues to offer lighthearted respite.

In the 300 block where Core Spaces has begun a major mixed-use development, a chain link fence cordons off an entire corner. Red Rock Saloon, Canterbury Inn, Casa de Lara, A Room of One’s Own, and Community Pharmacy once stood here. The bookstore and pharmacy relocated to the Atwood area. The saloon moved down the street.

State Street is still smarting from a triple-whammy of unrest, COVID-19, and an ongoing worker shortage made worse by both, but the businesses that survived offer testimony to their will to succeed.

Business churn

Downtowns are always in a state of flux with businesses moving in and out, and certainly Madison’s is no different. According to the Central Business Improvement District (BID) led by Tiffany Kenney, there were 40 vacancies in the BID’s area as of May 2. More than half, or 22 of the vacant storefronts, are on State Street.

Four existing State Street businesses will be relocating up or down the street; three are closing or moving out of the BID district entirely; and six known businesses (one is TBA) soon will populate State Street.

Of those six, two are retailers, Gamer’s Library (449 State St.) and Jewelers on State (550 State St.). The remainder are food and drink establishments, which is not surprising since the downtown business mix continues to favor food, drink, and service, while the number of retail establishments has fallen from 28% in 2010 to 18% in 2021.

With serious cases of COVID-19 retreating and events returning to downtown Madison this summer — including the Madison Night Markets, the Dane County Farmers’ Market, Taste of Madison, and the always popular Concerts on the Square, the vibe is cautiously optimistic, though questions remain.

Older buildings are coming down in favor of new ones, rents are high, and plans for bus rapid transit’s (BRT) 60-foot buses — at least on a portion of State Street — are moving forward.

Downtown Madison Inc. (DMI) President Jason Ilstrup reports that retail and restaurants recorded strong holiday results, and pedestrian traffic and parking counts are up. “You can just feel the energy downtown,” he says. “Events coming back cannot be understated in terms of their importance for the retailers.”

A successful main street is built on four factors, Ilstrup explains: a lot of residents; a large and diverse employee base; multiple large events; and tourism.

Downtown Madison was checking all four boxes, with 34,000 residents, 55,000 jobs, countless events, and one-quarter of all tourism spending in Dane County ($300+ million).

Then COVID-19 changed its course.

Positive signs

“We lost some residents when businesses and the university closed or went virtual,” Ilstrup notes, “but now we have between 2,500 to 3,000 apartment units either in construction or in the process, including Core Campus’ ¯oLiv Madison, which will add over 1,000 beds and an affordable housing component as well.”

At the beginning of the year, about 35% of office workers were working downtown, and that number has been increasing, Ilstrup says, especially after the mask mandate eased. “More and more people are coming back. We’re also seeing that in the parking totals and pedestrian counts.”

Business and conferences have lagged but now show signs of a comeback. “We’re more of a business and conference market. That sector fell 64% during the pandemic, from $304 million in economic impact (visitor spending) to $115 million. We lost 44% of jobs supported by visitor spending. These are huge numbers.”

There are 378 total storefronts in the Central BID, which also includes the Capitol Square and King Street areas. At its worst, there were 55 vacancies. Now it’s at 40 and trending down. “There’s always natural turnover, which for us averages around 25 to 30 vacancies.”

There’s expansion, too. Longtime men’s clothier Jazzman has been renamed Soli by Jazzman (340 State St.), and Jazzman and Duet (307 and 309 State St., respectively), now offer women’s and men’s apparel.

A new Target across from State Street Brats also has been well received.

Another positive, the city made its Streatery program permanent, allowing restaurants, taverns, and other eligible businesses to expand their footprints onto public rights-of-way or private parking areas.

In addition, an agreement signed between the city and JD McCormick Properties to create the Culture Collective, a pop-up shop for entrepreneurs of color in the 400 block of State Street, has proven successful. “That flag has been carried so well by the Latino, Black, and Hmong Chambers of Commerce,” Ilstrup states. Two have already graduated to their own retail models outside of the downtown.

Dane Buy Local got involved at the height of the pandemic, administering $28 million in grants from Dane County to downtown businesses to help keep them afloat. The money came from the federal Coronavirus Aid, Relief, and Economic Security Act (CARES) says Executive Director Colin Murray.

He agrees that the city has added good programs aimed at attracting small businesses, and he hasn’t heard complaints about safety in a while. “As long as that perception is out there, businesses will be happy.”

Cautionary State

Alder Mike Verveer, District 4, represents the State Street area. “I think we’re on our way toward a healthy recovery, but we’re not there yet.”

Verveer agrees the top of State Street is troubling. In many cases, he notes, government workers are no longer required to work from downtown office buildings, and that’s had a significant, negative impact on the downtown economy.

“I am bullish on the future of Madison’s downtown, but I know I also sound bleak. Upper State seems like a ghost town right now, like the 1980s, mostly because of the failed boutique hotel that sits vacant.”

There is a difference this year, however. Events are returning and people are coming back downtown. Verveer remains hopeful; others have noticed too.

“We are overwhelmed with multifamily housing development proposals,” he says. Also, the probability of a new tax-incremental district, or TID No. 50, which at press time had not yet passed, will be a powerful financial tool to fund initiatives that would otherwise not be funded in tight budgetary times. “We haven’t had a TID district on State Street in years.”

As for BRT, Verveer says Mayor Satya Rhodes-Conway has conceded the 400, 500, and 600 blocks of State Street, meaning the 60-foot buses won’t travel that far, potentially leading to discussions about a future promenade closer to campus.

“I’m bullish and optimistic that we will recover one day, including upper State Street, but I wish I could predict retail.”

Snippets from survivors

State Street businesses from the 100 to the 500 blocks reflect on the past few years. What they say about how they’re doing, city support, bus rapid transit (BRT), and more.

Ken Clary, owner, Clary’s Gourmet Popcorn
105 State St.

“The weekends have come around a bit, but the weekdays are very slow. I’m not sure the state workers are back yet, and don’t know if they will ever come back. I got some grant money that really helped. Now we need things to normalize. The bottom of State Street is busy, but our bread and butter were the state workers. On my block alone we have at least 10 empty stores. It’s hard to be optimistic.”

Has the city helped?

“Not really. I hear about what a great street this is, but I don’t think they’re doing a great job of taking care of us. Many events went to Breese Stevens last year, which didn’t help.”

Thoughts on BRT:

“I’d rather keep buses on the outer ring, and I’d prefer a pedestrian mall, but I think BRT will be a significant accomplishment for the mayor; a legacy she can look back on even though many people, including former mayors, disagree.”

Business Future:

“I’m not concerned about closing. My competition left, which has made me more optimistic.”

John Hayes, owner, Goodman’s Jewelers
220 State St.

“Things have improved because of pent-up demand. We’re very busy now with our wedding- and engagement-ring business. Since the mask mandate was relaxed, it seems restaurants and bars are busier too. It’s been a challenge, but we’ve also been very fortunate, and people have supported us. It’s great to see smiles again!

“December 2021 was a turning point for us, when we finally felt like we were back to normal, and every month since has been good.”

Has the city helped?

“There’s been no help from the city whatsoever. We did get a grant from the Boys & Girls Clubs of Dane County, and Michael Johnson [president and CEO] deserves all the kudos for that. He helped us and others, as did Dane Buy Local and the PPP loans. We’re on our own now and foot traffic has improved.”

Thoughts on BRT:

“The big bus does not belong on State Street! I think it could delay businesses from opening here because it seems so counterproductive. We need to open State Street and keep it more vibrant and bike and pedestrian friendly.”

Business Mix:

“There should be more retail than bars, but it’s not going that way. We need local businesses. National companies are OK, but they don’t have the same feel as mom-and-pop shops.”

Joe Perkins, co-owner, Tutto Pasta
305 State St.

“We’re at about 80% of normal right now. We’re surviving and we never shut down.

“What’s hurting us is inflation. My food costs have gone up 20%, but we haven’t raised our prices at all for food or drinks. I’m not going to punish our customers for things that are out of their control. We did start charging 3% on credit card transactions, but others did too.

“The good news is, we picked up a ton of catering and that’s helped tremendously. Once the Overture Center is back and people start coming out this summer, there will be a huge boost, but I still think it will be another 12 to 18 months before we’re back to where we were.”

Has the city helped?

“We received PPP loans which helped a lot and we took out an SBA loan as well.

“No comment on the city. We have a great alderman (Mike Verveer), but what happens down here is what they choose, not what we choose.”

Thoughts on BRT:

“I have no problem whatsoever with buses being down here, but I have a real problem with 60-foot-long buses going down a narrow street like State Street and monstrous bus stops. I know many things are still being decided, but how it all happened is bothersome to me. It seems to have been rushed through.”

Business Future:

“I’m optimistic because I know our capability as a restaurant. There’s absolutely no danger of Tutto Pasta leaving State Street!”

Dimitri Vranas, co-owner, Parthenon Gyros
316 State St.

“We’re busier than we were before, and our hours are shorter. Now we close at 10 p.m. and we’ll probably keep it that way.

“We never shut down and we didn’t lose anyone. We do a lot to keep our employees happy. We continued giving quarterly raises. They can eat for free while they’re working, but during the pandemic we also allowed them to eat for free even if they weren’t working.

“My wife, Erin, is busy with a new product, Yips! Yogurt Chips, probiotic chips made of real yogurt, and they come in three flavors, so that’s helped as well. They’re sold in 50 stores around the country. Our problem is making them quickly enough!”

Thoughts on BRT:

“Supposedly, the bus will go past us and stop at the end of the block. There are pros and cons with all of it. The new development will be huge and inject a lot of new energy, which is great. We need more life and energy here.”

Steve Manley, owner, B-Side Records
436 State St.

“I thought about moving to a cheaper area, because this is the most expensive lease rate in the city. But it’s a tradeoff because this is my market. I’ve already gone through being upset that we’re being forced out (by development), but we’re moving from 436 to 514 State Street, into a slightly larger space, so I’ll get to expand.

“Early in the pandemic, we all had to shut down for a while. We did some curbside pickup and gradually opened with limited hours.

“I’m back to pre-pandemic levels now. Weekdays are still a little dicey, but weekends have made up for any lost sales.”

Business Future:

“Twenty years ago, nobody thought young people would ever buy records again. It’s a miracle to me because it’s saved my store. There’s enough of a niche market now, primarily among young people who want to build a collection. That’s why we’re still here. Now I get to move, and we celebrate 40 years in September.”

Skylar Palm, store manager, Art Gecko
510 State St.

“The first year of COVID was extremely hard and messed up a lot of people’s income. Only a few people could be in the store at once, so we lost clients. We’re a direct-buy business and couldn’t travel to Indonesia to purchase inventory.

“Last year we did very well. People came out in droves and bought things again. We’re doing well this year too. We’re getting inventory again and I’m expecting things to improve.”

Business Mix:

“This was once a shopping district and now some of our staples, like Community Pharmacy, have been forced out because of gentrification. I think State Street is losing a sense of community because of the high rises going up that are displacing small businesses.

“Except for a few shops selling cool things, it seems like all we have now are coffee shops, bars, and restaurants.”

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