Picture a deserted downtown

After decades of success, State Street is struggling again. Help may not be forthcoming.
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State Street is at the heart of the Madison economic engine. Recent photos by Brent Nicastro show the iconic thoroughfare largely deserted.

Editor’s note: This is the first in a two-part special report on what has happened to one of Madison’s venerable streets during the COVID-19 pandemic. Author Marc Eisen is a veteran Madison journalist.

So here we were again, neighbors trying to keep our sanity in a crazy time.

It was mid-November and another convening of the Friday afternoon cocktail party on our little patch of Rutledge Street. More or less socially distanced, we milled around the sidewalks in front of our homes. Yes, drinking, small talking, and bonding at a time when such casual intimacy was missing in our lives.

Jessie Loeb, my neighbor from two doors down, had a story to share: She and her teenage daughter had biked to the Capitol Square and State Street the previous Sunday morning. It was that last golden day of fall. They were looking for a leisurely brunch at a street cafe and some mother-daughter talk.

They found something else. A downtown largely deserted. Instead of shoppers they saw mostly panhandlers and drifters. The outdoor cafes were closed. “It was just spooky and sad and looked pillaged,” Loeb said. Sleeping bags, tents, dogs, and handwritten signs asking for money dotted the streetscape.

Those bold social justice murals on State Street storefronts? They had brightened the plywood that had gone up after Madison was convulsed by window breaking and looting following police violence in Minneapolis and Kenosha.

Once so cheering in their affirmations, now five months later the murals were worse for wear and bleeding color. And with plywood still covering so many storefronts, you couldn’t see any goods or easily detect if a store was actually open or shut down for good.

“Frankly I have no idea where the new tenants will come from,” a commercial real estate broker says of State Street vacancies.

 

Uncomfortable at what they saw, Loeb told us she and her daughter peddled off to Monroe Street. She was worried. Years ago, she had worked in downtown retail and had loved the street’s energy. Now the energy was gone.

 

 

Jessie Loeb’s State Street story is hardly unique. I suspect most of us have heard similar
stories or experienced firsthand the almost surreal emptiness of State Street. When I began reporting this story in November, I realized I had been downtown exactly three times in the previous eight months. Me, a dedicated flaneur! A guy who was always walking downtown for lunch confabs, reportorial assignations, glorious music, and serious shopping for wine and books.

The whole city has benefited from the new wealth (and tax base) created downtown in recent decades. But now the red lights are flashing for State Street. There are these troubling trends:

  • Businesses are closing. Begin with the fact that the COVID-19 pandemic and its lockdowns have hit small business — especially bars and restaurants — like a meteor from outer space. We’re talking fireball mass destruction. “If we get away with less than 30% closure rate in the next two years, that would be an optimistic outcome,” says Colin Murray, executive director of the advocacy group Dane Buy Local. “I would not be surprised if 40%, 50%, maybe even 60% of local businesses are gone.”

This wouldn’t mean that other entrepreneurs wouldn’t cross their fingers and open a new business in the next year. But John Bergh, president of White Box Commercial Property Group, which closely monitors retail vacancies, says he knows of 20 State Street properties available for lease as well as eight other stores “that are quietly looking to get out.”

“Frankly, I have no idea where the new tenants will come from,” says Bergh. He thinks it will be very hard to fill the retail vacancies, and that it may not be until fall 2022 — more than 18 months away — that business returns to “low” normal on State Street.

Sue Springman, a senior project manager with The Mullins Group, which owns more than 200 commercial properties in the Madison area, is not optimistic either. “It’s going to take years to recover,” she says.

Deb Archer, who ran the convention and visitors bureau for 27 years before retiring in December, pulls no punches. “People don’t understand how different our city is going to look and feel when this pandemic finally clears,” she says. “So many of the places we all love won’t be here.”

Key retailers have departed.

Even before the pandemic struck, the percentage of retail businesses downtown was trending downward as bars and restaurants, as well as service purveyors, trended upwards. The retirement-related closing of Sassafras and Karen & Co., 307-309 State St., two esteemed purveyors of stylish women’s clothing, has only added to the sense of critical loss on State Street.

  • Downtown no longer draws a crowd. State Street is particularly vulnerable because the high rents require big revenue. The problem: Heavy pedestrian traffic, the veritable lifeblood of successful urban commerce, has dried up. Downtown foot traffic plunged by more than 60% from November 2019 to November 2020. It’s a casualty of remote learning on campus, public and private office workers toiling at their kitchen tables instead of their downtown offices, UW sporting events devoid of fans, and several brutal episodes of civil disorder.

Take Campus Street Sportswear, 636 State St. Football Saturdays at Camp Randall would generate $20,000 in sales, according to owner Mark Dunbar. This fall, the one football Saturday produced a meager $2,000. Dunbar is calling it quits after 25 years of hawking Badger apparel. He’s not alone in pulling the plug on a once profitable State Street shop.

Icon Restaurant & Tapas Bar, 206 State St., closed shortly after the lockdown began last spring. “We saw no future,” co-owner Kevin Hayden says. “People are afraid to come here … and you can’t replicate the dining experience with takeout.”

  • Amazon is ascendant, of course, destroying local business at a rapacious pace. With its arguably monopolistic dominance of online ordering, Amazon has captured unprecedented market share during a shelter-in-place pandemic. (Third quarter 2020 saw Amazon revenue soar to $96.2 billion, 37% higher than the record second quarter.) In peril is both community identity and the special vitality that local business provides. What happens if State Street loses its quirky, one-of-a-kind stores? What happens if State Street fades as Madison’s calling card to the world?

The usually upbeat Carol Schroeder, who co-owns the iconic Monroe Street business Orange Tree Imports and who has literally written the book on niche retailing (Specialty Shop Retailing: How You Can Succeed in Today’s Market is in its fourth printing), is not optimistic. In her 45 years in retail, this is the worst time ever for shopkeepers like herself.

Schroeder says the pleasure of shopping is lost in a pandemic, while the required safety measures make the economics of survival very difficult. Even worse, Amazon’s lock on bargain shipping constitutes “unfair competition” for small retailers.

“Not a lot people want to start a retail shop,” confirms Tiffany Kenney, who directs the downtown Business Improvement District (BID). “It’s a hard world. Amazon is a beast to fight.”

  • City hall’s development strategy has shifted. State Street’s precarious situation has been worsened by the sea change in City Hall’s approach to economic and community development. The decades-old consensus — that building up the downtown neighborhoods, particularly the commercial districts, would benefit the city as a whole — has collapsed. In 2019, the long mayoral reign of Paul Soglin ended. Nine of 20 alder seats turned over. A new generation of leaders stepped forward. For better or for worse, they believe the city has poured way too many resources into the downtown. Instead, they argue the city should focus these resources on neglected, poorer neighborhoods.

“This is quite literally institutional racism. That the whitest and the wealthiest neighborhoods receive the most resources,” said Alder Rebecca Kemble (District 18), as the council on July 21 decisively rejected an aid program for State Street businesses looted by rioters.

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The July 21 meeting had the feel of a watershed moment in city policy. Citizens and
council members alike had a scathing assessment of a proposal by Mayor Satya Rhodes-Conway and Alder Mike Verveer (District 4) to offer $250,000 in direct public assistance (originally $500,000 was proposed) to ransacked downtown businesses.

Police said around 75 businesses were looted or damaged following the death of George Floyd at the hands of Minneapolis police in late May, including longtime downtown stalwarts like Fontana Sports, 216 N. Henry St. and Goodman Jewelers, 220 State St. Both stores said damages and inventory thefts exceeded $100,000.

 

Rioting is “the language of the unheard — I suggest that you listen,” a citizen urged the council.

 

Rallying opposition, the activist group Allies For Black Lives-Madison circulated a boilerplate letter for copying that asked public officials: “If budgets are moral documents, what are our morals if we’re even considering giving a half-million dollars to the elite group of people who are privileged enough to own a downtown business?”

The draft letter quoted Justice Castaneda, executive director of the east side nonprofit Common Wealth Development Inc., in what would become a widely cited condemnation: “The history of Madison’s downtown is one of exclusion, corruption, and of boosterism and land-grabbing.”

At the virtual public hearing on July 21, Christopher Patterson, who identified himself as a biomedical engineer, warned that “repairing the windows and doors of these [vandalized] properties will do nothing to correct the social injustices which led to the damages in the first place.”

He called rioting “the language of the unheard — I suggest that you listen.”

Artist Jenie Gao objected “to public money going to private business that might otherwise advance the public good.” She implored the council not to ignore “the racist roots of wealth and property.” That is, white men stole the property of the indigenous people they displaced.

Activist Kailea Saplan said the city should be less concerned about broken buildings and more concerned about broken policing and broken Black and brown bodies.

Miranda Alksnis, representing the Teaching Assistants Association, argued the city should pay reparations to people of color, and the money should be taken out of the police budget.

Advocates of the recovery program had their say. They made the case for emergency funding for the city’s most famous retail corridor, but the fact they couldn’t point to a single Black business owner put them on the defensive. And it was clear whose arguments swayed the council.

Alder Max Prestigiacomo (District 8), who represents a portion of State Street, said he could not “in good conscience” support recovery money for a commercial district that lacked Black businesses. Instead, this money “should be spent on reparations and funding Black Lives [Matter],” he said.

Alder Tag Evers (District 13), like Prestigiacomo another first-termer, suggested the council “call upon the local business community to take care of their own.” Given that the Frautschi family, whose wealth came from the printing and doll-making industries, had donated $250 million or so for construction of the Overture Center for the Arts, Evers thought it would be an easy lift.

What Madison really needed, he argued, was a truth and reconciliation committee to sort through the legacy of racist discrimination in Madison.

 

The city’s recovery program proved functionally irrelevant to the damaged businesses, but did provide political cover for the council.

 

After several hours of debate, the $250,000 recovery program for State Street went down in flames even when paired with a hastily devised $250,000 equity program designed to assist entrepreneurs of color to locate downtown.

Former Alder Scott Resnick, who watched the proceedings, was taken aback. He says the council failed to grasp that a third path existed: “You could save small businesses while addressing inequality.”

The economic situation is so dire on State Street, he adds, that the $250,000 wouldn’t be enough to save most of the faltering businesses. “But the opportunity to save a handful — the alders couldn’t find the political will to act on it.”

A few months later, the council did adopt a $750,000 small business grant program aimed at what are described as “historically underrepresented” groups. The program is citywide.

(A nominal Downtown Recovery Program was also approved, but the city’s $60,000 in funding, to be matched by privately raised money, wasn’t new money but an unspent city allocation already earmarked for downtown business support. The new program, while perhaps providing political cover for alders, has proved functionally irrelevant for businesses. Only six grants have been approved for a grand total of $4,600 in city aid, according to city staff.)

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A pernicious false narrative took hold of the council on July 21. Because State Street has no
black-owned businesses, it should be righteously denounced as a citadel of white economic power. Here’s the problem: To believe that requires ignoring the diversity of the flourishing immigrant businesses, particularly Chinese American owned, that have long animated State Street.

Their numbers also include Pakistani, Portuguese, Nepalese, Mexican, Greek, Korean, Laotian, Turkish, Syrian, and Colombian owners, according to a survey of Kenney’s BID group, which self-taxes itself to improve the commercial environment.

The most anguished testimony at the council meeting came from Miar Maktabi, a Syrian political refugee who owns Dubai Mediterranean Restaurant and Bar, 419 State St. “You’re burying us. You’re treating us as dead,” he cried out.

Maktabi later told me he slept in his restaurant for a week during the June disturbances, trying to protect his property from thievery and destruction. At one point he even livestreamed video of him waving a ceremonial sword to frighten robbers who had broken into the restaurant.

 

“My situation is very hard,” says Fugu Asian owner Amanda Chen. But she sounds more confident than her words suggest.

 

His voice grew passionate as he explained that his life savings were tied up in the restaurant. That he would lose everything, including his house, if the restaurant failed. He had to defend it. For that reason, Maktabi supported the police and would not defund them as the protesters wanted.

“But we are not against Black Lives,” he said. “I’m Syrian. I’m a Muslim. People are racist against me.” He cited several episodes at the restaurant, including one where Black diners rose to his defense when a customer began insulting him for his Muslim creed.

“Put the color and the religion all aside, let’s be nice to each other,” Maktabi said. “That’s how it should be.”

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Christine Shan, who represents many of the Chinese-American restaurateurs on State
Street, has coined a phrase to describe their ignored presence: They live a “shadow existence” in Madison. Hobbled by language, educational, and cultural differences, they are all but invisible to the broader community, including the “woke” members of the City Council and even to the downtown business groups.

Shan, a first-generation Chinese immigrant, is a certified public accountant, real estate broker, and informal bridge to official Madison for immigrant businesses. She can rattle off the names of 30 or so Asian American enterprises clustered around State Street.

The picture she paints of the owners (she took me on a walking tour to meet several restaurant owners) is stark and sobering. Their lives are defined by hard work and personal austerity. Their restaurant menus are carefully priced for student and working-class budgets, the profit margin razor thin, and the house favorites have to be unique but served in ample proportions. Success depends on their extraordinary effort.

“It’s shocking to me,” says Shan, that alders believe that State Street businesses are a bastion of white privilege. “I want them to come here and change roles. Let them do this work six days a week, 12 hours a day, 10 in the morning to 10 at night. There are no holidays, no vacations. They just work and save money. Where is the privilege?”

 

“Let them do this [restaurant] work six days a week, 12 hours a day,” Christine Shan says of skeptical alders. “Where is the privilege?”

 

Fanny Chen and Wen Qi Liu, co-owners of Chen’s Dumpling House, 505 State St., nod their heads in agreement. Both are first-generation immigrants from the same village in northeast China. Liu is the chef who mastered the excellent dumplings. Shan says they’ve taken a wage cut just to stay afloat. Chen says they hope to hold on until the pandemic passes and the international students, who are their core customers, return to campus.

Shan and I walked to Fugu Asian, 411 W. Gilman St., where owner Amanda Chen has suspended sit-down service for takeout only. “She’s a single mother with three children and two businesses,” Shan preps me as we walk in and slide into a booth. That’s to say Amanda Chen knows how to get things done.

“Safety is the big issue,” Chen tells me as we debrief on State Street’s situation. She details several safety incidents I suspect would worry women. The plunge in foot traffic has been ruinous for walk-in business, she adds. Gross revenue is only 30% to 40% of what it used to be. “My situation is very hard,” Chen says, but sounds more confident than her words suggest.

Chen’s second restaurant is Takumi, 4222 East Towne Blvd. It’s busy enough to open for dining. Whatever money she makes at Takumi, she spends to keep Fugu open. “Things need to turn around by summer,” she says matter of factly.

What accounts for the exceptional drive of immigrants like Chen? I put that question to
Denia Garcia, a UW–Madison sociologist whose specialty is race and ethnicity. The answer is that immigrants are a self-selected group. They have the resources and motivation to uproot themselves for a foreign shore. Often, they move to the U.S. to provide better opportunities for their children. Social networks of kin and friends are extraordinarily helpful in navigating their strange new world, including its prejudices, Garcia points out.

There isn’t a lot of margin of error for the family businesses they open, says Garcia. “They have to put in the hours to make those businesses succeed. There aren’t many other options other than to just work harder. That’s what life is for a lot of immigrants.”

The relative invisibility of these immigrants, Garcia explains, is a byproduct of “the myth of the model minority” in Asian American communities. The celebration of the doctors, scientists, and tech founders they nurture obscures the contributions of working-class Chinese Americans who aren’t college graduates.

Just as concerning, she says, the “model minority” designation can be turned into reproach directed at other groups, like African Americans: “If they can make it, why can’t you?”

The reality is that the Asian American immigrant experience is not at all comparable to the African American experience of enslavement and generation after generation of discrimination, Garcia tells me. This legacy has left Black America with barely any household wealth or the access to the capital and credit needed to start a business.

“Opportunity is not equal,” Garcia says of the American experience.

Part 1 of a two-part series. Read Part 2 here and a related column from author Marc Eisen here.

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