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Sunday, May 30, 2010

City Sells Rosebud Lot to ICAP at 66% Loss

Roadmap for Saving the Masonic Temple?

After holding a twice extended option for a year and a half, Inter-Lakes Community Action Program is finally laying down the cash to buy the old Rosebud property and put up its own building. Saturday's MDL (not online yet) gives a cheer for this economic development. I'm happy for ICAP... but Madison is losing big.

Let's check the numbers:
  • On February 15, 2008, the Lake Area Imrpvoement Corporation bought Rosebud's downtown properties for $500,000 as part of its land shell game to lever Rosebud's undesirable manufacturing out of downtown and out to the edge of town to refill the shuttered Arctic Cat plant. (The LAIC has since sold a couple of the smaller Rosebud plots for $35,000 and $500.)
  • On February 15, 2008, the City of Madison bought the main half block of the Rosebud property, across the street from City Hall, for $400,000.
  • In December, 2008, the City of Madison approved a deal arranged by LAIC for ICAP to purchase the Rosebud half-block from the city for $350,000.
  • ICAP didn't buy right away. ICAP paid $5000 for a six-month exclusive purchase option. ICAP extended that option twice, $5000 each time. Total paid so far: $15,000.
  • The city commission will consider a purchase agreement Tuesday night that gives the land to ICAP for $135,000. Minus the option payments, the actual cash to change hands is $120,000.
  • ICAP will kick in up to $10,000 for remediation costs—i.e., removing lead-impacted soil. If I'm reading the agreement correctly, ICAP will also share up to $5000 of the cost of soil testing done since this year March 31.
  • The city will approve Tuesday a brownfields grant agreement with the state Department of Environment and Natural Resources that should put another $50,000 of federal money toward removing and replacing about 400 cubic yards of lead-impacted soil.
  • The city still bears the cost of demolishing the Rosebud buildings. I don't see a cost estimate on that aspect of the project in the city agenda, but I image we could lower that cost with a Crazy Days sledgehammer contest....
Looking at just the property purchase costs, the LAIC and City of Madison thus appear to have arranged a $265,000 handout to ICAP, 66% of the original purchase price.

I thought LAIC exec Dwaine Chapel once told me that the LAIC doesn't believe in handouts. I am at least pleased that they have changed their tune to benefit an organization that does good work like ICAP.

But subsidizing the community work of ICAP is the only justification our city fathers can offer for this project. The land swap and sweet deal certainly aren't economic development: we've only moved players around, not added any new ones. We're not increasing the tax rolls: ICAP is a non-profit. The only stretch by which we might offer an economic justification for this fire sale is that maybe, just maybe, ICAP was saying they were going to leave town if they didn't get this property cheap, and the LAIC and city thus acted to keep Madison from losing jobs.

Given this math from the city, we have a proposal. There is another derelict property in downtown Madison, the Masonic Temple, just crying for development. My wife and I and some friends are prepared to form a non-profit organization to acquire, renovate, and preserve the Masonic temple as a non-profit community cultural center hosting a wide variety of education, entertainment, tourism, and economic development projects.

The last purchase price for this architectural landmark was $46,000. If the LAIC and City of Madison would buy out the owner for that amount, then sell it to our non-profit group at a 66% loss... well, that's less than $16,000. I could line up that funding by the end of the month.

Arrange this Masonic temple buyout and transfer, city leaders, and you don't just keep jobs: you add cultural and economic activity where there currently is none. Essentially, arranging a deal analogous to the Rosebud-ICAP deal for the Masonic temple is a $30,000 investment that creates new economic activity. What say you, commissioners?


  1. Good info. Must be noted that Cory gives all the numbers but the Madison Daily Leader article (the online version anyway) was incomplete. They didn't print what the city paid and the amount of the original offer. Either very poor reporting or they chose to give a favorable slant to the proposal.

  2. Michael Black5/30/2010 4:06 PM

    What if the present owner of the Masonic Temple doesn't want to sell?

    The building has NO parking. Whose parking lot will you take over to make it work?

    As much as I appreciate the history of the Masonic Temple, I think that it may be a money pit dooming even the richest owners to failure.

  3. I believe CAH's numbers here are quite conservative. From my conversations, I believe that the losses are substantially larger.

    Luckily, this is all public information. An interview with Jeff Heinemeyer down at the city could provide information regarding how much the city has already spend and how much it will spend tearing down the building.

  4. Michael: everyone has a price. And if a group I belong to can't come up with pogramming that people are willing to walk one block for, then that's our failure. Parking is a red herring: people walk across the parking lot at the mall or Menards.

  5. Brief history of the Masonic Temple: Back 15+ years ago, Ben Zimmerman offered it to the then Arts Council for $1. Turned down. Then there was the whole Mason's on Main kerfuffle (I still think that was a deliberate tax write off). Then it was bought by someone in Minnesota, and let to sit and stew for a while as they tried to get $100K for it. Ha!
    5 years ago, when my husband and I looked it over, the Masonic Temple already had real interior problems, thanks to some bozo leaving the heat off during the winter (burst pipes). The price has come down - but I've also heard that when it comes down just a little bit more, DQ is going to buy it, tear it down, and make the area into a parking lot.

  6. Delon Mork already owns the Masonic Temple Building. He purchased it from Great Western Bank when it went through foreclosure. Smart move. I think Delon is open to proposals and ideas, but a person would have to determine if the building is salvagable or too far gone from water damage. It may not have too many practical applications anymore, considering the cost of renovation vs demolition.

  7. Eve, even a parking lot might be an improvement over a space where nothing happens... although I would much much much rather see a historic building preserved and brought back to life to greet people to our Main Street. A vacant building at the heart of downtown sends a negative message about the city... and right now, every person who comes to Madison sees that message.

    Rod, I can cite an architect who will tell you $100K takes the building down and preps the lot for other use. That same $100K fixes the basic damage, seals the building from further water damage, and makes it functional. Which would you pick?

  8. Cory, that's a tough call. I'm faced with the same thoughts on my own office building that has nine steps to the main level. Steps just aren't acceptable to people anymore. Call it ADA evolution or something like that. At least Mason's has an elevator that can accomodate people who have difficulty with steps.

    Part of me feels, while the building is a regal archway to downtown, it is also limited in function by it's own multi-level design.

    When you add in the costs of renovation which would easily exceed $250,000, you have to really LOVE that building to keep it.

    I'm guessing Delon didn't buy it because he loves it, rather he wanted to protect himself or allow himself flexibility if he needs a new larger Dairy Queen or more parking in the future.

  9. Love? I've always been a romantic...

    Ah, and historic register status eases the ADA requirements. That's one less obstacle to turning this building into something functional and eventually wonderful. Now, city commission, where's my subsidy?

  10. I’m going to throw another argument into the mix; one that takes us in a bit different direction. I’d encourage anyone who cares one way or the other to stand on the Great Western Bank corner opposite the Masons building and imagine it gone. My soon to be architect colleague tells me that my argument is about maintaining the street front. In other words, the Mason’s building is important architecturally because it anchors Main Street, and provides visual cues that you’ve arrived at the retail center of Madison. It’s important to all of Main Street. I’m an amateur in community design, but I know enough to know that most of my design-type friends would think that’s a poor place for a parking lot. So, the real question might be, is Main Street Madison worth the investment?

  11. I always thought it would have made a perfect home for John Green's art gallery and store. Sorta like the Redlin art gallery in Watertown. It would have been impressive, welcoming all to the home of Madison artist John Green, and showcasing his works in a visible location. Is it too late for this to happen?

  12. Lindsey, I like the visualization. I think people would be surprised at how strongly that current building is fixed in their mental image of our Main Street. They would be quite jarred to see the building gone. They would be just as jarred (in a positive way, I hope!) to see people coming in and out of that building again.

    Linda, a new Green studio might not be a bad use for the space. And his current studio is a good model for a community fundraiser to support the arts: the community raised $100K to help Green move into his current studio. He's been there for 7 years or so... is he ready to move again?

  13. Getting back on track to the post of the City selling Rosebud lot to ICAP at a 66% loss...

    Here's another thought. Perhaps the City should consider keeping the Rosebud lot, doing the soil mitigation, tearing down the old structure...And building a new City Hall/Police Department/Fire Department in one location that is handicap accessible and conveniently downtown. It may be less expensive for ICAP to simply buy a tract of one or two acres in the Industrial Park to build their new headquarters, perhaps next to the green Heartland building?

    The City of Madison may never have another opportunity to consolidate its services under one roof, keep it all downtown and provide more efficient services to the public rather than sell the half-block for a pittance. Half-blocks downtown don't come along...EVER.

  14. Well, the ICAP fire-sale is a done deal since last night's commissino meeting, so I guess we're all supposed to settle down and say, "Good job, Dwaine!" Interesting that the city bought lead-contaminated property without negotiating any requirement for the original owner, Rosebud, to take responsibility for the pollution it left behind. We taxpayers are eating an enormous loss, just to cling to the status quo.

    So, any advantage to moving City Hall to the Masonic temple? Metaphorically, it might be apt to have our local government operate from a building that once housed a secret society... ;-)


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