Schroeder said that the street has many locally owned businesses and that she welcomes the proposal for smaller retail spaces likely with local ownership. “I think it’s very well in keeping with the goals of the merchants’ association,” she said.

The project also meets a great demand for housing on and around Monroe Street, Morrison said. Despite its proximity to UW-Madison, the proposed mix of one-, two- and three-bedroom units is designed to attract residents who want to downsize but not leave the neighborhood, and to serve smaller families looking to find a place there, she said.

The redevelopment will include an underground parking garage with a minimum of 68 spaces, and a small surface lot to serve commercial uses.

The ULI proposal follows investments in significant projects.

Gregg Shimanski is now building a $5 million, four-story, mixed-use building with 5,000 square feet of first-floor commercial space and 44 housing units on upper floors at 1603-1609 Monroe St. Associated Bank is slated to relocate to a smaller space in that project.

Hotel Red, 1501 Monroe St., recently won city approvals to add three stories and 39 rooms to the existing four-story hotel, which has 48 rooms. The expansion includes a rooftop bar and lounge.