× Expand A proposed nine-story boutique hotel would replace the six-story building at Carroll, Dayton and State streets.

Too much traffic, too little parking and too much height are among the issues that could stall a proposed $35 million hotel on the top north block of State Street.

Other challenges include city planning guidelines and a possible glut of hotels downtown.

The project needs approval from city committees and the Common Council. If all goes well, groundbreaking would begin during the second quarter of 2018.

City and neighborhood officials laud the sensitivity and responsiveness of the development team. However, Peter Ostlind, who chairs the steering committee for Capitol Neighborhoods Inc. says the proposal conflicts with the city’s guidelines for development there. “I think it is worth noting that the developer has acknowledged that from the start they did not have a proposal that fit the height requirement of six stories.”

“They maintain that nine stories [are] required for the economics of the hotel,” he says, “not because it is a good or appropriate fit for the site.”

The hotel would be run and partly owned by Provenance Hotels, based in Portland, Oregon. Five of its nine “lifestyle” hotels are in that city. The others are in Seattle, Tacoma, Nashville and New Orleans.

Provenance describes itself as friendly. “We are not about buildings because buildings can’t smile,” according to its website. Partner investors, referred to as “Co-conspirators” are “visionaries, boundary pushers, tastemakers, deal makers” and — appropriately for Madison — “rule breakers.”

The local partners for the proposed Madison hotel are Eric Nordeen and Matt Prescott of Milwaukee-based Ascendant Holdings, and Central Properties, owned in part by Harold Langhammer, who owns 122 State St., which will be razed for the project.

This will be “an urban independent lifestyle hotel or boutique hotel; more of a maybe bigger city urban feel,” says attorney Jeff Vercauteren of Husch Blackwell LLP. Besides serving on the Capitol Neighborhoods board as past president, he’s the hotel project’s registered lobbyist. (He and Ostlind agree there’s been no conflict of interest.)

The proposal calls for 110 to 120 rooms, a restaurant and bar on the ground floor, and some sort of bar and restaurant on the top floor, which would include a set-back terrace. Room rates will be “near the top of the market,” says Nordeen. Prescott adds, “It definitely will be up toward there in price. That’s sort of where the term ‘lifestyle’ comes in.”

While there would be a pedestrian-oriented entrance at the combined parcels of 118 and 120 State St., the main entrance will be on Carroll Street, which forms a cul-de-sac at the Capitol Square. Guests would arrive by car on Carroll. There will be no onsite parking — valets will park cars — and an airport shuttle is not envisioned.

One community benefit, from the developers’ view, will be that a 24-hour business would “activate” an area where homeless people congregate next to the Wisconsin Veterans Museum.

“As you know, the city has struggled with some of the behavioral issues at that part where Carroll meets State Street, so this is an opportunity to bring some more activity there, which I think the business owners see as a net positive,” says Vercauteren. (Isthmus rents office space on the corner.)

But the project conflicts with several city plans and the zoning code, which was rewritten in 2013. Some local stakeholders say the developers will have to address that.

“I am not a fan at the present time at the height blowing through the Downtown Plan, and the precedent that would set,” says Ald. Ledell Zellers, whose district ends a block and a half from the site.

According to city planning staff, there are now 16 hotels in an area roughly bounded by Park Street and the Regent/Proudfit Streets area on the southwest, to the Yahara River on the northeast. Seven other hotels are currently under development. If they’re all built, they will add 773 rooms downtown, for a total of 2,833.

Nordeen says the State Street location is underused and ideal for a hotel. “You have a great piece of real estate,” he says. “But — if you were starting from scratch — what would be the optimal use for that site?”

The developers would remove the skyway that runs over Dayton Street to the State Street Capitol Garage. The proposal has recently been tweaked to preserve the historic façade of 118 State — the building most recently was home to Winedown. The main parcel, 122 State, is an L-shaped six-story building. It was built as a YWCA in 1918. The Fountain restaurant was a recent tenant. A more famous upstairs renter was The Onion, from 1994 to 2001, before it moved to Manhattan.

So far, there has been no objection to demolition of 122 (along with the skyway), which was renovated in the 1970s.

Parking could be a thornier issue. Nordeen says they are “in the process of locking in where the cars are going to go.” The city will not rent the hotel space in its garage across the street, he says.

At first blush, the developers’ parking requirements would appear to be low. Despite having 110 to 120 rooms, Nordeen expects to only need space to park 40 cars on average nights. On peak nights, he expects to only need 70 cars.

Nordeen says that’s because the nature of travel is changing. He expects many guests to arrive at the hotel by taxi or ride-sharing services like Uber.

“The number of people actually bringing cars to hotels is declining year to year, especially in an urban condition,” says Nordeen. “It’s part of a national trend that’s going on.”

He expects only about 45 percent of booked rooms to have a car. With an average occupancy of 75 percent, or 90 of 120 rooms, that translates to 40 cars.

But the biggest obstacle for the hotel is the proposed height of the building.

The existing six-story building already violates current height limits, but has been grandfathered.

The plan calls for the building to go up four stories on the State Street side, while on Carroll and Dayton streets it would go up to nine stories. (The proposal doesn’t violate the state’s height restrictions around the Capitol, which are non-negotiable.)

Ald. Mike Verveer, whose district includes the project, is uneasy with that tradeoff. “I could even live with six stories of hotel rooms and a partial seventh.”

When buildings don’t meet the zoning codes, the developers can work with the city to craft site-specific exceptions for what’s known as a PD, or planned development.

In the early 2000s, the process of applying for what used to be called a “planned unit development implementation plan” — was heavily used (some say abused), leading to a mishmash of development styles as nearly every project utilized it. That’s a big reason why the zoning code was updated four years ago, after a lengthy process that included developers; they wanted clarity, instead of a constantly moving target and endless but necessary special consideration by committees and commissions.

Now PD is rarely used. “I think this is the second in the downtown area,” says planning division director Heather Stouder.

Verveer says there is a lot to like about the proposal, but would like the developers to find a way to work with what the zoning code allows. So far, he has been unsuccessful. “Despite my best efforts to encourage the development team to present a product that adheres more closely to the zoning code, they say they are unfortunately unable to do so.”

Editor's note: This article originally stated that the project will be reviewed by the Urban Design Commission on Dec. 20. However, the project is no longer on the agenda for that meeting and is expected to considered at a later meeting.