Madison Market
Construction Steady Despite
Recent Major Completions

by Craig Barner

Madison has been on a roll with the start of some major projects over the last two to three years.

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They include the $180 million West Campus Cogeneration Facility, the $100 million renovation of the University of Wisconsin's venerable Camp Randall Stadium and the first phase of the $100 million Overture Center performing arts venue.

Larry Thomas, senior project manager with Madison-based general contractor J.H. Findorff & Son Inc., said the second phase of the Cesar Pelli-designed Overture is expected to run through February and will include the Madison Arts Center, conversion of the Oscar Meyer Theater into a hall for music and theater performances and renovation of the Isthmus Theater.

Because these projects are well under way, the Madison market was sure to experience a decline in starts activity in 2004, but construction activity in the college town nevertheless remains stable.

McGraw-Hill Construction data show that total 2004 starts were $1.54 billion, down just 2.2 percent from 2003. Data also show that starts in 2002 were only slightly more than $1 billion, 50 percent less than 2004's figures.

Local executives are confident about the town's prospects.

"By its nature, the area is almost always recession proof - everyone says that," said David Cullen, president and CEO of J.P. Cullen & Sons Inc., a general contractor in nearby Janesville. "The university is always hiring and active, as is the state government."

Madison's Diversity

Data show nonresidential and residential starts are keeping the market humming.

Nonresidential starts in 2004 were $530 million, up 49 percent from 2003's $356 million.

Driving the robust growth were a number of projects, including the approximately $100 million Epic Systems Corp. headquarters in nearby Verona. Findorff is overseeing the project's first phase.

Nonmanufacturer-owned laboratory starts shot up partly because of UW's $100 million Microbial Sciences Building.

That project is part of the university's $317 million BioStar Initiative, which is aimed at strengthening its grip on life-sciences research and education. The $210 million HealthStar Initiative, a different life-sciences project the university and state are jointly overseeing, is complete except for the Interdisciplinary Research Complex, a project with first-phase cost of $135 million.

Smaller research projects are under way in the University Research Park on the west, Fitchburg Technology Campus on the south and American Family Insurance campus on the east.

In residential construction, data show 2004 starts finished at $833 million, up 7.5 percent from 2003's $775 million.

"Downtown living is coming back a little bit," said Bob Barker, executive vice president of the Madison-based Associated General Contractors of Wisconsin Inc. "People are still wanting to move away from town, but there are empty nesters who work downtown and want to live there now."

Driving growth were the $32 million Weston Place condominium, $30 million 100 Wisconsin Ave. condominium and Bergamont Housing Development in the nearby town of Oregon. An $81 million mixed-use development on Park Street that will include university-owned residences is in the earliest stages of construction.

Health-care construction was strong, up 80 percent to $58 million.

Barker said the UW hospital is planning to build a pediatric facility, and St. Marys Hospital Medical Center has also announced an expansion.

Infrastructure Down

The only weak spot was infrastructure starts, down 60 percent to $177 million.

"That's a function of projects wrapping up," Barker said. The redo of West Washington Street is complete, and the widening of U.S. Highway 12 to Sauk City on the west is nearly complete.

Looking forward, discussion has started on building a possible North Beltline highway, Barker said. It would run between Interstate 39 near the Dane County Regional Airport, loop above Lake Mendota and suburban Sun Prairie and connect with Highway 12.

A question mark is whether the state's budget deficit, estimated at $1.3 billion, will sap funding for public projects in transportation, education and other areas.

"A dramatic cutback in funding for university construction could have a negative impact, but the university does a good job of private fund-raising," Barker said.

Madison Starts (in millions)
	YTD 2003	YTD 2004	% Ch., 04/03
Nonresidential	$356	$530	+48.6%
Residential	$775	$833	+7.5%
Infrastructure	$443	$177	-60%
Total Construction	$1,574	$1,540	-2.2%
Source: McGraw-Hill Construction

Madison experienced a 2.2 percent drop in the value of construction in 2004, in part because of major starts in previous years.