A Footnote on the Edgewater Subsidy

Planning, the magazine of the National Planning Association, ran a piece in its April issue that paints Madison’s rejection of a $16 million subsidy for the Edgewater Hotel  expansion as an exercise of NIMBYism. Author Greg Flisram, who is  director of economic development  for the city of Green Bay, falls back on the  familiar complaint  that  the Madison review process is just too long, too complicated and prone to manipulation by people who do not want development in their backyard.

You can read his piece here:


Whatever the merit of that complaint, Flisram misses the elephant in the room. Here’s my letter to the editor:

Greg Flisram, in ridiculing Madison, Wis., for not subsidizing the $98 million Edgewater Hotel renovation, demonstrates the common failure of urban leaders to distinguish flashy real estate development from substantive economic development.

For a $16 million subsidy, the Edgewater project would deliver little: several hundred low-pay hospitality industry jobs and temporary employment for construction workers who largely live outside of Madison. As an economic catalyst, the project failed.

The Edgewater is boxed in by a residential historic district. It’s too isolated to reinforce Madison’s nationally known State Street shopping district or the city’s picturesque Capitol Square. Worse, it’s not close to the Frank Lloyd Wright-inspired Monona Terrace convention center, which sorely needs new adjacent hotel space.

Flisram seriously erred in saying the tax increment generated by the Edgewater construction would pay for the $16 million subsidy. In reality, repayment hinged on tapping the new taxes generated by a large mixed-use project near the UW-Madison campus.

When the assessor looked at the $98 million Edgewater renovation, he concluded that its underlying economics would only justify a $44.8 million assessment–less than half of its construction cost.

Flisram, who is Green Bay’s economic development director, needs a lesson in economics.

Here is the Edgewater column I wrote for Isthmus in September 2009:


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