A ceremonial ground-breaking Thursday kicked off the start to renovations at The Edgewater Hotel, a controversial project previously denied funding from the city but now financed through private sources.
The ground-breaking served as the start to the construction, Ald. Scott Resnick, District 8, said. He said this project was particularly unique because it has taken the city five years to process and financially plan it.
“Students, alumni and city members will be able to enjoy these renovations for years to come,” he said.
Ald. Mike Verveer, District 4, said he is pleased the hotel was able to secure financing for the project without using $16 million of taxpayer money to assist in the construction.
According to a statement from Rod Hise from the Luminis Group, Ltd., the ground was broken for the project this morning by project developers as well as by business, civic and university leaders.
The ground-breaking event was an exciting time, according to Resnick. More than 200 people were in attendance, including Interim Chancellor David Ward and Bucky Badger.
Some renovations will occur in a part of the building constructed in the 1970s, Resnick said, which will be demolished and leveled to build a new public plaza. There will be an ice rink, a stairwell that provides lake access and a large hotel tower, he added.
In addition, there will be a terrace overlooking Lake Mendota, and the hotel will be restored to its original style of the 1940s, according to the statement. It also said the hotel will have 189 new rooms, 10 condominiums, a banquet and meeting space and a spa, as well as dining options.
Verveer said he expects the construction to bring large improvement to the existing hotel. Right now, he said, the hotel shows age and a lack of significant amounts of renovation over the years.
The construction is expected to begin sometime next week, according to the statement.
Resnick said he believes this project will be good for the city’s economy. The city will make money back for every room used, he said, which means the hotel will give the city additional revenue over time.
“We have a tight budget in Madison,” Resnick said. “This project is going to add to the economic vitality.”
The renovations are projected to cost $120 million, Resnick said, and about $60 million will be received from disaster relief funds created after the state’s flooding in 2008.
The statement said the construction process will create approximately 700 jobs, and an additional 250 jobs will be permanently created after the hotel’s opening.
“I just feel bad for the employees that will be laid off after the hotel closes its doors [sometime next week],” Verveer said.
The project will not be receiving tax increment financing from the city, which would offer the cheapest interest rates for construction, Resnick said. The project will receive bonds from the disaster relief funds as well as from multiple banks instead, he said.
He said while TIFs would have made for a quicker planning process, he is glad the final result will not take money from the public.
“Everybody wants to make a huge deal out of this, but it’s basically like they’re taking out a loan,” Resnick said.
He said the estimated $60 million from the disaster relief funds would be reimbursed to the city over time. According to the statement, the grand opening of the renovated hotel is expected to take place in the summer of 2014.
Robert Dunn, owner of The Edgewater Hotel and Hammes Company president, could not be reached for comment.