State Street, one of Madison’s greatest monoliths, shines on the isthmus running between Lake Monona and Lake Mendota and connects the University of Wisconsin campus to the State Capitol square — many agree it is truly the heart of downtown. However, a strew of long-time businesses on the iconic street closed in the last few years, which has many worried about what the future holds for one of Madison’s main attractions.
Ald. Zach Wood, District 8, explained this is a definite trend the city has noticed over the years.
“It’s a frequent topic of conversation among downtown stakeholders,” Wood said. “State Street tends to have relatively high commercial rents, and therefore can be a tough place to stay afloat, as evidenced by the closings.”
In the late 1960s, downtown areas in the U.S. were dying with the arrival of shopping centers, Madison Mayor Paul Soglin said.
Soglin, who became mayor in 1973, led a “novel” transformation of downtown Madison. The implementation of pedestrian-friendly streets and the State Street mall boutiques gave the area the character we know today, he explained.
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“We built the State Street mall, and State Street became an incredible, vibrant place. It challenged the trend of dying downtowns. The formula [for] creating small, intimate stores and not going after the giant department stores worked,” Soglin said.
That model thrived through the 1980s and into the early 21st century, Soglin said. However, recent changes led to the departure of several retail spaces which have been replaced by bars and restaurants.
A downtown retail assessment and strategy prompted by widespread concern was conducted by the city in 2016.
The study found that in the Madison region during the 25-year period from 1989 to 2014, there was a dramatic shift in the types of storefront space. Retail and service businesses — like apparel, bookstores and hair salons — declined from 97 to 70, while bars and restaurants increased from 26 to 62 establishments.
According to the Princeton Review, UW is ranked third in the nation for colleges with “lots of beer.” People ages 18-24 represent 68 percent of downtown Madison’s population compared to the national average of 9 percent. Therefore, it’s unsurprising that many establishments that serve a local population base cater to younger adults.
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Soglin said that while the increase of restaurants on State Street has had benefits like creating more diverse and healthier food options — mentioning that in the beginning, almost all the restaurants served hot dogs, hamburgers, brats and pizza — it is hard for small retail boutiques to compete with stores that sell food and drinks.
Furthermore, rent on State Street is becoming more expensive. According to the 2016 study, the average asking rent for downtown Madison is about $24 per square foot, which is significantly above the national and greater Madison averages. However, rent can reach up to $60 per square foot on State Street — a “truly remarkable level for a community the size of Madison,” the study said.
Many retailers are finding it hard to afford these high prices. For example, Tellus Mater, a locally-owned retailer that has been selling kitchen supplies on State Street for 59 years, announced they will be closing their doors in the very near future. The owner, Bruce Edwards, told the Wisconsin State Journal that profits had decreased in recent years due to the popularization of online shopping.
Yellow Jersey Bike Shop, Gino’s Restaurant and Shakti — three longtime businesses — all closed in 2013. College Barber Shop, a State Street fixture since the 1920s, closed in 2014. Fanny Garver Gallery and Steep & Brew closed in 2015. Most recently, Mary’s Tailoring shut down in 2017 and Capitol Kids, a toy store on the Capitol Square, closed its doors last year.
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In the last dozen years, State Street property owners have seen restaurants and bars that are able to pay significantly higher rents compared to traditional retailers because they need less space to store inventory, Soglin said. He considers those establishments to be a “fatal blow” to the model of housing small retail boutiques on State Street, as it has driven them out.
Soglin has tried vetoing liquor licenses and appealing to the public to start demanding accountability from city council members to diminish the amounts of bars, he said.
“I’m deeply concerned about the future of State Street turning into something like the French Quarter in New Orleans where it’s a great night time entertainment district, and all of the interesting daytime uses — particularly shopping — are driven away,” Soglin said. “I’d like to see us go back to the balance we had twenty years ago and have the amount of retail doubled and take out some of those bars and restaurants. I prefer locally-owned, but I’d like to see us return to a better balance and have more stores like Tellus Mater and Paul’s Bookstore.”
Satya Rhodes-Conway, who is running against Soglin in Tuesday’s mayoral election, agreed that State Street has weathered many changes in recent years and that it is essential to keep a variety of activities alive on State Street to ensure it is a welcoming place for everyone during both day and night.
She said that as mayor of Madison, she would identify opportunities to support existing businesses and encourage or incentivize locally owned businesses to locate on State Street.
She said these businesses could include services such as arts and music classes, beauty services, wellness facilities, a space for youth entertainment (especially for teenagers), insurance and other financial service providers and other activities that would invite people to utilize the area on weekdays and weekends.
“We also need to support existing businesses whose owners are ready to retire in transitioning to new ownership rather than closing,” Rhodes-Conway said. “State Street has been an important part of Madison for a long time, and we need to make sure it will be successful far into the future.”