9UNP0398SD_Bob_Dunn

- Jeanan Yasiri: Good afternoon, everybody, welcome back to Entrepreneurship in Society. This is a course that is offered through the University of Wisconsin School of Human Ecology. I'm Jeanan Yasiri. As we begin today, I would like to extend thanks to our partners in supporting this course, the UW Office of Corporate Relations, the UW College of Engineering for their technical support, and the Ewing Marian Kauffman Foundation, which is committed to advancing academic education in entrepreneurialism. Additionally, we'd like to thank our media partners, Wisconsin Public Television and their University Place crew for taping today's lecture. I'm quite pleased to introduce our special guest today. He is Bob Dunn, managing partner and president of Hammes Corporation. Bob has been active in the real estate development and construction industries for 23 years and affiliated with Hammes Company for 16 years. In his capacity there, Bob is responsible for the management of operations of each firm's operating divisions, which focus on the planning, development, finance, marketing, and operation of major sports and entertainment, academic, health care, and commercial projects throughout the United States and abroad. 

Bob has been directly responsible for projects valued in excess of $7.5 billion. Bob is recognized throughout the real estate development industry for his leadership and direction on a whole host of the nation's largest and most complex urban mixed-use and destination-oriented developments. These span projects from Los Angeles Stadium to the Georgia Dome in Atlanta, to the Mayo Clinic in Rochester, and of course, the Kohl Center right here in Madison. I've asked Bob to come and share his experiences as an entrepreneur and specifically talk with us about his experience in developing the highly-publicized Edgewater Hotel renovation project here in Madison. It's been a journey of real estate development, for sure, but also creative interactions with various constituents of our community. So with that, please join me in welcoming Bob Dunn. 
(applause)

- Bob Dunn: Thank you, good afternoon, it's a pleasure to be here. I'm going to quickly run through a little bit of an overview of our firm. 

The firm is based here in Wisconsin, has been since its origin in 1991. I'm a lifelong resident of Madison, I was born here, grew up here, I haven't always lived here, but spent the better part of my life here. My career has given me the opportunity to be involved in Madison on a few projects, the Kohl Center being one. The latest being the Edgewater, which is kind of an odyssey in a lot of different respects, which I'll talk about a little bit. Our company is, at its core, a real estate development firm. I talk a little bit about what that involves, but basically my office was nice enough to help me put this presentation together. I haven't really gone through it, so I'm going to pick this up as we go. A topic that obviously all of you are involved with and the origin of this class

- If you went to Webster's, it would say an entrepreneur is one who organizes, manages, and assumes the risk of a business or enterprise. And in my experience, I'm not sure that I've encountered an industry that is probably more grounded in the notion of entrepreneurship than real estate development. 

And if you went back in time here a little bit on campus, as some of you that are involved in the business school, may know of Jim Graaskamp. Jim Graaskamp was the head of the real estate and urban land program at the university here for many, many years. He chaired the department when I was in school here. And Graaskamp's definition of real estate development is, a process, an entrepreneurial-driven process involving an enterprise operating in an efficient market. And what's interesting to me about that is, number one, the notion that real estate is entrepreneurial, which we'll talk about. But secondly, the fact that it's in an efficient environment, and in real estate, the challenge that we constantly face is taking factors that you could define as being highly inefficient, it could be financing, it could be marketing, it could be market demand and supply, it can be operations. Really every facet of real estate is really characterized in many respects by the inherent inefficiency in the business, which to me is what really draws out the entrepreneurial character of real estate development, which is managing and organizing that, addressing the risks inherent in the real estate development process, and putting together an operating model that can be successful over time. And what I've experience myself over the years, and my peers in the industry, is, to be successful in a real estate development world, I would frankly put entrepreneurship as probably the driving ingredient of people that are successful in this business, because what it requires is the ability to deal with sort of the broadest set of factors that come into play in getting a project or a property developed, operated, and managed successfully over a period of time, recognizing the inefficiencies that are inherent in the business model. So with that as sort of a broad characterization of real estate development, I'll give you a quick little overview on the Hammes Company. The firm was founded by my partner, John Hammes, in 1989. 

We characterize the company as being a full-service real estate development firm and you'll see what that means in a minute. The firm is based here in Wisconsin, we have offices throughout the country. And we're currently involved in a number of large projects which add up to a lot of money. The number changes day by day, so what I can tell you is every day, every month, every year, we're involved in typically large projects that are complex, that live a life over many, many years. And I have a feeling that the Edgewater could set the bar a little bit higher. It's a project that seems to be taking more time than I would like. The market segments that we're involved in, primarily, are sports and entertainment, which is probably where I spend the greatest concentration of my time, what we call urban mixed-up projects, the Edgewater would be a good example of that, health care, and then government and academic work. Those are sort of the four market segments that we speak to directly, but the fact is, our work spans a very broad spectrum of different project types, but most of it fits into these categories. And we basically focus on four disciplines where we try and organize the process of real estate development. One is obviously development, what we call program management, which is really all about the process of taking a project from idea up to the point that it's an operating asset. 

The second is finance and investment advisory services. All of the work that we do requires a capital structure in order for a project to come together, get built, and ultimately go on to be managed. The third is marketing and sponsorship. One of the interesting sides of our business is, any project that you take on, ultimately you need to respond to the markets and you need to market the asset to whatever that marketplace might be, whether it's a hotel, a stadium, a sports or medical facility. Really all of our projects get very involved from a marketing and sponsorship standpoint. Then the last component of our business tends to be operations. So that's kind of a quick overview of the business structure. From an experience standpoint, as I said earlier, we're involved in a lot of different projects, a lot of different project types. Some of the projects that we're involved in currently in sports and entertainment, which I think is probably the most challenging of the project types that we're involved in. And I say that because these are projects that tend to be very large, very complex just in terms of putting all the pieces of the puzzle together. 

They have a tendency to be very controversial, they're very public. They tend to be public-private ventures between government and a private business. And there tends to be a lot of emotion around these projects. You're either strongly in favor of a sports team or you don't like the notion of public finances to support a stadium and a franchise, as an example. And these are projects that I used to say would take us maybe five to six years from the origin of the project to the point that a team was playing in the building. Today I would say it's a minimum of a ten year process. We're leading an effort on behalf of the National Football Leagues in LA to bring football back to Los Angeles. We've been working there for six years now, and we're probably six years from the point where the stadium will open and a team will be playing there. So these are projects that span a very long period of time. And you see some examples here. 

We're right now finishing a project in New York, which is the largest stadium to be developed in the US. It's a new stadium for the New York Jets and New York Giants, two of the NFL teams. We worked in Detroit. Probably the project we're known for the most here in Wisconsin is the redevelopment of Lambeau Field. In terms of the entrepreneurial aspect of that project, when we first started working for the Packers, Bob Harlan, the former CEO, came to us and asked us to basically look at the Packers' strategic plan over the next generation. And because of the changing economics of the National Football League, we quickly realized that the long-term viability of the franchise would require that we approach the stadium in a very different way. Had to expand and completely change the profile of Lambeau Field to support the future of the Packers. So we put a whole strategic plan in place to do that, which led to a public funding structure that was put in place through a referendum. Went forward and completely redeveloped Lambeau Field, and we're now working with the Packers again on some ideas about further evolution of Lambeau Field. So that's a pretty good cross-section of the sports work that we've been involved in. 

Probably the largest problem that we were involved in was the Beijing Olympics in China a few years back. So we've seen a pretty interesting cross-section of the sports world. Some of the other projects that we're involved in, I'm working with Mayo Clinic now on a very forward-thinking plan for evolving the community to become, sort of the tagline is, "The world's leading destination medical community." But the whole thought process there is to evolve the community consistent with the evolution and mission of the Mayo Clinic, which considers itself to be, and probably is by almost anyone's measure, the world's leading destination medical center. So you can imagine all the elements that come into play dealing with an organization and a community like that and trying to set a strategy for the next 50 years. And then there's a series of other projects that I could go through in great detail, but for the sake of trying to stay on track with your course, these are just some examples of, little easier to see, some of the work we've been involved in. And as you can probably imagine, between the different project types that we get involved in from sports to healthcare to academic work, projects are probably, there's no real rule on this, but project types are probably 60%, 70%, 80% similar from project to project. What's unique is that 20% that's different between a sports franchise, a healthcare institution, an academic institution. And that's really where we focus much of our attention, is building a team of people that have the entrepreneurial vision, the creativity, the experience, whether it's experience in financing, architecture, construction. What we've really tried to do as a business is establish a process, as per the first slide. 

From an entrepreneurial standpoint, most of what we do is that 80%, it's managing and organizing the process. The value that we feel that we bring to a particular situation is the other 20%. It's really having that unique knowledge about sports, about healthcare, about academic projects, and how to really capture value there. That's where we feel we really make a difference, whether we're investing our own capital or we're investing on behalf of one of our clients. So, in terms of approach, people always ask me, "What do you do? How do you do projects?" I think most people, including my mother-in-law, think I'm an architect. We employ design professionals, we employ construction professionals, we employ people that are experts in finance and marketing and management, all the disciplines that come into play in projects. But our primary job is really to bring leadership to the process, to manage and organize all the disciplines that it takes to get a project developed successfully. And the way that we do that is through a series of different contracting types, whether we're an advisor or whether we're taking the risk on the project, investing our own capital, and developing it, as we say, for our own account. 

So, just to help kind of give you a sense of how a project is organized, on any project like Lambeau Field, our job is to put together the design, the construction. When we say "targeted business," a lot of our time and effort on projects really is working with the community, whether that's working with the community from the standpoint of building public support, looking at economic development factors, looking to grow jobs and tax base, or whether it's working with a community for targeted interests. We say "targeted businesses," oftentimes our projects have targeted goals and objectives in a community, working with minority-owned businesses, women-owned businesses, certain designated entities or individuals that are targeted to gain some of the benefit of the project. So there tends to be a strong community focus in almost every project that we're involved in. Development, which is really the conceptualizing and the execution of a project, operations, finance, and marketing. Those are sort of the core elements of any project that we take on. And generally speaking, what we do is, we organize the process of putting together the design, the schedule, the budget, the finance plan, the project management plan, the operations plan, the marketing plan. It's really the business plan, if you will. We call it a "development plan," but it's really harnessing all of those different elements and getting those fit together into a development plan that then ultimately sets the stage for some type of business transaction to occur. I'll talk about the Edgewater at some length, but you have to do all of that work, you have to manage and organize that process and all the different professionals that come into play, you get to a point that you have that business plan, which then allows you to go forward and whether it's a negotiation between ourselves and a governmental body, or it's a negotiation between ourselves and a tenant, or it's a negotiation between all of the above, the process takes you from business plan to deal structure. 

And this occurs in almost every case that we're involved. And once we have that set, this is a graphic that we used recently with the Falcons, basically what we end up doing is bridging a set of relationships between government, in this case a sports franchise, the finance markets. Our job is then to put the deal structure together based on a development plan and then manage all of these disciplines, everything from land acquisition, community relations, finance, development, financial management, design, construction, etc. If you literally laid out all the parties that come into the pyramid, so to speak, that make up a project, you'd have literally hundreds of business interests down here and our job is to balance out the interests of the project's sponsors, if you want to think of it that way, and all the people it takes to execute the project and our job really becomes writing the rules, if you will, putting the work product together that allows that whole project to go forward. So, that gives you a quick cross-section of the Hammes Company and the business that we're in, and the general approach that we take to projects. The Edgewater is a project that I've worked on for the last two years in an active manner and I've probably spent five or six years prior to that working with the existing owner to get to a point that we had a contract put together that allowed us to step in and take ownership of the Edgewater. And from my standpoint, knowing Madison fairly well, having grown up here, my feeling for years has been, the Edgewater is the most valuable piece of real estate in Madison. And I say that partly because there's a history and tradition that exists with that property that very few properties in this community could match. It used to be, even before I was around, long before you were around, that the Edgewater used to be "the place." It was the place that people socialized in Madison. 

And my feeling is, great communities are defined by great places. That's really the business that we're in, is creating great destinations in communities. And when I look at Madison, I think there's some wonderful places and wonderful destinations in Madison, but there's really nothing in my mind that captures the essence of Madison. In my mind, there's not one place you can go that gives you the best that Madison has to offer. Now, I'm guessing anyone in this room would say, "That's not true, there's the Union terrace." Or there might be another place or two that you might look at and say, well, that's it. And that's really the point, is, the Union terrace would be number one on my list today. But the Union is really geared toward a fairly direct market segment, which is all of you in this room. And people like me still invade the Union because when I was in school here, that was my place. And so the point on the Edgewater is, can we create a place that has the atmosphere, the aura, all the connecting points about Madison that make the Union so great, can we do that in an environment that's really geared toward family and the community at large? 

Because, good, bad, or indifferent, the Union is and will always be a place that's geared primarily toward a student market. As with any student union. So that's always been the vision, is, could you create a place that really does define Madison? And to me that's the craft here, that's the entrepreneurial side of that project. And it happens to be a location that can allow that to happen, because to do that really well, as we've experienced over the years, it has to be an authentic experience. A lot of communities try and create a great downtown core, or they try and create a great waterfront setting, or they try and create a certain type of destination that may not necessarily be authentic. A lot of communities have tried to replicate Michigan Avenue in Chicago. Well, that's extremely difficult to do. No different than it would be very difficult to replicate the feeling of the Union if you didn't have all the attributes that make the Union so great. So the vision with the Edgewater started there. 

It was, could you take this iconic property that dates back to the '40s, capture the character and the history and all the iconic value that existed there when there used to be big bands playing on the roof and it's where everyone had one of their life's experiences, whether it was, my parents were married there, anyone that graduated from the university, they had their graduation dinner there with their parents. Everyone had a connection in some way with the Edgewater. And this is the original rendering from the '40s. This is what was built in the '40s. It was then expanded in the '70s, and what makes the Edgewater so unique is, I'm sure all of you know Madison now about as well as I do

- you're on the lake, you're at the intersection of Wisconsin Avenue, which takes you right to the most iconic place in our downtown, being the capitol, but it is the primary access point in our downtown. Wisconsin and Martin Luther King Boulevard, that's the access point that connects lake to lake through the state capitol, I mean, there's not another civic corridor that's on par with that stretch between the two lakes. And the third point that I would reference is simply, at the end of Langdon Street here, you're also at the doorstep of the university. So you've got this sort of triangular relationship between waterfront, the heart of our downtown leading to the capitol, and the doorstep to the university. And the fact is, there's not another property, there's not another site in this community that captures all of those elements in one place. 

So from there, we began to study very carefully, what is the opportunity here? If you wanted to create a destination in Madison that can capitalize on this unique location, what would that want to be? And so we looked at, we did a lot of research, we did a lot of analysis, we hired the best consultants in the business. We had three different consultants come to Madison and we said, "We want you to evaluate this market independent of one another and give us your best assessment of what the opportunity is with this property." And all three, one of which was employed by the city, all three came to the same conclusion. What this wants to be is a unique destination-caliber hotel that is more than a typical hotel. It's a destination, which gets into many things. I'll run through these quickly. It's about adding rooms. In order to do what we want to do, we have to increase the capacity, namely rooms, to support the investment to make all the other elements viable. 

And when I say other elements, everything from this public terrace that I'll talk about, restaurants, spa, a redevelopment of the waterfront, to really build the amenities, you've got to have enough of a concentration of rooms to support the investment that it takes to create the amenities that make it the type of place that the Union is. It really focuses on opening up access to the lakes and to the waterfront. The thing that I marvel about with Madison is, I can't think of another city in the world that has the access to water that we have in Madison. And there's literally not one decent restaurant that you can go to and sit at the edge of the water. Now, in that respect, I don't include the Union. To me that's not a restaurant. I mean, I've probably had more burgers there than anyone on earth, but to me that's not the same kind of experience. The third point is really strengthening Madison as a convention destination. What makes great convention cities is not the size of the convention center and the programmatic aspects of the venue that you hold an event in. It's the infrastructure that the city brings together. 

The dominant convention markets in the world today are places like Anaheim, San Antonio, Orlando, Chicago, Boston. Cities that are great cities, that are great destinations. That's why people want to have events there, not because the convention center had the right dimensions in the exhibition hall. Outdoor recreation emphasis. I think naturally, if you said, what's one of the things that you would like to capture as part of a destination like this, it would be to bring together use of the waterfront. One of the ideas that we're working on diligently is to include an outdoor ice rink in the winter months on this public terrace that we want to build. Our architect for the project comes from Boston. He did the redevelopment of Rockefeller Center in New York. They have an ice rink at Rockefeller Center, it's enormously successful. And that's the type of activity that we want to bring to the Edgewater. 

Some of the other points are building cultural tourism. The notion of really playing up the culture of Madison, the great history and tradition of the Edgewater and really making it something that is unique to Madison. Distinct visitor districts, this is something that we study very carefully in cities where we're taking on this destination developments, and really looking at ways to create an environment that is unique to the city. You can imagine how you could do this at the Edgewater, where you're at the edge of the waterfront on access with the state capitol, in the heart of our downtown, I mean, that's something that is unique to Madison, that if a person came here as a hotel guest, you would walk away knowing that you were in downtown Madison, not any number of other cities around the world. Iconic attractions. Again, this is the notion of trying to bring together things that are unique to this location. For instance, the Hay-Adams Hotel in Washington D.C. Some of the outdoor terrace spaces they have there, when you're in that space, you know exactly where you're at. It's an iconic place. You're looking down at the White House and there's no other hotel in the world that has that experience. Authentic customer service, environmental stewardship, improved transportation. 

These are all the kinds of things that we want to make a part of the redevelopment of the Edgewater's. So with that as kind of a framework of the project that we've focused on, that led us then to, how do you bind all that together and execute a plan that can do and become all of those things. So this is what we're starting with. What we're starting with is, the original 1940s building that you see kind of tucked off in the corner here. And this is the 1970s addition. This building, the combined building has about 107 rooms today. When this '70s addition was built, it was built in a way that there's two stairs kind of embedded back in here that give you access up on top of this roof. So today, there's an easement right that all of us have to go down on this property and walk up on top of this building. Now, the reality is, there's absolutely no reason to go up there. You know, there's a stone ballast roof system. 

Behind this wall here are all the mechanical systems. If you went up there in the summer months, it's about 300 degrees. It's not an inviting public space. Having said that, our desire is to capture the intent of what that wanted to be, but to do it in a way that you can create this iconic place that defines Madison. So, in order to get there, what we propose to do is to basically demolish the upper level of this building. Take away the top floor, retain the 1940s structure and bring back that style of architecture, which is very much an art-deco style of architecture. And by doing that, that opens up all of this space, which brings back the view that was lost when the '70s addition was built. This is the '40s building here. Going back to my first point in this sort of programmatic assessment that we did of the project, we have to expand the room capacity, so the plan is to build a hotel expansion at the eastern edge of the property to get the room count up to just under 200 rooms. And by doing this, it supports the development of this public space. 

And the idea here is, if you go back, right at the edge of this slide is the street. So the idea is to create a destination where the public, 365 days a year, can walk down this public terrace, circulate throughout this space, which, interestingly enough, the space that you see here, in area, in plan, is equal in area to the amount of space that exists at the Union. Just to sort of put a reference point behind that. So the idea is, this is a tiered terrace that takes you down about 20 feet from street level, and this becomes a public space about 40 feet above the lake. In addition to that, we want to cut this stair that you see up here. We want to separate the buildings where they're connected today, cut this stair through, kind of an Italian stair, that would separate the '70s addition from the original '40s building. And by doing that, create a portal to the waterfront. Again, as I said, one of the things that just amazes me about Madison is, as wonderful as Madison is with the tremendous access we have to lakes and the water, I ask people all the time, "What is it you love about Madison?" And consistently people say the same thing, "We just love the lakes." When you ask them, "When was the last time you were on the lake or you were at the edge of the water?" 

And for most people it's been years. We just don't have public access to the waterfront that you would expect for a community that has such great waterfront. So this is one of the things that we really feel can define this location. And this gives you a sense of the plan from the opposite side, from the lake. So the idea here is, this is the 1940s building, the '70s addition today sits right here. We'll actually take that away to create this public terrace, and then this is where the expansion of the hotel would occur. Then what we want to do is redevelop the waterfront and allow this stair to bring you down to a point where people can truly enjoy and access the lake and the waterfront in a way that you really can't do in Madison today. And that's our presentation. So with that, I'll open it up to questions. 

- Yasiri: The students have questions regarding, certainly, the Edgewater and undoubtedly some of your other projects. 

The way we work this is, they each kind of do this at me and then I hand off the mic to them. I can see, is it Logan over there, has a question first, so I'll go ahead and hand it off. 

- Hi, I'm Logan. And one of the main destination points in Madison right now is the Monona Terrace. And do you feel that there is maybe some public backlash that the Edgewater reconstruction will compete too much with the Monona Terrace? 

- Dunn: That's a good question, and it's a question I'm asked quite a bit. And frankly I think just the opposite is true. We have quite a bit of experience with this as a company. You know, dealing with convention venues as part of these destination developments that we do, and it goes back to what I said a minute ago. Great cities, or great convention cities, are defined more by the experience of coming to the city than they are the venue itself. 

It's why San Antonio is an example, it's become one of the dominant convention markets in the world. It's the experience of going to San Antonio, and they have great facilities there that support that. And where I think we're lacking in Madison is, what's the unique experience that someone gets when they come to Madison? And while Monona Terrace is a great facility, it's on the water, it's got the history of the Frank Lloyd Wright connection and all of that, the fact is, the polling that's been done of groups that come to Madison for conventions, you ask them, what do they desire more of? They want to experience what is truly Madison, meaning, they'd like to get on the lake. Almost no group that we've ever brought to Madison for a convention has actually accessed the water. So the opportunity we have with the Edgewater is, it's a companion destination. And this is how great cities do this. They string together a series of activities and events and assets that really characterize and define that city. So take Madison as an example. 

You can imagine where you host an event at Monona Terrace and the second or third night of that event, you host a dinner at the Edgewater, you put people on a dinner cruise, you take them down by the Union terrace, you allow them to truly experience what is unique about Madison as part of coming to Madison as a destination. So I believe strongly, the Edgewater will only strengthen Madison as a convention city. I don't think it will do anything from a negative standpoint to detract from that. 

- Hi, my name is Brett. Is this hotel supposed to be upper class, like five-star hotel caliber? 

- Dunn: That's a good question, too. I get asked that question as much as any other question, I imagine. 

- Yasiri: And Bob, if you could, maybe as you answer it, could you put it in context with other hotels in Madison? 

- Dunn: Sure. 

- Yasiri: Because I'm sure that there's some... 

- Dunn: That's a good framework for the question. The fact is, there's not a hotel like this in Madison. If you looked at national statistics, the Hilton's the top-rated hotel in Madison and that would be a three-star hotel, if you want to use that as kind of a benchmark. But a destination hotel is different than your typical Hilton or the Concourse, or any of the other hotels in Madison. It's really about the amenity package that comes with the hotel. So we expect that there will be multiple restaurants, this terrace, etc. So if you ask me, well, characterize it in terms of stars, hotels are rated by three, four, five stars. It's above a three-star. But I'm always careful that Madison is not a market where we can support a so-called five-star hotel. You can't get the nightly rate that you would like to get with a five-star hotel. 

Not to say that market doesn't exist at all in Madison, but you can't do 200 rooms that way. So, say it's a four-star hotel if you want to characterize it that way. But I would characterize it not as luxury, I would characterize it as defined by the amenities that make it a unique destination in Madison at a price point that's supportable by the Madison market. 

- Hi, my name is Dan. Going back to your earlier projects involving the NFL, you said that you're hopefully within five years of bringing a team back to Los Angeles. Do you have any idea, any NFL teams that are currently interested in that? 

- Dunn: I do. 
(laughter)

- Would the Jacksonville Jaguars be one of them, since they're currently getting no one attending their games lately? 

- Dunn: Uh... Uh, yeah. The reality in the NFL is

- We define the league by quartiles. And the fourth quartile teams are the teams that are most challenged financially in terms of maintaining their competitive position with their peers around the league. The Jaguars would be one of those teams. That decision, I think, will be made in the not-too-distant future. And it will involve a team relocating to Los Angeles, so it won't be an expansion franchise. 

- How are you doing, my name is Darion. I actually stay right next to the Edgewater. 

I can kind of see my house right there. I stay in the Delta house, which is right next... yeah. 

- Dunn: We've been watching you. 

- Really? 
(laughter)

 One thing, I really believe that's an amazing idea, and I'm pretty sure you guys have thought about this, too. Wisconsin, and even Langdon, and even some of the other streets, it's not enough room to get

- I would say it would be congested for the amount of people that would be trying to attend this area. The only streets that would lead there are Wisconsin and Langdon. 

And with those two streets, even now, they get very congested, based with the downtown area. How are you guys planning on having a smooth transition from the capitol, whatever areas. 

- Dunn: You're making this difficult on me, now. 

- 'Cause I even think about it now. Frat Row is, like, crazy. 
(laughter)

 So to put the Edgewater right at the tip of Frat Row on a Saturday night, you know? Or even Thursday? 
(laughter)

 What are you guys planning on doing in order to keep, you know, the flow. 

Or even keep it very productive without a lot of congestion. Because there's a lot of nice homes in that area as well. 

- Dunn: I'm coming over to your house. It's a very important and fair question. The technical answer is, we've done several very thorough traffic studies and when you look at Wisconsin Avenue, nearly all of the traffic to and from the hotel will come up and down Wisconsin Avenue. It's something like 88% or even a little higher than that, of the traffic movement to the hotel will come on Wisconsin Avenue. And you're right, there aren't too many other options. But interestingly enough, when you look at the traffic capacity on the streets, what those streets were designed to support in terms of traffic by the hour, with the full expansion that we've proposed here, on Wisconsin Avenue, we're only at 55% of its designed capacity. Now it's important to understand about a hotel different than a stadium, for example. At stadiums traffic is extremely difficult to deal with, simply because everyone comes an hour before the game, or they might come three hours before the game, but when the game is over, 70,000 people are leaving right now. 

Hotels are different. Hotels are literally 24 hours a day, not that much between midnight and 6 AM, but you do have guests that check in at 2:45 in the morning. But the traffic impact of a hotel is really felt and it's dispersed throughout the day. So because of that, it doesn't increase the volume on Wisconsin Avenue the same way that a large office building might, where at 4:45 in the afternoon, everyone's hitting the exit ramp. So it's a fair question, it's a fair point, but we do very careful traffic planning, and in this case we're nowhere near the design capacity of the roads that support that entire neighborhood, and that's been proven out pretty carefully and it's all been agreed to by the city. 

- Hey, how's it going? My name's Aiden. I pick up the school newspapers every now and again, but I don't really take a look at the front pages. I see that there's columns about the controversy and all this surrounding this. I haven't looked into it and I'm not really sure, so can you just kind of touch on the points. 

What are the main constraints? 'Cause this all seems awesome to me. I feel like this would be great for Madison, you know what I mean? So can you just elaborate, what are the main constraints holding back development of the project? 

- Dunn: That's another very good question and it's one of the more interesting sides of the work that we do. Large projects, whether it's this project or it's a $2 billion stadium in New York, there's a certain degree of public involvement, scrutiny, and controversy. It's just inherent in the work that we do. And by Madison's standards, this has been a controversial project, and I can only share with you my opinion. But my opinion is, there's overwhelming support in this community. Almost everyone that I talk to responded the way you did, it's tremendous, would be a great asset to our city, etc. 

Madison is a community, though, where a faction, be it an individual or ten people or 100 people, can really influence the public process. More than most communities. And that's held true on the Edgewater, probably as much as any other project that's ever been done in Madison. And by my definition, there's a very small faction, centered around the neighborhood, mostly, of people that are determined, in my opinion, to kill the project. Not to evolve it to a point where it's compatible with the neighborhood by their definition, but truly to kill the project. And I say that because, in most cases, and recognize I do some fairly complicated projects. Most of the time when you have an opponent on a project in some respect, they have some number of issues that they're just galvanized around. It might be height, might be traffic, might be waterfront issues, might be something. But this group has attached themselves to every single issue imaginable, many of which they've come up with on their own, many of which they just attach themselves to. Everything from the shape of the pier to the waterfront to the traffic, to the parking, just pick any issue. 

And we've been locked in that process for a long time, and we've worked very hard to satisfy those concerns, doing everything from initially moving the building over 60 feet to get out of the Wisconsin Avenue right-of-way. This is actually an old rendering. Then we lowered the building by three stories to address their concerns about height. Then we took away, originally this was a level terrace coming out here. Then we took the '70s addition away because they liked the old historic hill and the view that it used to have. So we responded with that. To things to deal with traffic and buses and parking and all of that. Most recently, we went through a complete redesign of the building to respond to some of their concerns about making it fit more within the historic context of the neighborhood, to our fifth major redesign, which is underway right now, which now involves moving the building over another 15 feet and proposing to build a parking structure on the back side of the property to take the traffic off this plaza so that the plaza can be a true public space. So I've now designed this thing five times, all to respond to the interests and concerns of this group and the city. The city fathers have been on us for a long time to respond to these issues. 

And in my opinion, we're no closer with this faction in the neighborhood to understanding an agreement about how a project can go forward than we were on day one. There's always a new hurdle that's put up in front of us. But overall, I believe when the community at large looks at this, I believe just based on the feedback that I get that the response and the support for the project is overwhelming. And we're now to a point where the city has to take a vote on this, it has to go to the council. We've done as much as we can do. I've worked very hard to respond to these concerns, but it's time to take a vote and determine, is the council going to support going forward with the project? 

- Hi, I'm Will. I'm pretty sick, also. My dad is a big convention-goer, and I know his favorite destination is Atlantic City. Do you ever see gaming being a possibility in the downtown? 

- Dunn: In Madison? 
(laughs)

 I've got to think about that one for a minute. 

- Yasiri: Try to pass that by the city council. 

- Dunn: It won't be me, I'm sure of that. You know, I would say... I would say no. We're looking at it from the standpoint of, gaming today and all the factors that come into play there, I don't think, and recognize, gaming is, we just got done working with a client on a big project in the heart of downtown Detroit that had a major casino tied to it. We've been around a lot of gaming work. I can't see today that gaming would be a possibility in Madison, recognizing all the factors in that industry and in this community. 

Having said that, I would've said, 10 or 15 years ago, there's not a chance that gaming will expand the way that it has expanded in this country in the last 10, 15 years. It's like prisons. It used to be, no one wanted a prison in their backyard. Well, you go to build a prison today, it's jobs, it's tax base, communities are eagerly pursuing prisons in their community, so in this business, you can't really ever say "never." But under current, the dynamics that make gaming work today, I can't see gaming in Madison. But I've learned never to rule anything out in the real estate world. 

- Hi, Logan again. So I'm a big baseball fan. And Minnesota just built a new stadium. In your opinion, why in the world wouldn't they put a roof on the thing? 

- Dunn: It's primarily cost. And I know that situation fairly well. There's a certain amount of, in that case, Hennepin County tax that was available to support building a ballpark. And to put a dome on it would've been another, probably $300 million. So what happens with that dome is, you've just taken away all of the incremental income that's gained by building the stadium that goes to the team. And you're leaving the team in basically the exact same financial position they would've been in had they stayed in the Metrodome. So it's purely financial in almost every case. 

- Hi, Bob, my name is Maria. Madison is a big bike-oriented town. Are you factoring that in to the design of the waterfront at all? 

- Dunn: Well, there's two points I would make on that one. And you're right, Madison is a strong biking community. I was literally in a meeting this morning, we were talking about designing bike racks. So we've got a whole series of areas planned where we can accommodate bikes, and we want to be able to do it well. The last thing you want to do in a great public space like this is litter it with anything. Cars, bikes, anything like that. And we've got some great, there's a cafe designed right in here and there's a series of terraces that step down to the main public plaza and there's a stair here. So we're trying to disguise bike racks inside these terraces and inside the landscaping. And then on the back side of the building, I don't remember the count that they're working on, but we've got a large number of bikes there. The other thing I can tell you that's interesting to me, I don't know where it will go, but there's been a lot of discussion about this pathway along the lakefront. 

Now, today and in the future, we will maintain an easement that will come along the lakefront, giving public access to circulate along the waterfront. I think it would be nice over time if that continued from the terrace to James Madison Park. That doesn't necessarily mean I'm advocating for it or I'm supporting, but in a lot of ways, great waterfront communities have done that type of boardwalk development. And from a biking standpoint and a pedestrian standpoint, I think it would be wonderful. Whether it ever happens or not, there's a lot of issues I know within the student community about bringing something like that along the lakefront here and interrupting the presence of your home on the waterfront. Those are all issues that would have to get debated and worked through. All I know is, from our standpoint, we strongly encourage pedestrian and bike access to this location and to the waterfront. Where it goes from there, time will tell. 

- Yasiri: I'm just going to ask the last question, Bob, and that has to do with the current status of the project. When we first asked you to come speak, I know that the council was scheduled to vote on this two days ago. 

But has it moved into April now, did I read that correctly? 

- Dunn: The current schedule is, we've got a series of commission meetings with the city that will occur over the next month or so. And we're expecting that we'll be to the council for a formal vote on the project no later than the middle of April. Could happen a little bit sooner than that. And where I expect it to go is, we're cautiously optimistic that the council will support the project. There was a vote this week on one of the more challenging issues, which is a waterfront setback ordinance. The council passed that 13 to 7. That might be the dominant issue, it's certainly one of the dominant issues. So we had a very favorable vote this week and we feel confident that with all these latest design ideas that we're working on, that we'll come through this with flying colors in the weeks and months ahead. But ultimately it's a decision of the council. 

- Yasiri: It's a real privilege to have you come and talk with our class, particularly during this very busy time. Students and I want to give you a University of Wisconsin mug. 

- Dunn: Thank you. 

- Yasiri: Because we know you're a Badger. And I know everyone joins me in thanking Bob Dunn. 

- Dunn: Thank you. 
(applause)