3 downtown Madison buildings prepare for sale as state consolidates office space

State workers are vacating several Madison office buildings as the state prepares to put those downtown properties up for sale. 

The plans are part of the governor’s Vision 2030 blueprint, which involves consolidating office space as remote work becomes more popular. 

Department of Public Instruction employees have already cleared out of a brutalist state office building known as GEF 3, according to a Vision 2030 update released this week. It’s eventually going to be listed for sale in conjunction with the neighboring GEF 2 building, which houses the state’s Department of Natural Resources. (The GEF acronym, pronounced like “Jeff,” refers to General Executive Facility.)

Jason Ilstrup, who leads Downtown Madison, Inc., anticipates those two buildings just east of the state Capitol on South Webster St. will eventually be torn down to make way for a large development with multiple uses.

He says that could include restaurants, hotel space and, likely, housing.

“We also have a housing crisis here in Madison and downtown is a place we can still build significant amount of dense housing for our residents,” Ilstrup said.

Together, GEF 2 and 3 are valued at $59 million and include more than 90,000 square feet of office space.

The two buildings are just north of King Street, near prime downtown property that for years has been has been used as a surface-level parking lot. The city of Madison, however, is seeking developers who will repurpose the former Brayton Lot.

Those plans, combined with the revamp of what was once GEF 2 and 3, add to that area’s economic momentum, Madison’s Economic Development Division Director Matt Mikolajewski said.

“GEF 2 and 3 are basically an entire city block — one could argue, even more than a city block full of development,” Mikolajewski said. “We’ve really seen in recent years that there’s been an sort of renewed interest in kind of that King Street corridor.”

Historic Human Services Building primed for renovation

A third Madison office building will also be sold, once Wisconsin’s Department of Health Services completes its relocation to another state building known as GEF 1. In all, that reorganization will result in more than 200,000 square feet of reduced office space, according to the Vision 2030 update.

The art deco-style Health Services building was built nearly a century ago and Ilstrup anticipates a future developer will renovate it in a way that preserves its historic character. The West Wilson Street building is valued at $26 million, and it overlooks Madison’s second-largest lake near the Monona Terrace Convention Center.

“It’s a gorgeous, wonderful institutional building here in downtown,” Ilstrup said. “To breathe new life into that facility would be a real shot in the arm for downtown and for Wilson Street and the Monona Terrace.”

All three Madison buildings could be listed for sale by the end of 2025, although it will likely take longer for the properties to be vacated, a Department of Administration spokesperson said.

Gov. Tony Evers’ administration has sought to promote flexible work environments for some state employees as a way to recruit talent while saving money.

“Through our Vision 2030 efforts, we’re also making sure Wisconsinites can join our state workforce regardless of whether they live in Rhinelander, Fond du Lac, Siren, or anywhere in between,” the Democratic governor said in a statement. “Our goal is to find the best workers, no matter what community they live in, and that’s great news for Wisconsinites and our state.”

In total, the Department of Administration projects that the Vision 2030 plan will save $7.4 million annually in occupancy fees by freeing up state office space across Wisconsin. The department also estimates Wisconsin will save more than a half billion dollars by avoiding maintenance costs at aging buildings.