Feb. 9, 2008 - Madison and Marcus Corp. are discussing a much-desired Downtown hotel -- perhaps the largest in the city -- to serve Monona Terrace and other needs.

Marcus, which opened the 14-story, 236-room Hilton Madison at 9 E. Wilson St. adjacent to Monona Terrace in early 2001, has first option to build across the street on a parking lot behind the landmark Madison Municipal Building or the adjacent Government East parking ramp site.

Mayor Dave Cieslewicz met with top Marcus officials Friday -- their second meeting in eight weeks -- and the Milwaukee-based hotelier unveiled concept drawings, mayoral spokesman George Twigg said.

The mayor 's office and Marcus officials declined to share details, but Twigg said the early concept is of the scale being sought by the Greater Madison Convention and Visitors Bureau and others, who want a hotel with about 500 rooms and meeting space.

The city 's biggest hotel, the Concourse at 1 W. Dayton St., has 356 rooms.

The mayor "feels they 're moving in the right direction, " Twigg said. "He thinks this is something that has real potential. "

Marcus officials said it 's too early to say much.

"The market is strong, " said David Merritt, Marcus Hotels and Resorts senior vice president for development. "I think the city would like to expand rooms. We 're one of the logical people to look at that option. "

The prospect of a new hotel is important because city officials and others in the business community contend Monona Terrace is losing business because it can 't deliver enough hotel rooms near the facility.

"We feel like we 've hit the glass ceiling, " said Monona Terrace Director Jim Hess. "It 's not our capacity. It 's the capacity of hotels in the Downtown to support us. "

Some conventions won 't even consider the city because it doesn 't meet specifications for hotel rooms in proximity to the convention center, which opened in 1997, Hess said.

The number of conventions at Monona Terrace doubled after the Hilton opened in 2001 but have stagnated at about 70 per year, Hess said, adding, "We think we can do more. "

Since the start of 2005, Monona Terrace has lost 40 events -- worth an estimated $30 million to the local economy -- to other cities, convention and visitors bureau president Deb Archer has said.

"We 've seen a proliferation of operators building big hotels that weren 't around 10 years ago, " Archer said. "The novelty of Monona Terrace has worn off. We need a more competitive package.

"We believe if there is a significant hotel built Downtown, we 'll be able to pick up business we 've lost and look at adding more business, " she said. "Our customers would like a 500-room hotel. "

Convention and visitors bureau director of marketing Tom Farley added, "We 're not competing with Dubuque or Peoria. We 're competing against Chicago, Columbus (Ohio). "

The major competition isn 't coming from the Wisconsin Dells, either, despite big resorts there with lots of rooms and entertainment attractions, Farley said.

Madison, he said, can get national conventions with ties to UW-Madison in the areas of biotech, agriculture and health care.

The mayor 's office and Marcus wouldn 't say exactly where a hotel would be located, but Archer said the closer to Monona Terrace the better, meaning the Madison Municipal Building property.

But getting a hotel built won 't be simple.

The $31.2 million Hilton, for example, got $9.5 million in city tax incremental financing support plus $1.1 million for a pedestrian bridge between the hotel and convention center.

Cieslewicz said he 's open to TIF support for a second hotel, but other hotel operators have warned against another subsidy for Marcus.

The mayor 's office is now preparing a resolution asking the City Council to approve a market analysis on the appropriate number or rooms, location and amenities, Twigg said.

The study, Archer said, should also explore "what happens to Monona Terrace if a hotel isn 't built? "

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