State of State Street: How downtown Madison is recovering

State Street

MADISON, Wis. —  Community Pharmacy has moved out its location at State Street and Gorham and has opened a new location on Fair Oaks Avenue. The co-op’s move is an example of how difficult it can be for shops to survive downtown Madison.

Foot traffic was historically low last year, according to data from Downtown Madison, Inc.  Foot traffic rebounded into July, but it’s still 25-40% below pre-COVID.

State Street Foot Traffic

Courtesy Downtown Madison, Inc.

Vacancies are also trending up.  That’s been the for years before the pandemic.  In 2021, 23 downtown Madison businesses closed or moved out. Twenty-three businesses also moved in, but overall there were 50 vacancies in July, according to Downtown Madison Inc.

Downtown Vacancies

Courtesy Downtown Madison Inc.

Community Pharmacy is one of the businesses that just left.

“Downtown has changed a lot,” said Barbara Brown who’s worked at Community Pharmacy for 35 years. “Even if the landlords didn’t want to sell the block, we knew we weren’t going to renew.”

“Our downtown location is seven-times more expensive than our Eastside location,” said Issy Bilek with the pharmacy.

Jason Ilstrup with Downtown Madison Inc. said prices are based on all the activity.

“You kind of become a victim of your own success. Rents were going up.  Now we’re starting to see them level off and come back down,” Ilstrup said.

Ilstrup said the pandemic accelerated a shift being seen across the country where more first-floor storefronts are service-oriented instead of more retail-based businesses.

Among the stores moving in is a scaled-down Target. Chain Raising Cains also just opened.

“I would argue you need a mix of both national and locals to succeed,” Ilstrup said. “You need to create a ton of different reasons to come downtown.”

The cost to live downtown is also on the way up. The average apartment is going for 25% more than 5 years ago. This coincides with plans for more high-rise apartments downtown. Bilek with Community Pharmacy said that wasn’t going to help.

“The people who are going to live in these luxury apartment complexes are often not our customers,” she said. 

Ilstrup said downtown success is all about striking the right balance.

 “You don’t want to lose the fun weirdness of state street with these old buildings, but you need to keep up to make sure we have enough density,” he said.