No decisions were made, and the city’s powerful Finance Committee on Monday offered mixed signals about if or how the city should help close a $5.2 million financing gap for the long-envisioned, now $20 million Madison Public Market on the East Side.
The discussion Monday was intended to give direction to Mayor Satya Rhodes-Conway and city staff on next steps.
City Council President Keith Furman questioned the project’s location at First Street and East Johnson Avenue, said the market’s costs continue to increase and asked if such spending is a good use of public money, and that “at some point, we have to stop throwing good money after bad.”
Alds. Sheri Carter and Tag Evers, who represent the South Side, said the city should not further tap a robust tax incremental financing (TIF) district in the East Washington Avenue corridor for the market because money from the district is also envisioned to address significant needs on the South Side, especially with the coming attachment of much of the town of Madison to the city later this fall. They said the city should explore other funding sources for the Public Market.
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But Ald. Syed Abbas, 12th District, who represents the market site at the two-story, 45,000-square-foot, city-owned former Fleet Services Building at 200 N. First St., said the market will create entrepreneurial opportunities for minorities and women, and that the city should remain committed to the project.
Under existing plans, the city would convert the former building on 3.4 acres into a year-round community destination featuring a diverse group of entrepreneurs offering fresh produce, culturally diverse prepared food, locally made food, and arts and crafts. The market is to include a Food Innovation Center that would be a flexible small manufacturing venue with services and equipment to boost small entrepreneurs and minority-owned enterprises.
“Many people have many dreams attached to the project,” said Abbas, who is not a member of the committee but spoke during the meeting.
Under plans, the city would continue to own the property, while the nonprofit Madison Public Market Foundation would operate the market. The building has been used as a temporary homeless men’s shelter since December 2020. The city and county are preparing new temporary and permanent men’s shelters.
Rhodes-Conway did not suggest a specific direction and invited further input from council members.
In late August, the city informed the foundation that rising construction costs have also added $1.8 million to the project, pushing it to $20 million, and that the city had to withdraw an application for a $3.4 million federal grant that was a key piece of the market’s financing package because the city couldn’t meet a deadline to guarantee how it would cover the additional costs.
Last week, Rhodes-Conway’s proposed capital budget for 2023 that continues the current, approved funding levels for the project but includes no additional money to help close the financing gap that will, at minimum, delay construction from November until early spring and could threaten the project altogether.
To finance the market, the city had intended to use $7 million in TIF, $849,000 in city funds, $3 million in private donations and the $3.4 million federal Economic Development Agency grant. In February, Gov. Tony Evers announced $4 million for the market from a state program that uses federal COVID-19 relief funds, which city officials then said was the last piece of funding needed.
But there was no way for the city to quickly move to get approval of borrowing or more TIF funds to cover the gap caused by inflation, and, facing a federal deadline, the city had to withdraw from the EDA grant, Rhodes-Conway said.
The city’s project team estimates that about $800,000 to $1 million can be cut from the project without “deep, negative impact” to the overall operations of the market, and the city is exploring a new source of federal funding, but at most, it could provide only $1 million toward the market, city economic development director Matt Mikolajewski told the committee.
Still, there’s a lot of federal COVID-19 stimulus money still out there, Mikolajewski said. “We want to do what we can to identify additional sources,” he said.
The Finance Committee will consider amendments to the mayor’s proposed capital budget later this month, and the full City Council will consider the capital and yet-to-be proposed operating budgets in November.
Photos: The Dane County Farmers Market then and now