Madison, Dane County proposals can close $5.2 million public market funding gap

After weeks of uncertainty, Madison and Dane County officials are proposing proposals that would close a $5.2 million funding gap for the $20 million Madison Public Market on the East Side.

But proposed changes to the city and county’s capital budgets for 2023 must be approved by city council and county council.

County Council Chairman Patrick Miles formally proposed an amendment to the county’s capital budget on Tuesday to borrow and provide $1.5 million to help the city fill the funding gap. This funding, however, is dependent on the city increasing its contribution to the project by approximately $4 million to fully close the gap and the county finding a funding avenue to provide the money which could include a division of market land.

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The county finance committee will consider the proposed amendment and others on Thursday. County Council will make final funding decisions the week of November 7.

“The proposed amendment demonstrates that the Public Market is recognized as an important economic and social opportunity for Madison, Dane County and the region,” said Anne Reynolds, Public Market Foundation board member and chair of the city ​​public market development committee.

Further, Madison Alds. Regina Vidaver and Syed Abbas confirmed on Tuesday that they will soon propose an amendment to the city’s capital budget to use up to $6 million to help fill the funding gap.

Vidaver, a member of the city’s food policy committee, called Miles’ proposal “remarkable” and “wonderful.” She said the city’s proposed money increase was not based on borrowing but rather on an additional tax financing (TIF) district in the area that is designed to support such projects.

Abbas, 12th District, who represents the site, said a county contribution, possible federal funding and design changes to save money would likely mean the city wouldn’t need the full $6 million. of dollars ; the proposal represents “a worst-case scenario”.

“I think the public market will be a vehicle for economic opportunity and provide increased access to locally produced food,” Miles said. “I strongly support the project’s goal of increasing economic opportunity for low-income populations and people of color.”

The county cannot borrow and provide capital for uses not permitted by state law, but the county can purchase real estate and lease it, Miles said. In this case, the county could buy a portion of the property that would house a food innovation center, expected to cost $1.5 million, and then lease it to the city for $1 a year. After the loan is paid off, the county would sell the property back to the city for $1, he said.

Destination all year round

So far, Mayor Satya Rhodes-Conway has declined to provide additional funding in his proposed 2023 capital budget, and no member of city council has proposed an amendment to increase the city’s contribution in the initial amendments considered by the finance committee in mid-September. The mayor was not immediately available on Tuesday for comment.

But council members can still propose amendments to the city’s capital budget early next month before final budget decisions are made the week of Nov. 14.

According to plans, the city would convert the former two-story, 45,000-square-foot, 3.4-acre Fleet Services Building at 200 N. First St. into a year-round community destination with a diverse group of entrepreneurs offering fresh produce, culturally diverse ready meals, locally prepared meals, arts and crafts.

The market would include the Food Innovation Center, which would be a small, flexible manufacturing venue with services and equipment to boost small entrepreneurs and minority-owned businesses.

From now on, the city would continue to own the property, while the nonprofit Madison Public Market Foundation would operate the market.

Funding challenges

In late August, the city informed the foundation that rising construction costs had added $1.8 million to the cost of the project, bringing it to $20 million. As a result, the city withdrew a request for a $3.4 million federal grant, a key part of the deal’s financial package, because the city could not meet a deadline to guarantee how it would cover the additional costs.

Rhodes-Conway’s proposed capital budget for 2023 maintains current and approved funding levels for the project. But it doesn’t include any additional money to help fill the funding gap that, at a minimum, would delay construction from November until early spring and could threaten the project entirely.

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To fund the market, the city intended to use $7 million in TIF, $849,000 in city funds, $3 million in private donations, and the $3.4 million grant from the Federal Agency. of economic development. In February, Gov. Tony Evers announced $4 million for the market under a state program that uses federal COVID-19 relief funds, which city officials said was the last funding needed.

But there was no way the city could move quickly to get approval for a loan or more TIF funds to cover the inflation gap, and, faced with a federal deadline, the city had to withdraw from the EDA grant.

The future of Madison's Public Market is in jeopardy after a funding setback

The city’s project team estimated that around $800,000 to $1 million could be taken out of the project without a “profound negative impact” on overall market operations. The city is also exploring a new source of federal funding, but that could only provide the market with $1 million at most.

“The Madison Public Market Foundation continues to work on private fundraising and certainly appreciates the continued support of our donors and community members,” Reynolds said.

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