Beitler Real Estate Services is suing Madison over the Judge Doyle Square project, claiming that the city “unilaterally seized” some private portions of the project when it approved additional funds to construct them.
The lawsuit, filed June 4 in U.S. District Court in Illinois, follows the Madison City Council’s approval of an additional $11 million in public spending to construct retail space, private parking and a structural slab to support an apartment building — collectively called the podium.
“The City’s brazen attempt to develop the above-grade parking structure without Beitler’s consent in violation of Beitler’s clear rights under the development agreement, falls into the City’s continued pattern of excluding Beitler from the development process, refusing to provide Beitler with necessary information about the project without justification, and waging a public smear campaign against Beitler, falsely blaming Beitler for the City’s request to fund the development of the above-grade parking structure,” the lawsuit states.
However, due to rising construction costs, the Chicago-based developer previously informed the city it could not pursue this part of the project without the city paying for the podium.
The costs for the first-floor retail space, parking and apartments, planned to be built on top of a new underground public parking garage behind the Municipal Building, jumped from an estimated $32 million to $48.5 million, nudging the total cost from $170 million to $186 million.
“After Beitler informed the City earlier this year that it was not able to finance its portion of the parking garage, the City stepped up and appropriated $11 million to build the parking and keep the project alive,” City Attorney Michael May said.
The additional funding increased the 2018 capital budget by $4.4 million. The $11 million is split between the $4.4 million and $6.6 million in funds that were not expended from what was originally budgeted for the new municipal garage. The city is now investing a total of $50.4 million into the project.
The lawsuit alleges that the city broke its development agreement with Beitler by pursuing construction of the podium. Beitler is asking the federal court to stop Madison from moving forward with construction this part of the project.
May said the city will “vigorously defend” its actions to keep the Judge Doyle Square project "alive."
“Madison has not breached any of its obligations to Beitler,” May said. “The lawsuit does nothing to build Judge Doyle Square and is a curious response by a developer who claims to want to work with the City to see the project go forward.”
The podium and nine floors of apartments will be built on top of the new underground parking garage that will replace the current Government East parking ramp. Construction on the private portion of the project would need to start when the new garage is complete or else the city would be required to cap the ramp to follow building and zoning code regulations.