JDS Stone House (copy)

Stone House Development's $40 million project includes 159 apartments. A special staff team has recommended the proposal over two others for a private piece of the massive Judge Doyle Square project Downtown.

Madison’s Finance Committee delayed choosing a developer on Tuesday for part of the downtown Judge Doyle Square project, opting to request additional information about how contractors prioritize diversity and fair wages in their hiring practices.

The committee referred its decision to June 10, which should not affect the City Council’s final consideration of the developer at its June 11 meeting.

Three developers — Milwaukee-based Mandel Group and Madison-based Gebhardt Development and Stone House Development — submitted applications to develop Block 88, the part of the project located next to the Madison Municipal Building.

Project manager George Austin said Tuesday that all of the developers are “capable of delivering a high quality project to the city.” However, the city negotiating team unanimously recommended the proposal from Stone House Development.

“We believe that Stone House balanced the delivery of the workforce housing with the financial return to the city and provided the most straight forward development framework,” Austin said.

The local developer’s proposal to build a 159-unit apartment project and 7,000 square feet of retail space in the podium would cost an estimated $40 million. Occupancy in 37 units would be restricted to renters with household incomes at or below 80% of the Dane County median income.

Stone House Development would also request $1.2 million from the city in affordable housing funds and would pay the city $5 million to purchase the air rights and the podium.

Proposals were required to include an element of workforce housing. The city prioritized projects that maximize the tax base, have a straightforward development framework and utilize sustainability concepts in the design, construction and operation of the building.

The other proposals under consideration:

  • Gebhard Development’s $52 million proposal to build a 196-unit apartment complex and 26,000-square-feet of commercial space and amenities above the ground-level commercial space and two floors of private parking, collectively called the podium. Seventy-eight units would be income restricted for renters with household incomes at or below 60% of the Dane County median income. Gebhardt is also requesting $1.75 million of affordable housing funds from the city and has proposed to pay $7.5 million to purchase the air rights and the podium, subject to structural modifications.
  • The Mandel Group is proposing a $38.2 million project that would include a 144-unit apartment complex and 7,000-square-feet of retail space in the podium. Twenty-nine units would be income restricted for renters with household incomes at or below 80% of the Dane County median income. The developer would also seek an unspecified amount of funding from the city, to be negotiated at a later date, for the affordable housing. Mandel Group has also proposed a future purchase of the air rights for $1 million within 10 years of occupancy.

Committee members requested more information on how developers’ contractors would address diversity in hiring, apprenticeships and fair wages. Further, the committee requested a memo from staff explaining how they can use the additional information when selecting a developer.

Austin said developers were asked to submit a targeted workforce and business participation plan but did not “hit the nail on the head.”

“We saw a commitment but not specifics, and we also evaluated the proposal primarily through the lens of affordable housing return to the city and a straightforward development framework,” Austin said.

Ald. Barbara Harrington-McKinney said the city should be dedicated to discovering diversity information earlier in the process.

“As a city we need to be making a priority not in the negotiation phase of it, but it really should be up front,” Harrington-McKinney said. “It should be very clear that that’s a priority in terms of looking at diversity and how these (request for proposals) are framed.”

The committee also requested information on how the Parking Utility would be repaid because the developers are requesting funding from the utility's reserves, and more details on the assessed value of the properties.

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