Straying from a city staff team recommendation, Madison’s Finance Committee backed a proposal from Gebhardt Development that would bring over 70 units of affordable housing downtown as part of the major Judge Doyle Square redevelopment project.
At their meeting Monday, committee members heard several hours of testimony from speakers, many of whom raised concerns regarding fair wages and diversity over proposals from Stone House Development, Gebhardt Development and the Mandel Group.
“If the city is going to spend public money to build affordable housing, then the construction workers that build that housing should be able to afford to live there as well,” said Andrew Disch, political director with the North Central States Regional Council of Carpenters.
Gebhardt’s $52 million proposal that brings 78 income-restricted units for renters household incomes at or below 60% of the Dane County median income sealed the deal for some alders.
"(Gebhardt Development's proposal) is the most ambitious and could bring us the most value in so many respects," said Ald. Mike Verveer, District 4. "I think we should give it a shot."
Gebhardt’s proposed relationship with local construction management company JP Cullen, which uses union labor, was positive news for some alders.
However, under state law, the city cannot mandate that a developer contract with a particular labor organization or consider labor organization contracts as a factor in making an award.
“Nothing forbids the city from considering a company’s positive labor relations policies as a positive factor, among many others, in choosing a developer,” Assistant City Attorney Kevin Ramakrishna said in a memo Monday. “However, selecting a developer primarily based on unionized workforce is no different than having a policy to that effect, which would be illegal.”
The committee voted on a voice vote, with Ald. Donna Moreland, District 7 voting against, to recommend the proposal from Gebhardt. The City Council will make a final decision on whether to enter into negotiations with Gebhardt at its meeting Tuesday.
Once the City Council makes a decision on a developer, the city will begin negotiations to create a development agreement.
A special city negotiating team previously recommended that the committee choose Madison-based Stone House Development, over Gebhardt and Milwaukee-based Mandel Group to build a mixed-use development, including affordable housing, above the new, city-owned underground parking garage that is under construction.
Project Manager George Austin said the proposal from Stone House Development was the most straightforward project that also balances the delivery of the workforce housing with the financial return to the city.
“We felt Stone House was a slightly better fit for what we are asking at this point in time for the project,” Austin said.
However, Austin noted that all three developers are capable of producing a successful project.
Ald. Rebecca Kemble, District 18, underscored the difficult choice between the three proposals. She ultimately supported Gebhardt due to the large number of affordable housing units.
“Those lines are really thin and the balance of concerns are multi-variable, multidimensional,” Kemble said.
Gebhardt Development’s 78 units of affordable housing are included in proposal for a 196-unit apartment complex. The developer is also proposing 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.
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.
Part of Gebhardt’s proposal included separating the lobbies between the affordable housing units and the market rate units, though the developer said this could be changed. This project design raised concerns from committee members and is what drove Moreland to put her support behind the Mandel Group and vote against Gebardt.
“It’s very offensive to me, and it questions my trust in their genuineness,” Moreland said. “I cannot support Gebhardt.”
Stone House Development’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.
The Mandel Group is proposing 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.
Though the Mandel Group was not selected, Verveer hopes to see more proposals from the Milwaukee developer for Madison projects.
“I really truly hope that this is not the last we’ve seen of the Mandel Group,” Verveer said.