Faced with rising construction costs, Madison is increasing its investment by $5 million to $16.2 million for improvements at the evolving Village on Park mall on the South Side.
The city previously approved directing $11.2 million from a tax incremental financing, or TIF, district for redevelopment activities at and around the mall, including to support creation of the Urban League of Greater Madison’s $25.5 million Black Business Hub now under construction and a $9.1 million parking garage at the mall, 2300 S. Park St.
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The TIF Review Board of taxing entities including the city, Dane County, the Madison schools and Madison Area Technical College had approved a plan to use the $11.2 million from nearby TIF District No. 42 for the mall. Under state law, a municipality can target funds outside of a TIF district if the project is within a half-mile of its boundary.
Under that plan, the city intended to direct $9.1 million to a roughly five-story, 250- to 300-space parking garage to serve the mall; $800,000 in pre-development costs for the Black Business Hub; $1.1 million for demolition of a building on the north side of the mall and construction of a new parking lot; and $200,000 for design work on a pilot project to create low-cost, owner-occupied housing on the South Side.
But now, the city is adding $5 million to cover rising construction costs and additional stormwater management measures.
The revised project plan adds:
- $2.4 million for stormwater.
- $1.4 million more for a cost overrun for the parking structure.
- $1 million more to demolish a building at the north and of the mall and create the new parking lot.
- $200,000 for public art.
“While some of the cost increase is a result of a change of scope to cover things like public art and additional site work, the vast majority is the result of inflation,” said Matt Wachter, city director of planning, community and economic development. “We are seeing very dramatic construction cost increases in projects across the city this year.”
The TIF Review Board has approved the increase and the city’s Community Development Authority, which owns the Village on Park, agreed to accept the funds earlier this month.
“It’s not at all unusual for amendments like this to occur,” said Ald. Tag Evers, 13th District, a CDA board member whose district is near the site. “It was anticipated that stormwater costs could go up once we got in the ground due to the high water table. But most of this can be attributed to inflation — rising material and labor costs — which is burdening construction projects all over the city.
“The city’s commitment to this project is unflagging; that’s how important it is,” Evers said.
In 2004, the CDA purchased the site as part of a master plan to redevelop the worn mall into an attractive, multi-use space. The Village on Park’s two-story atrium was redesigned in 2009 to include community rooms, office space and restrooms. Also that year, the CDA sold off part of the site to the Urban League and the Madison Public Library, which built facilities there.