A city committee recommended Monday that Madison terminate negotiations with the developer it had picked for part of the Judge Doyle Square project Downtown and instead go with the developer staff originally recommended.

The Finance Committee voted to end negotiations with Gebhardt Development, which was chosen over two other suitors to develop the mixed-use building that will go above the parking garage nearing completion on the Madison Municipal block.

Gebhardt was picked in June in large part because its plan for the building offered the largest number of low-cost housing units in the apartment complex that would go above the garage.

But on Monday, the committee recommended the city go with Stone House Development, which the city’s negotiating team had initially chosen for the project.

“The Finance Committee has voted to terminate negotiations with Gebhardt and go back to negotiations with Stone House, according to the original staff recommendation,” Mayor Satya Rhodes-Conway said. “Our negotiating team will move forward in that direction.”

Negotiations with Gebhardt had faced several hurdles, including controversy over whether to separate the subsidized housing units from the regularly priced units and unforeseen modifications needed to the parking garage and first-floor retail — collectively called the podium — to support the weight of the building, which would have driven up costs for the project.

“When we picked Gebhardt, we were shooting for the moon,” said Ald. Keith Furman, 19th District. “And I feel good that we tried, but ultimately there were just too many complications.”

After learning that its planned building technique to use an engineered wood frame is not yet allowed under state law, Gebhardt proposed two new proposals to use steel and concrete instead. One would cost an extra $500,000; the other, an extra $1 million.

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Both of the new proposals would have separated the low-cost housing units from the other units.

Ald. Mike Verveer, 4th District, said the primary driver of the decision was concern over the modifications needed to the podium being too costly and causing delays for the opening of the garage, which is slated to open Nov. 1. Verveer said the segregation of the units also factored into the decision, but the main focus was the construction difficulties.

“The cost and timing were such that we made the very difficult decision tonight to move on because we just couldn’t see a way that we could realistically get the proposed Gebhardt building to fit the podium,” Verveer said.

Gebhardt had initially proposed setting aside 78 of 196 apartments for households with incomes at or below 60% of the county median income, or $49,560 for a family of three.

In comparison, Stone House proposed a plan for 159 apartments, with 20 being for renters with household incomes at or below 60% of county medium income, and 17 for those with household incomes at or below 80% of county median income, or $66,030 for a family of three.

The City Council will decide whether to approve the Finance Committee’s recommendation at its Sept. 3 meeting.

[Editor's note: This story has been updated to correct the date of the City Council meeting where the Finance Committee's recommendation will be taken up. It is Sept. 3.]

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Emily Hamer is a general assignment reporter for the Wisconsin State Journal. She joined the paper in April 2019 and was formerly an investigative reporting intern at the Wisconsin Center for Investigative Journalism.