With land costs too high to put a $13.2 million Madison Public Market on East Washington Avenue, city officials are embracing an option to reuse the nearby city Fleet Services building for the market.
Mayor Paul Soglin announced Monday that the city is dropping its bid to acquire land to build the market as part of a coming private redevelopment of the Washington Square shopping center at the corner of First Street and East Washington.
“A decision like this is a 100-year decision,” Soglin said at a press conference at the Fleet Services building Monday morning. “It’s very important we get it right.”
The city had been negotiating to buy 0.9 acres along East Washington Avenue immediately east of Burr Jones Field but has settled instead on the Fleet Services building on 3.4 acres of city-owned land at the corner of First and East Johnson streets.
The city and the owners of the shopping center, developers Steve Doran and Todd Waller, were roughly $1.6 million apart on the value of the land the city was to buy, and the developers had also submitted a request for $4 million in tax incremental financing support mainly for a parking structure at the private part of the project, which included housing, retail and possibly a hotel.
“The numbers just didn’t work,” city economic development director Matt Mikolajewski said.
Using the Fleet Services building, 200 First St., has many advantages, including potential cost savings, city control and ownership of the building and site, much more square footage, room for parking and better accessibility for delivery trucks and traffic, Soglin and others said.
The city budgeted $13.2 million for the market in its 2019 capital budget, and costs at the new location could be less, Soglin said.
The Fleet Services building presents unique opportunities for design and use, city Office of Business Resources manager Dan Kennelly said.
The building offers an industrial feel and 45,000 square feet of space, compared to 28,000 in the building under design for the property that was to be purchased from Doran and Waller, Kennelly said. It also has 20-foot-high ceilings, walls with large windows to bring in natural light, tall bay doors and a 6,000-square-foot, second-floor mezzanine overlooking ground-floor areas that will provide space for events, dining and more, he said.
“It has architectural character that’s unique and you can’t re-create,” Kennelly said.
An adaptive reuse aligns well with the architect selected by the city, MSR Design of Minneapolis, which did the $29.5 million renovation of the Central Library and the recent $30 million makeover of the landmark Madison Municipal Building, and has been chosen to do the $12 million upgrade of Olbrich Botanical Gardens, he said.
Advocates have been trying to create a public market for at least 14 years. The site has bounced from the Brayton parking lot on East Washington two blocks east of Capitol Square, to what would become the Judge Doyle Square project south of Capitol Square, to the current area between East Washington and East Johnson just east of the Yahara River.
In 2014-15, the city was focused on the Fleet Services building but uncertainty about the timing of relocating Fleet Services to Nakoosa Trail on the Far East Side and opportunities presented by Doran and Waller steered interest toward the 3.65-acre Washington Square shopping plaza site.
But after months of discussion and joint planning efforts, the sides hit an impasse on costs.
The city obtained two appraisals for 0.9 acres of the private site: one for $975,000 showing the parcel as if it were raw land, and another for $2.6 million reflecting an ongoing shopping center venture.
“There was a huge gap there,” Mikolajewski said. “We were having trouble negotiating the difference. We really didn’t get close at all.”
In a September application, Doran and Waller sought $4 million in TIF to help support a $24.1 million private development that included a 100-room hotel, 100 apartments, two restaurants, 14,500 square feet of retail space and a 310-space parking garage.
The TIF support was largely to support the parking garage, but the city and the developers never really got deep into talks over TIF because the sides were so far apart on the value of the land for the market, Mikolajewski said.
Doran and Waller could not be reached on Monday, but Soglin said the developers will continue to pursue a private project on their land. They “can move forward with their redevelopment project independently but still integrated with the market,” the mayor said. “The private development will continue to be a huge asset in supporting the health of the market.”
The city is now at the right spot, Soglin said. He said he’s visited at least 15 public markets nationally with a range of purposes — such as providing high-end food, lunch places for business people or tourist destinations — and said the Fleet Services building offers an industrial feel to support basic food production operations, such as at markets in Cleveland and Detroit.
The market is designed to provide “vegetables with dirt on them,” Soglin said, adding, “We believe this is going to re-energize food production in the city of Madison.”
Jamaal Stricklin, president of the nonprofit Madison Public Market Foundation, which is raising private funds for the project and will operate the market once it opens, called the building “wonderful” and said donors see the positive attributes of the change and are supportive.
The city recently earmarked $29.2 million for construction of the new Fleet Services facility in the 2019 capital budget, meaning that agency can relocate in 2020, Soglin said. That means work to create the Public Market can begin in 2020, with completion in 2021, he said.