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A much-anticipated public market planned for the city’s East Side next year will be delayed until 2021, Mayor Paul Soglin said, blaming the rising cost of city borrowing.

“The public market is of great importance to the city,” Soglin said Monday. “It will provide employment to a significant number of people with a wide variety of job skills. It will be a major contributor to the regional economy. I can’t think of a greater disappointment over a capital project.”

A draft business plan would repurpose the city’s aging Fleet Services garage at North First and East Johnson streets into a $9.5 million to $13.5 million public market with retail, wholesale and food production facilities with the potential for a demonstration kitchen, restaurants, brewery, wine bar and other offerings.

The city’s 2015 capital budget includes $6.25 million and a total of $8.6 million for construction envisioned in 2016 and 2017.

Soglin, a champion of the public market, said a delay is necessary because city borrowing must be cut and money directed to the planned relocation of Fleet Services to city property on the 4000 block of Nakoosa Trail on the Far East Side. The 2015 capital improvement plan, a non-binding five-year spending plan, anticipates spending a total of $21.2 million to move Fleet Services there in 2018-19.

To achieve the public market on its initial timeline, the city would have had to accelerate the Fleet Services move, but Soglin said that wasn’t possible given other priorities and limited resources.

The mayor’s proposed 2016 capital budget and capital improvement plan, to be released Tuesday, will envision $10.35 million in spending for the public market in 2021. The city, however, has designated funds to continue planning for the market.

“It’s the result of careful examination of the level of debt we’re carrying, drawing a line we can’t cross, and moving everything that isn’t absolutely essential beyond that line,” Soglin said.

The mayor said he’s been trying to address city finances since he returned to office in 2011 and trying to move forward this one major project he believes is important to the city’s future.

“He had to make some difficult decisions,” city finance director David Schmiedicke said. “There are other things that need to be done in the capital budget.”

Dan Kennelly, a city economic development specialist close to the public market initiative, said, “We’ve built a lot of support for the project. The challenge we have now is: How do we maintain momentum?”

Soglin wants planning to continue so construction can begin by the end of 2017 “just in case” federal policy changes make more grant money available.

“I’d like us to be in a position where we have projects ready to go,” he said.

The city has been using a federal Urban Development Grant Act refund of about $1.2 million from the 2013 budget to pay for public market planning, and about $700,000 of that remains for planning purposes so no new appropriation is needed to continue that work, Schmiedicke said.

Soglin has asked the Local Food Committee, which is spearheading the planning effort with the consultant Project for Public Spaces of New York, to explore sites to start a public market in the meantime.

A draft business plan by Project for Public Spaces outlines three options for the public market that call for $731,700 in startup costs, and construction costs at $9.5 million, $10.6 million and $13.5 million.

The city seems to be eliminating the lowest-cost option because it would run at a deficit. That option would use the Fleet Services building to create 50,230 square feet of space for a West Hall for a permanent market and an East Hall housing a temporary market and flexible space, offices, demonstration kitchen and storage.

But the other two options are still in play:

  • A multi-use market with more production and retail space. This $10.6 million option would be the same as the basic option but have an addition for more production and retail space. It would increase leasable space and add $325,000 in annual revenue, meaning a $27,016 annual operating profit in year one.
  • The multi-use market with third-floor public space. This $13.5 million option includes all the features of the other options plus a third-floor addition and rooftop patio with community garden room and views of the state Capitol and lakes. It would cost more but further increase revenues, resulting in a $20,489 annual operating profit in the first year.

City committees have been studying the draft proposal, and the City Council on Tuesday was supposed to consider a resolution accepting the plan and directing the Local Food Committee to develop an implementation strategy and recommendations for an operating structure and more. The decision, however, is being pushed back until Sept. 15.

The city has been studying the feasibility of a public market for more than a decade.

Initially, advocates envisioned a market without broader economic spin-offs in the core Downtown. But Soglin saw it located in a neighborhood and as both a source of healthy food for residents and a nexus for jobs and entrepreneurial opportunities.

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