Surging construction costs place Madison Public Market budget $5.2 million short
MADISON, Wis. – A one-two punch of rising construction costs and vanishing grant money means the long-anticipated Madison Public Market will likely be delayed again.
In a memo dated Wednesday to the Public Market Development Committee, economic development director Matthew Mikolajewski wrote the project now faces a $5.2 million budget shortfall.
About $1.76 million of that comes from rising construction costs, which a city-hired consultant revealed in an updated cost estimate.
The biggest hit comes from losing an expected $3 million federal Economic Development Administration grant related to those rising costs. Mikolajewski said the city was forced to withdraw its application for the CARES grant upon learning it did not have the funding to pay for the rest of the public market project.
Between a $4 million state grant, $7.8 million in city budget and TIF funds, and $3 million in private contributions, the city had enough to cover the expected cost of the project with the federal grant prior to the updated cost report.
“Construction costs continue to rise, and it is likely that this gap will increase further prior to bidding the project,” Mikolajewski’s memo said.
If the city does not find a way to fill the $5.2 million gap, it could postpone the project for the considerable future.
“I would say it would be put it on life support, if that’s the case, if we don’t get the money right now,” said Barry Orton, who sits on the Public Market Development Committee. “I would hate to see the Madison Public Market become like the Monona Terrace and take 30 years to build.”
He added that a funding delay would not necessarily kill the project however.
“I think the Monona Terrace proves that it’s never ‘never,'” Orton said. “It’s either going to be in a couple of years or more than that.”
A history of delays
Madison planned to break ground on the Public Market this fall and open in late-2023. Inspiration for the market dates back to the mid-2000s, but changing city leadership, location, and funding issues slowed progress. Then, the pandemic delayed construction plans in 2020.
For now, the city still intends to build the market at 200 N. 1st Street by renovating its old Fleet Services building. That building currently houses a temporary men’s shelter, which the city is relocating to another temporary location on Zeier Road this fall. Current plans for the market include hosting at least 30 permanent vendors. The first five vendors were announced in 2021.
A path forward?
Mikolajewski suggests the city could cut some costs by up to $1 million without impacting the overall project and the Public Market’s long-term viability. The City of Madison is also pursuing a different $1 million federal grant. However, that still leaves a significant budget gap and Mikolajewski does not anticipate private donors offering enough to cover it.
“It is therefore clear that additional sources of funding will be difficult to secure,” he wrote.
“This building for three years has been used to fix police cars and change the oil in trucks,” Orton said. “So we’ve got to really make sure it can be food ready and it’s not cheap to do that.”
He added that it has the potential to be a powerful driver in the city.
“It’s an economic development tool for the city, and the city has spent quite a bit of money already developing the vendors,” Orton said.
The Public Market Development Committee met Thursday night. The budget memo is the only item on the agenda.
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