Faced with rising construction costs, Madison is increasing its investment by $5 million to $16.2 million for improvements to the evolving Village on Park mall on the South Side.
The city previously approved $11.2 million in Supplemental Tax Financing, or TIF, for redevelopment activities in and around the mall, including supporting the creation of the Black Business Hub in $25.5 million from the Greater Madison Urban League currently under construction and a $9.1 million parking lot. garage at the mall, 2300 S. Park St.
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The TIF review board of taxing entities, including the city, Dane County, Madison Schools and Madison Area Technical College, had approved a plan to use the $11.2 million TIF district n ° 42 neighbor 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 boundaries.
As part of this plan, the city intended to allocate $9.1 million for a parking lot of approximately five stories and 250–300 spaces to serve the mall; $800,000 in pre-development costs for the Black Business Hub; $1.1 million for the demolition of a building on the north side of the mall and the 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 to the north and the shopping center and create the new parking lot.
- $200,000 for public art.
“While some of the cost increase is the result of a change in scope to cover things like public art and additional site works, the vast majority is the result of inflation” , said Matt Wachter, city manager of planning, community and economic development. “We are seeing very dramatic construction cost increases in projects across the city this year.”
The TIF review panel 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 happen,” Ald said. CDA board member Tag Evers, 13th District, whose district is near the site. “It was expected that stormwater costs could increase once we were in the ground due to the high water table. But most of that can be attributed to inflation — rising material and labor costs — that are weighing on construction projects across the city.
“The City’s commitment to this project is unwavering; that’s how important it is,” Evers said.
In 2004, CDA purchased the site as part of a master plan to redevelop the worn-out mall into an attractive, mixed-use space. The Village on Park’s two-story atrium was redesigned in 2009 to include community rooms, offices, and restrooms. Also that year, the CDA sold part of the site to the Urban League and the Madison Public Library, which built facilities there.