Faced with rising construction costs, Madison is increasing its investment by $5 million to $16.2 million for improvements at the developing Village on Park mall on the South Side.
The city previously approved directing $11.2 million in tax increment financing, or TIF, district for redevelopment activities in and around the mall, including to support the creation of the Urban League of Greater Madison’s Black Business Hub, which is now underway of construction and parking for a $9.1 million garage attached to the mall, 2300 S. Park St.
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The TIF Tax Entities Review Board, including the city, Dane County, Madison Schools and Madison Technical College, approved a plan to use $11.2 million from nearby TIF District No. 42 for the mall. Under state law, a municipality can direct funds outside of a TIF district if the project is within a half-mile of its boundary.
Under that plan, the city intended to direct $9.1 million toward a roughly five-story garage with 250 to 300 spaces to serve the shopping center; $800,000 in pre-development costs for the Black Business Hub; $1.1 million to demolish a building on the north side of the mall and build a new parking lot; and $200,000 for design work on a pilot project to create affordable, owner-occupied housing in the South.
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 in cost overruns for the parking structure.
- Another $1 million to demolish a building on the north side and the mall and create a new parking lot.
- $200,000 for public art.
“While some of the cost increase is a result of a change in scope to cover things like public art and additional site work, most of it is a result of inflation,” said Matt Wachter, the city’s director of planning, community and economic development. “We’re seeing a very dramatic increase in construction costs in projects across the city this year.”
The TIF Review Board approved the increase, and the city’s Community Development Authority, which owns Village on Park, agreed to accept the funds earlier this month.
“It’s not unusual at all for these kinds of amendments to happen,” said Ald. Tag Evers, 13th Ward, a CDA board member whose district is close to the seat. “It was anticipated that stormwater costs may increase once we go into the ground because of the high groundwater table. But most of that can be attributed to inflation — the rising costs of materials and labor — that is putting a strain 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 dilapidated mall into an attractive, multi-use space. Village on Park’s two-story atrium was redesigned in 2009 to include community rooms, office space and restrooms. Also that year, CDA sold part of the site to the Urban League and the Madison Public Library, who built facilities there.
Photos: Racers enjoy a new pump track at Aldo Leopold Park