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.

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.

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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 doesn’t anticipate private donors offering enough to cover it.

“It is therefore clear that additional sources of funding will be difficult to secure,” he wrote.

The Public Market Development Committee meets Thursday night.  The budget memo is the only item on the agenda.

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