The Common Council recently had a presentation on the Central Library Proposal. The proposal, entitled “A Signature Idea,” was presented by the Madison Public Library and the lead team of The Fiore Companies and Irgens Development Partners.
The Mayor opened with a few thoughts, saying he has not yet fully decided whether or not he is going to include the full proposal into his capital budget, adding that the project would be “an investment in more than just one building.” He also said that the project may be worth the short term investment for its long term gain.
Next, the development team gave an elaborate and detailed PowerPoint, with the following noteworthy points:
- “doing nothing” is not an option because of the current library’s poor condition. this is a 50 year project
- the redevelopment would provide better meeting space, study space, computer space, and allow for more active programing
- the current library operates with 40% of its space open to the public and 60% administrative space. the proposed library would increase public space 30% to a total 70% public space
- usage of the central library has increased since 2003, with circulation going up 13.6%, visits increasing 8.4%, and internet usage growing a whopping 213.9%
- the future role of libraries: 1. encourage variable, collaborative, and social nature of learning 2. participants of a broader ‘fabric’ of learning infrastructure 3. real and iconic center of community culture, recreation, and education
- the developers would buy the current library site for $4 million and propose building a 250 room hotel that has 10,000 square feet of retail and 400 new parking stalls
- the projected total cost of the library is around $42,850,000 (which does not include planned loan forgiveness, with projected savings of aroud $8 million, bringing the cost down to $34,850,000)
- the projected funding sources of the project include the $4 million purchase from the city, $18.8 million in city funded tax exempt bonds, $10 million in New Market Tax Credits*, and $10 million in private grants and donations
- * the New Market Tax Credits (NMTC) were set up in the federal reinvestment and recovery bill (the stimulus), and are intended to spur economic development in public projects, with the site of the library on block 66 qualifying. the NMTCs use ‘Build America Bonds’ that have an interest savings of about 1%. the tax credits are bought by companies and infuse equity into projects and then the federal government then gives them tax credits in the end, this being the $8 million savings as the low interest set for 7 years and a projected 80% of the loan amount forgiven after the 7 years, again creating the $8 million in equity to the city (yeah, complicated eh? but sounds like a creative and adventageous funding stream that is a win-win for the city and private investors)
- with the proposed hotel-mixed use development, projected net benefits in city taxes total a flat $26 million over 50 years and $72 million over 50 years when a 2.5% escalation in taken into account
- let’s break down that $$$ for the city. from property taxes alone: $228,000 a year, a flat $11.4 million over 50 years, and $20.6 with escalation over 50 years. from room taxes: $789,000 a year, a flat $39.9 million over 50 years, and $72.5 million with escalation over 50 years. energy savings of $85,000 a year, a flat $4.25 million over 50 years, and $8.285 with escalation over 50 years. all that added up minus the city debt service over 20 years plus the NMTC brings the total net benefits to a flat $26 million over 50 years and $72 million with escalation over 50 years
- projected property taxes to madison schools: $252,000 a year, a flat $12.6 million over 50 years, and $22.9 million with escalation over 50 years. projected property taxes to MATC, Dane Co, WI: $111,300 a year, a flat $5.565 over 50 years, and $9 million with escalation over 50 years
- projected 200 construction jobs plus 500 indirect jobs sustained for 4 years
- Findorff estimates a total 10% savings in total costs if building contracts are set soon because of depressed construction prices
- northstar economics, inc reports a 400% return in economic contribution from libraries
This project has been in the works for a few years and having been on the council for a few months, this presentation was extremely helpful for me to understand the scope, costs, benefits, etc… of the proposed project. I am excited at the project’s potential investment in the city and look forward to talking with the city, mayor, and council over the next few weeks and months leading up to budget time!