If all goes as planned, Madison can get a $37 million, state-of-the-art central library and city taxpayers will pay only $16 million of the cost over 15 years.

That's because the financing plan relies on city borrowing plus the sale of the existing library site, federal tax credits, $10 million in private donations, and increased room and property taxes from a second phase of development.

But in a worst case scenario, taxpayers would bear more of the cost and the library initially may not be opened or furnished in a way that meets expectations.

As a vote nears, City Council members are questioning if the city is getting the best price, if the $10 million can be raised, and how the second phase of development will turn out.

"I think there are questions not satisfactorily being answered," said Ald. Michael Schumacher, 18th District, saying he may offer a capital budget amendment to minimize taxpayer exposure. "(The financing plan makes) good assumptions, but they're not guarantees."

Mayor Dave Cieslewicz, who included the library in his proposed $185.8 million capital budget for 2010, said the project comes at a time of low construction and borrowing costs, along with favorable federal tax credits due to the bad economy, and that the project will create much-needed jobs. The community will step up with donations and a second phase of development will happen, he said.

"Everybody agrees we need a new library," Cieslewicz said. "This is the time to build."

The council will decide the mayor's capital and $239.4 million operating budgets the week of Nov. 10.

Mayor's choice

Cieslewicz wants the city to use $37 million in borrowing, federal tax credits and private fundraising over three years to pursue the Fiore Cos.' proposal for a six-story, glass-and-stone library at Henry Street and West Washington Avenue that would be part of a larger redevelopment.

The proposal offers a state-of-the-art library "at the lowest net cost to taxpayers than will ever be possible again," Fiore executive vice president William Kunkler said.

"These are as favorable conditions as we're going to get," Library Board Chairman Tripp Widder agreed.

Under Fiore's proposal, a new 105,000-square-foot library would be built first on its property next to its Network 222 tower, followed by a second phase that would put a 380,000-square-foot mixed-use project - likely including a hotel - on the current library site at Fairchild and West Mifflin streets. The full value of the project exceeds $80 million.

HDR, a consultant hired by the city, says Fiore can build the library for $35.7 million. In fact, after an HDR analysis came out in the summer, Fiore cut the cost from $43.2 million to $37 million.

The HDR analysis, Kunkler said, has gaps in it, including a fair developer's fee.

Cieslewicz called the $37 million price tag "reasonable," but added, "This is still an estimate. We believe opportunities exist to see extra savings."

Selling one plan

In selling Fiore's plan, Cieslewicz contends $6 million federal New Market Tax Credits - which the city is very likely to get but not guaranteed - room and property tax increases from the second phase of development, and $10 million in private fundraising make the plan affordable. The inability to get the tax credits would be a huge blow and it's unclear how the city would proceed.

Depending on what's built in the second phase, the plan is much cheaper or similar in cost to renovating the dated, 44-year-old library, which would cost $27 million, he said.

If a hotel is built in the second phase, the library would cost taxpayers $16 million, or $12 annually for the owner of an average $245,000 home over the next 15 years, Cieslewicz aide Andrew Statz said. If condos were built - the worst-case scenario - the cost to taxpayers would be $24 million, or $17 annually for the average homeowner.

Cieslewicz acknowledged there are no hard guarantees for the timing of the second phase of construction, but he added, "If we don't do the (library) project, Phase II can't occur. This proposal gets us a new library and unlocks development potential on that block."

The mayor's projections, based on conversations with the Madison Library Foundation, assume $10 million could be privately raised for a new library but only $5 million for a renovation.

'Lot of hard work'

There's another way to look at the financing plan.

Cieslewicz, in his capital budget, proposes spending $23 million for the library in 2010, including $13 million in borrowing, $4 million for the sale of land and $6 million in New Market Tax Credits. The mayor would then borrow a total of $4 million in 2011 and 2012.

That $27 million would cover the $22 million cost to build the structure and the first $5 million of $15 million needed to fully furnish the library. The final $10 million would be covered by the private fundraising.

The Madison Library Foundation is committed to raising $10 million, Widder said.

"It's going to be a lot of hard work, but the board is committed to it," he said. "We don't have any substantial commitments at this time. The problem has been that we don't have a project we can talk about."

No final decisions have been made, but Widder said he'd prefer to use the initial $5 million plus initial fundraising to deliver a high-quality finish - walls and fixtures - and then make decisions about movable furniture such as shelving and computers.

If fundraising is $5 million or so short, the foundation would continue its campaign and, in the meantime, the board would consider not opening some floors or using existing furniture from the current library until new items can be purchased, Widder said.

"I don't think that will happen, but we'll take the necessary steps," he said.

The mayor said he doesn't see asking taxpayers to fill the gap if fundraising dries up.

For the public, it's an opportunity to bring the library "to the next level," Cieslewicz said. "If the public doesn't step forward, the library is not going to be all it can be."

"I can't predict how this will be viewed five years from now," he continued. "But even in the worst case scenario, 20 years from now, this will be viewed as the right decision."

Add or View Comment

Login to post your comment. If you don't have an account, you may register for one.