Madison Mayor Dave Cieslewicz released correspondence Tuesday between Fiore/Irgens and the city regarding the stalled negotiations over the new downtown library.
In an email to the Madison Common Council, the mayor wrote:
As a rule, I think we would all agree that it is not a good idea to negotiate in public. Nonetheless, because Fiore/Irgens has been seeking to make its case by talking to individuals outside of the negotiating process, City Attorney Mike May has come to the conclusion that these are documents that are no longer subject to exemptions for active negotiations under the open records law. I agree with his conclusion, and therefore I am providing them to you now and to the press shortly.
In the email, Cieslewicz also writes, that there are four main sticking points.
First, we have concluded that the project would be better handled as a public works project. We believe that this gives us the best chance of getting the best possible prices for our taxpayers. Under the condominium approach originally proposed by the developer, Fiore/Irgens could not guarantee a price for the shell and core of the building below $23.9 million, and therefore suggested the city explore a public works model. The $23 million offered by the city was the maximum amount we felt we could offer without seriously compromising the quality of the interior while not going above the total of $37 million for the shell, core and interior that has been promised in the budget you and I adopted in November. It was also well above the $20.6 million recommended by our consultants. Unfortunately, this was not acceptable to Fiore/Irgens. Now that the condominium proposal is off the table, we can concentrate on a regular public works bid process which makes it easier to plan and build the exterior and interior of the building as one unit. We are confident of getting bids that will bring the total project in at the budgeted amount.
Second, Fiore/Irgens asks $1.6 million for the existing structure on top of which our library will be built. Our consultants believe the structure is worth only $600,000. In the spirit of compromise we have offered $700,000.
Third, Fiore/Irgens claims over $2.7 million as compensation for work done to date on the project. This includes compensation for things such as construction management that they will not perform under the public works process. Fiore/Irgens has not responded to requests for a more detailed itemization of what they feel they should be compensated for. It is our position that the bulk of their costs are simply the costs of doing business. It would be a mistake for the city to establish a precedent of compensating every developer whose plans did not work out. Nonetheless, since we would be using some of the work product of Fiore/Irgens we have offered $100,000 as compensation.
Fourth, and perhaps most significantly, Fiore/Irgens now states that they no longer intend to purchase the existing library. This provision was key to my support for the Fiore/Irgens project and most likely key to the Council's support for it as well. Without it, $4 million in budgeted income for the first year of the project would not be guaranteed. Moreover, the total net cost of the project would rise substantially since there would be no offsetting tax revenues from development of the rest of the block. Under this scenario, the rehab option makes more sense.
There are a few other issues, but these are the most significant right now.
We have scheduled another meeting with Fiore/Irgens to go over these points. I still hope that we can work them out and move forward on the original plan. If not, I will be back to you with a proposal to move forward with the rehab option.
The rest of the correspondence is available here (PDF).