Amid market changes and declining revenue due to COVID-19, the Madison City Council slashed funding for three prominent tourism organizations, but also applied for a federal grant to help finance the construction of another project — an indoor public market.
Because of the pandemic’s lingering economic impact, the city council will reduce the funding to Destination Madison from $4.7 million in 2019 to $3.75 million in 2021. The Monona Terrace will only receive $3.75 million in lieu of $4.8 million last year, and the Overture Center will be allocated $1.5 million instead of $2 million.
The travel and leisure industry struggled this year, prompting a sharp decline in hotel tax collections. A state law requires the city to use 70 percent of the revenue toward tourism, with the rest directed toward a general fund.
However, projections indicate only $8.3 million will be available for 2021, down from $18.9 million in 2019 and $19.5 million in 2020, according to the Wisconsin State Journal.
After two rounds of budget cuts, one of which amounted to $10 million in reductions, the city may be forced to replace $1.2 million in lost revenue from its “rainy day fund.”
Ald. Mike Verveer, District 4, told the State Journal that the city’s Room Tax Commission — which allocates the funds — will likely “have to revisit this budget in the New Year.”
After the commission listened to room tax recipients, it approved the 2021 funds in a 5-1 vote Monday.
At the same time, the city council signed a resolution on Tuesday to apply for a grant from the U.S. Economic Development Administration to help finance the construction of a $13 million indoor public market. The market is proposed to fill the current Fleet Services building on 200 N. First St. and may open in 2022 if construction begins early next year.
The Madison Public Market Foundation, the non-profit that will eventually run the market, will file the grant application. The resolution also requires the city to provide matching funds and for the mayor and city clerk to accept the funding upon approval, the Cap Times reported.
The potential $3 million in financing would alleviate concerns regarding an initial $3 million of funding in federal New Market Tax Credits in which market changes have left the credits as a “potentially insufficient funding source.”
Another $7 million in funding will be drawn from tax increment revenue from a district along East Washington Avenue and another $3 million in private donations to fulfill the market’s budget.
The proposed indoor public market includes two floors consisting of 30 permanent vending spots, more than 100 temporary vending spots, an outdoor plaza on the first floor and a children's play area on the second, according to the Cap Times.
Other features include gender-neutral restrooms, parking for cars, bikes and rideshares, a banquet hall and public art gallery spaces.
The market plans to foster equity-based economic development, or economic growth rooted in uplifting low-income people and communities of color by prioritizing vendors and small businesses and plans to offer jobs and advancement opportunities. More information about the Madison Public Market can be found on its website.