Madison terminates development rights for Garver Feed Mill ‘micro-lodges’

July 24, 2018

As a developer proceeds to re-purpose the crumbing landmark Garver Feed Mill building on Madison’s East Side, another part of the project to bring dozens of “micro-lodging” units to the surrounding area has hit a major roadblock.

Baum Revision of Chicago’s $19.8 million project has had two main pieces: a $14.4 million building renovation to transform the former feed mill, 109 S. Fair Oaks Ave., into an artisan food-production facility, and the construction of up to 50 short-term rental micro-homes of 200 to 600 square feet each on five adjacent acres to the northeast. The city owns another 12.6 acres of parkland further northeast.

In recent weeks, Baum has been unable to provide city-required documents that show it can obtain financing for the micro-homes, and the city sent Baum a letter dated July 2 terminating its development rights to the adjacent five acres, known as Lot 2.

Under a development agreement between the city and Baum, Baum was supposed to meet various conditions, including proof of financing for Lot 2, by June 30, city planning, community and economic development director Natalie Erdman said.

Baum project manager Bryant Moroder said the company has the necessary financing and the company is “working with the city to provide them with additional information they have requested.”

“Like the on-going rehabilitation of the historic Garver building, we’re committed to the project and building something special that will benefit the community,” Moroder said in an email.

The two sides are continuing discussions, but it would now take City Council action to amend the development agreement or approve an alternative agreement for Baum to proceed with the micro-homes, Erdman said.

“We are still talking about options,” she said. “We have nothing to propose to the council at this time.”

Ald. David Ahrens, 15th District, said on his city webpage that “the question now is, what should we do with the many acres on the site that have been largely cleared of brush and hills of mulch? No doubt, this developer and perhaps others will try to cut a different deal. But there has been popular support for use of part of the site for a dog park and restoration of the remainder of the area to its earlier prairie state.”

“We are getting a second chance,” he said in an interview.

“Now, we have a chance to do something that is more sensible.”

In April 2015, the city selected Baum over three other companies to reuse Garver. Each offered unique uses and costs ranging from $19.8 million to $39.8 million.

Late last year, the council approved an agreement with Baum to provide $1.82 million in city funding for the project plus $1.6 million for soil remediation on the site, which is contaminated with some petroleum and polycyclic hydrocarbons, or PAHs. Several areas of the property need to have soil capped or removed, and clean topsoil must be brought in.

The remediation will be done if soils are moved on the site, Erdman said.

In December, after nearly three years of delay and negotiation, Baum began work on restoring the main building, with completion slated for 2019 and the renovated structure occupied by “second stage” food producers who have established themselves locally but are looking for room to grow — both spatially and economically.

The building, which features tall ceilings and dock doors, will also have space for events, meetings and retail uses.

The micro-homes are intended to showcase sustainable design and operations, giving guests a chance to experience “tiny living,” according to Baum’s website.

But the city never received adequate documentation of financing, the city’s termination letter says.

A June 29 letter from Baum showed $4.9 million of equity to be funded but “without any evidence of the source of such equity,” the city letter says.

The two-story, Industrial Romanesque feed mill was built in 1905 and named a city landmark in 1994.

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