Funding concerns took center stage during debate over an initial proposal to incorporate the renovation of Madison Fire Department facilities into constructing a high rise development in the downtown area.

The Board of Estimates met with MFD officials and Hovde Properties Executive Director Michael Slavish at its meeting Monday to deliberate whether the city would be able to fund the project, which would include a 14-story, mixed use development with space included for fire department administrative offices.

The project would also provide room within the development for Fire Station No. 1, currently located on West Johnson Street. The development itself would be located at West Johnson Street and Dayton Street.

MFD Chief Steven Davis said current high energy costs and space concerns are driving factors for the inclusion of the fire station and administrative building in the proposed development.

“We’ve essentially outgrown the administration building,” Davis said. “It was originally designed for 25 people, and we currently have 45, so we’re a bit cramped.”

According to Slavish, the city would be responsible for funding the portion of the development housing fire department offices, and the residential and retail space would be funded privately by Hovde Properties.

The development would ultimately include 250 residential units comprised of studio, one- and two-bedroom apartments, 10,000 square feet of retail space and approximately 400 parking stalls that would accommodate both residents and fire department employees.

Slavish said the project would be constructed in two phases so the fire department would not be forced to shut down for a period of time.

According to Aaron Olver, city director of economic development, proposed costs for the fire station and administration building are estimated at between $14 million and $18.4 million, with a potential $11.4 million in current resources from which funds could be drawn. The remaining $3 to $7 million would be added to next year’s capital budget.

Mayor Paul Soglin reminded the commission should the project be approved, budget constraints would delay other city projects.

Initial estimates project the final development should be finished by July of 2014.

Soglin spoke of the opportunity costs associated with the proposed development.

“If we don’t do this, sometime in the next five to 10 years, we will not only have had to spend $1.6 million that’s needed for Fire Station No. 1 (for its renovation,) but we’re going to have to find a new site for the station,” Soglin said. “Given the costs of downtown land, and given the size of the (fire department) facility, that is going to be really daunting … We need to take advantage of an opportunity.”

Olver added the fire station would need to be replaced sometime in the near future if it is not included within the proposed development.

Soglin closed the meeting by expressing his content with the proposed development conversation.

“The discussion has been very valuable in regards to giving a sense as to what kind of resolutions we should introduce, and so I think I’ve got a food feel from the board,” he said.

City officials will continue to meet in the coming days to draft resolutions to formally begin the process of approving the development, Soglin said.