The Wisconsin Alumni Research Foundation wants Madison to significantly cut a $600,000 bond closing fee on a $150 million campus project, saying it is a nonprofit entity doing a project in the public interest.

The city 's Community Development Authority now must decide whether to charge the full fee and use it for city revitalization efforts or cut the fee and reduce costs for WARF 's much-anticipated Wisconsin Institutes for Discovery.

"We 'll give it serious consideration, " CDA chairman Stuart Levitan said. But "it 's going to be problematic to meet their request. Any dollar we push back to WARF is a dollar not available for something like the East Madison Community Center. "

The CDA delayed a vote, which will likely occur next month, Levitan said.

WARF is seeking to use CDA tax-exempt redevelopment revenue bonds to help build and equip the state-of-the-art research complex that will rise on the 1200 and 1300 blocks of University Avenue. The CDA and city have no financial liability for the "flow through " bond transaction.

Long-standing CDA policy requires WARF pay a 1/3 of 1 percent closing fee -- perhaps more than $600,000 -- on the bond issue, which may be up to $185 million.

Two-thirds of the funding for the project comes from private gifts: $50 million by John and Tashia Morgridge and $50 million by WARF. One-third comes from the state of Wisconsin.

That money will be invested, and the return on that investment will be used to pay off the bonds. It 's anticipated that the rate of return will exceed the amount needed to pay the bonds, and the excess will be used to support the institutes ' outreach mission, said project manager George Austin.

About 250 researchers will work at the complex -- half for the private arm, the Morgridge Institute for Research, and half for the public arm, the Wisconsin Institute for Discovery.

The university is on an aggressive track to complete construction by the end of 2010.

"The fee is extremely large, " Austin said, adding that savings can be used for construction, the institute 's scientific mission and educational programs. "It 's something for them to consider. "

The CDA, for example, could impose a fee for the part of the bond issue up to $100 million, which would deliver $330,000 Austin said.

But the CDA has a fee policy and its central mission is to muster resources for initiatives such as the redevelopment of Allied Drive, not support scientific research projects, Levitan said.

There is precedent for reducing the fee.

The CDA cut the fee from about $400,000 to $150,000 when it issued $115 million in redevelopment revenue bonds for Overture Center, said city economic revitalization supervisor Percy Brown. But in that case, the city had a special relationship with the arts facility, which replaced the Madison Civic Center, he said.

WARF, Austin said, has other financing options and doesn 't have to use the CDA 's redevelopment bonds.

"It 's a very delicate situation, " Levitan said. "There 's always room for negotiation. I 'd certainly rather get 90 percent of $600,000 than 100 percent of nothing. "