LINCOLN, Neb. (KMTV) — The state would double its financial commitment, from $75 million to $150 million, to Omaha’s CHI Health Center under a bill given first-round approval Thursday in the Nebraska Legislature.
The so-called “turnback” tax proceeds would also double for Ralston’s Liberty First Credit Union Arena, to $100 million, under Legislative Bill 927.
The bill advanced on a 31-0 vote, but not before two rural senators questioned devoting more state tax revenue to arenas in the Omaha area.
“I’m amazed at how much money we have to give to Omaha. They’re never satisfied,” said State Sen. Steve Erdman of Bayard.
Only for construction?
Henderson Sen. Curt Friesen also questioned whether state funds ought to be used not only for construction of such facilities, but also for parking garages and remodeling.
The CHI Health Center is seeking another $75 million, and the Ralston arena another $50 million, to build parking garages to replace the loss of surface parking.
Proposed development of a parking lot near the CHI Health Center will necessitate the construction of a parking garage, state senators were told, and the Ralston arena will soon need a parking garage to replace parking lots due to the construction of a casino at the nearby Horsemen’s Park.
Debate on Thursday included a history lesson in turnback taxes, which were authorized to help Omaha finance the replacement of its aging Civic Auditorium in 2004.
State taxes turned back
Under the law, the state’s portion — 5.5% — of sales taxes paid at hotels within 600 yards of the CHI Health Center are “turned back” to help retire debt payments. Lincoln’s Pinnacle Bank Arena, opened in 2013, also gets turnback revenue.
The Ralston arena, completed in 2012, gets turnback taxes, but its turnback includes sales from nearby retail stores, including a Menards store.
LB 927 was introduced by Omaha Sen. Rich Pahls, a former member of the Omaha City Council. But Pahls has been absent in recent days due to an undisclosed medical issue.
That left Norfolk Sen. Mike Flood and Elkhorn Sen. Lou Ann Linehan to speak in favor of the turnback spending, which they said has translated into cultural benefits statewide as well as increased spending near the arenas.
Rural areas benefit
Flood said his neighbors in Norfolk, for example, just attended an Elton John concert in Lincoln. Events at the Omaha center, such as the Olympic Swimming Trials and the annual Berkshire Hathaway meeting, draw visitors — and spending — from across the country.
Thirty percent of the turnback revenue generated by the arenas goes toward community centers across the state and to economic development and gang prevention programs in North Omaha and South Omaha.
Flood said rural Nebraska has netted $37 million so far for projects there, and North and South Omaha, $7.5 million.
‘Creative districts’
The Norfolk senator, who is running for the GOP nomination in the 1st Congressional District, got an amendment attached to LB 927 to devote the rural portion of the turnback revenue for one year to finance grants for “creative districts.” That could help redevelopment in downtown Norfolk, as well as other communities. The grants, of between $100,000 and $500,000, would require approval by the Nebraska Arts Council.
“This is a good bill,” Flood said. “It helps protect important assets. It benefits both urban and rural communities.”
Linehan, who proposed the Ralston arena portion of the bill, said the facility’s management has improved in recent months. That is in contrast to 2015, when the Omaha suburb had to raid other city funds to avoid defaulting on construction bonds.
Construction of a parking garage is essential, Linehan said, to give the Ralston facility “a little bit more breathing room.”
Law redefined
The $295 million Omaha arena, initially called the Qwest Center, is projected to be paid off by 2027, so an extension and an increase in turnback payments is needed to help finance the parking garage, according to Jack Cheloha, the City of Omaha lobbyist.
LB 927 redefines the turnback law to allow funds to be used for parking facilities that are not attached to the arena.
One amendment attached to the bill might require more discussion, according to Linehan.
That amendment would expand the turnback area around the Omaha and Lincoln arenas from 600 yards to 1,200 yards, thus taking in more hotels along Cuming Street in Omaha and in downtown Lincoln.
Omaha Sens. Terrell McKinney and Justin Wayne both spoke in favor of expanding the turnback zone, with Friesen speaking against it.
Nebraska Examiner is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Nebraska Examiner maintains editorial independence. Contact Editor Cate Folsom for questions: info@nebraskaexaminer.com. Follow Nebraska Examiner on Facebook and Twitter.
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