OMAHA, Neb. (Nebraska Examiner) — A Colorado group wants to buy the former headquarters of one of Nebraska’s oldest companies — but first is asking the City of Omaha for a public subsidy to help revamp the place.
The Denver-based Kentro Group intends to buy and rehabilitate the nearly 90,000-square-foot downtown Omaha complex that the international Scoular grain company occupied before it moved to west Omaha.
Kentro’s Chris Viscardi said proposed construction work would create additional office space and prepare the century-old facility for new tenants, which he anticipates will surface once the office market improves. The project’s $8.3 million price tag includes $3.4 million to buy the former Scoular site at 2027 Dodge St.
The development team seeks to defray eligible expenses with its request for $1.4 million in tax-increment financing.
The Omaha City Council must approve the subsidy. Under the TIF, property tax revenue generated on the new or improved development would, for 15 years, go toward paying off the developer’s loan. Normally property tax revenue goes to schools and local governments. (Property taxes paid on the value of the structure before the proposed rehab would continue to go to the traditional coffers.)
City planners consider the TIF, seen as an economic development tool, justified for the project, saying that “uncertainties often encountered in such (older) building projects and the additional project costs resulting from redeveloping a site in a constrained, highly built out area reinforce” the need.
Though it’s not uncommon for TIF to be used to rehab historic or underutilized buildings, the majority of such projects have resulted in a new purpose for the property. In this case, the former Scoular complex — built in the 1920s as a Veterans of Foreign Wars hotel — is to continue as an office structure.
A gymnasium and event hall are to be converted to expand office space on the nearly three-acre campus. Viscardi said he anticipates multiple tenants to move in.
"It seems to benefit an out-of-state company."– State Sen. Machaela Cavanaugh of Omaha
State Sen. Machaela Cavanaugh of Omaha said she was not familiar with all the details of the Scoular building project but said city officials should consider beefing up scrutiny of projects seeking TIF. She questioned the blighted designation of a property that’s across the street from the Joslyn Museum and Central High School.
“A project like this doesn’t seem to add significant value to underserved communities,” she said. “It seems to benefit an out-of-state company.”
Planning Director Dave Fanslau said in a memo that the project would promote job creation and downtown’s reputation as a primary employment hub and “image center.” A TIF committee of city representatives said that without the boost, the proposed update would not be feasible.
A south parking lot is to be reconstructed. The developers intend to maintain the exterior’s vintage architectural character.
Originally, the developer hoped to include a new 150-unit apartment building on the west parking lot. Viscardi said that component bumped into a problem and might be revived at a later date.
If approved by the City Council, Viscardi said he could begin renovation this summer and have the complex and 184 parking stalls ready for lease the following spring.
This would be the Kentro Group’s first project in Omaha, Viscardi said. He said his team has been wanting to enter the market for years and the old Scoular site allows the opportunity to play upon the group’s strength of modernizing while retaining the character of vintage structures.
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