OMAHA, Neb. (KMTV) — It will be one of the biggest projects in Omaha history, in one of the most pivotal and busiest areas in the city — replacing the old mall that stood for decades at 72nd and Dodge Streets.
A modern, urban sprawl of shops, apartments, offices, bars and restaurants that’ll cost over $500 million.
The project first needed city council approval for tax increment financing, also known as TIF.
Omaha Mayor Jean Stothert said the new development will be a cultural, entertainment and leisure destination in the city.
“Without our support and your approval of the TIF application, this project will not move forward,” said Stothert.
It begs the question, how exactly does TIF work?
Think of it like a loan you pay back in your property taxes.
In this case, the developers are getting $79 million to jump-start the project. With a huge increase in property valuation, the owner pays that back through property taxes, over a period of 15 years.
In this case, the value of the property is expected to jump 3200%, going from around $13 million to $418 million.
While the city never explicitly spends the money, critics take issue with it, saying those property tax dollars should go where they’re supposed to go. Specifically, government-funded organizations such as school districts.
But supporters of TIF point to the millions in additional property tax revenue local governments have, after the 15 year period.
In this case, developers are expecting an additional $9.5 million annually going to an array of local organizations. Those include Westside Public Schools, Douglas County and the City of Omaha.
There were several opponents who questioned the TIF funds and worried the city has bigger issues that the council should address.
“I think your goal as a city council is to vet these projects and make sure they’re truly benefitting the city at large. Not in 15 years, when the tax finally catches up to us, but like...right now,” said Sarah Johnson, who testified in opposition, saying she wants to see the council focus on affordable housing.
The Crossroads project is mammoth. It has an estimated cost of $554 billion and would come complete with housing, office, entertainment, retail and restaurant space.
Developers believe it would add 3,200 part-time and full-time jobs and would make the area extremely walkable — with a plaza, open space and sidewalks all around. Those in favor said it’s how future developments should look like.
“This isn’t just a neighborhood thing, and actually it’s not just a 2022, 23, 24...it’s a 2039 thing,” said Marty Hosking, a supporter of the project.
The council voted unanimously to approve the TIF funds. Pete Festersen, who represents the district, said it’s important to maintain the emotional heart of the city.
“My constituents and my neighbors have waited a long time to see this happen. It’s a huge redevelopment in our city and will be a positive addition and positive re-investment in the heart of our city,” said Festersen.
Councilmember Aimee Melton said the project will not raise taxes and in fact, may help them go down — or at least keep them from going up.
“This is how we keep property taxes from going up. We expand the revenue base so that we're collecting more money from development. This is the best way to grow our city," said Melton.
The developers plan to keep a few portions of the Crossroads Mall area. Areas making the cut include the parking garage which they’re expected to renovate and the Target building which is owned by the Target Corporation.