Omaha City Council approves $80 million TIF request for redevelopment at Crossroads

Omaha, Neb. (Omaha.com) – New shops, offices, restaurants, apartments and entertainment venues could come to life at the former Crossroads Mall as early as late 2024.

The Omaha City Council on Tuesday voted 7-0 to approve an $80 million tax-increment financing request for the project, an award that should help developers deliver on a $553 million redevelopment vision at the site near 72nd and Dodge Streets.

KJ Crossroads Venture LLC, made up of Omaha-based Lockwood and Century development companies, also plans to include public plazas, artwork and about 4,000 parking spots.

“The Crossroads will become a commercial, residential, entertainment and leisure destination at the true crossroads of our city,” Mayor Jean Stothert said in remarks to the council.

The project’s $80 million TIF request had raised eyebrows among opponents, some of whom say the city has been too generous in granting the tax incentive that is meant to spur development in blighted areas.

Under TIF, the developer of a city-approved project takes out a private loan to help cover some expenses. The loan is paid back, generally over a 15-year period, by using the increased property taxes that are generated on the new development. During the TIF period, the property owner continues to pay a portion of property taxes to local governments based on the valuation that existed before any improvements.

After the TIF loan is repaid, property taxes collected on the higher-value, improved property then start flowing to those local governments.

In the case of the Crossroads, a projected total of $121 million in property taxes on the new development will have been diverted to pay principal and interest on the $79.4 million loan. But after the loan is paid, local government entities would stand to gain an estimated $9.5 million a year in property tax revenue.

City officials and proponents contend that the projects that receive TIF — and the extra tax revenue from them — wouldn’t have occurred at all without the incentive.

Councilwoman Aimee Melton noted that if a project falls through, the risk is on the developer to pay back the loan, not the city. Projects like the Crossroads, that expand the city’s tax base, are how the city can continue to grow and drive down property taxes, she said.

“This is also going to spur development all around this area,” Melton said.

Sarah Johnson, one of a couple opponents who spoke Tuesday, said she’d like to see the city award TIF to projects that produce a benefit sooner, such as low-income housing developments.

“The people that are going to be working at this development aren’t even going to be able to live in the apartments that are next door,” Johnson said. “That seems problematic.”

Sarah Johnson, one of a couple opponents who spoke Tuesday, said she’d like to see the city award TIF to projects that produce a benefit sooner, such as low-income housing developments.

“The people that are going to be working at this development aren’t even going to be able to live in the apartments that are next door,” Johnson said. “That seems problematic.”

Jude Beller, Lockwood’s senior vice president of development, told the council that the 40-acre campus will include about 2½ acres of public plaza space and more than 2 miles of sidewalks. The plan also reconfigures the street layout on the site to match Omaha’s grid system.

“Quite a bit of this square footage … will be dedicated for a public amenity, or public gathering space, or otherwise dedicated to the public,” Beller said.

Demolition of the mall, which began in December, is expected to be complete in May. Grading and infrastructure work will take about a year. The first businesses and tenants could be occupying buildings by late 2024 or early 2025, Beller said.

The redevelopment team, in conjunction with the city and transportation advocates, has kept different modes of transit in mind as they’ve designed the Crossroads overhaul. Most of the sidewalks on the property will be 10 feet wide, including the one that will run along Dodge. Councilman Pete Festersen noted that the distance is wider than many of the city’s trails.

The plans also call for various bicycle parking options as well as a Heartland BCycle dock expected to sit near an existing ORBT bus line station on the corner of 72nd and Dodge — allowing cyclists and bus riders easier access to the development. There’s also talk of the Keystone Trail one day connecting with the property.

Those options were good news to Cyndonna Tefft, a nearby small-business owner who is part of Mode Shift Omaha, a local transportation advocacy group that has discussed transit options with the developers.

“It’s exciting to see the connectivity this project will have,” Tefft told the council.

Diners, drinkers and overnight hotel guests at the Crossroads may end up paying a bit more on their bill. The developers anticipate applying for an Enhanced Employment Area occupation tax — similar to ones in the Blackstone and Capitol Districts — to recoup some of their project’s costs. The redevelopment is expected to create 3,200 full- and part-time jobs.

There are also ongoing discussions on whether the city may buy the 2,200-stall parking garage north of the Target store. Both the Target and the garage will remain as part of the redevelopment.

About one-third of the campus will contain retailers, restaurants, hotel space and entertainment and fitness options; another third will go toward office space; and the final third will be for multifamily and senior living.

“Pure work, play and living quarters, all in one site,” Beller said. “We’re proud of that.”