The area around TD Ameritrade's new, $130 million headquarters is now cleared for redevelopment that could qualify for tax incentives.
But the Omaha City Council's 5-2 vote to deem part of Old Mill as blighted and substandard came despite testimony from neighbors who said the area barely qualified as such under state law and who are worried that the designation could harm their property values. The council also approved blight designations for three other sections of land throughout the city on Tuesday.
Council members must eventually decide whether forthcoming plans for the area receive tax-increment financing. City planning officials and a TD Ameritrade representative said the Old Mill blight designation would clear the way for economic development and needed improvements to the area's streets.
Residents who packed council chambers to listen to the two-hour debate largely disagreed.
“We're asking you to look at the spirit of the law,” area resident Robert Lonnecker told the council. “Is this right? Is this fair?”
Councilman Franklin Thompson repeated the theme of Lonnecker's words when he explained his “no” vote.
“Sure, we are razor thin within the lines of the law. But that's not the spirit of the law,” he said. Councilwoman Jean Stothert also voted against the proposal.
Councilman Chris Jerram told residents that they might encounter greater demand for their property as redevelopment progresses. He also noted that the city no longer places its sole focus for redevelopment projects east of 72nd Street.
“Whether we like it or not, there is a ‘blighted and substandard' or community redevelopment area migration,” Jerram said. “It's moving west.”
City officials said they would use roughly $4 million in diverted property tax revenue from TD Ameritrade's project to improve streets and create bike-friendly infrastructure, such as a pedestrian bridge to cross the Papio Creek, in the Old Mill area. Streets in line for improvements include 108th Street, Old Mill Road, Davenport Street and a West Dodge Road frontage road.
Officials said the tax debt could be repaid within five years.
“Believe me, we understand that this can be an emotionally charged process,” said city Planning Director Rick Cunningham during his comments to the council.
But approving the redevelopment area, Cunningham said, was critical to spur economic development in Old Mill. Property values typically increase after redevelopment areas are created, he said.
The “blighted and substandard” legal designations are needed under state law to clear the way for tax-increment financing for new developments. The property tax incentive can help fund demolition costs, site preparation or street and sewer upgrades.
Until recently, it was expected that full property taxes from the financial giant's headquarters would go to fund schools, city services and other local governments.
The firm's 2,000 employees, however, will likely strain Old Mill Streets because they aren't well-connected to other major roads. Diverting property taxes to street improvements means the headquarters near 108th Street and West Dodge Road could stay off the tax rolls for two to five years.
State law says a project may tap tax increment financing only if it needs that incentive to go forward.
Patrick McNeal, president of the Silverwood Homeowners Association, said his gated community of 39 condominiums would still suffer from the blighted designation.
“We understand the City of Omaha desperately needs funds for infrastructure improvements, but we feel the city misuses and subverts the use of tax-increment financing when it proposes to reclassify established neighborhoods in order to gain TIF authorization,” he said.
In addition to Old Mill, the City Council approved three other blight designations Tuesday:
>> 45.6 acres in old downtown Elkhorn, roughly bounded by 204th Street on the east, 207th Street on the west, Glenn Street on the north and Blondo Street on the south.
>> 24.7 acres on the southwest corner of 72nd and L Streets. The Menards chain of home-improvement stores seeks to build a retail store at that location and wants TIF funds to offset unexpected costs to remove the land from a floodplain.
>> 345.9 acres in north Omaha, roughly bounded by 42nd Street to the east, 49th Street to the west, Nebraska Avenue to the north and Fort Street to the south. Service organizations hope to redevelop the now-closed St. Richard Catholic School near 44th Avenue and Fort Street. A commercial area at 42nd Street and Sorensen Parkway could also be improved.
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