The Omaha City Council met Tuesday to approve the redevelopment agreement for the proposed streetcar, as well as an agreement with the Omaha Development Foundation for preliminary engineering and design work on the project.
The redevelopment agreement lays out the collaboration with the Omaha Streetcar Authority (OSA), but the City Council made sure there were plenty of “off-ramps” if they decide not to move forward with the project. Council President Pete Festersen said Tuesday’s vote wasn’t a “go or no-go” on the streetcar.
An analysis by consulting firm MuniCap, Inc., is still being conducted, but Jennifer Taylor from the city law department said the preliminary data is consistent with existing estimates and timelines. Still, multiple City Council members were concerned the report wasn’t yet available.
“It’s rather last minute, like a lot of things have felt to me on this project,” Festersen said. “Some council members I know had that briefing at one o’clock, one hour before our two o’clock meeting.”
Taylor said MuniCap’s report will be available before the city can start selling bonds to fund construction. Rather than taxpayers, private investors will take on the risk by purchasing the bonds. The city will pay them using proceeds from tax increment financing loans (TIF), which sets property taxes at their current rate even as improvements are made. The practice saves developers money — in this case hundreds of millions in taxes that would otherwise go back to the city.
The redevelopment agreement authorizes more than $356 million in TIF. The plan identifies three sources, with current estimates adding up to $354 million:
- $50 million from extending current TIF projects’ terms from 15 to 20 years
- $218 million from new projects, which will donate 10-25% of their TIF proceeds
- $86 million from the increased value of every property within the TIF district
OSA President and local developer Jay Noddle said although the City of Omaha hasn’t used this funding mechanism — paying municipal bonds with TIF proceeds — before, it’s increasingly popular in other cities. He said that the streetcar will spur economic development throughout the city.
Councilmember Juanita Johnson also requested that MuniCap explore additional routes in their analysis, citing the lack of public transit connecting North and South Omaha.
Although money is not yet going directly towards the streetcar, the City Council did allocate up to $3.4 million Tuesday to the Omaha Development Foundation for engineering and design services. Noddle said the initial work would be “early due diligence,” surveying the proposed route and investigatory work.
The city wouldn’t be obligated to pay the full amount if construction on the streetcar isn’t approved. The preliminary work may cost the city less than $1 million, which would come out of the 2022 Parking and Mobility fund. If the project does move forward, the full amount would eventually be refunded using bond proceeds.
“It makes a lot of sense to get started,” Noddle said. “Would we like it to be after the fact, after the bond proceeds are in hand? Certainly we would, but we don’t have the luxury of that kind of time.”
The City Council also moved forward with the relocation of the W. Dale Clark library by approving a $678,000 agreement with Cox Contracting for the demolition of the current site. The City Council also approved a contract with Ronco Construction for construction services associated with the relocation to 1401 Jones Street, and a contract with The Weitz Company for relocation to the 3020 South 84th Street site.
The Douglas County Board of Commissioners met Tuesday to allocate funding from the American Rescue Plan Act (ARPA). The Board approved $500,000 to Charles Drew Medical Center for a mobile health care unit, $22,600 to Douglas County Historical Society, and $50,000 for a new facility for the North Omaha Cultural Center.