Omaha makes move to develop Midtown
Omaha is the commercial and transport hub of Nebraska, it is the state’s largest city and is the home to five fortune 500 companies and has been named by Forbes as the “Best Bang-For-The-Buck” city in the US and one of those leading the country’s recovery.
But, like cities across the United States, the global downturn hit hard and caused further deterioration of areas that were vulnerable to social decay even before the recession.
One such area is in Midtown Omaha. The city council of Omaha recently designated parts of the 3.6 square mile city neighborhood as “blighted and substandard”.
This is due to a lack of investment and capital flight from the city in the wake of the recession, as well as a general trend that has been going on for many years.
Midtown as a whole, however, is a fairly upward moving neighborhood of the city.
Over the last four years Omaha news media have reported appreciating house prices, investment in the area by the private sector and entrepreneurs, as well as the opening of large businesses near Midtown, have all contributed to improving conditions in the neighborhood.
Midtown is home to 28,000 residents and 48,000 employees and is one of the most racially diverse and picturesque areas of the city with its tree-lined streets and ‘front-porch’ homes, dating back to the 1800s.
Factors such as these are the area’s strengths that the city council is hoping will help under-developed areas of Midtown find investment.
The “blighted and substandard” designation of parts of Midtown is not just a description, it is a term that has real application in local law, for its will enable these parts of Midtown to find investment through a range of incentives that can be put forward by the city council.
The most important of these incentives is TIF or tax incremental financing.
TIF is a mechanism that, put simply, enables local governments to spend money on projects in the present based on projected tax revenue that will be generated through the project in the future. A shopping mall, for example, may therefore be built for $100 million, because its construction will generate several million dollars in tax revenue each year, thereby paying for itself.
There are several thousand TIF zones in operation across the United States. The mechanism was exported across the US by California, which invented the investment mechanism in 1952. In the State of California, TIFs raise about $10 billion in tax revenue, have $28 billion in debt and contain a land value of over $600 billion. The incentive therefore has been proven to work, its supporters assert.
It is hoped that dilapidated and empty buildings dotted around Midtown will become sought after locations for new businesses wanting to set up shop in the area or open a new outlet in the city and take advantage of Midtown’s wider highly-developed economic activity. One such example of an entrepreneur using TIFs is Dave Jenkins, who opened a photography studio in an abandoned building Midtown.
“It was a complete revitalization of the building. We added insulation, we stripped the floors, we painted the walls,” he told Omaha news media, adding that his investment is something many small business owners can do.
This is an important part of the initiative, attracting small business as they are, after all, the major source of tax revenue for any local government. But, a community coalition called Destination Midtown is also encouraging and indeed funding major developments aimed at having a ‘trickle down’ effect for the wider area.
One such major development is that of the Midtown Crossing at Turner Park, a several acre mixed-use development that will incorporate condos, apartments, an expansive urban park, a retail and shopping area, as well as a health spa and gym, a movie theatre and a hotel. The park areas alone will add seven acres to the urban parkland of Omaha.
Gary Peterson, the chairman of Destination Midtown, is pleased with the new designation due to its capacity to attract investment through incentives.
“You're going to see a lot of pockets get filled in,” he told Omaha news media. “I think there's been some areas where you've seen businesses move out and you're going to see development centers and you'll see some housing developments get started with this.”
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Omaha Feature
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Omaha makes move to develop Midtown
TIFs have their critics, but the progress thus far seems to show that incremental tax financing may work in Midtown Omaha and provide the investment that some pockets of the neighborhood need to revitalize the area.
Omaha is the commercial and transport hub of Nebraska, it is the state’s largest city and is the home to five fortune 500 companies and has been named by Forbes as the “Best Bang-For-The-Buck” city in the US and one of those leading the country’s recovery. Read more
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