Developers advance plan for ‘transformational’ development of destination at Nebraska Intersection
This story was originally published in the Nebraska Examiner.
LINCOLN. On Wednesday, developers joined the state Senate in seeking state aid to build a “targeted” retail, sports and entertainment complex that could rival Kansas City’s “Legends” district, which draws 15 million visitors a year.
Such a development—a proposed expansion of the existing 1,000-acre Nebraska Crossings mall in Gretna—could include retail stores new to Nebraska such as Ikea and Nordstrom, hotels and water parks, and regional football and baseball tournament fields.
“This could change Nebraska’s image as a frivolous state,” Gretna Mayor Mike Evans told the House Revenue Committee.
Can change the rules of the game
“It could legitimately be a game changer,” Sen. Lou Ann Linehan of Elkhorn said.
Senator Lou Ann Linehan of Elkhorn (Courtesy of the Unicameral Information Bureau)
Its Proposition 692, Good Life Transformation Projects Act, will help fund such massive projects by earmarking up to half of the state’s 5.5-cent county sales tax revenue for development spending. Various areas of the state may have bid, but the bill’s witnesses on Wednesday focused on the area of Interstate 80 off Nebraska Route 31 in Gretna.
Rod Yates, owner and developer of Nebraska Crossing, said the LB 692 is somewhat similar to “STAR Bonds” – bonds with an expected sales tax income. Such tax-funded government bonds provided $450 million for the development of the Legends District in Kansas City, Kansas.
In addition to over 75 retail outlets, the Legends District is surrounded by several other attractions, including stadiums for professional minor league football and baseball teams, a water park, Kansas Speedway, and the Nebraska Furniture Mart.
At one time, Yates was involved in the multi-million dollar transformation of the Crossroads shopping center in Omaha, but in the end his business partner joined forces with another developer.
“Retail leak” to other states
Promoters said that Nebraska is losing an estimated $1.6 billion a year due to “retail leakage” to other states and that the proposed 1,000-acre expansion of Nebraska Crossing will keep buyers in the state and attract youth sports tournaments now held in other states.
Rod Yates, owner/operator of the Nebraska Crossing mall. (Paul Hammel/Nebraska Examiner)
“Youth sports is a $25 billion a year industry, and Nebraska is getting zero right now,” Yates said.
Robb Heineman, sports developer and co-owner of the Sporting Kansas City pro football team, said Nebraska is “completely underfunded” with football facilities.
He said the Legends area has eight baseball fields and 10 football fields, and is adding a 200,000-square-foot building for sports practice and volleyball. Similar facilities will be provided at the Nebraska crossing, Heineman said.
In recent years, state legislators have spurred the construction of several youth sports complexes, from La Vista to The Valley to Lincoln, which has sparked an “arms race” for families spending on “sports tourism.” But Yeats said there’s still room for more.
Untapped potential
He said that Nebraska Crossing also has untapped potential for retail growth, and that stores that may not be considering locating in Nebraska will be drawn to the new development as it serves the Omaha and Lincoln areas.
“I believe we’re still in the third inning in terms of potential,” he said.
Under the bill, the state will use up to half of the state’s sales taxes received from the intersection of Nebraska and the new Good Life neighborhood towards expansion costs. State benefits will be extended for 25 years.
According to projections provided by the project’s promoters, an additional $20 million in tax revenue per year will be generated over five years, growing to almost $40 million in 25 years.
The promoters said the state’s forgone sales tax revenue would be recouped four years later through increased sales.
Minimum $500 million investment
Under LB 692, a minimum investment of $500 million would be required in a county the size of Sarpi County to qualify for Good Life benefits. At least 20% of sales generated must come from out-of-state buyers, but Yates said 30% of Nebraska Crossing customers are no longer Nebraska residents.
The STAR bonds caused controversy in Kansas, where critics questioned whether they had achieved their ambitious tourism goals.
Linehan, who chairs the Legislature’s revenue committee, said the best type of tax is the one paid by out-of-state residents, and said such revenues could help solve the state’s overreliance on property taxes.
She added that the development would help connect with other tourist attractions in the area, citing Schramm and Mahoney State Parks, the Cloisters on the Platte retreat center and a proposed huge sandbox lake near Linoma Beach.
A fiscal note prepared by the Legislative Revenue Office said the bill could violate the requirement that the state have only one sales tax rate. But Linehan said she would solve the problem.
Yates said that if the state does not help fund the proposed development, this will not happen and the area will be earmarked for the construction of new truck stops or industrial buildings.
“Or we could have a beautiful new destination,” he said. “This could be the front door to Nebraska if done right.”
The Revenue Committee took no action on LB 692 following Wednesday’s public hearing. But Linehan said passing the bill would be her priority this year.
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