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(March 20, 2017)

“The Civic Auditorium site is back on the market,” said Mayor Jean Stothert.

In an email to Mayor Stothert Tuesday, Project 19 LLC Member Zach Wiegert said it would “no longer pursue developing the Civic Site”.  Project 19 was the name given to the project by Tetrad Property Group.

“I had faith in Tetrad and I am disappointed that after almost four years, they cannot complete this project,” said Mayor Stothert.  “We have a lot of interest and investment in downtown Omaha and someone will develop the Civic site.  An interested developer has already contacted me today.”

The City issued the Request for Proposals (RFP) for development of the site in 2014 and selected Tetrad.  The company planned a $320 million mixed-use development that included a 355,000 square foot office tower to house a major tenant to be secured by the developer. 

Tetrad submitted a preliminary plat for the development in 2017. The Planning Board and the City Council approved it.

In February 2018, Tetrad proposed a new Memorandum of Understanding (MOU) that included more than $40 million in taxpayer contributions in addition to over $50 million in Tax Increment Financing and Enhanced Employment Area Occupation tax incentives.

Tetrad asked for:

  • Up to $50 million in TIF
  • Use of the Enhanced Employment Area Occupation Tax to finance maintenance of public areas on the site
  • The City would give Tetrad the land at no cost. The original agreement was for Tetrad to pay $20 per square foot, for a total cost of $7.9 million
  • The City would waive the costs associated with demolition of the auditorium: $3.273 million. Tetrad was originally to reimburse the City for the cost of demolition
  • Parking:
  1. City to build and pay for a new parking garage estimated to exceed $30 million
  1. First rights to lease the existing city-owned garage (Park 5) at no cost to Tetrad for 20 years, which would also displace people who currently lease parking in that garage. The

garage is currently 85% occupied

  1. Sublease the parking lot under I-480 at the same rate the city leases it from the state
  • Commitment of city resources to help secure a major office tenant. In the original proposal, Tetrad agreed to secure the tenant.

The City countered this month will an alternate MOU that would be more affordable for the City and the taxpayers.

The City:

  • Agreed to waive the auditorium demolition expenses to assist in the successful redevelopment

of the site

  • Required the developer to pay the $20 per square foot for the property, a condition of the original RFP. The City would agree to waive that amount with the successful commitment of a major office tenant to the site
  • TIF financing not to exceed 20% of the total costs of the project
  • Agreed to construct and operate the new parking garage (estimated to exceed $30 million) if deemed necessary by the commitment of a major office tenant, offered to the developer at a reduced rate for 5 years
  • Would maintain ownership and control of the existing parking garage (Park 5) and I-480 lot with spaces leased to the developer at a reduced rate for 5 years
  • Would consider use of an Enhanced Employment Area Occupation Tax to support the maintenance of public areas on the site

The City’s offer was conditional on the developer successfully securing a major office tenant with over 1,500 employees.

“I am the steward of the taxpayer’s dollars,” said Mayor Stothert. “We work with all developers, but we must be fair. Tetrad was asking for incentives far beyond what we have done for other developers.”

In its letter terminating the agreement, Tetrad also cited delays in the demolition of the Civic Auditorium and obstacles caused by new developments planned for other city-owned property downtown including the Riverfront, Gene Leahy Mall and Lot B, west of the CenturyLink Center.

“I don’t look at all the development downtown as obstacles, I look at it as progress,” said Mayor Stothert.

The City selected Tetrad to develop the Civic site in August 2014.  An auction to sell the contents of the Auditorium began in October 2014. In the Spring of 2015, Olssen & Associates was hired to develop the RFP for the demolition contract.  The City Council awarded the contract to DeNovo in February 2016.  Shortly after, DeNovo declared bankruptcy; the contract was then awarded to Spiritas which agreed to complete the demolition as scheduled.  The demolition was completed in July 2017, fifteen months later.

Mayor Stothert said the City will develop a new RFP for a mixed-use development as soon as possible. “All development is market-driven.  The landscape downtown has changed a lot since 2014. I feel strongly we will have another developer who will develop this great downtown location.”

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