UNMC sparks long-term shifts on corridor

A new housing proposal draws ire from area residents

By: - January 26, 2022 6:02 am

New row houses, apartments and retail buildings would rise northwest of Saddle Creek Road and Pacific Street near UNMC’s campus. (Courtesy of Studio 951)

OMAHA — A $44 million housing and retail campus appears to be next in the lineup of projects fast and furiously changing a midtown Omaha corridor anchored by the expanding University of Nebraska Medical Center.

Nearly 200 market-rate apartments and row houses, a restaurant and a bank would rise on about five acres northwest of Saddle Creek Road and Pacific Street under a proposal by Commercial Investment Properties. To make way, five houses, a sixplex and commercial buildings occupied by landscaping, electrical and party rental equipment businesses would be demolished. 

Developer CIP also seeks City of Omaha approval for tax-increment financing, a public subsidy intended to revive blighted areas by allowing property tax money generated from a new project to be used on eligible development costs. In this case, instead of going to public coffers such as school districts or city government, the new property tax proceeds for about 15 years would be paying off a developer’s loan of $5.1 million (not including interest).

CIP’s proposed apartments — which feature a courtyard, outdoor pool and 280 garage spaces — is the latest in a flurry of private and publicly funded real estate developments, which are poised to shift landscape, population and more in that midtown area for years to come.

Attracted to urban core

Dr. Jeffrey Gold, chancellor of UNMC, calls growth on and around the state-supported campus astounding.

“It just continues to accelerate,” he said. “We continue to recruit incredibly successful faculty, students and staff. That creates resources. … Resources attract more people. It’s a self-perpetuating and accelerated cycle.”

Fueling momentum are job-producing facilities such as the relatively new Buffett Cancer Center and the multibillion-dollar Project NExT, a federal disaster response and medical training center planned to rise on the UNMC and Nebraska Medicine headquarters property.  

Leaders estimate that NExT could create more than 8,700 permanent jobs and $1.3 billion in annual economic impact. 

Last fiscal year, UNMC’s outside grant and contract funding for research, education and public service hit a new record of $228 million and triggered demand for more workers. Gold said many newcomers want to live near their job site — including himself (Gold lives in Midtown Crossing). And, he said, many are attracted to the urban core for its entertainment and arts offerings.

UNMC continues to compete with private developers to buy and control property around its headquarters. The university also has called on a few to help reshape a swath west of Saddle Creek Road as an expansion of its campus.

Bustling corridor

Among projects shaking up that Saddle Creek corridor:

  • A massive 350,000-square-foot administrative complex for UNMC offices, as tall as 17 floors and with restaurants and retailers open to the public, is to start rising as early as this spring at the southwest corner of Saddle Creek Road and Farnam Street.
  • The City of Omaha has pledged $48 million from transportation and lease-purchase bonds (saying it would not increase taxes) to develop roads, infrastructure and a parking structure on that western expansion of the medical center. The garage, attached to the administrative facility, will sport a unique feature: a pedestrian overpass resembling a small park, crossing over Saddle Creek Road. The goal is to provide safe passage for those walking and biking between the main UNMC campus and the new facilities. 
  • Just west of the administration building will be the “Innovation Hub,” which will renovate and add to the old Omaha Steel Castings industrial tract. Led by GreenSlate Development, the hub will house medical related businesses such as UNeMed, UNeTech and the Nebraska Business Development Center. The site is to include a food hall and community amenities, possibly including hotel rooms.
  • The northwest corner of Saddle Creek Road and Farnam Street has been cleared of buildings and is controlled by UNMC, which has yet to announce a future use. Gold said possibilities include swapping the land for other property UNMC is eyeing.

The medical center’s expansion west of Saddle Creek encompasses about 30 acres, the size of 22 football fields. That doesn’t include numerous newly constructed, privately led apartment buildings, hotels, restaurants and businesses that have claimed a piece of midtown in recent  years.

Shops and retailers in the trendy, fast-growing Blackstone district near 40th and Farnam streets, for example, feed upon activity spurred by the medical campus, developers of that strip say. 

Among others: the 283-unit Duke apartments north of 46th and Dodge streets, and the Dundee Flats mixed-use building at 49th and Dodge and a planned hotel northeast of Saddle Creek and Farnam, adjacent to the new Home2 Suites by Hilton. 

‘Monster’ structure criticized

The proposed CIP project, which is west of the relatively new 158-unit Bos apartments, recently received the green light from the Omaha Planning Department and Planning Board. Necessary zoning and TIF approval have yet to be approved by the City Council.

New rental housing and retail buildings would rise northwest of Saddle Creek Road and Pacific Street near UNMC. The retailers to front the Saddle Creek corridor. (Courtesy of Studio 951)

Area residents who spoke against the project at a recent public hearing — a few called it a “monster” structure — raised concerns about traffic and congestion. They also objected to the proliferation of midtown apartments. 

“I don’t want to look out of my house and see a slew of six-story apartment buildings,” said Jordan Scupien, who lives near 46th and Pacific streets. He added, “How many banks do we need on this street?”

He was among those at the hearing who questioned the use of TIF, saying the tool should be reserved for neighborhoods where developers are “actually taking a risk.”

If the subsidy is approved, Scupien said, the city should require inclusion of some “affordable” units. As it stands now, rents at the site would range from $1,064 for a studio with 516 square feet to $1,700 for a two-bedroom unit double that size.

Project site Commercial Investment Properties (City of Omaha)

To that point, Cydney Franklin of the Planning Board encouraged people to rally their elected officials into enacting change on the city or state level.

“There are some of us on this board, myself included, that would agree with you that a recipient of a public subsidy should have some requirements for affordability,” Franklin said. “But at this time, we have no authority to require that of a developer accessing a public subsidy like TIF.”

Tired corridor?

Larry Jobeun, CIP’s attorney, said the developer, indeed, was in risky territory by trying to revitalize old infill property with constraints such as steep grade changes and a high-voltage power line and tenants to relocate. 

He envisions the project sprucing up a tired part of the corridor. The  developer is trying to fit in with the adjacent neighborhood by lining the west side of the housing complex with pitched-roof, three-story row houses. Elsewhere, apartments stack four stories on top of two underground parking levels.

The two stand-alone commercial structures — a bank and a restaurant or coffee shop — would face the busy Saddle Creek Road.  

CIP said in city documents it hopes to begin construction soon and to complete the project in 2024. 

Meanwhile, UNMC officials are on the lookout for more parcels to buy around the campus, Gold said. He said it’s exciting to watch the real estate renovation, construction and bustle.

He noted that the medical center’s investment also extends to new clinical space in west Omaha — and in rural Nebraska. UNMC and its hospital partner, Nebraska Medicine, say that they have a combined annual economic impact of $5.9 billion statewide. 

“It’s not just Omaha-centric growth, it’s state growth,” he said.

 

What is the latest with Project NExT?

Dr. Jeffrey Gold, chancellor of the University of Nebraska Medical Center, told the Nebraska Examiner there is little doubt the all-hazards response facility that’s expected to cost $2.6 billion to $4.3 billion will be built on campus. 

The outstanding questions, he said, are: how big and over what stretch of time.

While Congress has yet to finalize key budget details to determine those answers, Gold said UNMC and Nebraska Medicine have pushed ahead with planning and are about to start site preparation and demolition of some aging buildings. He said his team hopes to start identifying contractors soon for the new hospital and training facility, which would contain federally funded building wings equipped to respond to a host of national disasters.

The main facility is expected to rise north of the Buffett Cancer Center in an area that includes the Munroe-Meyer Institute, which is relocating to the Aksarben Village area.

Gold said he hopes to start seeing “steel in the ground” in 2023, but that will depend on when and how much funding the federal government commits. He said the deliberation process is ongoing.

Meanwhile, private fundraising continues, with roughly $400 million raised so far in private philanthropy, Gold said. 

The City of Omaha has pledged about $45 million for NExT from occupation taxes collected on tobacco and vaping products. 

The State of Nebraska has approved $300 million, contingent on additional financial support for the effort from other parties.

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Cindy Gonzalez
Cindy Gonzalez

Senior Reporter Cindy Gonzalez, an Omaha native, has more than 35 years of experience, largely at the Omaha World-Herald. Her coverage areas have included business and real estate development; regional reporting; immigration, demographics and diverse communities; and City Hall and local politics. She has won awards from organizations including Great Plains Journalism, the Society for Advancing Business Editing and Writing (SABEW) and the Associated Press. Cindy has been recognized by various nonprofits for community contributions and diversity efforts. She chairs the board that oversees the local university’s student newspaper.

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