OMAHA — With Wednesday’s ceremonial groundbreaking, Mutual of Omaha kicked off construction of its $600 million new headquarters poised to outstretch all buildings in Nebraska and five other surrounding states.
At 677 feet tall, the glassy tower slated to open in 2026 is to include 800,000 square feet of office, meeting and amenity space.
Public use limited to city-funded garage
It is to feature a “sky lobby,” a food court, a fitness center, landscaped terraces and a million square feet for a 2,200-stall city-funded parking garage.
However, aside from garage parking on evenings and weekends, the project approved for more than $60 million in public tax-increment financing won’t offer retail, gathering or other spaces for public use.
There will be times that people from outside the insurance and financial services company will be invited to events or meetings, said Mutual CEO James Blackledge. But the skyline-changing structure, at the entrance to the recently revamped Gene Leahy Mall, is to be devoted to its 4,000 or so local employees.
“Our investment is actually in our workforce,” Blackledge said. “That’s the central focus of our investment.”
During the event that drew top city and business leaders to a downtown tent, Blackledge and Mayor Jean Stothert also touted growth they expect the Mutual project to spur around the city block it will occupy.
That block, bounded by 14th, 15th, Douglas and Farnam Streets, is the former site of the city’s main W. Dale Clark Library, which was recently demolished.
“The momentum that we have to forever change our urban core is undeniable,” said Stothert. She compared the Mutual plan, which is tied to the planned $300 million-plus modern streetcar system, to a revitalization effort launched a half-century ago with creation of the original downtown mall and lagoon.
According to Stothert, more than $4 billion in development over the past five years has been completed, is in progress or is planned stretching from downtown to midtown in the state’s largest city. That includes new facilities at the job-magnet University of Nebraska Medical Center.
Blackledge said Mutual, founded in 1909, also remains committed to the midtown campus it has called home since about 1940. The area at 33rd and Farnam Streets is along the streetcar route, which Mutual has said was integral to its decision to relocate to downtown.
Jason Lanoha, whose development company is involved in reshaping both the downtown and midtown Mutual sites, earlier told the City Council that roughly $400 million was to be invested in the revamp of Mutual’s midtown campus.
Said Blackledge: “So from the Med Center to the riverfront, linked by the modern streetcar, really the potential for development is virtually unlimited.”
The related plans have not come without controversy — and hefty public incentives.
In addition to the Mutual headquarters’ tax-increment financing package — which is among the highest amounts ever approved by the city — the streetcar project is to be financed with bonds that are to be paid off with TIF revenue.
Generally in a TIF-approved city project, increased property taxes generated on new development go to pay off eligible redevelopment costs for a period of 15 or 20 years, instead of being distributed to traditional recipients such as school districts.
After the TIF financing period, the higher property tax revenue starts flowing to those traditional recipients.
Increased use of TIF in Nebraska, a longstanding economic growth tool authorized by state law, has raised eyebrows of some, including at least a few in the current Legislature.
State Sen. Lou Ann Linehan of Elkhorn, for instance, has introduced three bills this session related to the streetcar, saying she believes a state-level airing of the plan is needed.
Seed planted two years ago
Blackledge on Wednesday reflected on the last two years since Mutual’s downtown plan hatched.
While Mutual had long been contemplating a new corporate base, Blackledge noted a January 2021 meeting he had with Investors Realty broker Ryan Zabrowski and Jason Lanoha of Lanoha Real Estate Company.
“The pitch involved a streetcar, a move downtown and the redevelopment of our midtown campus — simple stuff like that,” Blackledge said, with a chuckle.
The idea bloomed into a project announced a year later, in January 2022, which linked the streetcar and the Mutual headquarters.
Among other elements of the city-Mutual agreement, the city is to pay about $100 million for the garage attached to the downtown tower. Mutual is to rent spaces from the city for its employees during the day, while the city is to lease spots to the public during other times.
The city also is to buy three parking garages on Mutual’s midtown campus, with those stalls to be leased to the public.
Flexible work model embraced
Blackledge said the downtown tower is designed and sized to support a flexible work model that acknowledges many employees want to work at least some of the time from home.
The new high-rise’s 800,000 square feet of office space compares to about 1.7 million square feet at Mutual’s current headquarters, which is more spread out.
Mutual officials said the new tower will be the tallest in Nebraska, Iowa, Missouri, Kansas, South Dakota and Wyoming.
A First National spokeswoman said Wednesday that the bank’s downtown office tower, which is currently the city’s tallest, is 633 feet high, putting the new Mutual at 44 feet higher.
Known as Project Beacon, Blackledge said the office structure will be a “beacon inviting employees to a new and modern workplace.”
“It will also be a beacon for vitality, development and investment in our downtown,” he said.
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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.