Omnibus bill aims to help make Nebraska Crossing a mecca for ‘retail tourism’

LINCOLN — For years, the State of Nebraska has avoided giving incentives for retail development.

The thinking has been that helping build a new shopping center just encourages existing businesses, and existing spending, to shift to a new location, generating little net gain in tax revenue or jobs.

Plus, shopping center jobs don’t pay high wages, and retail developments don’t last as long as other projects that get state tax incentives, such as factories and corporate expansions.

But all could change under a multi-faceted economic development bill quietly working its way through the Nebraska Legislature.

Large package of economic development bills

Debate could begin as early as this week on Legislative Bill 727, a package of more than 20 bills aimed at increasing economic activity lumped together.

There’s something for everyone in the measure, including incentives for renovation of Omaha’s CHI Center, construction of a convention center in Lincoln, a tax break for retired firefighters, tax credits for those selling soybean-based biodiesel and tax credits for those restoring historic buildings.

There’s even a portion of the bill that would allow bond financing of state highways, something that has been avoided in the past in this traditionally pay-as-you-go state.

But the headline proposal in LB 727 is aimed at helping Nebraska Crossing finance a proposed 1,000-acre expansion so it could become a “retail tourism” destination, comparable to the Legends complex in Kansas City.

State Sen. Lou Ann Linehan of Elkhorn, the main architect of the LB 727 package, said that providing incentives for this retail development is different because it would draw in retailers who have bypassed Nebraska in the past, such as IKEA and Crate & Barrel. And, because it would have unique stores, it would draw shoppers from outside Nebraska, generating spending — and taxes — now flowing to places like Kansas City, Denver and Minneapolis.

Right now, the area around Nebraska Crossing is “a corn field,” the senator said, and unless the state helps out, the area will become a forest of strip malls, like those that already exist along 204th Street in west Omaha, or another truck stop.

‘A huge win’

“I’m not a lover of incentives,” Linehan said., “but the money that we’re losing to other states and the money we could bring in here, I see it as a huge win.”

Under her initial bill, the “Good Life Transformational Projects Act,” half of the state’s 5.5-cent sales tax generated by the expansion would go to the retail development to help finance the expansion.

At a legislative hearing last month, Nebraska Crossing owner/developer Rod Yates and Gretna Mayor Mike Evans touted the proposal as ending an estimated $1.6 billion a year of “retail leakage” to other states, and ending Nebraska’s image as a “fly-over state.”

They also envision a complex of soccer and baseball fields and motels that would lure “youth sports tourism” that is now going to other states because of a lack of complexes here.

The Gretna exit on Interstate 80, Linehan said, is the ideal location because it sits nearly midway between the state’s two largest cities.

 “We’re never going to get a Crate & Barrel or the stores people drive to Kansas City, Denver or Chicago unless we do it between Omaha and Lincoln,” she said.

Yates was involved in the development of the Legends complex in Kansas City, Kansas, which includes 100 “designer” outlet stores and restaurants. It received bonds backed by state sales tax-backed to help develop it.

The Legends complex draws an estimated 15 million visitors a year because it sits next to the Kansas Speedway, a Great Wolf Lodge indoor water park, Nebraska Furniture Mart and the stadium for the Sporting Kansas City soccer team.

But the quiet advancement of LB 727, as well as its broad scope, has some officials and developers worried.

La Vista Mayor Doug Kindig, whose community has helped retail development such as Cabela’s and the new City Centre area in that Omaha suburb, urged state lawmakers to slow down on advancement of such a huge package of proposals.

‘Very few’ aware of bill

“Very few people know about this bill,” Kindig said last week.

Among his concerns is that an expansion of Nebraska Crossing will only “cannibalize” existing retail outlets, leading to them moving from their current locations to the Gretna area. And, Kindig said, it’s not guaranteed that unique retail stores will come.

George Achola, a vice president of real estate for Omaha-based Burlington Capital, said he’s also concerned that the Nebraska Crossing aspect of the bill is narrowly tailored to benefit one project and that it continues suburban sprawl of development, including the proposed youth sports complex at Nebraska Crossing.

Not all families have the luxury, time or funds to travel to west metro Omaha area athletic complexes, said Achola, a former Nebraska football player.

Kindig estimated that the state would be foregoing million of dollars a year in sales tax revenue to the Gretna development. He questioned whether there was enough oversight on how that money would be used.

Linehan said the package of bills is not in its final form, and she is working with those who have concerns. Plus, she said, the Nebraska Crossing portion of the proposal has been amended so it could apply to other areas.

The glacial pace of action at the Nebraska Legislature this year, caused by repeated filibusters launched in protest of a bill blocking gender-affirming care for minors, has spawned a forest of so-called “Christmas-tree bills” such as LB 727.

‘Christmas trees’ aplenty

Because debate has been limited to a smaller number of bills, legislative committees have opted to lump together several similar proposals into single bills in hopes of getting the entire group passed.

They’re called “Christmas trees” because they are stacked with multiple ornaments — in this case, legislative bills.

Linehan, who chairs the Legislature’s Revenue Committee, has a black belt in putting together packages such as this. Last year’s income- and property-tax relief package was an example, as are the twin tax relief bills advancing this year.

Plus, the senator added, the LB 727 package includes three senator priority bills and one committee priority bill that might not get passed this year without climbing onto the Christmas tree.

‘Everyone’s getting something’

“Everyone’s getting something here,” Linehan said. “That’s how you get big packages done.”

The downside of Christmas tree bills is that they may not get as much consideration as when two dozen bills face three rounds of debate each. And it can serve to stifle opposition — a legislator and lobbyists may not oppose a portion of the package they don’t like because part of the package is something they do.

Lincoln Sen. Eliot Bostar, a member of the Revenue Committee, has three bills as part of the LB 727 package, including a measure that would help Lincoln build a long-sought convention center in the downtown area.

Bostar said the estimated $120 million convention center is a top priority for Lincoln. His goal was to help, thus adding his LB 732 to the Christmas tree made sense, the senator said.

“If we can pass this bill in its current form, that will create the right environment for the private investment and the city’s investment, to make this a reality,” he said.

Bostar said only bills that had unanimous support from the Revenue Committee made it into the committee’s Christmas tree.

He added that he supports the Nebraska Crossing portion because the bill requires a retail development to meet certain investment and job-creation threshholds in order to qualify for the “Good Life” sales tax benefits.

In addition, a Good Life district, if located in a county the size of Sarpy County, must show that it draws at least 20% of sales from out-of-state residents, that it has attracted “new-to-market” retailers, and that it will generate at least 3 million visitors per year.

Linehan said providing state incentives for retail may be new, but in the case of Nebraska Crossing, obtaining half of the new sales taxes generated by an expansion of the mall is better than “half of nothing.”

“This guy Yates has done this,” she said, referring to the Legends in Kansas City. “It’s not like we’re taking a risk on something that hasn’t been done before.”

(Nebraska Examiner reporter Cindy Gonzalez contributed to this story)