NE legislative effort to re-energize North and South Omaha hits milestone

LINCOLN — It’s been about 18 months since a pair of Nebraska lawmakers launched an unprecedented, multimillion-dollar plan to essentially reset historically neglected North Omaha neighborhoods they represent. 

South Omaha eventually was included in what the Legislature last year adopted as the $335 million Economic Recovery Act to boost the state’s most disadvantaged and pandemic-impacted areas.

Still, certain details had to be hammered out — namely the selection of South and North Omaha ventures that would be awarded the bulk of that public funding to carry out economic growth goals. 

On Thursday, the last day of its 2023 session, the Nebraska Legislature tied a bow on an updated plan governing future delivery of $225 million in grant money approved last year.

Some funding from the original act already has been disbursed, and lawmakers this year switched some funding sources because of looming deadlines. But when fully implemented, officials say roughly $400 million will have been invested into North and South Omaha as a result of the past two years of work. 

As approved Thursday in a 37-8 vote, Legislative Bill 531 also added new funding for initiatives such as a visitors center honoring Ponca Chief Standing Bear near Ponca State Park, a Malcolm X museum in North Omaha and community health clinics in still-to-be-identified low-income parts of Omaha.

‘Relieved’

The package that now goes to Gov. Jim Pillen for his endorsement includes other bills and projects unrelated to Omaha, such as up to $5 million for railroad spur construction near Lake McConaughy and $1 million to a new Revitalize Rural Nebraska Fund.

State Sen. Terrell McKinney, who as chairman of the Urban Affairs Committee took the lead on LB 531, said he was “relieved” to have reached this point.

No single element jumps out as his favorite, but McKinney said he feels overall pride and optimism that fate-changing resources are headed to east Omaha.

“It’s been a long process,” said McKinney, who along with Sen. Justin Wayne, also of North Omaha, introduced the original proposal. “I’m eager for people to start getting their projects going.”

As outlined in the legislation, the Department of Economic Development is now tasked with doling out the $225 million in grants to nonprofits and other entities that it decides offer the best proposals to fundamentally improve South and North Omaha jobs, infrastructure, health and safety.

Last year, a special legislative committee led in part by McKinney and Wayne worked with the Olsson consulting firm, which was under a $1.7 million state contract to assess North and South Omaha needs and recommend a slate of winning applicants.

Other committee members included State Sens. Tony Vargas and Mike McDonnell, who represent parts of South Omaha, and Anna Wishart of Lincoln.

The Olsson team organized stakeholder meetings and vetted 367 applications containing thousands of pages before it narrowed down frontrunners to 35.

Documenting their work, the Olsson consultants submitted an 80-page main report and roughly 500 pages of supporting data, narratives, photos and graphics. Much of that was also translated into Spanish.

In the end, though, final grant selection will go to the DED, McKinney said. The department is to consider the Olsson work, he said, but all original 367 applications again will be in the running.

“You can like it or not like it, and some people don’t,” McKinney said of the grant process. He said the Olsson picks were never intended to be “set in stone.”

Vargas said his understanding is that the Olsson recommendations will be given priority by the DED. He said a few of those groups, representing perhaps 10% to 15% of the funds, have indicated they no longer are interested in the grants, which would open the door to others.

Overall, Vargas said Thursday that he is “ecstatic.”

He said the state has never directly invested that kind of money into South and North Omaha.

“Now we’re going to empower the different projects and organizations to follow through on their visions,” he said. “This is going to lead to amazing change.”

Not without challenges

The process has not been without challenges. Controversy bubbled up after the Olsson recommendations were publicized. Questions surfaced at a North Omaha meeting, for example, over how Olsson ranked a newcomer organization above long-established organizations.

The Flatwater Free Press reported that Wayne had ties to one of the recommended grantees. Wayne said he had no current involvement or financial interest in the company, and McKinney said he saw no conflict.

Wayne chose not to vote on the bill during later stages of the process to avoid potential challenges.

Meanwhile, some North and South Omaha organizations that applied for grants say they’re waiting and wondering.

“That’s the big mystery: What is next?” said Marcos Mora, who is part of a group that Olsson had recommended receive a grant to turn la Plaza de la Raza on historic South 24th Street into a tourist and economic development magnet. 

He added, “It’s just crazy how long this has been dragged out.”

Some funds obligated to specific projects in the original Economic Recovery Act, including for tourism and affordable housing programs, have already been allocated.

And several bills unrelated to urban Omaha were folded into the broader LB 531, including one that calls for the state to buy or accept by donation the historic Mayhew Cabin in Nebraska City, a stop on the Underground Railroad. The state also would subsequently rehab and manage the property.

A related fiscal note points out that potential challenges exist with the transaction, and that further assessment is necessary to determine possible costs.

Highlights

Among highlights of the package:

• The $60 million earmarked in the original legislation for a new business park near Omaha’s airport expands to $90 million.
• Up to $20 million is to go to help build the Malcolm X museum; another $20 million is for the Omaha community health centers, and up to $16 million is to be available to help develop the Standing Bear visitor center.
• A switch in funding sources was prompted by time restrictions on about $250 million that was to go to Omaha projects from the federal pandemic-related American Rescue Plan Act. To be tapped instead are state funds, including interest earned from investments set aside for the Perkins County Canal and future state prison. (The ARPA funds are to be shifted elsewhere, to projects under the Department of Natural Resources.)