Omaha Steel Casting's sprawling operation at 46th and Farnam Streets is the kind of place you can drive by and barely notice — perhaps because it seems so unlikely, a steel foundry tucked in alongside a hospital, businesses and homes.
Inside buildings with small, darkened windows, workers lit by the glow of molten metal pour steel into molds. The air is hazy with flames and kicked-up dust and the kind of sharp smells that cling to your clothes, even hours later. For more than 100 years, as the city has grown up around it, the foundry has churned out machine parts and oil valves, building frames and power plant doors.
But over the next few years, the operation will move to a site with more elbow room — and leave open a key piece of midtown real estate that's already attracting interest from several groups, including the nearby University of Nebraska Medical Center and developers of medical facilities, student housing and hotels.
As announced earlier this week, Omaha Steel plans to build a new, $12 million facility in Wahoo, where it will shift all of its production and any of the 225 employees who want to move or make the 35-mile commute. The company plans to break ground as soon as July and hopes to complete the transition within two years.
Omaha Steel President Phil Teggart said the move has been in the works since soon after he purchased the company in 2008. He knew then, he said, that the company would need a new location if it was going to grow.
The need for growth is still clear. After a major drop-off in 2009 — sales dipped by 60 percent from $25 million in 2008 to about $10 million — things started picking up significantly in 2010. That year, the company's sales rebounded to about $16 million. By 2011 they were back to $25 million, and this year, Teggart is projecting sales to be closer to $30 million.
The 20-acre site northeast of Wahoo will provide more space and a chance to make production cleaner and quieter with almost entirely new machinery. To develop the new facility, the company has enlisted the help of an Ames, Iowa, firm called Midwest Foundry Consulting.
Wahoo wasn't the company's first choice. Working with the Omaha Chamber of Commerce, it located four potential locations in the city, most of them in north Omaha.
But Teggart said one of the biggest stumbling blocks to staying was the upfront cost for power. Wahoo, which has city-run utilities and operates as a power wholesaler with the Nebraska Public Power District, offered a much lower price tag for the initial power hookup. Wahoo also had some of the needed infrastructure in place.
Omaha Public Power District spokesman Mike Jones said the utility tries to work with all of its larger customers, including Omaha Steel, but he said he didn't know of any details of Teggart's discussions.
Teggart isn't sure how many employees will stay through the move. He figures it could be 50-50 — workers from Council Bluffs or other Iowa cities probably won't want to make the commute — but added that he plans to do everything he can to keep people onboard. He's considering a shuttle service.
"That's our biggest resource, the thing we're most fortunate about," he said. "We have several employees with over 30 years of experience."
He expects that the move could attract workers from in and around Lincoln. The company will also keep up a tradition of hiring inmates in work-release programs.
While the head of the Wahoo Chamber of Commerce, Doug Watts, cheered the news of the move, Omaha Chamber spokeswoman Karla Erwert said her organization is disappointed to lose a large business — though pleased that it will be a short enough move to keep some Omahans employed.
"In this case, they're staying in the greater metro area, so that's positive," she said.
And at least one other thing isn't changing, despite the company's new Wahoo address: the Omaha Steel name.
In the meantime, however, the future of the company's current 10.67-acre property —long eyed as a potential site for expansion by UNMC — is uncertain.
The land is owned by a trust controlled by the family of Ron Howlett, who died in 2009, a year after he sold the company he'd run for almost three decades. It's been listed for sale, along with a nearby 1.65-acre parcel, for a combined $8 million.
UNMC, which already owns other property adjacent to Omaha Steel on the west side of Saddle Creek Road, sees the site as "prime territory," said spokesman Tom O'Connor.
The medical center has been exploring its options for growth for several years. It commissioned the engineering and architecture firm HDR to look into options for moving Saddle Creek Road to provide room to expand the campus. Cost estimates for the road project ranged from $40 million to $50 million.
City officials have been involved in the discussions and surveys and have the road project on a long-term to-do list — but don't see anything happening in the near future, said city engineer Todd Pfitzer.
Some preliminary environmental surveys, which would be required if the city wanted to apply for federal money, are in the works. But without a clear source of funds, the Saddle Creek project isn't a top priority.
Pfitzer said none of the plans considered so far call for the road going through the Omaha Steel property, so the sale won't have much of an immediate impact. He said interest from UNMC in moving the road also appears to be a bit more limited than a few years ago.
"We don't know that (the project) is dead, but it certainly does not have a lot of life at the moment," he said.
O'Connor said UNMC is working with the trust to have the property appraised and won't make any decisions until that process is completed.
"It's too premature to know where we're going with any of that until we get through this appraisal," he said.
If it does want the land, the medical center may have some competition.
Jim Maenner, vice president of CB Richard Ellis, the company handling the sales listing, said he's met with UNMC officials and showed the property to several local and national developers. He said the site has potential as a mixed-use development similar to Midtown Crossing or Aksarben Village.
He's just beginning to advertise the property and expects that it won't take long to find a buyer.
"I think once somebody decides to do something, it may go pretty quick," he said.
Whatever the development, it's unlikely to be anything quite like a big industrial operation — and neighbors are on board with a change.
The foundry had drawn complaints for years from neighbors who said emissions hurt their eyes, throats and noses. The Douglas County Health Department sampled the air and found it to be safe.
Dave Schinzel, president of the Dundee-Memorial Park Neighborhood Association, said many residents are used to Omaha Steel and don't pay it much notice. He said it's also been no secret that UNMC wanted the land, so they figured it was only a matter of time before the neighborhood would change.
"We always assumed at some point they were going to move."
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