A new cancer research center was touted Monday for its potential to spur major redevelopment in midtown Omaha, with the goal of bringing new housing, stores, a hotel, jobs and tax dollars.
University of Nebraska Medical Center officials portrayed their plan as a catalyst to redevelop the Saddle Creek Road corridor into something like Aksarben Village or Midtown Crossing. Such plans could revive a concept to move Saddle Creek Road to accommodate a flood-control waterway.
Supporters of the $370 million UNMC project appealed to Omaha's big-city ambitions during a final pitch for city funding. They again stressed that the cancer center would be a “transformational” project for Omaha.
“It is absolutely the best thing you could ask for,” said Terry Moore, president of the Omaha Federation of Labor. “This is a dream job, an unbelievable opportunity for our city and our state.”
UNMC boosters used a Monday press conference to lobby for a plan to bring $35 million of city revenue to the project with a 4.5 percent tax on local tobacco sales, a tax that the City Council is to vote on today.
But representatives of the Nebraska Grocery Industry Association said they expected a dramatic drop in business for convenience stores and supermarkets that sell cigarettes because smokers would travel outside the city.
“When they talk about (the economic benefits), I'd hope they'd at least consider the negatives,” said Sean Kelley, a lobbyist for the grocers.
Kathy Siefken, executive director of the state grocers association, said that because 35 percent of all sales in convenience stores include tobacco, an increase in the cigarette tax could significantly affect their overall business.
“You lose the doughnut, the cup of coffee and the gas that goes with (the pack of cigarettes),” she said. “People want to do one-stop shopping.”
Kelley said his group wants the City Council to put off voting on the tobacco tax and study other funding alternatives, such as using a portion of the city's restaurant tax or seeking other private or state funds for the project.
Other opponents of the tobacco tax dispute the city's projections of how much revenue the tax could generate in the next decade — $5 million this year and a total of $40.7 million by 2021, the city's Finance Department forecasts — and want a public vote on the proposal.
Opponents also suggest that the tax would place undue financial burden on lower-income smokers.
UNMC officials say that if the City of Omaha doesn't immediately fund the project, construction on the cancer center would be dramatically altered and delayed. Taxing tobacco products to pay for a city contribution to the center, they say, would not affect local business any more than other occupation taxes, on restaurants and hotels.
According to UNMC officials, the cancer center will generate thousands of construction-related jobs and hundreds more at the medical center.
The project's scope is sizable by Omaha's standards. The estimated cost is more than double the figure spent on UNMC's two Durham Research Towers. Plus, UNMC officials say the project will require more private fundraising than any other building project in the state's history.
But the project also could advance UNMC's ambitions to bring in private development immediately west of its campus.
Don Leuenberger, the medical center's vice chancellor for business and finance, said a study from a Chicago firm concluded that a new cancer center would spur $383 million in new private development on property adjacent to the university, generating some $63 million in new property taxes.
The medical center has been acquiring property near its campus, including old rail lines and bank property. UNMC is in talks with the owners of the former Omaha Steel mill property and is considering adjacent sites for potential hotel development.
“I think that we would want, if not absolutely need, to have that hotel in place when the cancer center opens,” Leuenberger said. “Now the rest of the development around there that is commercial and housing and amenities and all that, I don't know how long that would stretch out.
“But I would see the hotel, wherever it goes, as necessary to the opening of the cancer center.”
Then comes the goal of bringing in mixed-use development similar to other recent midtown projects.
“We want to interest developers in doing that,” Leuenberger said. “Frankly, we think the developers have a better idea of the things that would bring a return to them than we do, with the exception that we need certain things, like a hotel.”
Inserting a “swale” — essentially, a flood-control ditch — along the Saddle Creek corridor would advance UNMC's long-held desire to control flooding along the roadway.
That idea has been discussed since before the cancer center project accelerated, Leuenberger said, adding that such improvements probably would be necessary to attract developers.
Last month, a UNMC official said there were no plans to relocate Saddle Creek Road as part of the cancer center project.
University officials approached local governments as part of a $200 million private and public fundraising campaign for the center. The state of Nebraska has committed to providing $50 million, while Douglas County will chip in $5 million. UNMC wants to have the facility open in 2016.
World-Herald staff writer Paul Hammel contributed to this report.
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