Gretna's costs for Nebraska Crossing outlet mall might top developers' - Omaha.com
Published Tuesday, February 19, 2013 at 1:00 am / Updated at 6:45 am
Gretna's costs for Nebraska Crossing outlet mall might top developers'

The City of Gretna would pick up more than half the cost of redeveloping the Nebraska Crossing outlet mall under a proposal being considered by city officials.

The city would provide $57.4 million of the estimated $111.1 million in redevelopment costs through a package of measures including tax-increment financing, a sales tax rebate and occupation tax proceeds, according to a plan submitted by the city's Community Redevelopment Agency that assumes the project would create 500 full-time jobs.

The plan was reviewed at a Feb. 5 City Council meeting, but a vote is pending a cost analysis. It was not clear when the analysis would be ready or when the council would take up the issue again. City offices were closed Monday.

Also read: 18 more factory outlet stores commit to Gretna mall

Kent Seacrest, an attorney working for the city, said he was not authorized to comment on behalf of the city. Mayor Jim Timmerman could not be reached for comment.

The written proposal indicates that certain incentives offered by city and state law for qualified redevelopment projects would be needed for Nebraska Crossing and that the project meets the requirements.

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With public incentives in place, the projected rate of return on the project would be 12.7 percent; without those incentives the project would return less than half that, or 6.1 percent, the plan says.

As outlined, the city's $57.4 million portion includes highway upgrades and new public streets, additional land acquisition, demolition, site work, tenant improvements and marketing costs.

The city's investment, as proposed, would include:

>> $12.8 million in tax-increment financing, which uses part of the future property taxes from a development to help pay for financing.

>> $14.3 million in turn-back sales tax incentives, which would return 1.5 percent in local sales tax on transactions for 10 years within the redevelopment area.

>> $26.2 million from an occupational tax on businesses in the development of 1.95 percent on sales in the area for up to 25 years.

>> $4.1 million of general obligation bonds paid back by residents through property taxes.

Two years ago, in February 2011, Gretna residents approved diverting some of the city's sales taxes to help redevelop the mall in a special, vote-by-mail election. The plan was approved on a 1,342-to-93 vote. State law allows cities to divert the city's portion of the sales tax, up to 1.5 percent, for qualified redevelopment projects.

Under the proposal, the city would pay about $10.3 million to upgrade utilities and sidewalks, while developers would pay $530,000. Developers would contribute $22 million for the mall's construction and the city would kick in $2 million.

The cost of tenant improvements would be closely split between developers, $13.2 million, and the city of Gretna, $12.3 million.

The city would pick up the bulk of the communication and marketing costs for the mall — $15.5 million, while developers would contribute $389,000.

The mall's developers — Frank Krejci of Omaha's Century Development and Rodney Yates of Arizona-based OTB Destination LLC — said last month that they had 25 committed tenants for the planned Gretna shopping center, including Ann Taylor, J. Crew, Polo Ralph Lauren, American Eagle, Gymboree, Kay Jewelers and a Scooter's Coffee.

Yates could not be reached for comment Monday.

As proposed, the outlet mall at the intersection of Interstate 80 and Nebraska Highways 6 and 31 would be demolished and rebuilt, housing more than 60 tenants in 350,000 square feet and offering customers a fully “wired” shopping experience, developers have said.

Contact the writer: 402-444-1142, janice.podsada@owh.com

Contact the writer: Janice Podsada

janice.podsada@owh.com    |   402-444-1142

Janice is a retail reporter for The World-Herald's Money section.

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