Papillion will pay nearly $1.9 million, minus the cost of a traffic light installation, to annex the new Settlers Creek shopping center off 72nd Street and Cornhusker Highway.
The City Council approved the annexation in April, which will bring the shopping center within Papillion's city limits.
An adjoining 229-lot residential subdivision will not be annexed at this time and will remain a Sanitary and Improvement District.
“There are no immediate plans to annex the residential portion,” Papillion community relations coordinator Darren Carlson said.
The city negotiated the payment — a net of $1.6 million, because Papillion will assume the cost of installing a traffic light at 72nd Street and Pinnacle Drive — with SID 272, which includes the Settlers Creek subdivision and the shopping center.
The financial agreement, approved by the Papillion City Council on Tuesday, now heads to the SID board for a vote at its next meeting, in September. The Sarpy County District Court will also have to sign off on it.
The 250,000-square-foot shopping center is still under development but is currently anchored by a Walgreens and a Hobby Lobby.
Promotional materials from developers RED Development and the Lerner Co. indicate that more retailers and fast-casual restaurants are expected to join the two stores.
The commercial part of the development is assessed at $9.7 million and the subdivision is valued at $25.5 million.
Cities can partially annex SIDs with both commercial and residential elements and will sometimes annex a shopping center or commercial development first to capture a share of its revenue, including sales tax.
A fiscal analysis of Settlers Creek shows that at full build-out, the center would probably be valued at $23 million and would generate $728,000 in property and sales tax revenue for the City of Papillion.
The city would assume $225,000 in annual debt service to pay off $1.875 million in 10-year bonds.
The subdivision portion of the development is not fully built out, either, though real estate activity has picked up since 2006, when the housing market began its slump.