Developer's plans for downtown Omaha high-rise excite officials

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Posted: Sunday, November 17, 2013 12:00 am

A building as high as 25 stories — topped with condos and filled with office, retail and parking space — could finally rise on a prominent downtown Omaha square block that has sat vacant and weed-infested for the past five years.

The project envisioned by Omaha's Lanoha Development for 14th and Dodge Streets would replace the failed WallStreet Tower project proposed in 2005 by Kansas-based Townsend Inc.

Townsend's 32-story condo, office and hotel project never got off the ground, leaving the former Union Pacific headquarters site empty even as eventually Gavilon's glass-walled headquarters rose next door.

Jason Lanoha of Lanoha Development said his firm's plan is still in the early stages and dependent on factors such as securing tax-increment financing and tenants. But his team has been talking for months to city officials, who support the proposal, and the developer is eager to reshape the downtown skyline.

“We believe Omaha is a great place for business,” Lanoha told The World-Herald. “And by investing in downtown, we are betting other companies agree.”

At this point, Lanoha's concept calls for a glass, asymmetrical structure 10 to 25 stories high, with a mix of uses and a construction price tag of up to $100million.

It would include as much as 40,000 square feet of retail space, 10 to 15 floors of office space, up to five floors of parking and as many as five upper floors with condominiums.

“This is an office-driven project,” Lanoha said. “At the end of the day, we are seeking that major tenant wanting to put their name on the building and join the other major companies who call downtown home.”

To start, the developer is requesting city approval of $5.5million in tax-increment financing. That request is to go before the City Planning Board as early as next month. Lanoha then must finalize the purchase of the land from the current owners, the WallStreet Tower LLC investors.

Lanoha declined to discuss terms of the sale.

Earlier, the empty lot was listed for $6.5 million.

Cassie Seagren, Mayor Jean Stothert's deputy chief of staff for economic development, said city officials were excited about Lanoha's high-rise concept and the prospect of filling a gaping hole in the city's bustling downtown.

She said key elements of the plan, including retail and indoor parking, fit master plan goals for downtown.

“This shows continued interest in our downtown,” Seagren said. “People want to be down here.”

Aware of the site's troubled past, she said city officials are impressed by the Lanoha leadership team's track record and are confident in its ability to pull off a project.

“Will it happen next year? Maybe not,” she said. “If the stars align perfectly, it sure could. At least having it in the hands of a developer rather than just an investor speaks volumes.”

Currently known more for its residential housing developments than office structures, Lanoha Development actually grew out of a nursery enterprise.

David Lanoha, Jason's father, started Lanoha Nurseries in 1977 and expanded into development in the late 1980s. He led the way in developing tree-lined suburban neighborhoods including Hawthorne, Baywood and Pacific Springs. Newer housing subdivisions include the Sanctuary and the Prairies.

With Jason as vice president, Lanoha's development arm also has led ventures such as Hawthorne Court at 180th and Q Streets, which offers a mixture of retail shops, office space and a grocery store.

Among the developer's most recent undertakings is a build-to-suit 18,000-square-foot office structure near 85th and Cass Streets.

Seagren called the proposed high-rise at 14th and Dodge “a little different” from the typical Lanoha project, but she said she was impressed with the variety in the developer's portfolio.

“They're not going to be digging a hole just to have another hole there,” she said.

Especially with neighboring corporations such as U.P., the Omaha World-Herald and Gavilon, Seagren views the environment as ripe for attracting business tenants.

Barry Zoob, longtime Omaha commercial broker with Colliers International, can see the property luring a new company headquarters to Omaha. The downtown office market has performed above average, and availability of other large amounts of Class A office space is limited.

As far as residential space, however, Zoob and others note that demand for downtown condos has slowed as apartment living has caught fire. “They'd have to have some awesome views and be at a price point that is in demand,” Zoob said.

He also questioned whether the area could support that much retail development, noting that stores appear to be flocking more to western areas of the city.

Lanoha said he expects the anchor employer that occupies the new building to, indeed, fuel the demand for more condos and retailers.

“The addition of a major employer to downtown will contribute to the demand for the proposed condo and retail components,” he said. “We want to be part of the solution in creating a vibrant downtown environment, one in which Omahans desire to live, work and shop downtown.”

Formerly home to U.P. headquarters, the property at 14th and Dodge Streets reverted to city ownership in 2002 as part of an incentive package for the railroad to build its new and consolidated 20-story corporate structure across Dodge Street.

In 2005, the Mike Fahey administration selected the WallStreet Tower project over a competing proposal for the property, selling it outright to Townsend for $1. The developer then paid several million dollars to tear down the old 12-story U.P. structure.

Demolition was completed in 2008, and the projected cost of the tower reportedly doubled from the original $122 million as its makeup shifted.

The fenced hole later was filled as the tower project remained stalled by a lack of financing during the economic downturn and then by tighter lending requirements.

At one point, city officials discussed taking back the property by eminent domain, but the then-Omaha planning director said the city lacked the money to pay the land's appraised value.

On later deals, Omaha officials have tried to avoid future loss of city property to nonperformers. For example, the developer of the former downtown Lerner building was given a two-year deadline to start an apartment and retail project before the property was to revert back to the city. (That project has begun.)

The city earlier approved $15.6 million in tax-increment financing for WallStreet Tower, but that would be canceled if Lanoha took over. City officials and Lanoha said that depending on the final plan, a request for TIF funding beyond Lanoha's initial $5.5 million request could be considered.

Jason Lanoha said the proposed building size and other elements also could change according to the wishes of still-to-be-secured tenants.

As currently depicted in a rendering by TACKarchitects, the proposed structure — called 1416 Dodge for now — would be angled to enhance views from the inside looking out. Stainless steel panels on lower levels would help hide parked cars.

“Ultimately,” Lanoha said, “the final tenants will drive the sizing and design of the end product.”

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