Mutual of Omaha buys midtown properties to clear way for development

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Posted: Sunday, November 24, 2013 12:00 am

Trying to clear the way for new development to the east of its $365 million Midtown Crossing campus, Mutual of Omaha has been quietly buying up a swath of properties on both sides of Farnam Street.

The insurance titan is not interested in permanently extending its reach there, said Ken Cook of East Campus Realty LLC, Mutual's real estate arm.

Cook said that Mutual had hoped to see a greater ripple effect from its Midtown Crossing investment and believes removal of the “obvious barrier” — the task of assembling a critical mass of parcels from various property owners — would help spur someone else to develop an office or commercial enterprise.

“The amount of economic redevelopment that we hope to see between here and the Interstate has not materialized,” Cook told The World-Herald. “It will be easier for others to see opportunity if the real estate is shovel-ready.”

According to public records, an entity called Turner Park North LLC has paid about $6 million for 17 parcels that include stand-alone buildings as well as several parking lots, storefronts and a few apartments to the east of its company headquarters and the Midtown Crossing complex of retailers, apartments and condos.

Until now, Mutual officials had not acknowledged that Turner Park North was owned by Mutual. And some paperwork listed an Idaho address and phone number as a contact.

Most parcels in the future development site shifted ownership to Turner Park this year. The area is generally bounded by Turner Boulevard, Interstate 480, Douglas Street and the alley that bisects Farnam and Harney.

The bulk of the businesses — including Alegent Creighton Health medical offices and the Little King and Casablanca restaurants — have moved out.

Mutual's plan is to demolish the empty structures, Cook said, as it is less expensive to maintain and pay taxes on a grassy or paved lot. Most recently razed was the six-decade-old PSI structure and 11-story North Twin Tower at Turner Boulevard and Douglas Streets.

“We're in discussions about which ones will be taken next,” said Cook. “If we can do what we can to wipe the slate clean, we think opportunity is going to be hard to miss.”

Businesses renting space in structures recently purchased by Turner Park likely will operate until their lease expires or stay with a month-to-month option.

A handful of property owners have yet to sell. A couple have been outright resistant. And not everyone is thrilled at the notion of moving.

“This location is perfect for us and the people we serve,” said Amy Richardson, executive director of the WCA, Women's Center for Advancement, noting its proximity to courthouse services. “We just recently got through a name change, and we would not want to confuse matters by moving.”

Located at 222 S. 29th St., the WCA succeeded the YWCA but serves the same clientele: domestic violence and sexual assault survivors. The agency home is not among those owned by Turner Park, and board members declined to say whether they had been approached by Mutual representatives.

Mary Ann O'Brien, CEO and founder of OBI Creative at 2920 Farnam St., leases bays in a structure sold to Turner Park, and she was unaware of any redevelopment plan.

She said she's invested $100,000 in remodeling since her agency relocated in 2006 from California to its “eclectic” midtown Omaha neighborhood. “We put a lot of love into that building,” O'Brien said, “I would hate for that to be part of a wrecking ball.”

Perhaps the most prominent and certainly the largest of structures absorbed by Mutual is the North Twin Tower condominiums.

The 1960s-era high-rise had been vacant for years, was the subject of a lawsuit and recently was dismantled. An underground parking garage remains and is undergoing cosmetic remodeling on the street level.

Because Turner Park representatives had not returned phone calls from reporters, that property's fate had remained a mystery until now.

Cook said that underground parking will remain available to residents of the south tower, which still stands and is owned by dozens of condo dwellers. “We're just making it look better than it was.”

A future developer would have to relocate those parking stalls if they didn't fit a project design, he said.

Although Turner Park purchased a penthouse in the south tower, Cook said it has no plan to buy the entire structure, where the condos are still occupied.

“It's basically 105 resident dwellings,” said Cook, noting the difficulty in negotiating with that many sellers.

Cook said he'd like to see a major company move in as Midtown Crossing's new neighbor. That would help feed the campus's retailers, condo sales and apartment leases. He said he also could envision a multitenant office building mixed with retail stores, or even single-family residences.

With Interstate access a skip away and downtown Omaha just blocks away, Cook sees the area as ripe for more development.

Mutual had long been surrounded by an area needing improvement when it announced the Midtown Crossing development, constructed between 2006 and 2010. The urban campus was an outgrowth of Destination Midtown, an effort that brought together major businesses, Creighton University, the University of Nebraska Medical Center and neighborhood groups to revitalize the area.

Upgraded in the process was the usually deserted Turner Park, now home to a giant stage added by Mutual and community events such as Jazz on the Green that bring thousands to the area.

According to an economic impact study by Creighton University's Ernie Goss, Midtown Crossing's nearly 500 condos and apartments and 225,000 square feet of retail and restaurants have been an “engine of growth” for the city.

Goss' report said the campus generated $729 million through 2011 and through 2016 will produce an additional $130.5 million and support an average of 262 jobs each year.

Valuation of properties within three blocks of Midtown Crossing (but not including the campus) expanded by 25 percent between 2006 and 2011, compared with about a 12 percent decline for the entire city, the report said.

What hasn't happened, Cook said, is the desired amount of spinoff commercial development.

“We've done our part,” he said. “We are the pioneers, now where are the settlers?”

Cook said developers have shown interest in the area east of Midtown Crossing, but to date no tenant or deal has been secured.

The hope is to change that, he said.

“We have solid confidence in the neighborhood, the improving economy and the location, location, location.”

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