A local development team has been quietly assembling property to make way for a new retail and housing district on a sleepy southwest fringe of downtown Omaha.

However, the build-out of that proposed mixed-use Flatiron District is “on pause” given uncertainty over what might rise on a nearby block that Douglas County has targeted for a youth detention facility.

“Do people want to rent an apartment across the street from a detention facility? Would they want to go to a restaurant across the street? I don’t know,” said Royce Maynard, president of Dicon Corp., which is part of the Flatiron Development group. “Until we know more, we’re going to be cautious, on pause.”

So far, his team has purchased a half-dozen buildings and parking lots around 18th Street and St. Mary’s Avenue as part of the effort to infuse fresh and trendy into one of the oldest sections of town.

Think a mini Benson or Blackstone corridor, Maynard says.

“What’s old is new again,” is how its investors describe the essence of the district. Early phases could exceed $30 million in investment, Maynard said.

Historical elements and original facades would be returned to old buildings; open spaces would be filled with new projects to create a pedestrian-friendly neighborhood where people could live, work and be entertained.

Bounded generally by 17th, 20th, Howard and St. Mary’s Avenue, the proposed district contains a few longtime businesses such as the Flatiron Cafe and Magnolia Hotel, but mostly is a “drive-through” zone for people leaving downtown, Maynard said.

Plans, in part, call for about 175 new apartments in and around the former Standard Oil building at 500 S. 18th St. The street level of that complex would offer space for shops, stores and offices. Other buildings to be transformed include the former Dakota Title building at 1801 St. Mary’s Ave. and former Freiden building at 563 S. 18th St.

Though under the radar until now, the concept has gained enough traction that city officials gave preliminary support to a new parking garage, a district occupation tax and up to $6 million in public improvements that would help move the district project forward.

“It’s extending the revitalization activity we’ve seen a ton of to a very much underutilized part of the city,” said Kevin Andersen, Mayor Jean Stothert’s deputy chief of staff for economic development.

Rehabilitation of the Freiden building is to begin within a few months as that initial piece was well underway, Maynard said. But the rest of the broader redevelopment is on hold, he said, until the county reveals details of what will happen on the block southwest of 18th and Harney Streets — a site bordering the proposed Flatiron District.

Two possible scenarios currently are at play:

One plan carries a price tag of $120 million, and would build on that block a parking garage and 10-story building to house juvenile courts, related offices and services, and the county attorney and public defender staffs. Next door would be the new youth detention center.

An alternative and scaled-down plan put forth by County Board member Jim Cavanaugh would erect a smaller building for juvenile court services. It would renovate the current Douglas County Youth Center near 41st Street and Poppleton Avenue, rather than build a new one downtown. It would not use eminent domain to acquire the 420 S. 18th St. structure owned by Omaha architect Bob Perrin.

Maynard said he’s not “totally” opposed to a youth detention facility rising near the Flatiron District, but said specifics such as the entrance and exit points for detainees and visitors has a “definite” bearing on future development.

He welcomes an office tower whose workers could increase foot traffic and commerce.

County Board Chairman Chris Rodgers said area businesses should not worry about safety, and said most of the youths in detention are not facing serious criminal charges but are waiting for services such as a behavioral health evaluation.

In terms of looks, he said, the facility would not look or feel like a jail, but rather be designed to alleviate and not create trauma to a youth.

Indeed, Rodgers said, the detention facility could even be built to include retail bays on the street level. He said the county knows about the proposed Flatiron District and would work with area businesses.

“They’ll have more traffic around there that is probably going to support the businesses they have,” he said. “We definitely are open to making sure we’re friendly to that district.”

And not all area merchants interviewed by The World-Herald last week were opposed to a downtown juvenile detention facility.

Charles Gifford, who owns the Bath and Tile shop with wife Michele van Deventer, said courts and government facilities are part of thriving city cores where they’ve lived. He said he was ready to embrace construction.

“I’d like something instead of nothing,” Gifford said. “It’s about moving forward and getting the best version of it as possible.”

Still, many neighbors were concerned that a detention facility could scare off customers and stymie momentum that was boosted a few years ago when Dicon Corp. rehabilitated the Flatiron building at 1722 St. Mary’s Ave.

Already, the Douglas County Correctional Center for adult detainees is nearby at 17th and Jones Streets, south of the district.

“We’d be in a detention sandwich,” said Kathleen Jamrozy, co-owner of the Flatiron Cafe, which for 23 years has been in the iconic triangular building.

Jamrozy said the future district as envisioned by Maynard’s group brought tears to her eyes.

“A city is defined by its neighborhoods,” she said. “The Flatiron District is ripe for becoming an important neighborhood.”

Sarah Gray moved her shop, which restores violins and other stringed instruments, into a street-level bay of the Flatiron building about a year ago. She said she was excited about what the area could become.

As it stands now, she said, she often delivers finished instruments to her customers because many are intimidated by the area. If the neighborhood develops more purposefully as a mixed-use district, she foresees window shoppers strolling along the corridor, peeking in at craft-making and other activity.

Birdhouse Design Studio owner Jessica McKay said she got a taste of what more could happen to the area when an art show popped up temporarily in the Standard Oil building. The corridor came alive with pedestrians.

“It felt like we were in a (big) city, which was really fun,” McKay said.

Scott Koethe of the Lund Co. is marketing a nearly 50,000-square-foot vacant building in the district boundaries. He didn’t have a comment on whether a youth jail might help or hurt a neighborhood revival, but he said he has had a flurry of interest in the four-story commercial property at 1901 Howard St. since the county discussion flared. The property has been on the market a couple of years.

“A lot of people are waiting to see what happens,” Koethe said.

Howlin’ Hounds Coffee at 712 S. 16th St. and the Vintage Ballroom in the Old Market are outside the district boundaries, but their owners have strong opinions against a downtown youth detention center.

The county’s adult jail sits behind the java shop, and Howlin’ Hounds owner Greg Sechser said it brings “negative energy” to the area. He likes the 16th Street corridor and urban core, saying “every year is better than the next.” He thinks another detention facility would curtail small-business growth.

Typically, Maynard said, any developer would be thrilled with a $120 million project rising near their property. He said he is encouraged with the county’s proposed investment and confidence in the area, and notes that his team already owns several buildings and parcels — and can’t simply bail out.

He said future investment and final design of projects, however, could be shaped by the county’s plan.

“It’ll have a significant impact on what we do.”

Reporter - Money

Cindy covers housing and commercial real estate for The World-Herald. Follow her on Twitter @cgonzalez_owh. Phone: 402-444-1224.

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