A stretch of new street is on the way for an old industrial part of north downtown, the first of several changes to take place as part of the proposed Millwork Commons project.

The Omaha City Council on Tuesday signed off on an agreement under which the city will pay up to $400,000 for the new Indiana Street between 11th and 13th Streets.

The street will go between the Ashton and Mastercraft buildings. Both are part of the new Millwork neighborhood, which calls for renovating the Ashton and filling part of it with Flywheel, an Omaha technology company.

The project, a $300 million endeavor involving several historic buildings and warehouses in a six-block area north of TD Ameritrade Park, is headed up by developer and investor Paul Smith of Black Dog Management.

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Under the agreement signed by the city, the city will either directly pay or reimburse the developer for costs associated with installing the street.

In turn, the developer gets to choose the street’s designer and contractor.

Smith said he chose Olsson and Lund-Ross Constructors because both companies are already engaged in work in the district. Olsson is assisting with infrastructure improvements, and Lund-Ross is the general contractor in restoring the Ashton.

Smith said he’s pleased to get the city’s approval to move forward with the street, which doesn’t have an exact completion date, though it would need to be done by 2020 in time for when businesses, like Flywheel, move in. He said Indiana Street will provide them essential access to the Ashton.

The street, which will be owned by the city, is planned to be a “centerpiece for the district” and could be the site of farmers markets and art fairs. There’s no through street right now in the area where Indiana Street is planned.

“We’ve gotten great cooperation from the city thus far,” Smith said. “This is the first step in a process where the city will support the redevelopment of that area and adapt it to this new type of innovative office use.”

The city has made similar arrangements, like in Aksarben Village and for improvements at Baxter Arena, where the city has offered a developer money and the developer gets to pick the contractor, said Troy Anderson, a deputy chief of economic development for Mayor Jean Stothert.

He said the city did an internal analysis to figure out about how much it would cost to build a couple of blocks of street between the Ashton and Mastercraft buildings to city standards. The agreement, he said, allows the developer to start construction earlier.

The city had called for $400,000 in city bond dollars to go toward building the new Indiana Street, but not until 2020, according to the latest capital improvement plan.

In all, the city has put up to $7.6 million in the capital plan toward street-related improvements that will benefit the Millwork area over the next several years. That includes building and extending streets and rerouting truck traffic.

In addition, Stothert and Smith signed a nonbinding memorandum of understanding that says the city will build a parking garage in the area when the parking demands are there and if funds are available. The developer also expects to seek tax-increment financing.

The $300 million Millwork Commons project is envisioned to be a mixed-use neighborhood. In October, it announced Flywheel, which helps customers build, launch and manage WordPress websites, as an anchor tenant of the Ashton building.

Smith said negotiations are underway with multiple parties to also move to the Ashton, which is slated to open in 2020.

Ben Petersen, owner of nearby Bench, a woodworking shop, said he’s pleased about the development and associated improvements. “It’s a great neighborhood,” he said. “We’re happy to be here and happy to see all the new neighbors.”

City Council President Ben Gray also praised the project in an area with other positive signs: a new shelter at the Siena-Francis House and plans for the Builder’s District, which includes a new global headquarters for Kiewit Corp.

“This has the potential of being a really, really great development for the northeast part of the city,” Gray said.

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