The plan would remake Omaha’s front door, which once abounded with two dozen brick warehouses, then became a suburban-style office campus for one of the city’s biggest companies.
But if we build it, will they come?
City leaders said they’re eager to dig into Conagra Brands’ $500 million proposal to bring office tenants, apartment and condo dwellers and shoppers and diners to an area east of 10th Street long chopped off from the rest of downtown. They said the city could help with financing, as it has with other big redevelopment projects.
Hines, the Houston-based company that Conagra tapped to develop the campus, certainly has the experience to get the work done, with 113 projects underway around the world, nearly 1,300 completed properties under its belt and $100 billion in assets.
Still, there are only so many people and so many businesses to go around, and downtown already faces an office vacancy rate of nearly 12 percent. Retail bays go empty. Parcels of land lie fallow, some with discarded or stalled development projects attached.
The Conagra land is unique, though, real estate types say: bookended by a lake and the Missouri River on one side and thriving 10th Street and the Old Market on the other. The proposal to redevelop the site can finally connect the Conagra campus with the rest of the city; part of the plan even recommends barreling Harney Street through what’s now a green space into the heart of the new development.
“That specific area is ripe for a project of that scale,” said Steve Sheppard, first vice president at Omaha’s CBRE/Mega Real Estate. “It’s a suburban campus feel, but in the core of downtown. I think that’s one of the reasons it’s such compelling real estate — it’s unlike anything around.”
And the project comes with significant back-to-the-river momentum as a group connected to Heritage Services — the nonprofit behind some of the city’s bigger projects in recent years, and which is funded by leaders of some of the city’s biggest businesses — is engaged in its own riverfront development planning.
The Conagra project can fit with the Heritage planning, creating a whole new area of downtown that had once been a collection of industrial and warehouse sites, but that has been underused by the public in recent years.
Ken Stinson, who is co-chairing a committee to redevelop a large swath of the Omaha and Council Bluffs riverfronts, said he saw Conagra’s plans for the first time on Thursday.
Stinson, along with Valmont Chief Executive Mogens Bay, are leading the Riverfront Revitalization Planning Committee, the group with connections to Heritage Services. (Stinson and Bay are former members of the ConAgra Foods board; they left the company in 2015.) The committee, which has held public meetings showing its ideas, also includes Omaha Mayor Jean Stothert and Council Bluffs Mayor Matt Walsh.
Stinson, chairman emeritus of Peter Kiewit Sons’ Inc., called Conagra’s overall plan “pretty darn exciting.”
He noted that the plan didn’t take into account some aspects of his committee’s concepts, including an idea to reduce the size of Conagra Lake at Heartland of America Park; the committee had proposed chopping the lake to 9 acres from 15 to make room to extend Farnam Street, allowing Gene Leahy Mall to open up to the Missouri River.
But both plans are works in progress. Conagra and Hines say the first phase of theirs should start in 2019 and be complete in about two years; the entire redevelopment could take seven to 10 years.
“There’s nothing we see that we don’t think can be resolved,” Stinson said. “Now both of our plans are on the table and I think we’re all committed to work together to make a great plan.” The two groups are planning to meet again — perhaps as early as this week, he said.
Tom D’Arcy, Hines’ senior managing director, said his team and the Riverfront Revitalization Planning Committee hadn’t seen details of each other’s plan until Thursday.
The two teams have since talked and will be “rolling up our sleeves and merging plans.” He said it’s too early to know how that might play out, whether certain streets will be extended or the lake shrunk.
“Clearly there is a way to bring both plans together in a way that is positive for both,” he said.
Conagra’s proposal, which The World-Herald reported Friday, would bring nine new structures that would include office space, residential units, restaurants, shops and a public plaza. One building, 908 ConAgra Drive — which is known as Building One on the campus — would be demolished to make way for an extended Harney Street, which now dead-ends at 10th.
Urban planners and architects for years have said it was a shame that Omaha’s street grid was cut off at 10th Street when the former chief executive of ConAgra Foods insisted in the late 1980s on tearing down more than 20 buildings in the Jobbers Canyon district to make way for the food company’s headquarters. The canyon remains the largest ever collection of buildings on the National Register of Historic Places to have been demolished in the United States.
Omaha City Council Vice President Chris Jerram, whose district includes the area, said the project could be a “catalyst for reinvigoration in that part of the city.”
“At this point, I look forward to seeing their specific proposals and entertaining any way the city can consider having this project come to fruition,” he said.
City Council President Ben Gray said he’s optimistic about the project’s potential and applauded Conagra for investing in Omaha.
Financing from the city could help the proposal move closer to a reality. Conagra and Hines haven’t said what incentives they will seek, if any.
Stothert said she expects — and would support — a request for tax-increment financing. Such financing, known as TIF, allows developments to use a portion of a project’s future property taxes to pay for upfront costs.
Stothert said she’s also discussed the city paying to build a public parking garage that would be near the Old Market and the Conagra redevelopment. The city also could help pay for possible infrastructure work involving streets.
Other potential incentives the city could use include issuing redevelopment bonds and allowing an “enhanced employment district.” Any incentive package would come before the City Council for a vote.
Development bonds, which are repaid by city property taxpayers, can be used to demolish buildings, work on site preparation and pay for infrastructure and public improvements.
And creating an “enhanced employment district” would allow developers to charge customers an occupation tax within the project’s boundaries.
The downtown Capitol District in July became the city’s first development to use the mechanism.
Mike Moylan, whose Shamrock Development is spearheading the Capitol District effort, said the Conagra-Hines proposal makes him excited for downtown.
It could compete with Moylan’s development for office, residential and retail tenants, but he said it seems Conagra is being realistic with its time frame: “This is something that will easily take 10 years to do and for the market to absorb,” he said.
The Conagra project would come at a time when there are other large developments rising across the city, including Moylan’s $205 million project near 10th Street and Capitol Avenue, with its 218 apartments, Marriott Hotel and plans for restaurants, bars, shops and office space.
Barry Zoob, senior vice president at Colliers International in Omaha, lauded the Conagra vision and said the proposed activity hub will help connect the Old Market and Missouri riverfront, but thought it might be too heavy on office space.
Zoob said he suspects that developer Hines might wind up building less office space and more residences. Downtown housing is in demand, he said, and there are already vacant lots in the area for new high-rise office buildings, such as the one at 14th and Dodge Streets that was the site of the former Union Pacific Headquarters.
Between 2,500 and 3,000 employees would typically fill the roughly 500,000 square feet of office space proposed under the Conagra-Hines plan, Zoob said. “We don’t see that kind of traction currently,” he said.
Todd Heistand, head of NuStyle Development, which has redeveloped apartments across downtown, said that even though Conagra’s project includes apartments — which will compete with his — “the more people you can have in an area, the more activity, the better off you are.” NuStyle redeveloped an old power plant into apartments that abut the Conagra campus.
He said the city can handle multiple mixed-use campuses that are in the pipeline, including one across the Missouri River in Council Bluffs, one at part of the old Boys Town campus in west Omaha and one planned to rise near Midtown Crossing. He said vision, and lots of activity, is needed to bring more jobs downtown.
“Other cities do it all the time,” he said.
In other words, he said: If we build it, the people will come.