Public spending on Pinnacle Bank Arena spurs private investment in Lincoln area

A ribbon-cutting ceremony Thursday afternoon will officially christen Lincoln's new Pinnacle Bank Arena and kick off a three-day open house.

LINCOLN — Pinnacle Bank Arena may be done, but hard hats in downtown Lincoln will remain as common as football helmets in Memorial Stadium.

The new 16,000-seat home to the University of Nebraska-Lincoln's basketball teams anchors the $375million transformation of a former rail yard west of Lincoln's Haymarket district. And local officials say the arena's zinc-clad halo has already thrown off economic vibes that will keep construction crews hammering away.

When elected officials turned to voters in 2010, they projected that the arena would spur $100million in private development by 2020. Before singer Michael Buble croons his first note on opening night, Sept. 13, city officials say the project has already attracted $70 million of private investment in what's now called the West Haymarket.

Sneak a peek

Want a look inside the Pinnacle Bank Arena? Take a free, self-guided tour:

Thursday: 4 p.m. to 10 p.m.

Friday: 11 a.m. to 8 p.m.

Saturday: 11 a.m., with a broadcast of the Nebraska-Wyoming football game on center court scoreboard at 7 p.m..

“They put their confidence in this biggest project ever in the city of Lincoln and it's working out beautifully,” Lincoln Mayor Chris Beutler said last week.

Based on private investment within a few blocks of the arena, Lincoln has jumped out of the gate faster than Omaha did when it opened its arena 10 years ago.

Omaha built a larger arena, with an attached convention center, at a cost of $291 million.

Qwest Center Omaha, later renamed the CenturyLink Center, has been called a catalyst for at least $40.5 million of private development in north downtown, including projects such as the TipTop building, Saddle Creek Records, 22 Floors and the Mattress Factory Bar and Grill.

Add together the private and public investments from north downtown and the adjoining riverfront and the development tally reaches about $1 billion since the Omaha arena was built, according to the Greater Omaha Chamber of Commerce.

Pinnacle Bank Arena

Broke ground: Sept. 7, 2011

Completed: Aug. 12

Arena cost: $184 million

Cost to redevelop West Haymarket: $191 million (includes site work on former rail yard, streets, parking, etc.)

Public debt: $355 million in bonds

How debt will be paid off: 2 percent occupation tax on bars, restaurants, and 4 percent on hotels and rental cars; $25 million from sales taxes from arena-area businesses

Public vote in 2010: 56 percent for, 44 percent against

Location: 600 R St., west of central business district and Haymarket

Size: 473,000 square feet

Seating: 15,200 for basketball; 15,900 for center stage concerts

Student seating: 2,000 on retractable court side bleachers

Suites: 36 (12 seats, four barstools)

Loge boxes: 20 (four seats)

Club seating: 816

Owner: City of Lincoln

Operator: SMG of suburban Philadelphia

Lead architect: DLR Group of Omaha and Lincoln

First five concerts: Michael Buble, Sept. 13 (grand opening); Jason Aldean, Sept. 19; the Eagles, Oct. 4; Miranda Lambert/Dierks Bentley, Oct. 10; Pink, Nov. 9

CenturyLink Center Omaha

Opened: September 2003 as Qwest Center Omaha; renamed in 2011

Cost: $291 million

Funding: included $75 million in private donations, $198 million in public bonds

How debt will be paid off: City officials initially pledged not to raise property taxes, but the funding structure didn't work as planned. In 2007 the Legislature passed a bill allowing more state tax revenue to go toward the bond debt. In 2009 the city increased property taxes for the facility and other city debt.

Public vote in 2000: 63 percent for, 37 percent against

Size: 1 million square feet, including convention center

Seating: up to 18,300 for basketball

Suites: 32

Club seating: more than 1,000

Home to: Creighton University basketball and University of Nebraska at Omaha hockey

Owner: City of Omaha

Operator: Metropolitan Entertainment and Convention Authority

Lead architect: DLR Group

First five concerts: Cher, Fleetwood Mac, Aerosmith and Kiss, Matchbox Twenty, Mannheim Steamroller

Both cities have seen their arenas transform former rail yards and brownfields into trendy urban districts where people can work, live, dine, drink and be entertained.

In Lincoln, it took a little less than two years to complete work on the $184 million arena.

Dignitaries will cut the ribbon Thursday afternoon before they throw open the doors for what amounts to a three-day public open house, culminating with Saturday night's “watch party” for the Nebraska-Wyoming football game on the high-definition scoreboard.

All the while, work on the nearby private developments will continue. At least a few of the restaurants are set to be open before the sea of red washes into town for the season's first kickoff.

“We have far more private development going on today than we would have anticipated,” said Dan Marvin, who manages the joint agency formed by the city and university to oversee the project.

Canopy Lofts is one of the major private developments in the new West Haymarket district. A few of the balconies jutting from the upper-floor apartments already hold patio chairs, giving tenants a front-row view of the glass-and-metal colossus across the street. The 70-unit apartment building takes its name from the new adjoining street, which features a four-block-long sidewalk canopy.

The street-level commercial spaces in the loft building will be occupied by restaurants, including Hiro 88, a Lincoln offshoot of an Omaha sushi eatery, and Mellow Mushroom Pizza Bakers, an Atlanta-based national chain opening its first oven in Nebraska. On the same block, work is well underway on a 111-room Hyatt Place hotel with 32 upscale condominiums, set to open next year.

East of the Canopy building is the Railyard, which will house more restaurant-bars and several small retail vendors. The Railyard also features a public plaza with a 36-by-16-foot wrap-around video screen called the Cube. The developers have arranged for the screen to show art displays and the Huskers' game-day tunnel walks.

The roughly 1½-block area also has the state's first entertainment district, where customers will be allowed to walk freely with an alcoholic beverage in hand. The area is loosely modeled after the Power & Light District in Kansas City, Mo.

WRK Real Estate of Lincoln and Chief Industries of Grand Island, Neb., have invested between $55 million and $60 million in the Railyard, lofts and hotel developments, said Will Scott with WRK.

Another block to the south is the second major private development, a $16 million building called Project Oscar. The 80,000-square-foot building will offer office and retail space and will serve as headquarters for Olsson Associates, a design and engineering firm. The project developer is Woodbury Corp., based in Salt Lake City.

The Lincoln arena, approved by 56 percent of those who voted, almost literally paved the way for the private developments.

It brought the public money to replace tons of diesel-contaminated soil and pay for $24 million in traffic improvements and parking garages that will add about 3,000 stalls to the area by the end of the year. Working with the city appealed to developers, Scott said.

“It was a really good opportunity to do a project that would add a great deal of value to the community,” he said. “Lincoln's really, really important to us. We want to see the community grow and be a great place.”

Yet not everyone is impressed by all the brick, metal and glass that has risen west of downtown. Some citizens organized to actively campaign against the arena when it went to the polls and have since formed a group they call Watchdogs of Lincoln Government.

Jane Kinsey, the group's spokeswoman, said members remain skeptical that a city of 265,000 will be able to support the new arena, let alone the nearly 20 restaurants that will open virtually overnight. Her organization's members also fear the project's debt will haunt the city.

“They want young, highly paid professionals in this town,” Kinsey said. “There are no jobs for them, yet they say the arena is going to draw these people here. I think they're dreaming.”

But the mayor said he is confident the arena project will continue to spur more private development, all the way south to O Street.

During the years of planning that led up to the public vote, other places were considered for the arena. By locating it in the Haymarket, they added new space to downtown that will be attractive to developers.

The arena and nearby developments will attract more young professionals, university students and others, Beutler said. And that's important, because a city either grows or it stagnates.

“We built the Capitol in the worst depression and we built this in the second-worst,” the mayor said. “Maybe that says things have to get really bad before we listen up.”

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