The Lincoln-Lancaster County Planning Commission on Wednesday approved a blight designation on a small section of land in central Lincoln.
The designation covers about 11.5 acres generally bounded by 56th, P and R streets and North Cotner Boulevard.
The label was sought by a developer who wants to build an apartment building at the site of the former Home Real Estate.
City Urban Development Director David Landis said the developer found soil compaction issues at the site that will make it impossible to support its proposed four-story apartment building. Fixing that issue will cost hundreds of thousands of dollars, making the project financially tenuous at best.
Landis did not identify the developer at Wednesday's meeting, but Commercial Investment Properties was approved last spring to build a 153-unit apartment complex on the site.
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Having the area declared blighted makes redevelopment projects eligible for tax-increment funding, which allows the increased property taxes generated from the new development to be used to pay for improvements that have a public benefit.
A four-story, 153-unit apartment complex would likely generate enough TIF to cover the developers' added costs.
A blight study done on the area by private consultants found six of 12 possible factors necessary under state law to declare it blighted as well as all four factors necessary for finding it substandard.
Landis said none of the six private property owners included in the proposed blighted area expressed any opposition to the plan. It also includes two parcels owned by Lincoln Electric System.
The blight designation still will have to be approved by the City Council later this month.