An affordable housing project where the old, deteriorating Pershing Center sits got the go-ahead from the Lincoln City Council on Monday.
The redevelopment agreement approved unanimously by the council will allow White Lotus Group of Omaha to move forward with a plan to build 93 affordable housing units, which is fewer than the 100 units initially planned.
Urban Development Director Dan Marvin said the redevelopment of the block between Centennial Mall, 16th, M and N streets is complicated with many challenges.
Among them, Marvin said: The old Pershing Center is dangerous and needs to come down, the project must go through the Capital Environs Committee, which sets a high bar for materials that will add cost to the project, and there are height restrictions along Centennial Mall.
Financing has also been complicated.
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Developers of the $25 million to $30 million project are applying for low-income housing tax credits, which has affected when the city asks the council for approval of certain parts of the project.
Also, both White Lotus and the city got federal stimulus grants from the state to help pay for costs related to the development.
The city got a $2.5 million grant to demolish Pershing. Initially, the developer agreed to pay 60% of the cost, with the city paying 40%. If the cost of demolition comes in above $2.5 million, the city and developer would contribute dollars based on that same 60-40 split, Marvin said.
White Lotus got $3 million in federal stimulus money for the affordable housing project, and the City Council will vote in January on allowing the developer to use $2.3 million in tax-increment financing. TIF will allow White Lotus to use future property taxes to pay for some upfront costs.
In addition to reducing the number of units, White Lotus also reduced the footprint of the building. Initially, the group planned to build an L-shaped building that would run along both 16th Street and N Street.
Now, the plan is to build a single five-story building along 16th Street, leaving the N Street side listed as future development, which would require another redevelopment agreement.
The city also could build a new central library on the block, though that would require that voters pass a bond issue.