Two redevelopment agreements would use a total of nearly $10 million in tax-increment financing — one for apartments where the Bishop Heights shopping center is and another for an apartment building near 48th and Holdrege streets.
Plans for redeveloping the Bishop Heights shopping center include three phases — and three different developers — that will ultimately include building about 230 luxury apartments, turning the old Shopko that anchored the shopping center for years into new commercial space, possibly with a 150-room hotel, adding new office space and making significant trail enhancements along bike trails that run along the east and north portions of the property.
On Monday, the Lincoln City Council considered a redevelopment agreement for the first phase — the apartments and some of the trail improvements, which will cost about $48 million and would use $6.5 million in tax-increment financing.Â
Tax-increment financing, or TIF, allows developers to use future property taxes generated by projects to pay for certain upfront costs.
The entire project will cost nearly $90 million, and will redevelop the shopping center, which has remained nearly vacant since Shopko closed in 2019 and the retailer declared bankruptcy. A Wells Fargo bank branch and an Arby’s remain there, and the fast-food restaurant is interested in updating its building.
Dan Marvin, director of the city's urban development department, said discussions about the project began before the pandemic.
"These things don't magically get put together," he said, especially a project like this that includes more than one developer.
EPC Real Estate Group, an Overland Park, Kansas-based company, plans to build a five-story, 230-unit luxury apartment complex.
RED Development, which owns the building that used to house Shopko and other businesses, plans to demolish it and develop either 70,000 square feet of commercial space with retail shops, restaurants and offices, or 50,000 square feet of commercial space and a hotel.
White Development Co. owns the former U.S. Bank branch building on the northwest part of the site, which it plans to demolish and develop into one larger office building or two smaller ones, with a maximum of 45,000 square feet of space.
During a public hearing on the redevelopment agreement for the apartments, Marvin said that instead of including affordable units in what will be a high-end development, the developer agreed to contribute $2,500 per unit — what will be about $500,000 — for the city to use for affordable housing. It could be used to rehab existing apartments or for new development.Â
Two bike trails run adjacent to the land, and developers plan to make significant trail upgrades, including adding three new sidewalk connections to both the Helen Boosalis and Rock Island trails from the apartments and commercial areas, additional landscaping and building shared trailhead parking stalls and installing bike racks along the south side of the property, where the Rock Island Trail runs along Nebraska 2.
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TIF dollars will be used for those trail enhancements, including additional connections to the trail that will encourage people to come into the commercial parts of the development, Marvin said.
Some neighbors have expressed concerns about the potential for increased traffic, but a traffic study submitted with the plans shows that while traffic would increase in the morning, it would drop by 28% in the evening and by 18% overall.
The council also considered a redevelopment agreement for 115 market-rate apartments at 48th and Aylesworth streets, the second phase of a project that includes another apartment building just to the south at 48th and Holdrege streets.
The redevelopment agreement includes using $3.2 million in tax-increment financing for the second phase of the project, which includes the apartment building that will be bounded by 48th, 49th, Aylesworth and Martin streets.
It will include 23 studio apartments, 19 alcove apartments (with more separation for beds), 45 one-bedroom and 28 two-bedroom apartments. There also will be 122 surface parking stalls and nine single-stall garages.
The apartment building will look similar to the apartment building just to the south, but will have apartments, not commercial space, on the first floor, because there’s more demand for apartments than commercial space.Â
TIF dollars will be used for energy efficiencies, including solar panels, charging stations for electric cars and more bike storage, Marvin said. The developer also will work with StarTran to make improvements to the nearby bus stop, to encourage alternative modes of transportation.
The second phase will expand the planned unit development approved in 2016 for the first apartment building by a little more than 2 acres. The land now has a number of old commercial buildings on it and they will be removed.
The council will vote on both agreements Aug. 22.Â