Episode Transcript
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Mama maryor Jean's Douthor, Mayor,good morning, good morning, thanks for
having me. Welcome, welcome.Lots of questions surrounding this Crossroads project from
folks I just talked to in thecommunity and anecdotal stuff, and then obviously
the news last week released from youroffice about updated plans. Bottom line question,
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Mayors Douthor, is this development,this project in trouble, No,
not at all. In fact,it's moving forward and it's got there's so
much more and the plan is somuch better than it was before. And
just to give a little history,we've been talking about Crossroads since I've been
down at City Hall, which hasbeen fifteen years if you include the city
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council time that I had. Buta lot of people ask me, what
are you going to do with thatarea at seventy second Dodge. But it's
important to remember that for many,many years it had one sole owner and
that was Frank Crazy. So thecity was there on a lot of the
conversations with Frank about what was goingto happen there, but we couldn't do
anything with that. It was aprivate development owned by a private owner.
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And then we did a redevelopment agreementand announced the plans back in twenty twenty,
and since then Frank has died.You know, the Lockwood Development came
on board as a partner, andnow we have a new partner which is
Woodbury or Corporation. They've joined thedevelopment team and they're the ones who now
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are going to be the project owner. They do these projects like this all
over the country. They buy oldmalls and old strip malls and redo them.
They have a lot of money anda lot of success. Does that
mean that Lockwood and chip Jams areout? I believe that Lockwood and Chip
James will still be part of thedevelopment, but the actual owners of the
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Crossroads development now will be the Woodburycorp. And so they they have updated
the project planning cost. If youremember, you know, the original with
Frank Craigie was around seventy nine milliondollars. Now they're increasing it to a
lot more than that. It isgoing to be about an eight hundred No
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I said that wrong. Frank Craigiewas five hundred and fifty three million,
and now it's going to be aneight hundred and sixty one million dollar development.
So it is I've seen the plansit is much denser than it used
to be. It has more ofa retail and more residential and less office
space. They've already got some wecall them allies, a letter of intent
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with some restaurants that I think peopleare going to be very happy about.
They don't have them in Omaha.Some leases out there with different retail and
different venues that we don't have now. So right now this plan is better
than it was before. It's denser, it's much more expensive than it was
before, and it is moving forward. It's important for everybody to remember though,
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that since the original crossroad structure wasdemolished, the developer has already completed
about thirty million dollars dollars in siteprep, so there was a lot of
sewer and utility construction and street constructionthat you really can't see from the street.
Okay, mayor yes, who ownsCrossroads right now? Is it owned
in part by the city or whoowns it? No, the city does
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not own it at all. It'sowned in partnership with Frank Crazy's old corporation,
which is still his family k JVentures, and then also Lockwood,
and they will continue to be involved. But the actual owner of the property.
In fact, there has been somecontracts signed just recently that Woodbury will
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own the property. Okay, soWoodbury, let's say it's Woodbury, and
then maybe Chip and Lockwood would bea minor partner. We're talking an eight
hundred and sixty million dollar project.Who's paying for the eight hundred and sixty
million that that would be the ownersand the developers say say if a developed,
they they will own the property,the Woodberrys. But say if they
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hire a partner to build apartments,then that partner would build the apartments and
pay for it, and but theWoodberris would still own the development. So
what the city will do the expensesfor the city will be that we have
with the TIFFs. And you knowwith the tiff we it was announced that
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we could we were going to buildgarages for them. We build garages all
over the city. And the reasonthat we can build garages is because we
have the ability to finance and fundat a better rate and in a better
way than the developer can. Andso what the city will do with the
garages there and there will be three, is we will use our bonding authority
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to issue bonds to finance the publicparking garages, and this assistance by the
city will make the project more economicallyfeasible for the developer. The project will
be paid for by the developer,not the city. Can you can you
go into a little detail, Mayorthat the parking garage on the north west
corner now needs to come to thenortheast corner of the area needs to come
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down. That's a relatively new garageand a nice one. Why can't we
keep that because it's in it's ahuge garage, it's over two thousand spaces.
But for this development, which willbe dense and like I said,
they'll be retailed, they'll be business, they'll be residential. It's located not
in the best spot, and whatthey would like are three smaller garages.
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Two will be underground. Now,in the original agreement, also in twenty
twenty, it did say that theCity of Omaha was going to purchase that
garage for thirty five million. Nowin the new amended agreement, we will
not we will not be purchasing thatgarage. So the amendments that will come
to the City Council that will takethat expense out of the agreement. So
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the city won't be doing the garage, they will demo the garage. Again.
When we buy garages, excuse me, When we buy garages like that,
we own and operate it, andwe pay for the garudges with the
revenue that it generates. That's whythe city has gotten into building garages for
different developments, because it makes itmore economically feasible. But we will pay
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for it with the revenue that itproduces, and we get it, and
we pay for it with a lowWe have the bonding capacity to get it
at a much better rate than adeveloper debt. I got this in from
a listener. I think it's areasonable questions. Ask the mayor why there
aren't any specific performance requirements included inthis supposed Crossroads redevelopment plan. So if,
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in other words, if you don'tmake the mark then the tiff reduces
that. Are there any performance requirements? Well, yeah, I mean in
the tip agreement. Again, thatgoes through a tiff committee and they approve
it. Then it goes to thecity council and it's all based on the
value of the property itself. Sothere's eligible expenses that are defined by state
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law and only those things can becovered with the TIFF, and it's basically
public infrastructure and things like rogers forpublic use. If the development does not
develop at that amount of dollars thatthey say it will, then no,
then the TIFF does not come throughas originally planned. Okay, and keep
in mind the tiff too. Igot to just explain that the tiff is
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no risk to the city. Thecity decides what tiff eligible expenses there are,
and the developer goes to the bankand takes the loan out. So
if the developer does not pay theloan back, or defaults on the loan,
or doesn't build the property like theysay they do, it's on the
developer's back, not on the city. Then why doesn't the developer just go
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borrow the money for the garage?Why is the city involved at all?
Why doesn't he borrow the garage?Because, like I said, there are
tiff eligible expenses that makes it moreeconomically feasible for the developer to build that
property. So we come in,say TIP eligible expenses are the garage,
and say are the roads and someof the infrastructure. It makes it more
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economically feasible for the developer if thesecould be covered by TIFF. And then
they could pay that loan back asthe property value goes up and the taxes
go up on that property, butthe developer is never going to pay back
the tiff. That'll come from futureproperty tax revenues. So that's actually city
money we're borrowing against ourselves because we'regoing to get the money for the tiff
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before the and then when the tiffis paid off, we get the sales
tax revenue I'm sorry, the propertytax revenue, property tax, that's right,
and then the EEA is another toolthat they have now that are the
sales tax. But the issue ishere that we still continue, and we've
talked about this before, we stillcontinue to get the property taxes of the
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value of the property now whatever it'sworth, say it's worth five million dollars.
Now, we continue to get theproperty taxes on those as every year
as that development develops more and moreand it's valued more and the assessor comes
in and values it revalues it more, that additional value of property tax the
developer continues to pay, and theywill pay the additional amount of value of
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property taxes, but that additional amountgoes back to helping the developer pay off
the loan to the bank, andso it's just it's a development tool and
one of the few that we havein Nebraska. But we very carefully go
through every tip. There's a lotof tip applications that we don't grant,
and we want to make sure thatit follows all estate law and it has
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to be if you recall, ithas to be in one of those blighted
in substandard areas. It certainly is. That's tax income and financing. By
the way, for the uninitiated,Thank you, Bert. I'm always going
to have you on. James Stothardhere