Press Release
Call it a new tool for economic development.
That’s how supporters describe a bill in the Legislature to enable a city to enter into an agreement to help develop property inside an “enhanced employment area.”
Cities could issue revenue bonds to assist the development. The bonds would be paid off by an occupation tax imposed only on those businesses inside the defined area. It would be targeted to specific employers that meet investment and employment goals.
The cities of Norfolk, Lincoln and York and League of Nebraska Municipalities lined up in favor of the measure, Legislative Bill 562, at a recent public hearing in Lincoln. Other support has come from Affiliated Foods and Dial Realty, owner of the Sunset Plaza property in Norfolk.
No opposition was expressed to the proposal at the hearing.
Mike Nolan, Norfolk city administrator, said the bill would be a help in redeveloping retail business districts.
“From the standpoint of aligning retail with traffic counts and land use, it’s an enhancer,” Nolan said. “It allows city councils and mayors to decide who benefits to help direct where retail development occurs where there’s a renovation concept.”
There are other positives as well.
“It helps a city have a mechanism where you can avoid having to create redundant retail when an old retail area has been depreciated out and you’ve got infrastructure that’s old,” he said. “It can help give developers (an incentive) to keep retail in that spot rather than create brand new retail areas. That’s a nice benefit.”
The bill is a priority measure of Sen. Greg Adams of York. It was reported out for floor debate by the Urban Affairs Committee with a committee amendment that reflected changes proposed by the sponsor at the public hearing.
The amendment ties the qualifying number of new employees that will result from the new investment to the size of the county. It ranges from two new employees and a $125,000 investment in a county of less than 15,000 to 30 new employees and a new investment of $3 million in a county of more than 400,000.
Also, any business with 130,000 square feet or more of space and annual gross sales of at least $10 million must offer an employer-provided health benefit of at least $3,000 annually. The amendment deletes the original requirement of having to pay a “qualifying wage” equal to that in the Rural Advantage Act.
Nolan said city staff members have met with a prospective developer, but the developer wouldn’t be able to pursue its project because of the costs involved. But that could change if the bill passes.
“Our pro forma (financial statement) at that location was about $2.8 to $2.9 million of unproductive costs when taking into account land acquisition and getting rid of old structures,” he said. “It just wasn’t going to work.”
Neither the location nor the developer have been publicly identified.
The proposed bill would be another avenue to foster development.
Now some properties can be declared blighted to qualify for tax-increment financing, which allows property taxes due on the land to be used to defray some costs. The proposed bill would keep the new development area on the tax rolls, and it would not have to be declared blighted.
The bill also says eminent domain may not be used if it is for acquiring land that is to be transferred to a private party under the redevelopment district, which is limited to up to 600 acres.
“It’s going to be a very good tool across the state. You’ve got shopping centers wearing out,” Nolan said. “That property sits there and doesn’t produce a revenue stream…This route provides a mechanism to keep that going so you have a concentrated commercial base in that location.”
- Story Courtesy of the Norfolk Daily News
