Pillen hears incentive pleas for Omaha soccer developments

LINCOLN — Nebraska Gov. Jim Pillen’s questions Tuesday about the level of private and city investment in two Omaha soccer projects seeking state sales tax incentives may hint at a possible thaw in his attitude toward them.

The governor, approached immediately after a State Capitol hearing before the Sports Arena Facility Financing Assistance Act Board, declined to comment on whether what he heard from the organizers behind the Tranquility Park soccer project and Union Omaha downtown soccer stadium had changed his views.

Pillen spokeswoman Laura Strimple said the governor has never taken state incentives for economic development projects off the table “that make sense for the taxpayer.” She said he is evaluating each of the projects individually in several ways.

She said he prefers projects with a public ownership stake for public incentives. He prefers projects that generate new sales tax revenue. He prefers projects that won’t compete with other state-backed projects. And he likes local buy-in.

“The law states that the board must consider whether state assistance to these projects is in the best interest of the state, and it may not be in the best interest of the state to siphon off existing state sales tax dollars,” Strimple said.

Part of Pillen’s willingness to listen also could stem from a legislative reality check, a change in state law this session that stripped him of his singular ability to keep such projects from accessing a state sales tax incentive for sports projects. 

Nine applications for the incentive have been pending for months. Pillen had balked at approving them. But now a majority of the five-member SAFFAA board could approve the projects without him. The group has 60 days to act on projects that had a hearing.

The SAFFAA board indicated it would meet in May to vote on projects. 

The nine applicants requesting the incentive have been in limbo, drawing frustration from organizers of proposals ranging from a $63 million volleyball-focused complex in Douglas County to a $9.38 million multipurpose sports facility in Valentine. 

The incentive from the Sports Arena Facility Financing Assistance Act lets developers steer a portion of sales taxes collected near arenas, fields and stadiums over a set period of time to help pay certain development-related costs. 

In the cases discussed Tuesday, the incentives would separately help redevelop a regional soccer park in northwest Omaha and a swath of land north of downtown Omaha that the city and history says has struggled to attract private development. 

One would use the incentive to help revamp and expand the half-century-old Tranquility Park that hosts youth soccer games. The application says the complex would become a haven for soccer and other sports with up to 16 separate multipurpose fields.

The other would use the incentive to help finance a north downtown Omaha home stadium for the Union Omaha professional men’s soccer team and a new women’s soccer team, which team officials said would help both teams compete at a higher level.

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Officials with the City of Omaha, which is a partner in both proposals, have said the initiatives won’t work as planned without the green light from the SAFFAA board to unlock the incentive. Though the so-called turnback tax was previously authorized under state law, the SAFFAA board must approve individual requests.

Both proposals envision the projects spurring investment by retailers, hotels and housing. Jacquelyn Morrison, a deputy chief of staff for economic development with the City of Omaha, said the projects matter to a growing city.

Of the Tranquility Park renovations, she said, “As a soccer coach, as a soccer mom … there are children and parents coming up to me asking if Tranquility is really going to be improved. Every kid wants a soccer home that they can be proud of.”

Heath Mello of the Greater Omaha Chamber of Commerce said of the Union Omaha site it “is one of the most visible undeveloped properties in our area.” He said the stadium is a chance to build and grow Omaha’s front porch from Eppley Airfield.

Pillen seemed more open and interested in both projects once he heard about millions of dollars in planned private investment from the family that owns Mulhall’s Garden Center near Tranquility Park and from Union Omaha’s ownership group and the City of Omaha.

He asked city staffers if they could calculate how much in new sales tax revenue the state could expect from purchases outside of the immediate stadium and park areas. The state panel expects to make a decision at its next meeting in several weeks.

“What could that number be for the state?” Pillen asked. “That could help me personally.”

New Nebraska State Treasurer and Pillen appointee Joey Spellerberg acknowledged the depth of the applications Tuesday and said sports tourism “is a big business” and said Nebraska wants to compete. He asked for more information on financing.

Much of the back-and-forth about Tranquility’s application centered on the future upkeep of turf fields that can be used more often and for more sports throughout the year. Some was spent discussing the impact on planned hotels and restaurants.

City staff said Tranquility could host additional soccer tournaments and other sports events and add up to $30 million in direct consumer spending each year. Officials said the city would run Tranquility like its golf program, keeping funds made at the park for upkeep of the park.

With the Tranquility Park project, the city said it plans to issue special tax revenue redevelopment bonds for about $65 million in principal. 

The proposal says the turnback tax revenue is expected to help cover bond payments. The idea is that multimillions of dollars in new retail redevelopment and retail around the complex will generate even more revenue for the state over time.

On the Union Omaha application, Pillen asked about the viability of the professional soccer franchise and the impact to the city of adding more mixed-use development in that part of downtown, north of Creighton University and Charles Schwab Field.

The Union stadium project is a partnership between Omaha and the Downtown Soccer Stadium Inc., which is a nonprofit affiliate of the Union Omaha ownership group. Proposed is construction of a 6,500-seat open-air sports stadium and entertainment facility on undeveloped land north of Cuming Street. The “hard cost” of the stadium is anticipated to be $125 million. It is to anchor a 20-acre mixed-use “Stadium District” composed of apartments, retail, restaurants, hotels and other commercial uses.

Union Omaha lawyer David Levy said the project would add 450 apartments, hundreds of thousands of square feet of retail and over $330 million in investment to the city’s urban core. He said the state would make new tax revenues, even during the 20 years of sales tax diversion, that it would not have otherwise.

According to the group’s proposal to the SAAFFA board, the district could generate enough new revenues to satisfy the $1.25 million annual turnback tax limit and contribute an average of $1.3 million annually in new tax revenues to the state. The applicant seeks approval for up to $1.25 million per year in turnback tax for 20 years. 

Bonds would be backed by a mix of state and local incentives, including the state sales tax turnback revenues. 

“Costs in excess of the bonds issued by the city, as well as the entire remainder of the Stadium District, will be financed through DSSI and its partners via a mix of private equity, state and local incentives and bank financing,” the application says.  

Said Levy: “Soccer has become important for competing for talent.” 

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