RES 2021-0569 - Blackstone East Mixed-Use Building TIF Project Plan ��((}} i City Clerk Office Use Only:
RESOLUTION NO. L_i/Zir `f
Publication Date(if pplicable):
Agenda Date: 5 L_ 2)
Department: i 1,09
Submitter: />�
CITY OF OMAHA
LEGISLATIVE CHAMBER
Omaha, Nebraska
RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:
WHEREAS, the primary objectives of the City of Omaha's Master Plan and
Community Development Program are to encourage additional private investment and infill
development within inner-city neighborhoods; and to eliminate conditions which are detrimental
to public health, safety and welfare, by developing vacant or underutilized property within these
neighborhoods; and,
WHEREAS, the approximately 1.05 acre redevelopment project site located at
3719 Farnam Street and 3710 Harney Street, legally described in Exhibit "A", which is attached
hereto and incorporated herein by this reference, is within a designated community
redevelopment area, as the area meets the definition of blight and substandard per the
Community Development Law and is in need of redevelopment; and,
WHEREAS, Section 18-2108 of the Nebraska Revised Statutes requires the City
of Omaha to adopt a redevelopment plan before taking an active part in a redevelopment project;
including the division of ad valorem taxes for a period not to exceed fifteen years under Sections
18-2147 through 18-2150, Revised Statutes of Nebraska; and,
WHEREAS, the Blackstone East Mixed-Use Building Tax Increment Financing
(TIF) Redevelopment Project Plan ("Plan") for the redevelopment project site proposes to
construct a new nine-story mixed-use building. There will be about 20,000 square feet ground
floor commercial space, with about 161 apartment units on the upper levels, as described in
Exhibit "B", attached hereto and herein incorporated by reference, with the use of TIF as
authorized by Section 18-2147 of the Nebraska Revised Statues; and,
WHEREAS, the Plan conforms to the City of Omaha's Master Plan and the
legislative declarations and determinations of the Community Development Law, as the
redevelopment project would not be economically feasible and would not occur at the
redevelopment project site without the use of TIF; and,
WHEREAS, the costs and benefits of the redevelopment project, including their
impact on other political subdivisions, have been analyzed and found to be in the long-term best
interest of the community and the local economy, and the redevelopment project will satisfy an
identified demand for the public and private services it will provide; and,
WHEREAS, the Plan for the redevelopment project site was approved by the TIF
Committee and subsequently by the City of Omaha Planning Board at the May 5, 2021 meeting;
and,
RESOLUTION NO. 2t2)
_D s` q
WHEREAS, this Resolution seeks approval of the Blackstone East Mixed Use
Building Tax Increment Financing (TIF) Redevelopment Project Plan and authorizes the City's
participation through the allocation of TIF in an amount up to $6,235,000.00, plus accrued interest,
to offset TIF eligible expenses, including, but not limited to acquisition, demolition, site preparation
construction, architectural and engineering costs, special engineered foundations, and public
improvements as required for a project with total estimated costs of$ 43,507,648.00; and,
WHEREAS, the Plan presents a project based on estimated figures and
projections that are subject to change as project costs are finalized, and is required to comply
with all Planning Department requirements and Planning Board recommendations.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF OMAHA:
THAT, the attached Blackstone East Mixed Use Building Tax Increment Financing
(TIF) Redevelopment Project Plan, for the redevelopment project site located at 3719 Farnam
Street and 3710 Harney Street, which proposes to construct a new nine story mixed -use building.
There will be about 20,000 square feet ground floor commercial space, with about 161 apartment
units on the upper levels, and authorizes the City's participation through the allocation of TIF in
an amount up to $6,235,000.00, plus accrued interest, to offset TIF eligible expenses including,
but not limited to acquisition, demolition, site preparation construction, architectural and
engineering costs, special engineered foundations, and public improvements as required, with
the applicant contributing $62,000.00 of the TIF loan proceeds to the Midtown Public Improvement
Fund, containing a provision for the division of ad valorem taxes as authorized by Section 18-
2147 through 18-2150, Revised Statutes of Nebraska, as analyzed and determined to be in
conformance with the Community Development Law and as recommended by the City Planning
Department, be and hereby is approved.
3093 nsp APPROVED AS TO FORM:
Ss 4
ASSI A T CITY ORNEY DATE
Adopted: JUN 15 2021 D
Attest: �� 1"4
City Clerk
Approved: \ ,�
Mayor
EXHIBIT "A"
Legal Description, Alta Survey, Topographical Survey, etc.—see following page(s)
Project Address&Legal Description Guide:
Lot# I Address Legal Description
1 1 3719 Farnam Street,Omaha, Nebraska HIGHLAND PLACE LOT 20 BLOCK 20 S 137.5 FT LT 2 BLK
j 68131 11 SMITHS ADD&ALL LTS 19&20
2 3710 Harney Street,Omaha, Nebraska HIGHLAND PLACE LOT 18 BLOCK 20 NE TRI 276 SQ FT L
68131 17&-EX SW 485 SQ FT-&N 15 SQ FT VAC ST ON W
*The two existing parcels will ultimately be re-platted into a single parcel with a new address and legal
description
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EXHIBIT "B"
BLACKSTONE EAST MIXED-USE BUILDING
TIF REDEVELOPMENT PROJECT PLAN
3719 FARNAM STREET
AND
3710 HARNEY STREET
MAY 2021
-�'� I Fg�y
iCr PLANNING•OMAHA
A
_. )
'T4•D FE130*
Jean Stothert, Mayor City of Omaha David Fanslau, Director
Planning Department
Omaha/Douglas Civic Center
1819 Farnam Street, Ste. 1111
Omaha, Nebraska 68183
Omaha
ju4 City Planning of OmahaBoard Planning Department
Degh Memo
PLANNING
To: Chairman and Members of the Planning Board
From: David K. Fanslau
Planning Director
Date: April 28, 2021
Subject: BLACKSTONE EAST MIXED USE BUILDING TIF REDEVELOPMENT PROJECT
PLAN
Southeast of 38th and Farnam Streets
Case #C3-21-096
PROJECT DESCRIPTION:
Existing Land Use and Conditions of the Redevelopment Site:
The TIF project site consists of two parcels. The larger parcel contains a paved surface parking
lots. A four story apartment building with six (6) units is located on the smaller parcel. It will be
demolished.
Proposed Use and Project Details:
The site will be cleared for construction of a new nine (9) story mixed use building. There will be
about 20,000 square feet of commercial space on the first floor with about 161 apartment units
on the upper levels. Additionally, a 400-plus stall parking structure will be developed, which will
be constructed as a separate component of the project, excluded from the TIF project
construction. A condominium plat will be submitted for the project, with the parking structure to be
conveyed to City ownership. Public improvements will include street lighting fixtures, sidewalks,
curb, gutters, right of way landscaping and on-street parking stalls. The project includes $550,000
in public improvements, and a contribution of$62,000 of the TIF proceeds into the Midtown Public
Improvements Fund.
The Developer is Blackstone Parking, LLC, managed by Thomas McLeay and Matt Dwyer.
The applicant anticipates starting construction in October, with project completion estimated to be
September 31, 2023.
Rehabilitation: No
Acres: 1.05 Approximately
# of Buildings: 1
Building Height(s): 9 stories
Parking Plan for Proposed Project:
There will be a parking structure of about 400 stalls developed and conveyed to the City of
Omaha. It will provide parking both for the Blackstone District and for the TIF project.
DS
ANALYSIS:
The project site is located within a Community Redevelopment Area, meets the requirements of
Nebraska Community Development Law and qualifies for the submission of an application for the
utilization of Tax Increment Financing to cover costs associated with project development as
submitted for approval through the Tax Increment Financing process. Construction staging and
materials deliveries are more difficult for sites tightly constrained by neighboring developments
and large roadways, and the required demolition of an existing, older structure also adds costs to
the project. These factors additionally support the necessity of TIF assistance, for project
success. Ultimately, this project plan will enhance the tax base for various taxing jurisdictions
within Omaha and the state. The project would not be feasible without the assistance of the TIF
Program.
This project is consistent with the vision of the Destination Midtown Plan, an adopted part of the
City's Master Plan, which calls for establishing the Farnam/Harney corridor as a "dominant mixed
use regional draw" (p. 97). The inclusion of public structured parking also supports the plan's
vision of creating "park once" districts where strategically located public parking allows for more
efficient, walkable development patterns (p. 23). The incorporation of retail and apartments
furthers Mater Plan objectives including encouraging job creation and promoting infill housing
development in the urban core.
No Building Permit will be issued based on a site plan that does not comply with the
provisions of the Zoning Ordinance.
RECOMMENDATION: Approval.
ATTACHMENTS:
General Vicinity Map
Project Plan
Case Number: C3-21-096
Page 2
DS
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Please contact Douglas County GIS for map questions(gis@douglascounty ne.gov) 03/24/2021 00:00:00 suitable for legal,engineering,or surveying purposes.Do NOT use property
lines from this website for plan submissions.
INTER-OFFICE COMMUNICATION
Date: April 15, 2021
To: TIF Committee:
David Fanslau, Stephen Curtiss, AL Herink,Jennifer Taylor, Robert Stubbe,
Bridget Hadley, Todd Pfitzer,Troy Anderson, Kevin Andersen
From: Don Seten-City Planning
Applicant: City of Omaha Planning Department
Project Name: Blackstone East Mixed Use Building TIF Redevelopment Project Plan
Location: Southeast of 38th and Farnam Streets
Request: The TIF request is for up to $6,235,000 at an interest rate of 6.0 percent, inclusive of capitalized
interest. Using the tax levy rate of 2.24313 percent and other assumptions of the TIF calculation
spreadsheets,the TIF request is supported using estimated cost and estimated market approaches.
TIF Fee Schedule: The $500 application fee has been paid; the processing fee of $3,000 and the
administrative fees of$42,500 will be collected. Total fees will be$46,000.
TIF Justification:
The project site is located within a Community Redevelopment Area, meets the requirements of Nebraska
Community Development Law and qualifies for the submission of an application for the utilization of Tax
Increment Financing to cover costs associated with project development as submitted for approval through
the Tax Increment Financing process. Construction staging and materials deliveries are more difficult for
sites tightly constrained by neighboring developments and large roadways, and the required demolition of
an existing, older structure also adds costs to the project. These factors additionally support the necessity
of TIF assistance, for project success. Ultimately, this project plan will enhance the tax base for various
taxing jurisdictions within Omaha and the state.The project would not be feasible without the assistance of
the TIF Program.
This project is consistent with the vision of the Destination Midtown Plan, an adopted part of the City's
Master Plan, which calls for establishing the Farnam/Harney corridor as a"dominant mixed use regional
draw" (p. 97). The inclusion of public structured parking also supports the plan's vision of creating"park
once"districts where strategically located public parking allows for more efficient, walkable development
patterns (p. 23). The incorporation of retail and apartments furthers Mater Plan objectives including
encouraging job creation and promoting infill housing development in the urban core.
ROI Statement
The City of Omaha considers a project's ROI as part of the TIF review, but has not established a specific,
numeric ROI threshold. The large number of variables involved in TIF projects would make any such
threshold arbitrary, and potentially inequitable. The project variables include the project type,the
geographic location,the project's market demand and competition, as well as the financial strength and
positioning, and the experience of the project developer.
The ROI of a redevelopment project is based on the risk/reward that the applicant is willing to accept to
fulfill redevelopment goals of the City of Omaha. Developers each have their own breakpoint for
determining an acceptable level of ROI, and the amount of acceptable risk for a given estimated reward
for any specific developer may change due to consideration of the many of the variables previously
mentioned. As a result,the ROI an applicant projects will vary across projects.
The ROIs stated in the within this TIF application are as follows:
ROI With TIF 8.8% ROI Without TIF 2.2%
TIF eligible costs are acquisition, demolition, site preparation construction, architectural and engineering
costs, special engineered foundations and public improvements. TIF eligible costs total approximately
$6,354,155. The total estimated project costs are$43,507,648.
TIF Eligible Expenses Amount
Property Acquisition(net) $ 1,247,937
Public Improvements in the ROW(landscaping, sidewalks, lighting,utilities) $ 550,000
Site Work(includes demolition) $ 2,105,289
Architecture and Engineering $ 1,454,929
Engineered Foundations $ 600,000
Subtotal $6,308,155
TIF Fees $ 46,000
Total TIF Eligible Expenses $ 6,354,155
The application notes that TIF will be used for these items only,and that PACE will be used only for eligible
building systems such as HVAC,windows and water conservation plumbing fixtures.
The TIF is 14.3 percent of the total project costs.
Recommendation: Approval.
Project Description
The project site is comprised of two parcels with a combined area of a little more than 1.0 acres. A four
story apartment building with six(6) units is located on the smaller parcel. It will be demolished. A new
nine(9)story mixed use building will be constructed. There will be about 20,000 square feet of commercial
space on the first floor with about 161 apartment units on the upper levels. Additionally, a 400-plus stall
parking structure will be developed, which will be constructed as a separate component of the project,
excluded from the TIF project construction.A condominium plat will be submitted for the project,with the
parking structure to be conveyed to City ownership. Public improvements will include street lighting
fixtures, sidewalks, curb, gutters, ROW landscaping and on-street parking stalls
The Developer is Blackstone Parking, LLC, managed by Thomas McLeay and Matt Dwyer.
The applicant anticipates starting construction in October, with project completion estimated to be
September 31,2023.
Project Finance Summary- Sources& Uses
Sources of Funds Amount
Owner/Developer Equity $ 3,200,000
Construction/Permanent Loan $ 30,807,649
TIF/PACE Financing($6,235,000 is TIF only) $ 9,500,000
Total Sources of Funds $ 43,507,648
Uses of Funds Amount
Land Acquisition $ 1,769,537
Construction Hard Costs $ 27,372,249
Site Work $ 2,105,289
Construction Contingency $ 1,718,522
Construction Soft Costs $ 2,382,846
Architecture and Engineering $ 1,454,929
Tenant Improvements $ 930,000
Capital Equipment Costs $ 300,000
Developer Fees $ 1,875 018
Financing Fees $ 3,348 757
Total Uses of Funds $ 43,507,648
Final Valuation Discussion
The applicant estimates a total probable final valuation of $35,744,000 upon project completion. The
estimate is based on comparable developments,and estimates a taxable valuation of about$170 per square
foot.
Land Use and Zoning
The project site consists of two parcels;one contains a four story apartment building with six(6)units.The
apartment building will be demolished. The building is occupied. The residents have received information
about the proposed project, and will be given at least 60 days notice to relocate. The project owners have
over 600 units in the vicinity, and have offered to assist tenants with relocation. There have been meetings
with City Planning about the project. The applicants need to submit for a Site Plan Review. The property
had been zoned GC-ACI-1(PL) General Commercial District with an Area of Civic Importance Overlay
District, but has recently been rezoned to NBD-ACI-1(PL)Neighborhood Business District, with the Area
of Civic Importance overlay zone designation.
Utilities and Public Improvements
Standard utilities(electrical,water, sewer)exist at the site.The project will also improve a portion of right
of way to create some on-street parallel parking spaces.
Transportation
No transportation issues noted. Public transit is available in the vicinity of the project. The ORBT transit
system is available close by, on Dodge Street.
Historical Status
The property is located in a National Register Historic District, but the site does not contain any historic
structures.
Evaluation Criteria: Mandatory Criteria—from the TIF application
1. The project must be located within a blighted area or an area eligible for a designation of
blight as required and set forth by Nebraska statute.
The project is located within an established Community Redevelopment Area(CRA).
2. The project must further the objectives of the City's Comprehensive Plan.
The Blackstone East project furthers the objectives of the City's Master Plan in the following
ways:
i. Increasing densification of the urban core and the Midtown Omaha market
ii. Redeveloping a blighted and substandard parcel of land
iii. Implementation of Urban Design elements
iv. Job Creation—The project will require at least 2 full-time property manager/leasing agent
and at least 1 full-time maintenance technician, as well as estimated 20-30 additional
employees associated with the addition of 9 new commercial businesses.
3. The use of TIF for the project will not result in a loss of pre-existing tax revenues to the City
and other taxing jurisdictions.
There will be no loss of tax revenue to the City or any other taxing jurisdictions resulting from
the use of TIF.None of the current taxes collected from the base value will be lost or used
towards TIF. Only the tax revenues generated by the improvements being constructed on the
site will be used towards TIF.
4. The developer is able to demonstrate that the project would not be economically feasible
without the use of Tax Increment Financing. In addition,if the project has site alternatives,
the proposal must demonstrate that it would not occur in the area without TIF.Return on
investment assists in determining the economic feasibility of the project.
The development team has demonstrated the economics of the deal and the need for TIF in the
aforementioned section of this application. Without TIF,ROI would be unacceptably low,the
project would not be able to attract investor equity, and the project would not occur. Utilizing
TIF allows the project to achieve an acceptable rate of return to enable it to attract equity
investment in an Omaha redevelopment project. The project has no viability without the TIF
since no financing or equity would be available.
Given the multiple attributes of this site there are no comparable alternatives to the proposed
project site. The City's Master Zoning Plans identifies limited location such as Farnam Street
in this 3600 hundred block for locations for mixed-use development such as this project
presents. Moreover, this location is on a currently underutilized lot that is also sizeable
enough to achieve a reasonable scale for a city affiliated parking garage. Finally,the location
near the new ORBT will provide for a significant to increase the use of the ORBT line which
has been heavily invested in by the City.
Cost-Benefit Analysis—from the TIF application
1. Tax Shifts resulting from the approval of the use of funds pursuant to section 18-2147 (of
the Community Development Law):
No tax shifts were identified for this project.
2. Public infrastructure and community public service needs impacts and local tax impacts
arising from projects receiving incentives:
This project will not create any additional community public service needs and TIF will be
used to cover the cost of necessary public improvements.
3. Impacts on employers and employees of firms locating or expanding within the boundaries
of the area of redevelopment project:
The Blackstone East Mixed-Use project will create a large number of construction jobs and at
least 3 permanent full-time property management positions.
4. Impacts on employers and employees within the city and the immediate area that is located
outside of the boundaries of the area of the redevelopment project:
Owners of the small businesses in Midtown Crossing and Blackstone District will benefit from
the additional of 161 apartment units.
5. Impacts on student populations of school districts within the city:
Blackstone East project could provide housing in close proximity to students at the University
of Nebraska Medical Center, Creighton University and the University of Nebraska at Omaha.
6. Any other impacts determined by the authority to be relevant to the consideration of costs
and benefits arising from the development project:
No additional impacts to mention.
ATTACHMENTS:
TIF Calculation Spreadsheet
TIF Application
Applicant:Blackstone East Mixed Use Building PRO FORMA
Debt Service Payments
Year Total Less Pre- TIF Treasurers Revenues -------------------------------------
(Semi- Taxable Development Taxable Tax Tax 1%Collection Available Interest at Loan Capitalized Interest at
Annual) Valuation Base Valuation Levy Revenues Fee For TIF Loan Principal 6.00% Total Balance Interest 6.00%
0 $6,000,000
0.5 $ - $0 $ - 2.24313 $ - $ - $ - $0 $0 $0 $6,180,000 180000 180000
1 $ - $0 $ - 2.24313 $ - $ - $ - $0 $0 $0 $6,365,400 185400 185400
1.5 $ - $0 $ - 2.24313 $ - $ - $ - $0 $0 $0 $6,556,362 190962 190962
2 $ - $0,$ - 2.24313 $ - $ - $ - $0 $0 $0 $6,753,053 196691 196691
2.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $188,500 $202,592 $391,092 $6,564,553 0 202592
3 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $194,155 $196,937 $391,092 $6,370,398 0 196937
3.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $199,980 $191,112 $391,092 $6,170,418 0 191112
4 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $205,979 $185,113 $391,092 $5,964,439 0 ' 185113
4.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $212,159 $178,933 $391,092 $5,752,280 0 178933
5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $218,524 $172,568 $391,092 $5,533,756 0 172568
5.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $225,079 $166,013 $391,092 $5,308,677 0 166013
6 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $231,832 $159,260 $391,092 $5,076,845 0 159260
6.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $238,787 $152,305 $391,092 $4,838,058 0 152305
7 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $245,950 $145,142 $391,092 $4,592,108 0 145142
7.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $253,329 $137,763 $391,092 $4,338,779 0 137763
8 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $260,929 $130,163 $391,092 $4,077,850 0 130163
8.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $268,756 $122,336 $391,092 $3,809,094 0 122336
9 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $276,819 $114,273 $391,092 $3,532,275 0 114273
9.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $285,124 $105,968 $391,092 $3,247,151 0 105968
10 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $293,677 $97,415 $391,092 $2,953,474 0 97415
10.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $302,488 $88,604 $391,092 $2,650,986 0 88604
11 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $311,562 $79,530 $391,092 $2,339,424 0 79530
11.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $320,909 $70,183 $391,092 $2,018,515 0 70183
12 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $330,537 $60,555 $391,092 $1,687,978 0 60555
12.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $340,453 $50,639 $391,092 $1,347,525 0 50639
13 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $350,666 $40,426 $391,092 $996,859 0 40426
13.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $361,186 $29,906 $391,092 $635,673 0 29906
14 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $372,022 $19,070 $391,092 $263,651 0 19070
14.5 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $383,182 $7,910 $391,092 $0 0 7910
15 $ 35,744,000 $521,600 $35,222,400 2.24313 $ 395,042 $ 3,950 $ 391,092 $0 $0 $0 $0 0 0
$10,271,092 $102,700 $10,168,392 $6,872,584 $2,904,716 $9,777,300 $753,053
(F9=calculate)
NOTE:This information is provided to assist in analyzing the Original Loan Amount $6,000,000
specific request to the TIF committee. This information is subject Capitalized Interest $753,053 ASSUMPTIONS:
to change based on actual tax assessments,including the levy rate. Loan Balance Remaining $0 1 Pre-Development Base $521,600
This schedule is based on the assumptions on the right side of the ---- 2 Loan Amount $6,000,000
this spreadsheet. $6,753,053 MAX POTENTIAL 3 Interest Rate 6.00%
The actual TIF amount available to fund site specific project cost 4 Est.Total Project Cost $43,507,648*
could change based on the cost of public improvements. 5 Est.Final Valuation $35,744,000
6 Incremental Base Value $35,222,400
Estimated Annual Incremental Tax Payment $ 790,084
Other Info:
77F Loan Request $6,235,000"
TIF Percentage of:
-Est Final Valuation 17.44%
-Est.Total Project Cost 14.33% '
Leverage Factor 6.98
'Est.Total Project Costs also represents the total Uses
from the Sources and Uses table,which equates to the
total Sources for the project. The leverage factor
indicates for every$1 of TIF,the City leverages"x"
dollars of other funding.
"Plus capitalized interest •
Blackstone East Mixed-Use Building
Mixed-Use Development
SW Corner of 37th& Farnam Street
Omaha, Nebraska
Application for Tax Increment Financing by:
Blackstone Parking, LLC
March 8th,2021
Contact:
Thomas H.McLeay
Principal& Manager
tmcleay@claritydevco.com
(402)516-8881
Matt Dwyer
Principal& Manager
matt@greenslatedevelopment.com
(402)320-7793
Project Name: Blackstone East Mixed-Use
Project Address: See table on following page
Project Legal Description: See table on following page
Property Owner/Applicant Name: Blackstone Parking, LLC
Owner/Applicant Address: c/o Tom McLeay 3814 Farnam Street,Suite 201
Omaha, Nebraska 68131
Estimated Total Project Cost: $43,508,000.00
TIF Request: $6,235,000.00
New Construction or Rehabilitation: New Construction
LIHTC Project: No
Market-Rate Project: Yes
Historic Tax Credit Project: No
Total Apartment Units: 161
Total Commercial SF: Approximately 20,000
Building Gross SF: Approximately 377,097
#Acres: Approximately 1.05 (sum of existing two parcels)
Lot/Parcel Size (SF): 47,932
Current Use: Parking lot and five-unit apartment building
Proposed Use: 161 market-rate apartments, 20,000 square feet of
commercial space and a 400-stall parking garage
Current Zoning: GC-ACI-1(PL)
Proposed Zoning: GC-ACI-1(PL)
Current Annual Real Estate Taxes(2019 Year): $11,167.04(sum of existing two parcels)
Current Assessed Tax Valuation (2020 Year): Land: $153,400.00
Improvements: $368,200.00
Total: $521,600.00
Requested Base Year: 2022
Requested Division Year: 2023
2
Project Address& Legal Description Guide:
Lot# I Address Legal Description
1 3719 Farnam Street,Omaha, Nebraska HIGHLAND PLACE LOT 20 BLOCK 20 S 137.5 FT LT 2 BLK
168131 11 SMITHS ADD&ALL LTS 19&20
2 3710 Harney Street,Omaha, Nebraska
1a HIGHLAND PLACE LOT 18 BLOCK 20 NE TRI 276 SQ FT L
68131 17&-EX SW 485 SQ FT-&N 15 SQ FT VAC ST ON W
*The two existing parcels will ultimately be re-platted into a single parcel with a new address and legal
description
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Table ofContents
Project Development Team — 5
Project Narrative 6
Development Financing Plan 8
Construction Budget with Itemized Public Improvement Costs 9
Construction Timeline lO
Three-YearPmFonna—Profit&Loss and Cash Flow Statements 10
Statement of Need and RQo Analysis(with and without T|F) ll
Evaluation Criteria:Mandatory Criteria 12
Comt'8enef|tAno|ysis 13
Project Site Plan and Elevations . 14
ALTA Survey and Legal Description 17
4
Project Development Team
The developers and sponsors of the Blackstone East Mixed-Use project are principals of Clarity
Development Companies and GreenSlate Development and have recently partnered to complete the
renovation of the historic Blackstone Hotel into The Kimpton Cottonwood Hotel located across 37th
Street directly to the east of this proposed redevelopment project. They are partnering again on this
final large piece of the Blackstone District redevelopment in coordination with that important project.
Clarity Development Companies
Clarity Development's principals have been involved in the development of over$500 million in real
estate nationwide including almost all types of development,historic tax credit rehabilitation,affordable
multi-family housing, new construction, multi-family apartments, retail,office, mixed-use and
hospitality.They bring unmatched depth of experience in development from inception through
construction completion and stabilization of a project.Clarity has wide-ranging experience with all forms
of incentives and real estate development issues Tax Increment Financing(TIF),Historic Tax Credits
(HTC)—both state and federal, Low income housing tax credits(LIHTC), Property Assessed Clean Energy
(PACE)and 45L financing and occupation or enhanced employment district financing.
GreenSlate Development
The principals of GreenSlate Development, Matt Dwyer and Jay Lund, have been the visionaries
of the Blackstone District since its inception in 2012. Over$175 million of new investment has
flowed into the area from GreenSlate and others during the past 8 years resulting in 26 new
businesses.Almost every building along the primary corridor of the District has been newly
redeveloped or is slated for re-development.The City of Omaha has offered unprecedented
assistance to GreenSlate to further this transformation by reconfiguring Farnam Street from a one-way
to two-way,adding new lighting and landscaping and rezoning parcels for continued denser
development in the District.The result has been a truly urban,walkable, high-density, 'live,work,
play' district in the shadow of the State of Nebraska's largest hospital system, largest
insurance company, and largest construction company.
Architect: Alley Poyner Macchietto Architecture
1516 Cuming Street
Omaha, Nebraska 68102
MEP Engineer: Morrissey Engineering, Inc.
4940 N 118th Street
Omaha, Nebraska 68164
Structural Engineer: TD2, Inc.
10836 Old Mill Road
Omaha, Nebraska 68154
General Contractor: Hausmann Construction
11627 Virginia Plaza#106
La Vista, Nebraska 68128
5
Project Narrative
A) Existing Land Use and Conditions
Current Use: Parking lot and five-unit apartment building
The current building has no active code violations.The building at 3710 Harney Street has been occupied
and residents have been made aware of possible redevelopment plans.The building will be demolished
as part of the redevelopment plans.
The development team has over 600 apartment units in close proximity to the site, many of which are
similar rental rates to the current building. Relocating the current residents to comparable housing will
be a priority.
B) Proposed Use and Project Details
Proposed Use: 161 market-rate apartment units,20,00 SF of
commercial space and a 400+stall parking garage
The proposed project includes the new construction of a nine-story building that will include (i)
approximately 20,000 square feet of ground floor, Farnam Street facing commercia retail space
designed to be divisible to 1,500-5,000 square foot spaces that would marketable to all sizes of local
businesses;(ii) 161 apartments located atop (iii)400+public parking structure to be constructed in
coordination with the City of Omaha Parking Department and to be owned and operated by the City of
Omaha upon its completion.The development team will advance the goals of the City of Omaha by
increasing density in the Midtown Omaha Market,creating commercial spaces for businesses, increasing
the available apartment units on the parcels from 5 to 161 and promoting the use of public
transportation thereby adding value to the City's large recent ORBT investment on nearby Dodge Street.
C) Parking Plan
The development team will satisfy the parking requirements by the completion of a city affiliated 400+
stall parking garage as part of the parcels'overall development.
D) Market Demand
Between 2019 and 2024,the Omaha-area population is expected to grow from 960,767 to 1,012,598.
That increase of nearly 52,000 people translates to over 7,000 new renters entering the market, based
on data from the past 10 years. Due to the project's location and size,the development team reasonably
believes these units will be easily absorbed into the market.
Source:The Lund Company I Cushman&Wakefield Market Insight Report 2019
Source:Kristin Hiller I RE Business Online
E) Residential Information
The Blackstone East Mixed-Use project will consist of approximately 161 apartments, including studios,
1-bed,and 2-bed units. Each unit ranges from 514-1,908 SF and renting for$865-$2,800 per month.
6
F) Employment Information
Job Creation&Retention
Permanent Full-Time Jobs Created 3
Part-Time Jobs Created 90
Total Jobs Created 93
Est.Annual Payroll (Avg. Per Employee) $45,000
Job Types Include:
Property Manager
Leasing Agent
Maintenance Technician
Small Business Employees(Part Time at an average of 10 employees per business)
Source:Small Business Trends
Estimated Total Construction Payroll $5,000,000.00
G) Zoning—Current and Proposed
Current Zoning: GC-ACI-1(PL)
Proposed Zoning: GC-ACI-1(PL)
H) Public Improvements
The public improvements associated with this project include landscaping, new sidewalks,curb
improvement and the creation of parallel on-street parking.
I) Historical Status
Not Applicable.
7
Development Financing Plan
Uses Amount
Land Acquisition 1,769,537.00
Construction Hard Costs 27,372,249.31
Site Work Construction Costs 2,105,289.12
Construction Contingency 1,718,522.55
Construction Soft Costs 2,382,846.30
Architecture & Engineering Fees 1,454,929.00
Capital/Equipment Costs 300,000.00
Tenant Improvements 930,000.00
Developer Fees 1,875,018.25
Financing Fees 3,348,757.08
Legal&Title Fees 250,500.00
Total Uses 43,507,648.61
Sources Amount
............ .... ....
Construction Financing 30,807,648.61
PACE Financing Wrap 3,265,000.00
TIF Financing 6,235,000.00
Equity 3,200,000.00
Total Sources 43,507,648.61
Upon project completion,the market the final assessed valuation has conservatively been determined
to be$35,744,000.00 or$170 per square foot. As an example,the development team's recently
completed The Traveller Apartments at 44`h&Douglas Street has already been assessed at a valuation
over$150.00 per square foot. The Traveller has no structured parking available to it and is not located
in an inferior of a location outside the heart of the Blackstone District.
8
Construction Budget with Itemized Public Improvement Costs
Construction Budget Amount
General Requirements 1,932,933.68
Sitework 2,105,289.12
Concrete 2,610,578.24
Masonry 1,932,933.68
Steel 508,233.43
Woods & Plastics 5,998,801.04
Thermal & Moisture 1,355,289.12
Doors &Windows 1,355,289.12
Finishes 3,288,222.80
Misc. Specialties 338,822.31
Equipment 677,644.56
Furnishings 338,822.31
Conveying Systems 508,233.43
Mechanical 3,915,867.36
Electrical 2,610,578.24
Total Construction 29,477,538.42
Itemized Public Improvement Costs Amount
Landscaping 100,000.00
Sidewalks 250,000.00
Curb Improvements/On-Street Parking 200,000.00
Total Public Improvement Costs 550,000.00
TIF Eligible Expenses Amount
................
Public Improvements 550,000.00
Acquisition(Less Current Tax Value) 1,247,937.00
Sitework(Including Demolition) 2,105,289.12
Special Foundations(Allowance for Geopiers) 600,000.00
Utility Extensions,Hookups and Relocations 350,000.00
Architecture&Engineering Costs 1,454,929.00
TI F Application&Contribution 46,000.00
Total TIF Eligible Expenses 6,354,155.12
9
Construction Timeline
Project Timeline bate
TIF Application Submission March 8th,2021
TIF Committee April 21st,2021
TIF Planning Board May 5th,2021
Submit for Permit May 26th,2021
TIF City Council#1 June 8th,2021
TIF City Council#2 and Approval June 22nd,2021
Construction Start October 1st,2021
Construction Completion September 31st,2023
Three-Year Pro Forma—Profit& Loss and Cash Flow Statements
Stabilized Year Year 1 Year 2 Year 3
Renta I Income
Residential GPR 2,943,105.12 3,016,682.75 3,092,099.82
Commercial GPR 446,400.00 457,560.00 468,999.00
Commercial NNN 172,403.09 176,713.17 181,131.00
Other Income 90,804.00 93,074.10 95,400.95
Total GPR 3,652,712.21 3,744,030.02 3,837,630.77
Residential Vacancy&Loss (151,695.46) (155,487.84) (159,375.04)
Commercial Vacancy&Loss (61,880.31) (63,427.32) (65,013.00)
EGI 3,439,136.45 3,525,114.86 3,613,242.73
Operating Expenses
RE Taxes 804,738.56 824,857.02 845,478.45
Commerical NNN 172,403.09 176,713.17 181,131.00
Insurance 40,250.00 41,256.25 42,287.66
R&M 32,200.00 33,005.00 33,830.13
Payroll 143,800.00 147,395.00 151,079,88
Utilities 24,150.00 24,753.75 25,372.59
Management Fees 130,470.15 133,731.91 137,075.21
Administrative 12,075.00 12,376.88 12,686.30
Advertising 8,050.00 8,251.25 8,457.53
Replacement Reserve 68,782.73 70,502.30 72,264.85
Total Operating Expenses 1,436,919.54 1,472,842.52 1,509,663.59
NOI 2,002,216.91 2,052,272.33 2,103,579.14
Debt Service 1,720,177.45 1,720,177.45 1,720,177.45
Cash Flow 282,039.46 332,094.89 383,401.69
10
Statement of Need and ROI Analysis(with and without TIF)
ROI Analysis jstabillzed Year 1 Figures) With TIF w/o TIF&PACE
Sources of Funds
Construction Financing 30,807,648.61 30,807,648.61
PACE Financing Wrap* 3,265,000.00
TIF Financing 6,235,000.00
Equity 3,200,000.00 12,700,000.00
Total Sources of Funds 43,507,648.61 43,507,648.61
Cash Flow 282,039.46 282,039.46
Return on Investment 8.81% 2.22%
*PACE financing
wrap is not
available from
lender w/o TIF in
this scenario
As demonstrated,the Return on Investment is severely diminished if TIF is removed from the capital
stack.Without TIF,the development team would be unable to raise the necessary equity and the project
would be unable to proceed. Furthermore,the challenges of developing dense urban infill projects on
small amounts of land results in large sitework and special foundations costs which TIF helps to offset
and promote this type of development.The project site also features specific challenges such as
topographic challenges that will require grading and earthwork, as well as a stormwater prevention plan
to prepare the project site.
11
Evaluation Criteria: Mandatory Criteria
A) The project is located within an established Community Redevelopment Area(CRA).
B) There will be no loss of tax revenue to the City or any other taxing jurisdictions resulting from the
use of TIF. None of the current taxes collected from the base value will be lost or used towards TIF.
Only the tax revenues generated by the improvements being constructed on the site will be used
towards TIF.
C) The development team has demonstrated the economics of the deal and the need for TIF in the
aforementioned section of this application. Without TIF, ROI would be unacceptably low,the project
would not be able to attract investor equity,and the project would not occur. Utilizing TIF allows the
project to achieve an acceptable rate of return to enable it to attract equity investment in an Omaha
redevelopment project. The project has no viability without the TIF since no financing or equity
would be available.
Given the multiple attributes of this site there are no comparable alternatives to the proposed
project site. The City's Master Zoning Plans identifies limited location such as Farnam Street in this
3600 hundred block for locations for mixed-use development such as this project presents.
Moreover,this location is on a currently underutilized lot that is also sizeable enough to achieve a
reasonable scale for a city affiliated parking garage. Finally,the location near the new ORBT will
provide for a significant to increase the use of the ORBT line which has been heavily invested in by
the City.
D) The Blackstone East project furthers the objectives of the City's Master Plan in the following ways:
i. Increasing densification of the urban core and the Midtown Omaha market
ii. Redeveloping a blighted and substandard parcel of land
iii. Implementation of Urban Design elements
iv. Job Creation—The project will require at least 2 full-time property
manager/leasing agent and at least 1 full-time maintenance technician, as well
as estimated 20-30 additional employees associated with the addition of 9 new
commercial businesses.
12
Cost-Benefit Analysis
A) No tax shifts were identified for this project.
B) This project will not create any additional community public service needs and TIF will be used to
cover the cost of necessary public improvements.
C) The Blackstone East Mixed-Use project will create a large number of construction jobs and at least 3
permanent full-time property management positions.
D) Owners of the small businesses in Midtown Crossing and Blackstone District will benefit from the
additional of 161 apartment units.
E) Blackstone East project could provide housing in close proximity to students at the University of
Nebraska Medical Center,Creighton University and the University of Nebraska at Omaha.
F) No additional impacts to mention.
13
Project Site Plan and Elevations
14
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