Since John Q. Hammons announced plans in December to build an upscale hotel in downtown Lincoln, the project has been on a fast track to try to begin construction in July. But Wednesday, the Lincoln-Lancaster County Planning Commission threw a wrench into the machinery by failing to garner enough votes to move the project along.

Hammons built Lincoln's $32 million downtown Embassy Suites five years ago and now wants to build a four-story, 150-room "extended stay" hotel that would cater to visitors to the University of Nebraska-Lincoln.

But the city would have to amend the Antelope Valley redevelopment plan to allow the city to acquire and demolish property in Hammons' preferred location: the block bordered by 17th, 18th, P and Q streets.

The block is within the Antelope Valley blighted area but also is home to a convenience store, a teriyaki restaurant, a used-car lot and repair shop — and three of those tenants told the planning commission they're concerned about being displaced to make way for a hotel.

After hearing their concerns, the planning commission voted 4-2 to recommend approving the amendment but needed the approval of five of the nine members (one member couldn't vote due to a conflict of interest, and two were absent). The commission's action effectively delayed the process for two weeks, when the full planning commission can take up the issue again.

One of the concerned property owners was Rick Krueger, part owner of a 76-space parking lot on the targeted block. He said the city is effectively transferring his parking lot to Hammons. Of his 76 spaces, 52 are assigned to employees of the Downtown Physicians Group, which leases part of another building he owns a half-block away. The lease agreement required adequate parking, and if he loses his parking lot, the physicians group may leave. He said another lease agreement for the building's first floor is on hold now due to uncertainty about parking availability, which could be an obstacle to marketing the space.

He said that since the city declared the area blighted for Antelope Valley, he has invested millions of dollars to redevelop it. He has met with city officials numerous times to discuss possible solutions but isn't satisfied with the outcome of what he calls "happy talk."

Mark Whitehead, owner of the U-Stop convenience store at 17th and Q streets, which also would be relocated, said a few years ago he received an award for beautifying the corner the city now calls blighted. Because it's too early in the process for city officials to say how much they'd pay for his property, he doesn't know whether he would be adequately compensated.

Sean Wieting, owner of Samurai Sam's Teriyaki Grill, leases space from Whitehead and said he would get "very limited" financial assistance with relocating. He estimates it would cover 10 percent of his costs to move and said he can't afford to cover the rest, so the $120,000 he's invested over the past five years — and his family's livelihood — would be gone.

"Our doors would have to be closed, plain and simple," Wieting told the commission. "So basically relocation means closure for us."

He said city government shouldn't be in the business of "taking out small businesses," and just because it's done in the name of Antelope Valley "doesn't make it right."

"It just amazes me that this could happen," he said. "It's just not right."

But city officials reminded planning commissioners they were to decide only whether the amendment conforms with the Lincoln-Lancaster County Comprehensive Plan. The City Council would have to decide whether to approve a redevelopment agreement, in which Hammons presumably would propose to build his hotel.

While city officials have promised to work with property owners to address their concerns, they can't answer all of their questions yet — in particular, how much the city would pay for their property.

If the city can't come to an agreement with property owners, it could take the property by invoking eminent domain, the right of a government to take private property for public use.

The commission's failure to get enough votes to move forward surprised Marc Wullschleger, director of the Urban Development Department.

"We have a potential developer that's ready to go," he said. "Delay doesn't help."

Antelope Valley will require the relocation of 47 residences, 49 businesses and 12 publicly owned buildings, and Wullschleger estimated the city has come to an agreement with 80 percent of the affected property owners. But displacing business owners is even more difficult, he said.

"That's tough for these guys," he said. 

Lynne Green Scheibler, general manager of Embassy Suites in Lincoln, represented Hammons at the planning commission meeting. Afterward, she said the delay shouldn't be a major impediment.

"I don't think that two weeks is a concern," she said. "We'll wait patiently."

She said the company looked at other sites downtown and on the city's outskirts but settled on the eastern downtown location because there's no extended-stay (geared toward at least five-night stays) hotel downtown. She said Hammons is committed to the redevelopment of Lincoln.

"He has big plans for Lincoln, Nebraska, and this is part of it," Scheibler said.

Hammons was unable to be reached at his headquarters in Springfield, Mo.

With a planning commission recommendation, the redevelopment amendment could go before the City Council in February.

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.

 

Steps in the process: Past, present, future

1. Lincoln City Council declares the Antelope Valley area blighted. (July 2003)

2. City Council adopts Antelope Valley redevelopment plan, a concept for the area. (November 2004)

3. The city's Urban Development Department asks Lincoln-Lancaster County Planning Commission to amend the redevelopment plan to detail plans for a block within the blighted area where John Q. Hammons wants to build a hotel. (Wednesday)

4. Amendment to redevelopment plan goes before City Council, with planning commission's recommendation. (likely February)

5. City crafts a redevelopment agreement with developers detailing, for example, what the hotel would look like and what the city would do to help make it happen.

6. City begins making offers on blighted properties in the area and starts purchasing them.

7. Construction begins on hotel, if Hammons is the chosen developer. (hopes to start in July)