Ninth and O hotel

If built as originally announced last year, the 15- to 17-story hotel-and-housing project at Ninth and O streets would be the city's third-tallest structure.

Courtesy image

A 15- to 17-story building topped by privately owned condominiums will anchor Ninth and O streets and define the entryway to Lincoln from the west and north for some time to come, City Council members were told Monday.

The downtown building, estimated to cost $72 million, will replace a vacant building on the corner and a building that burned about six years ago and was torn down, said Dallas McGee, deputy director for the city's Urban Development Department.

The new development will include two hotel brands with 200 rooms, a ballroom, a 263-stall parking garage and restaurants. 

The top-floor condos, to be built for an upscale market, will bring long-term and stable residents to downtown, different from the student housing constructed over the past few years, said Mark Hunzeker, attorney for the developers.

The hotel rooms and amenities will help Lincoln to meet requirements to host NCAA tournaments, he said. And the ballroom will be a premier location for all kinds of social events.

Most of the condos will be 1,100, 1,500 and 1,800 square feet, but the developers will build one as big as anyone likes, said John Klimpel, a hotel developer from Lincoln.

The group developing the project — Hotel Land Investments LLC — includes Klimpel and Lincoln firms Speedway Properties and Nelnet.

The city is assisting the redevelopment project in two ways: with traditional tax-increment financing of about $11.6 million and with a 2 percent occupation tax expected to pay for a $2.35 million bond over 20 years.

The occupation tax will be applied only to customers of the two hotels and the ballroom, but not the restaurants.

TIF and occupation tax funds will be used for site acquisition, utility relocation and improvements, streetscape improvements, and an upgraded building façade, based on the redevelopment agreement.

If approved by the council next week, this will be the second time a Lincoln developer has been allowed to use the enhanced employment occupation tax, which is limited to a specific geographic area.

A 1 percent occupation tax on SouthPointe retailers, which excludes restaurants, is being used to pay for a parking garage as part of the mall's expansion project.

Several people opposed the use of TIF and the occupation tax at Monday's public hearing before the council.

"Lincoln is not a rich community and all the hoopla about how great it is isn't going to draw people here," said Jane Kinsey, representing Watchdogs of Lincoln Government, a local conservative group.

This is "a champagne appetite on a beer income," she said.

She hopes the Legislature in the future will clarify how TIF is to be used and not make it so flexible.

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The project meets city benchmarks for the enhanced employment occupation tax, which are higher than state requirements, said Mike Lang, aide to Mayor Chris Beutler.

The project is larger than the city's $50 million minimum and it is a project with a strong retail base, he said. Much of the tax will be paid for by people who live outside Lancaster County, Lang said.

A zip code analysis of local hotel customers indicates more than 70 percent of the people staying in Lincoln hotels are from outside the county, he said.

The enhanced employment occupation tax will not be applied to restaurants, which already fall under the separate arena occupation tax. 

However, customers at the two hotels will pay both the arena occupation tax and this enhanced employment occupation tax, if approved. 

The bonds used for both the TIF and occupation tax financing will be purchased by the developer, so the risk is on the developer and not the city, Lang said. 

This is too much of a giveaway, said Richard Halverson, a private citizen, who pointed to TIF, the occupation tax and the developer's access to city right-of-way.

The council is expected to vote on the redevelopment, TIF agreements and the occupation tax funding at its meeting next week.

Reach the writer at 402-473-7250 or nhicks@journalstar.com

On Twitter @LJSNancyHicks.

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Reporter

Nancy Hicks reports on Lincoln city government, but she’s been following the leaders of local and state government for more than 40 years.

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