A 15- to 17-story hotel and condominium complex will rise on the southeast corner of Ninth and O, the third tallest building in the city and a signature project linking downtown to the Haymarket.
The project will include two hotels and 40 to 50 upscale condominiums and penthouses, plus parking, a restaurant and bar, and event space, the Lincoln-based developers and Mayor Chris Beutler announced Thursday.
This will be the tallest structure built in Lincoln since the 1970s and will be the third tallest building behind the Capitol and the downtown U.S. Bank.
"There are several things I thought I’d never see," Beutler said at a news conference. “An election of a black president, the Chicago Cubs winning the World Series and a 15-story building on the corner of Ninth and O.”
The project, called Block 54, is expected to cost $65 million to $70 million and includes about 200 hotel rooms. A Holiday Inn Express will occupy three floors, with an additional two floors devoted to a boutique hotel with a restaurant. The brand for the boutique hotel has not been announced.
The hotels will have separate entrances and lobbies, and hotel parking will occupy floors two through four.
The Holiday Inn Express is aimed at the family and business market, while the boutique hotel will be more upscale, with full-service amenities and a slightly higher price point, developers said.
The upper floors of Block 54 will include condos, penthouses and a rooftop garden. Heated and secure parking for residents will be provided in the basement level of the building.
The partnership developing the project -- Hotel Land Investments LLC -- is led by the Lincoln Hotel Group, according to a news release.
The team developing Block 54 includes Speedway Properties and Nelnet, with DLR Group as the architectural firm designing the project.
“Every owner working on this project lives and works in Lincoln,” said John Klimpel, with the Lincoln Hotel Group. “It is an unusual situation. You cannot find it with this size building anywhere in the state."
The demand for downtown housing continues to be unmet and a larger condominium project -- where people buy rather than rent -- hasn’t been constructed for several years, developers said.
Condominiums are part of The Schwarz, a redevelopment project in the works at the former Schwarz Paper Co. building at Eighth and O.
In July, Beutler announced plans for a three-building, $11 million project with apartments targeting young professionals and retirees and a grocery store at Canopy and N streets.
But the largest portion of downtown housing added in recent years has been apartments aimed at the student market.
“People today want to work downtown. People today want to play downtown. And we are going to give people new options to live downtown,” said Clay Smith, general partner of Speedway Properties.
“There has already been a fair amount of interest in purchasing condominiums in that building, said Smith. “Talk to us sooner rather than later."
The building has been designed around the iconic Terminal Building, which shares the block, "respecting its visibilities and windows," said Smith.
The developers will be working with the city and advisory groups to make sure the new building does not block any viewing corridors to the Capitol.
The developers expect to use tax increment financing, which allows them to use the tax dollars paid on the new value of the property for construction issues related to the public good.
This is a classic application for TIF, said Smith. The project needs parking, and parking cannot be provided without the revenue from TIF, he said.
The developers have also considered using a new tax -- a sales tax applied only at a specific location. But Beutler said no decision had been made about the use of that taxing mechanism.
“The city and developers are currently drafting the redevelopment agreement, said Beutler. “Everything is wide open. No package has been decided."
The new tax, allowed by the Legislature, requires an eligible area to add at least 25 new employees and a new investment of at least $2 million.
The City Council approved this mechanism at SouthPointe Pavilions -- collecting a 1 percent tax on most sales in the shopping center. The council labeled it a parking assessment.
This new site-specific sales tax is being used at the Nebraska Crossing Outlets in Gretna and a shopping mall in Scottsbluff.
Developers plan to tear down existing buildings at Ninth and O, including the former Knickerbockers, this year, start construction on the new building next spring and hope to open in early 2019, Beutler said at a news conference Thursday morning.