LINCOLN — The financing tool helped expand the Country Club Plaza in Kansas City, Mo., and paid for a new arena in nearby Independence, Mo.
It supported the development of the Falls at the Crackerneck Creek shopping area in Independence, helped redevelop the Branson, Mo., waterfront area and pays for a trolley to ferry tourists around historic downtown Branson.
But whether Nebraska developers will be able to use the same tool remains to be seen.
State lawmakers started debate Wednesday on a bill that would allow creation of new entities called community improvement districts.
Such districts could pay for services or improvements within district boundaries.
The districts would be authorized to charge up to 1 cent of sales tax or set special assessments against properties in the districts, with the proceeds used to pay off bonds or support ongoing services.
The sales tax would be in addition to state and city sales taxes.
State Sen. Amanda McGill of Lincoln, chairwoman of the Urban Affairs Committee, said the districts would offer a new way to pay for development and redevelopment projects.
If the projects are like those undertaken in states such as Missouri, they could help keep young Nebraskans here and attract other people to the state.
Such a district could have been used to speed the development of Village Pointe shopping center in Omaha, she said.
“We need big ideas,” McGill said. “When do we show some vision?”
But other senators got tripped up on the idea of a new sales tax and raised questions about how the districts would operate.
Sen. Abbie Cornett of Bellevue, chairwoman of the Revenue Committee, said Nebraska needs to look at all tools for economic development but called Legislative Bill 381 “bad tax policy.”
The bill would allow community improvement districts to be formed by as few as five people who own property in the designated area.
Sales tax increases could be approved by a majority of the district’s founders, which Cornett said was troubling.
“I am opposed right now to a sales tax increase on anyone,” she said.
Cornett also questioned whether sales taxes should be used to pay for services such as security guards and day care centers in the districts.
Sen. Galen Hadley of Kearney asked whether the bonds would sell without city backing. Under the bill, the bonds would not become general tax obligations.
Marc Abbott, an attorney with offices in Lincoln and Missouri who has worked with such projects, said the community improvement district concept has been widely used in other states.
Kansas, Missouri, Wyoming and Colorado all authorize such districts, he said.
In 2008, Missouri had 154 community improvement districts and 122 transportation development districts, a related but narrower tool.
“Nebraska is a little bit behind the eight-ball on this,” Abbott said. “It puts the state at a disadvantage.”
Jack Cheloha, a lobbyist for the City of Omaha, testified for the bill at last year’s hearing.
He said Wednesday the city has no definite plans for using such districts but could employ them in the midtown area or around the downtown stadium.
Lawmakers are scheduled to continue debating the bill Thursday. Legislators rejected an attempt by Cornett to bracket, or table, the bill until the end of the legislative session, which would have effectively killed it.
Contact the writer:
402-473-9583, martha.stoddard@owh.com
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