Blackstone District makes leap from run-down to revitalized in record time

Until the 90 rental homes and related retail bays were built from the ground up, redevelopment in and around the Blackstone business corridor had focused on rehabilitation and conversion of existing structures.

The pair of new construction projects — dubbed Blackstone Station and Blackstone Union — ushered in a different level of lender confidence, said area real estate leaders. They expect expansion of the area’s residential base to spark further investment in the Blackstone District, along Farnam Street from about 36th to 42nd Streets.

Already, merchant Mike DiGiacomo said he’s been taken aback by the foot traffic he attributes largely to new apartment dwellers.

“We were just blown away,” he said, describing his first weekend of business a few weeks ago. “No promotion; we just opened the door and exceeded all of our projections.”

DiGiacomo, a local morning television host, is no stranger to the area, as his dad for 40 years has owned the property where he and siblings launched the Blackstone Social tavern. He said activity has been so brisk that he’s re-evaluating the need to host a special event announcing the venture.

While the commercial corridor — known in the early 1900s as West Farnam District — had been sketchy and largely run-down as recent as five years ago, it had a rich history to build upon.

It’s buoyed by solid bookends: To the west is the University of Nebraska Medical Center, where professional jobs and employees have multiplied; and to the east is Mutual of Omaha’s Midtown Crossing retail and residential campus that opened six years ago and has been a boon to the surrounding area.

Add to that real estate developers who recognized potential. In 2013, GreenSlate Development started to modernize a cluster of four commercial bays anchored now by Mula Mexican Kitchen & Tequileria at the northeast corner of 40th and Farnam. Momentum hasn’t stopped since.

Along with partner Clarity Development, GreenSlate is about to acquire yet another patch along the Farnam spine that most likely will offer a mix of newly constructed residential and retail space, said GreenSlate’s Jay Lund. The GreenSlate and Clarity team controls most of the newest development along the Farnam corridor.

Among the area’s other ongoing projects:

» Set to open later this year are the Blackstone Flats, 3814 Farnam St. The GreenSlate and Clarity $2.5 million project features six high-end lofts and a ground-level restaurant carved out of the century-old former Central Distribution Co. warehouse. A restaurateur, who does not yet want to be identified, has signed a lease for the space that will have an outdoor patio fronting Farnam.

» The 45,000-square-foot former Colonial Hotel, just east of the Flats, is set to open in about one year as 40 upscale apartments and a ground-level pub. The $8.2 million historic restoration project is led by GreenSlate and Clarity.

» Thirteen loft-style apartments, 38 St. Lofts, opened in August in the renovated former Brite Ideas building on the northwest corner of 38th Avenue and Farnam Street. A salon and restaurant are set to open on the ground floor next summer, said owner Travis Freeman. He’s now planning to construct 112 apartments to the west.

» Two commercial tenants, including a full-service restaurant, are expected soon in the retail portion of the Blackstone Station on the northeast corner of 38th Avenue and Farnam Street. The 51 Station apartments, along with the 39 units at the Union at 41st and Harney Streets bring to about 200 the number of units that GreenSlate and Clarity built or rehabilitated in the area.

Jerry Slusky, a longtime Omaha real estate attorney, said a reviving area such as Blackstone is bound to have some turnover of young entrepreneurs still experimenting with business models, and others who may not get the traffic they expected. A vintage clothing store that opened two years ago on the Farnam corridor recently closed, and a tattoo parlor that predated GreenSlate left.

Still, Slusky couldn’t think of another old commercial area in the city that resurrected as quickly.

“Nothing has matured or gained as much traction as Blackstone in such a short time,” said Slusky. “It sits in a perfect spot and has just sprung back to life.”

Slusky expects that the next step for such an area could be a residential tower.

“With available land and buildings in short supply, and because Blackstone has all the attributes of a truly outstanding real estate location supported by good access, strong employment and central location, the next step should be the addition of high-rise multifamily buildings.”

The Blackstone shift has squeezed out some affordable housing options, but neighborhood residents said it also has motivated some surrounding property owners to spruce up their turf.

“You see something and you want to be a part of it,” said Jim Farho, who also sits on the area’s business improvement district board.

More developers have jumped into the fray as well.

Dundee Bank’s renovation of the old McFoster’s Natural Kind Cafe at 301 S. 38th St. is nearly finished. The structure, the bank’s second full-service branch, is to open next month, President Jeff Royal said.

Royal sees Blackstone development mirroring that of Dundee a decade ago. He sees more residential and commercial development in Blackstone’s future, and greater population density.

Freeman agreed. “The area will still be growing for the next five years; more businesses attract more businesses.”

Freeman bought his building in 1999, but after a fire forced the relocation of his Brite Ideas store, he rehabilitated and repurposed the property. He saw the best future use as apartments, and he anticipates his new apartment building to the west to rise within two years.

Clarity’s Tom McLeay said the assortment and local ownership of Blackstone stores and retail outlets has been a draw for both merchants and apartment dwellers.

Just this year, seven retailers — including Blackstone Meatball, Coneflower Creamery and Ground Floor Guitar — leased space from GreenSlate on the corridor.

A New York-style deli is to move into the existing Noli’s Pizzeria home next spring, as Noli’s moves to the southwest corner of 40th and Farnam Streets.

It’s nightlife, entertainment and commercial activity that attracted 29-year-old Chris Hubbs to the 38 St. Lofts.

He moved in last month and likes the residential mix of professionals, hipsters and medical students.

And after a long day at work in west Omaha, he looks forward to going home and visiting his neighborhood bar where people know him by name.

“I’m going to the Nite Owl and having a cocktail after work,” he said.