The price tag of Mutual of Omaha’s planned skyscraper has gone up.
Mutual’s new headquarters, originally estimated at $443 million, is now expected to cost about $600 million.
The updated cost was one of several details shared with the Omaha City Council on Tuesday by developer Jason Lanoha during a public hearing on the project’s redevelopment agreement.
“A number of factors” led to the increase, the main one being the current economic climate, Lanoha said.
The public hearing and next week’s vote on the project’s redevelopment agreement are among the latest bureaucratic steps needed to move the project forward.
The 138-page agreement contractually sets out the rights and obligations of both Mutual and the city in the massive project.
Under the agreement, Mutual of Omaha would acquire an additional downtown block as part of its now-$600 million headquarters project, while the City of Omaha would purchase the parking garage that’s part of the new skyscraper.
The City of Omaha would pay $99 million to buy the 2,200-space parking garage, charge the company to lease parking for its employees, and make the parking spots available for other public uses outside the workday.
The city would also acquire and operate for public use the three parking garages on the current Mutual of Omaha campus in midtown for $53 million. As with the downtown Mutual garage, the city would finance the purchase over time with bonds and would charge the public for use.
Mutual’s original acquisition of the block where the W. Dale Clark Library currently sits was made through a deal with Lanoha Real Estate Co. In exchange for the library property, the city will be granted ownership of a Lanoha-owned site at 14th and Dodge Streets.
The land swap will pave the way for the Mutual of Omaha tower to rise on the W. Dale Clark property at 15th and Douglas Streets, just to the west of downtown’s Gene Leahy Mall.
Ten opponents to the redevelopment plan voiced concerns Tuesday on the land swap and the city’s decision to demolish the downtown library.
“I do not have an issue with the City of Omaha, my issues are more with the culture of the city,” said Kimara Snipes, a previous mayoral candidate and former Omaha Public Schools board member.
“I believe in communication and that’s not something that the city does so well,” Snipes said. “You want to know why people are so angry and frustrated with this process? This whole process lacked real, proper, intentional and empathetic communication.”
Lanoha said the project will help to revive the city’s urban core.
“Our downtown has lost 21,000 jobs since 1963. With the vision and commitment of Mutual of Omaha, we’re ready to change that narrative and usher in a new era of prosperity for our downtown,” Lanoha said.
In addition to acquiring the block occupied by the downtown Omaha library, Mutual of Omaha plans to buy the block to the east to ensure space for future growth.
The redevelopment plan also requires the city to develop a streetcar line linking downtown and midtown.
Having the streetcar run by Mutual’s current midtown campus enhances the property’s redevelopment value, helping defray the cost of building the new high-rise downtown, according to city officials.
Council members will vote on the agreement May 17.
The block immediately east of the downtown Omaha library that was part of the Gene Leahy Mall will be sold to Mutual of Omaha. It is currently being used as a construction staging ground for the mall’s redevelopment.