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City of Omaha Swiftly Approves $6 million in Tax-increment Financing
 for Three New Hotels Near the City Owned Hilton

By C. David Kotok, Omaha World-Herald, Neb.McClatchy-Tribune Business News

Nov. 22, 2006 - More than $6 million in tax incentives was swiftly approved Tuesday for three new hotels within a few blocks of the city-owned Hilton Omaha.

None of the Omaha City Council members questioned granting tax-increment financing, or TIF, to build a Hampton Inn and Homewood Suites between 12th and 14th Streets along Cuming Street, or a Fairfield Inn northwest of 16th and Cuming Streets.

The adjoining Hampton and Homewood Suites, with a combined 262 rooms, will receive $4.26 million, and the 114-room Fairfield Inn will receive $1.8 million.

TIF is a way to subsidize a project by letting the new property tax revenue it generates pay for part of the development.

A fourth hotel near 14th and Cuming Streets is expected to win council approval for an additional $2.5 million in TIF, and the City Planning Board has recommended another $2.5 million in TIF to help build a new hotel in the Old Market.

City Finance Director Carol Ebdon, who also serves as president of the city hotel corporation that owns the Hilton, said the city is not at cross-purposes in encouraging additional hotel construction in and near downtown.

"These are different niches and different markets," Ebdon said.

Omaha taxpayers face the likelihood that they will have to pick up the tab for part of the Hilton Omaha's construction debt and the cost of keeping it in top condition.

The full-service, four-diamond Hilton connected to the Qwest Center Omaha can't be compared to economy and extended-stay hotels, Ebdon said.

Jake Christensen of Des Moines, who is the developer of the Fairfield Inn, said that hotel is targeting business and family travelers.

"We have a very different product," Christensen said. "We are building a limited service hotel that is not affiliated with the Qwest Center."

Bob Peters, a former Omaha city planning director who is working for the hotel groups, said the incentives are justified because of the extensive need for city services on former Union Pacific and industrial land. The city also is requiring the hotels to tailor their building designs to plans for enhancing North Downtown, or NoDo.

"We are encouraging growth in NoDo and downtown," Ebdon said, "which was the whole purpose of the Qwest Center and the Hilton hotel in the first place."

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Copyright (c) 2006, Omaha World-Herald, Neb.

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