Downtown Omaha’s Economy Is Recovering Quicker Than Other Cities

When Mary-Beth and Bruce Muskin moved to downtown Omaha 12 years ago, they found a quieter neighborhood primarily inhabited by singles and older residents. That is not the case today, they said.

“You’ve seen a tremendous amount of growth as far as building, the amount of people that are living downtown, even some young families,” Bruce Muskin said.

For decades, downtown Omaha has been evolving from a traditional business district into a hub for entertainment, arts and urban living. More people live downtown than they did a decade ago. There are also more tourists, according to data provided by the Omaha Mayor’s Office.

The Muskins are quick to note that Omaha’s downtown still has its downsides, like Uber traffic and no grocery stores. But, overall, Omaha’s downtown has bounced back better than most others since the pandemic, according to a University of Toronto study of 55 American downtowns.

“What’s leading its recovery is actually this nighttime weekend activity … arts, entertainment, restaurants, residents,” said Karen Chapple, director of the School of Cities at the University of Toronto.

Local officials and researchers credit ongoing development with aiding Omaha’s post-pandemic resurgence, even as some have raised concerns about the incentives used to spur much of that redevelopment.

In the past three years, downtown has welcomed a new concert venue, a state-of-the-art science center and three renovated parks spanning 72 acres between the riverfront and historic Old Market. Once dormant office buildings are becoming condos and several massive development projects are underway.

While some downtowns are operating at less than 60 percent of their pre-pandemic levels, downtown Omaha sits at nearly 90 percent, the University of Toronto study found. On weekends and evenings, that figure rises to over 96 percent.

No city has fully recovered during weekdays or work hours, 9 a.m. to 5 p.m. – lingering fallout from the adoption of remote work during the pandemic. Downtowns that have mounted the strongest recoveries tend to have diverse economies with a mix of industries and businesses, Chapple said.

Omaha had the 10th strongest recovery nationwide, and in the Midwest region, it was second to Wichita. The only downtown that has grown since the pandemic is Las Vegas, the study found. Almost a third of the downtowns studied have more activity on weeknights and weekends than they did before the COVID-19 pandemic.

“Every city has struggled a little bit, but Omaha has thankfully rebounded so much better than a lot of other guys,” said Holly Barrett, executive director of the Omaha Downtown Improvement District.

That rebound was on display on a Friday evening in late September. Diners packed restaurant patios, children darted through the newly renovated Gene Leahy Mall and dog owners strolled downtown sidewalks.

Omaha has seen a more than 7 percent increase in out-of-town travelers visiting downtown, rising from 1.86 million in 2019 to 2 million in 2023, according to a report from the Omaha Mayor’s Office.

The newly renovated downtown parks, known as the Riverfront, have attracted more than 3 million visitors since the Gene Leahy Mall reopened in July 2022, according to the Metropolitan Entertainment and Convention Authority, which manages the parks.

Downtown Omaha also appears to be doing better during work hours than its neighbors. By the end of 2023, the city had the lowest office vacancy rate of the 13 Midwest downtowns studied by commercial real estate agency Colliers. Omaha had a 6.2 percent vacancy rate, less than half of Kansas City’s and even better when compared to Indianapolis, where 23.3 percent of downtown office space sat empty.

Such a rebound was hard to imagine even just a decade ago, Barrett said.

When she moved to Omaha from Denver in 2014, downtown had lost 21,000 jobs since the 1960s, according to the Mayor’s Office. Over-parking had become a problem, with downtown adding more parking stalls than jobs, which contributed to a reduction in the number of available buildings for offices and businesses.

“It wasn’t growing and moving forward. It was declining and falling behind,” Mayor Jean Stothert said. “And we had to do something about it, because you can’t have a growing, vibrant city without a growing, vibrant downtown.”

In 2009, City Council adopted a master plan outlining the vision for downtown Omaha though 2030, stressing its importance as a cultural and civic hub and projecting 5,200 new downtown housing units in the two decades ahead.

Since 2010, nearly 7,000 new housing units have been built in Omaha’s urban core, an area that stretches from downtown to midtown, according to the City of Omaha Planning Department. The population of downtown alone has grown by at least 3,000, according to the U.S. Census Bureau.

“Downtown, originally, we had more than enough jobs, and we needed a lot more housing. Now the housing is caught up to the jobs,” said developer Todd Heistand.

Heistand has transformed at least 12 downtown offices into residential buildings. He has over 2,700 units in the area that are consistently at 95 percent to 97 percent capacity, he said. His latest project, The Duo, will add another 700 units.

Barrett has witnessed three mixed-use developments come online downtown: the Capitol District, Millwork Commons and Brickline. She said their proximity to arts and entertainment venues like the new Steelhouse Omaha concert venue and the recently expanded Joslyn Art Museum makes the area more desirable for both residents and visitors.

“They’re creating a destination, and people want to visit a destination. They want to work in a destination, and they want to live near it,” Barrett said.

Business and city leaders say teamwork between the private, public and philanthropic sectors helped position downtown Omaha for a strong recovery.

“We have been able to be as successful as we have over the years, because leaders in those three sectors have been able to come together around projects and strategic plans and have been able to get them done,” said Heath Mello, president and CEO of the Greater Omaha Chamber.

An old downtown rail yard became the site of a new convention center and arena in 2003, and a baseball stadium opened in 2011. Both projects were funded with a mix of public dollars and private donations.

Earlier this week, Omaha voters overwhelmingly approved a $146 million bond package that is expected to mostly go toward expanding the convention center.

The revamp of Omaha’s downtown and riverfront parks also started well before the pandemic. Gene Leahy closed for construction in March 2019 and reopened in 2022, while Heartland of America Park and Lewis & Clark Landing reopened about a year later.

Redevelopment of the three parks cost $325 million, with $50 million coming from the City of Omaha. The remaining came from philanthropists.

“I always tell people with the philanthropic support and partnerships that we have, it makes Omaha so unique,” Stothert said. “Other cities don’t have it like we do.”

Work didn’t stop during the pandemic – and neither did planning, some of which sparked controversy.

In January 2022, officials revealed plans for a massive downtown project involving relocation of the downtown library, construction of a new Mutual of Omaha skyscraper and the advancement of a long-debated streetcar project.

A crucial piece of those plans involves the use of tax increment financing, a development incentive that’s recently faced heightened scrutiny. TIF allows a portion of future property tax revenues to go toward some up-front costs of a redevelopment project. The city OK’d $129 million in TIF in 2023, according to an annual report.

The city is relying on TIF to cover the projected $389 million price tag for the streetcar project.

A recent letter from Nebraska State Auditor Mike Foley said TIF may be overused and hurting property taxes in the state.

That report fueled a tense exchange in October between state lawmaker and likely mayoral candidate Mike McDonnell and Stothert. McDonnell wrote a letter voicing concerns about the city’s “aggressive” use of TIF and calling on the city to pause projects. Stothert, who is running for a fourth term next year, accused McDonnell of raising the issue “for political gain.”

Following Foley’s letter in September, Stothert told the Flatwater Free Press that much of the criticism of TIF stems from a fundamental misunderstanding of it.

“To say that they’re just a bunch of rich developers, (and) we’re making them richer, it’s just not true.”

Stothert said she has no concerns about its use and that many projects wouldn’t have happened without it, including the streetcar. She predicted downtown’s revival will continue to gain momentum as more projects come to fruition.

For the Muskins, that revival has had a couple of downsides. The construction can make it difficult to navigate parts of downtown, let alone enjoy them. As avid walkers, they’ve also noticed traffic safety issues caused by increased use of ride sharing companies, like Uber and Lyft.

And despite all construction and redevelopment of recent years, downtown still doesn’t have a grocery store, they noted. But overall, the Muskins have no regrets about their decision – and no misgivings that others are following them.

“It’s been set up where people can actually live downtown,” said Bruce Muskin. “I think that’s been a huge change.



This article was first published by the Flatwater Free Press. Read the original article.