A plan to redevelop the Bishop Heights shopping center took its first step forward Wednesday.
The Lincoln-Lancaster County Planning Commission voted unanimously to recommend approval of a blight and substandard designation for the property at 27th Street and Nebraska 2.
The designation, which will have to be approved by the City Council, opens the door to using tax-increment financing as part of a formal redevelopment plan for the center. Tax-increment financing, or TIF, allows developers to use future property taxes generated by projects to pay for certain upfront costs.
RED Development, the company that owns SouthPointe Pavilions, is partnering with Lincoln-based White Holdings to redevelop the center.
They have not submitted their plans to the city yet but have shown them to neighbors. They include demolishing the strip mall owned by RED, the former home of Shopko and other businesses, as well as the former U.S. Bank building owned by White.
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As part of the project, EPC Real Estate Group is planning to build a “luxury multifamily building” on part of the former Shopko property, while RED would develop several smaller commercial buildings.
White plans to build either one large office building or two smaller ones on the property it owns.
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Existing businesses Wells Fargo and Arby’s, which own their buildings, plan to remain, and Arby’s has expressed interest in renovating its restaurant.
The strip mall portion of the site has been largely vacant since Shopko went bankrupt and closed in the spring of 2019.
Dan Marvin, the city’s urban development director, said a blight study found several factors, including deteriorated and dilapidated buildings, deteriorating site conditions, and overall economic obsolescence of the site, that justify the blight designation.
No one spoke in opposition of the blight designation at the meeting, although one area resident did submit email comments in opposition.
In his email, Cory Collins objected to including a house at 2711 Kucera Drive in the blight study. The house is owned by White Holdings, which wants to demolish it to create more parking and a buffer to other homes on Kucera Drive, which borders the property to the north.
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“There is indeed a need to revitalize this part of the neighborhood,” Collins wrote. “However, I would argue that the footprint does not need to expand onto the residential area on Kucera Drive.”
Members of the Planning Commission, some of whom are current or former residents of the Country Club neighborhood where the center is located, generally expressed agreement that the area meets the definition of blight.
“It’s very obvious that this whole area needs to be reworked,” said Commissioner Dick Campbell.
Commissioner Maribel Cruz said she believes the property fits the definition of what would be considered blight.
“And I’m just excited to see what’s going to come up in its place,” she said.
Photos: The Nebraska State Capitol through the years