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In a bustling, mixed-use development somewhere out in suburban west Omaha, a businessman kisses his wife goodbye as he steps out of their third-floor condo. After walking downstairs, he stops by the coffee shop located on the first floor of their building. With coffee in one hand and a brief case in the other, the man walks three blocks to the light-rail station. Four minutes later, one of the regularly scheduled trains picks him up for the 15-mile ride to his office in downtown Omaha.

Does this sound ridiculous and far-fetched? It’s not. Omaha is indeed a candidate for a rail-based transportation system. Rail transit is becoming more and more popular across the nation. Large and medium-sized metro areas from coast-to-coast are building rail-transit systems or at least studying the possibility. Omaha needs to keep up in the rail-transit race, because the economic and cultural benefits are enormous.

Back in the 1970s and ’80s, only the mega-cities, like New York, Chicago and Washington, could justify rail-based mass transit systems. Other U.S. cities were too “suburban,” spread-out and in-love with freeways and automobiles. But as populations continued to soar, and new housing development occurred further away from the city center, many Americans started looking back into the city and seeing possibilities.

Now smaller metropolitan areas, with populations not much bigger than Omaha’s, are getting into the rail-transit game. Charlotte, N.C. (2.07 million in population); Portland, Ore. (2.06 million); Salt Lake City, Utah (1.56 million); Memphis, Tenn. (1.25 million); and Little Rock, Ark. (813,000) all have rail-transit systems. With a metro population of 840,000 and a 50-mile-radius population of almost 1.2 million, Omaha compares favorably to these communities. Omaha can justify a rail-transit system.

Before we go much further, some definitions are in order. According to Omaha Streetcar, an organization advocating rail transit in the Omaha area, streetcars, light rail and commuter rail would be appropriate options for Omaha’s rail-transit future.

“Streetcars” are steel-wheeled vehicles powered by overhead wires that usually operate in mixed-street traffic and operate in single-units only. Streetcars can use modern equipment, similar to operations in Europe, or use vintage or heritage equipment.

“Light rail” is an electric railway system characterized by its ability to operate single or multiple-car systems along exclusive rights-of-way at ground level, on aerial structures, in subways or in streets, able to board and discharge passengers at station platforms or at street, track, or car-floor level. It is normally powered by overhead electrical wires.

“Commuter rail” is an electric or diesel propelled railway for urban passenger train service consisting of local short distance travel operating between a central city and adjacent suburbs. Such rail service, using either locomotive hauled or self propelled railroad passenger cars, is generally characterized by multi-trip tickets, specific station-to-station fares, railroad employment practices, and usually only one or two stations in the central business district.

Rail transit makes sense for Omaha. We would probably start out small, with streetcar lines in the downtown/riverfront area. Then, we could extend the streetcars to Dundee, North Omaha and South Omaha. Eventually, we could explore the possibility of a light rail line that would connect downtown with suburban areas. Eppley Airfield could be connected to downtown via streetcar or light rail, whichever made more financial sense.

A number of factors rationalize rail-transit in our community. Omaha is a growing city, aggressively recruiting new businesses and people. We are a business town, with lots of commuters on the go. Omaha is investing in its urban core as evidenced by $2 billion worth of downtown construction. More than 1,000 new condo units are under construction in or planned for downtown, which means there will be a growing pedestrian urban population eager to use streetcars. Urban neighborhoods outside downtown Omaha are getting attention too. The Destination Midtown effort is actively improving a 3.5 square mile area just west of downtown. “Urban villages,” like Dundee, Benson and South Omaha, are becoming more popular. Such places make great sites for rail-transit stations.

Omaha is becoming a regional tourist destination. Every year we add more retail, restaurant and entertainment attractions. The Qwest Center is bringing in thousands of visitors each year, and a streetcar system would be very useful in shuttling convention-goers between the airport, hotels and the convention center. The unusually close proximity of the Omaha airport and the central business district, would make a light-rail connection less expensive to build than it would be in other cities, where airports are located out in the suburbs.

Though Omaha is not a huge metropolitan area, it does have traffic congestion. A recent study identified Omaha as one of the nation’s most congested mid-sized metro areas. Furthermore, because a disproportionate amount of Omaha-area development takes place on the western edge, some new suburban developments are more than 20 miles away from downtown!

Obviously, there would be challenges to building a rail-transit system in the Big O. Chief among them would be money. Even the lowest cost rail-transit option, streetcars, would cost millions of dollars, but cost issues can be overcome. The federal government pays for a large chunk of most rail-transit systems. Omaha’s unique ability to create strong public-private partnerships could also help the system become a reality.

Another challenge is the lack of population and population density. This can be overcome by selecting the right routes. Though Omaha is only the 58th largest U.S. metro area, it is the 30th most densely populated one. Certain parts of Omaha are already very dense and downtown Omaha is developing a great deal of density.

The benefits of having a transit system would more than make up for the challenges. According to an article in the October 2005 edition of Retail Traffic magazine, rail-transit stations are magnets for real estate development. It turns out that young professionals and empty nesters, the same people who love living in downtown condos, love living in urban developments located along transit lines. In Dallas, real estate developers are building mixed-use neighborhoods next to new transit stations. Residents can live in a nice building in an established urban neighborhood and walk to the transit station. From there, they can go downtown, to the airport or anywhere else the system goes. These developments are injecting billions of dollars into America’s inner cities. Shouldn’t Omaha get its share?

Additionally, rail transit in Omaha would be good for economic development. Companies looking for corporate headquarters locations like cities with rail-transit, because it makes it easier for employees to get to work. Because rail transit is considered a quality-of-life benefit, it helps in recruiting talented people. By connecting a city’s attractions, rail transit makes it easier to recruit conventions and trade shows. Convention planners take great comfort in knowing an efficient transportation system is in place to ferry their conventioneers around town. Rail transit is interesting and unique, so people see it as a fun and enjoyable way of moving about town. That’s good for tourism.

Finally, rail transit would bring the benefits of cleanliness and efficiency to Omaha. For every person who takes rail-transit, there is a corresponding decrease in the amount of air pollution. More importantly, for most people, it saves money. With the price of gasoline going out of control, the thought of rail transit is appealing especially for those on a tight budget. Thirdly, a rail system would decrease traffic congestion. Omaha will continue to grow and will someday be a significantly larger city. We need to plan for that growth now if we don’t want intolerable grid-lock in the future.

Fortunately, some Omahans are looking ahead. One such group is Omaha Streetcar. Anyone interested in learning more about this topic should consider attending Omaha Streetcar’s next meeting scheduled for Wednesday, November 2nd from 6 to 7:30 p.m. at the Spaghetti Works in the Old Market. The cost is $10.99 per person and covers dinner. To make a reservation, go to omahastreetcar@gmail.com.

Jeff Beals, vice president of operations for Coldwell Banker Commercial World Group, hosts a weekly radio talk-show called “Grow Omaha,” which focuses on economic development in the Omaha area. It airs Saturdays at 8 a.m. on KKAR (1290 AM). Beals co-hosts the show with Trenton Magid.

Level Field 2005-09-22 18:43:21
Osborne says tax incentives put states on equal footing

While participating in the Greater Omaha Chamber of Commerce’s trip to Washington, D.C. last week, I found myself in a question-and-answer session with U.S. Representative Tom Osborne (R-Neb). Although 69 Omaha-area business and political leaders were in the meeting to discuss federal issues, I couldn’t resist asking a state-related question.

Because Osborne is a candidate for governor of Nebraska, I figured my question was fair game: “Congressman, what is your opinion of the new tax-incentive package passed by the Nebraska Legislature earlier this year, and what are your thoughts on the role of tax incentives in economic development?”

Osborne said that tax incentives are necessary tools in order for a state to be on equal footing with its competitors. The former Hall of Fame football coach made an athletic analogy. “It’s like having a football team that’s allowed to give 25 scholarships per year, but you decide to compete with only 15.”

I couldn’t agree more. Nebraska is in a perpetual, cut-throat battle with every other state in the nation and every nation in the world to attract good jobs. Every state wants new manufacturing plants, corporate headquarters, research and development facilities and distribution centers. If Nebraska is going to survive and hopefully thrive in tomorrow’s global economy, we must be a tough competitor today.

That’s why the new Nebraska Advantage business incentive legislation, passed earlier this year, is so important. Nebraska Advantage incentives become active on Jan. 1, 2006. Because of the new package, Nebraska will become far more competitive and much more desirable in the business recruitment race.

The Nebraska Advantage Act of 2005 (known as Legislative Bill 312) is a comprehensive package of nearly $200 million in annual business development incentives designed to give businesses the support they need to expand, start new ventures, train workers for 21st Century jobs and develop new products and services.

The package offers incentives for a wide range of business and development activities. The first of which will make Nebraska much more competitive in the manufacturing sector. Manufacturing machinery, equipment and related services are now exempt from local and state sales taxes.

Overall, the Nebraska Advantage package outlines five tiers of incentives available to qualifying businesses. Tier one requires $1 million of new capital investment and the creation of at least 10 jobs. This tier supports small businesses if at least 75 percent of sales are out-of-state. Companies are eligible for a partial refund of sales tax paid for their investment, job credits, plus a three percent investment tax credit.

Tier two requires at least $3 million of new investment and the creation of at least 30 jobs. Companies at this tier may qualify for a full sales tax refund for qualified investments in the project, job credits and a 10 percent investment tax credit. Tier three is for job creation without an accompanying capital investment. Businesses that create a minimum of 30 new jobs may qualify to receive jobs tax credits.

Tier four requires companies to invest at least $10 million and create a minimum of 100 jobs. These companies receive the credits outlined in tier two, plus they may qualify for property tax exemptions for the purchase of certain equipment used in the course of business. The fifth and final tier is for companies that invest a minimum of $30 million without the creation of new jobs. These companies may qualify to receive the full refund of sales taxes on capital investment in the project.

The term “jobs credits” is mentioned several times above. The jobs tax credit in the new package is a sliding-scale credit, ranging from three to six percent of the average wages of new employees and is based on an index of the Nebraska average annual wage. If new jobs average at least 60 percent of the Nebraska wage, the job credit is three percent. If the new jobs average at least 125 percent of the annual average wage, the job credit is six percent. These credits can be used to offset employer withholdings.

Finally, Nebraska has set aside significant funding to support custom job training. This funding can be used with new job creation or to retrain an existing workforce learning to work with new technology.

While the details of the package can leave a lay person with blurry eyes, these incentives are exactly what companies are looking for when choosing a place to invest and create jobs.

Governor Dave Heineman, who signed the bill into law earlier this year, summed up its importance: “In this global economy, our entrepreneurs need the tools to compete,” he said. “The Nebraska Advantage and its targeted tax credits will help our existing businesses create good jobs for Nebraskans, but we need to let them know these opportunities exist. This is an important investment in good jobs for our children and grandchildren.”

While the whole state will benefit from the Nebraska Advantage business incentive package, Omaha, as the state’s primary commercial hub, will benefit the most. That’s intriguing. I have great optimism for the future of Omaha’s economy. To that end, I expect we will hear some exciting economic-development announcements in the coming year.

Jeff Beals, vice president of operations for Coldwell Banker Commercial World Group, hosts a weekly radio talk-show called “Grow Omaha,” which focuses on economic development in the Omaha area. It airs Saturdays at 8 a.m. on KKAR (1290 AM). Beals co-hosts the show with Trenton Magid.