Step by Step: Steady Transformation Due to DevelopmentMay 27, 2021 03:41PM ● By Brody Hilgenkamp
Photo by Bill Sitzmann
Those who haven’t been out west in a while can drive the expressway on West Dodge Road and find multiple large buildings in the works. Crossroads Mall? A lot of it is gone now, demolished to make way for something new.
Omaha is undergoing a big transformation, with several billion dollars worth of major development underway all across the metro area, from Avenue One and Heartwood Preserve to the west, to Crossroads and the Riverfront Revitalization Project in the center and east. Those massive undertakings provide a snapshot of what the region will be around the corner and also prompt questions about where the next big thing will go.
The Lerner Co., a commercial real estate brokerage, development, and property management company, conducted an analysis of the Omaha-area retail market in 2020; it hadn’t done a similar report since 2017 but brought it back to try to quantify the impact of COVID-19. In 2020, just under 11% of retail square footage was vacant, according to the report, marginally higher than it was in 2017.
Ben Meier, vice president at The Lerner Co., said that points to the region’s steady pace of development that, while it may have held back growth that could’ve happened more quickly, it also prevented overbuilding. “It is interesting to see how Omaha, we have had a model of just slowly getting better and we don’t have the big ups, we don’t have the big downs,” he said. “The conservative aspect has really saved those ugly eyesores where you get into some of the larger cities that have overbuilt without really thinking about it.”
One of the fastest developing areas in the metro is around Elkhorn South High School near 204th and Pacific streets, and one project there will bring the area’s first restaurant with a rooftop pool.
That’s where Omaha developer Aaron McKeever and his business partners are putting Barrel & Vine, as well as a sister development of higher end apartment buildings called The Dalmore. Barrel & Vine will be a combination restaurant, bar, and music venue with a rooftop bar and swimming pool that are accessible to the public and The Dalmore tenants. Patrons will have an “elevated experience,” McKeever said. “What we’re creating is pretty much a one-stop shop in terms of various experiences you’re going to have at Barrel & Vine,” McKeever said. “We’re also allowing for our tenants to take in those experiences as well, within a walkable community.”
McKeever envisions a scenario where someone can enjoy lounging in the sun and cocktails by the pool during the day, eat a meal prepared in a kitchen led by two executive chefs with a combined 60 years of experience, then go home and return for a concert later that night in a music venue that holds between 300 and 400 people.
Convenience will be a major draw at Barrel & Vine, McKeever said. With its location on the western edge of the city, it will be easily accessed by the households nearby. Rather than driving 20 or 30 minutes to a venue in Benson or downtown, those concertgoers can drive five or 10 minutes, making spur-of-the-moment outings more appealing. Nearby communities such as Bennington, Gretna, Valley, and Fremont also could take advantage of the amenities and attractions.
McKeever also noted that Barrel & Vine will have a “modern rustic” design and vibe, adding that it was important for these elements to complement each other at the music venue and the nearby apartments. “We didn’t want it too rustic where people thought that we were a country place,” he said, “and then we didn’t want it too modern in western Omaha where people would think that it was too extravagant.” He took an interest in many of the design elements of Barrel & Vine and included inspiration from restaurants in New York City; Scottsdale, Arizona; and everywhere in between. Barrel & Vine will be “progressive in terms of having that cool factor” with the rooftop pool, which he has seen at restaurants in Kansas City; Minneapolis, Minnesota; and Chicago.
The location, and lots of action nearby, made for an appealing environment to bring in the restaurant and 77-unit The Dalmore, which derives its name from a high-end Scottish whisky—thus reinforcing the tie to Barrel & Vine. Multiple strip malls with a variety of businesses and a grocery store are within walking distance, planting an urban-style walkability experience in a suburban area. (McKeever noted that even if someone lives close to downtown areas and music venues in other parts of Omaha, they’re still driving to get groceries.) Love Church recently relocated from Millard North High School to its new building immediately to the east.
Other developments line 204th Street, especially to the south. Multiple apartment complexes are in the works. A movie theater went in near Harrison Street. An orthopedic and physical therapy facility is under construction and expected to open in the fall near the intersection with Center Street. Immediately to the east of that is a private car condo for collectors that opened last year. All of this is not to mention nearby projects commuters see popping up along West Dodge like the billion-dollar Avenue One development at 192nd Street.
The development along 204th Street “is blowing up overnight,” McKeever said. The road is highly accessible and is part of the state highway system that connects communities as far north as Bennington to those further south like Ashland and Gretna. As the metro’s last major north-south corridor before the Elkhorn River, it makes for an area of high growth potential. “It takes a few projects and then it just dominoes,” he said.
Meier said he sees Omaha’s future growth happening in two ways. The first is around the western and southern crescent from Bennington as far south as Springfield. In anticipation of continued growth, voters in the Gretna, Bennington, and Springfield-Platteview school districts approved bonds for school expansion in 2020, and Gretna and Papillion-La Vista voters approved bonds
Other than a blip in 2017, single-family housing construction permits west of Interstate 680 typically outpace those in the interior of the city, although the gap is closing, according to Omaha-Council Bluffs Metropolitan Area Planning Agency’s Regional Development Report that was released last October. (Commercial permits, those for construction typically devoted to employment, are more evenly distributed across the metro, according to MAPA.) Sarpy County and its cities established a sewer agency to provide infrastructure to the southern portion of the county below a ridgeline that has made development difficult. “That’s going to create all sorts of opportunities for residential growth that you just don’t have north of [Interstate] 680, east of Blair High Road,” Meier said.
The second way Meier sees Omaha growing is internally through updating current development, also referred to as infill. He pointed to the former Mall of the Bluffs and Menard Inc.’s plan to renovate that area into one of its home improvement stores, and the $500 million Crossroads Mall redevelopment project at 72nd and Dodge streets, as prime examples. “That’s going to be phenomenal because that’s one of the densest parts of Omaha,” Meier said of Crossroads. “You can really get a good smattering of customers.” He added, “Density and infill stuff is absolutely going to continue to be a hot spot, and the biggest challenge is going to be dirt cost.”
Proximity to high traffic corridors will always play a role in fostering development, and those in combination with a third factor, local land use policy, can also shed some light on where a city’s next major venture will be. Mike Helgerson, transportation and data manager at MAPA, said accessibility to transportation networks have always played a role in development. He pointed to how towns grew along railroad routes and how streetcars and intercity rail have shaped cities. When automobile use became widespread, cities were able to expand. In Omaha, the expressway on Dodge accelerated expansion west.
It’s a chicken-or-the-egg argument whether accessibility to corridors causes development or vice-versa, but local policy is where the inherent relationship between the two manifests itself. The City of Omaha, in its master plan, has nodes at many major intersections around the city that are dedicated for a mix of uses. The intent is to create environments where people can live, work, and play all in the same vicinity. Those nodes provide a framework and an invitation for either new development—like what’s happening at 204th and Pacific—or “strategic infill” similar to the Crossroads revitalization. Heartwood Preserve, the impressive endeavor underway on the old Boys Town Farm that stretches south from Dodge near 144th Street, has elements of both.
Modes of transportation themselves can also play a role. There are multiple initiatives through the Greater Omaha Chamber, MAPA, the city of Omaha, and other entities to broaden transportation options in the area, whether it be bike lanes or a streetcar. Helgerson pointed to the ORBT bus line that began operating last fall along Dodge Street as a decision that could foster development, both along the current route or future ones, if and when ORBT expands.
“That local policy is really what’s guiding that development, and in certain areas there’s more flexibility than others,” he said.
The UNMC/Nebraska Medicine has plans for a campus that could cost as much as $2 billion, announced in 2019, could have massive ripple effects in the vicinity of its campus and throughout the region due to its outsized role as a major employer, its central location, and its proximity to the ORBT route.
The Lerner Co., in its 2020 retail report, made note of the metro area’s southwest quadrant, specifically Oakview Mall at 144th Street and West Center Road, as an area of opportunity. The area had the metro’s highest vacancy rate at 14.7%, including large portions of Oakview Mall, which saw the recent departures of multiple anchor tenants and recently sold. At the time of the interview, Lerner said Oakview likely will be turned into a mixed use development, similar to the transformation currently underway at its cousin Crossroads. Lerner also noted two grocery stores and a Gordmans location also closed in the quadrant.
Meier said retail companies still value accessibility, proximity to other retailers and major thoroughfares, and favorable demographic data. But some, due to a combination of technological advancements, economic trends, and pandemic-related innovation for survival, are changing the nature of retail, which could have impacts on future development. Meier said many businesses in the retail sector have altered their approach into a hybrid of traditional retail and modern distribution center elements; examples would be Walmart and Target beefing up their online shopping experiences or Chipotle adding space in its kitchens for a seamless drive-thru experience. As those companies go through those changes, they will keep an eye on high-performing areas where they can place future stores.
This article originally appeared in the June 2021 issue of B2B Magazine. To receive the magazine, click here to subscribe.