The Omaha Planning Board earlier this week voted in agreement with a City of Omaha Planning Department recommendation to deny the Tax Increment Financing and Enhanced Employment Area applications for a Drury Plaza Hotel proposed for a long-vacant, grassy lot southeast of 10th & Harney Street downtown. The project site is south of the Brickline apartments and north of Embassy Suites.
Drury purchased the land last year and plans to build a $55 million, 210-room hotel with 2,000 sq. ft. of conference space, a pool and onsite restaurant and bar. The 8-story building would be built over a two-level, 175-space parking garage.
In 2018, the City of Omaha adopted a recommendation from a private consultancy firm that identified an oversaturation of hotels in the downtown market that were less than the luxury or upper-upscale levels as defined by the STR hotel chain rating system. The STR rating system is primarily based on average daily rates, meaning the higher the rates, the greater likelihood of a higher STR rating.
To promote the development of luxury and upper-upscale hotels downtown, the city created a policy to restrict awarding TIF and EEA to hotel projects unless they are luxury or upper-upscale brands. The planning department recommended to deny the TIF and EEA applications, because the Drury Plaza brand does not fall into either the luxury or upper-upscale hotel designations. The recommendation was upheld by the planning board on a 4-1 vote despite assurances from the developer that it would build the hotel with finishes and accommodations equal to upper-upscale brands.
Possible next steps are not yet publicly known. The hotel developer might take the request straight to the city council. In addition to the proposed project site, the same developer also owns the northwest corner of 10th & Harney Street.
