The City of Omaha is creating a new program to help incentivize the construction of upscale hotels in the City. Over the next few weeks, the City Council will review and vote on an ordinance to create a Hotel Occupation Tax Reinvestment Program.
The program allows developers to use all or a portion of the transient rental guest tax revenue to reimburse eligible development costs, including acquisition, construction, rehabilitation, utility extensions and parking, among other things. Per the Omaha Municipal Code, the transient rental guest tax totals 5.5 percent of the gross charge for hotel occupancy.
According to the ordinance, a qualifying hotel project must meet several parameters. Foremost, the hotel must be new to market and be considered an upper-upscale hotel. The City defines “upper-upscale” as a hotel that meets a Four Diamond rating or better under the AAA hotel rating scale.
The hotel must also be located within half a mile of a city-owned cultural or entertainment facility, including museums, sports facilities, conventions center or other publicly owned assets that directly impact local tourism. Additionally, such a hotel project must provide a substantial benefit to a city-owned tourism attraction through redevelopment, activation or improvements of said attraction.
For reference, in the 2025 AAA list of Four Diamond hotels, Nebraska has two, both in Omaha: the Kimpton Cottonwood Hotel in the Blackstone District and The Farnam Autograph Collection at 14th & Farnam downtown.
This week, the ordinance will be introduced under first reading. Next week, the City Council will hear public comments on the ordinance, if any.
Photo by Brad Williams
