Omaha’s modern streetcar project is generating new development at a rapid pace. That, in turn, is increasing revenue to pay for the future transportation system. At the same time, the cost of the streetcar is going up.
Development in the urban core along the planned streetcar route is now estimated at $1.3 billion by the end of this year, which exceeds estimates.
By comparison, Municap, a city-hired consultant, projected $2 billion over 15 years and $608 million in revenue generated by the increase in Tax Increment Financing to be paid by developers. Municap’s projections were made in 2022.
A new estimate of real estate development, prepared by the city’s finance department, has nearly doubled to $3.9 billion over the next 15 years, resulting in a minimum of $940 million in revenue generated by TIF proceeds. This windfall substantially exceeds the amount necessary to build the streetcar.
The updated estimate is based on 26 development/construction projects underway in the urban core.
With design of the streetcar system nearly 90 percent complete, the initial cost has increased. the preliminary $306 million bond issue was based on the 2022 conceptual design.
The updated bond estimate is $389 million – that’s the cost paid with the revenue created by adjacent development. The Omaha City Council has authorized up to $440 million in bonds for the streetcar, so the new estimate remains below the authorized limit.
Total investment in the streetcar corridor totals $459 million. The streetcar project itself is $389 million. The $70 million difference is the cost of infrastructure improvements to utilities, sewers and bridges.
“Taxpayers will not pay for the streetcar,” Stothert said. “There will not be a tax increase, and the streetcar will not put the city in debt.”
The city is making progress on project even though construction has not yet begun. The initial streetcar route has been modified, and the Farnam-Harney Street bridges over Interstate 480 have been redesigned for pedestrian and bicycle access and safety. The location of the streetcar’s vehicle maintenance facility has been determined and designed.
The 90-percent streetcar design milestone is expected to occur this summer. Actual streetcar construction should start this year. Utility work along the route has been underway for some time now.
