Council to maintain 'blighted' designation downtown

McCOOK, Nebraska -- The McCook City Council coordinated a public hearing, Monday evening, to discuss whether the majority of the downtown business district should be declared "blighted" and "substandard." The designations, as defined by Nebraska Statute 18-2103, will declare the area conducive to ill health, the transmission of disease and crime and detrimental to public health and welfare, and were described as being sought to increase eligibility for additional future grants for downtown infrastructure, specifically Tax Increment Financing.

After receiving assurances from McCook Economic Development Director Rex Nelson that he believed there was no downside to businesses located within the area to be designated as "blighted" and "substandard," councillors unanimously approved the measure.

"The blight designation lays the groundwork for future projects," explained Nelson, adding that it was an element utilized to reduce the decay that was taking place at the Keystone building before its renovation.

Nelson said the designation opened up opportunities for TIF funds, which could be used for a broad range of things, such as sidewalks, streets, street lights and even landscaping. "It could also be used to provide fire access to apartments buildings, but probably not for constructing the apartment buildings themselves," said Nelson.

Councilman Mike Gonzales asked what the drawbacks were to the designation and Nelson said, "It sounds bad. The point is there is deterioration in downtown [McCook]," said Nelson. Nelson said he believed the designation was a first step in ultimately stopping the decay of downtown McCook and eventually bringing the property values back up.

"Is there any downside to businesses located there?" asked Gonzales.

"I don't believe so," replied Nelson.

Councilors did not discuss the impact the designation will also have on the city's power of eminent domain, specifically by increasing the city's right to acquire property located within the designated area.

Nebraska Statute 76-710.04 restricts any city from taking property, for economic development purposes and through the use of eminent domain, but the statute has several exceptions and one of which allows for "taking private property based upon a finding of blighted or substandard conditions."

City Attorney Nate Schneider told the Gazette Tuesday morning that a resolution would have to be passed, prior to declaring the acquisition of a property as necessary, and added, "It has never happened in McCook under the community development act to the best of my knowledge and was not the intent of the reaffirmation last night."

Schneider added that "the power of eminent domain is one of those things you don't want to take lightly or utilize unless absolutely necessary."

City Manager Jeff Hancock said during the meeting that the designation would not need to reaffirmed for 10 years.

The same downtown area that the McCook City Council will consider for the designation, which encompasses all businesses on Norris Avenue from south of E Street to A Street in addition to most B Street businesses between East First Street and West Third Street, was previously designated as blighted and substandard in 1999.

Nelson said he believed there were three projects currently in McCook that had utilized TIF funding, the Keystone Business Center, Valmont and the renovation of the old YMCA on Norris Avenue into apartment buildings.

According to a study of Omaha Tax Increment Financing projects by Jack Dunn of the Progressive Research Institute of Nebraska, supporters of TIF credited it with producing economic growth in blighted areas and providing development incentives via a 15-year tax break. The same study cited opponents arguing that TIF plans had subsidized projects that would happen anyhow, shifted developer costs to the rest of the city and most often benefited persons of means, as opposed to blighted areas with high concentrations of poverty.

A second public hearing was coordinated to discuss a Downtown Revitalization Program. City staff was subsequently authorized to apply for a $30,000 grant for the first phase of the program. The grant will require the city provide a $9,300 cash match and commits them to the second phase of the project, which will have a maximum allowable funding request of $350,000 which would require a city match of $112,000.

No specifics were discussed during the meeting pertaining to what the program may entail, but City Manager Jeff Hancock said the project could be as many as three years out. Hancock indicated that the $112,000 would not necessarily need to be accounted for budget wise in the upcoming budget and that the project and match could come in lower than the maximum allowable amount.

Tuesday morning Hancock told the Gazette that "We will see from the downtown merchants, businesses and community what they wish to accomplish after the planning process is completed. This will not be a top down process but will be driven by both the downtown and the total community."