Game Changer: West Haymarket Redevelopment Project

by admin

It’s an incredible time to be in Lincoln, as the city’s new skyline conveys the momentum and energy Lincoln is experiencing. Four years ago, when many cities were paralyzed by the economic climate, Lincoln voters put the city on a new path by voting “yes” to move forward on the West Haymarket Redevelopment Project. In August 2013, the new 16,000-seat Pinnacle Bank Arena opened its doors.

The $344 million West Haymarket project envisioned the redevelopment of 400 acres of blighted and underutilized property bordering the popular Haymarket Landmark District and downtown core.

The area we call the “Haymarket” sits along the western edge of the central business district. It was a place for industrial and warehousing uses back in the early 19th and 20th centuries and served the adjacent Burlington and Missouri River Railroad yard.

Nearly 100 years after the rise of the Haymarket, many buildings were vacated and boarded up as the last manufacturer, Russell Stover, pulled its operations from Lincoln. This eight-block district, however, was viewed as an important element to Lincoln’s history, and the city designated it as a Landmark District in 1982.

A New Beginning

In 1985, the Lincoln Haymarket Development Corp. was formed as a non-profit organization to revitalize the area. That same year, the Haymarket was selected as the first urban warehouse district to undertake the revitalization program administered by the National Trust for Historic Preservation.

Now almost 30 years later, many of the buildings in the Historic Haymarket District have been rehabilitated. The city, along with private partners, saw the West Haymarket project as an opportunity to build upon its success and attract more shoppers, diners, residents, hotel guests and many others to Lincoln’s downtown.

The West Haymarket project area presented Lincoln with a unique opportunity. The land is in close proximity to the state’s largest university campus — University of Nebraska-Lincoln — as well as Memorial Stadium, Haymarket Park and a thriving downtown.

During the past few years, Lincoln has experienced a significant increase in rental demand, primarily among young professionals and empty nesters looking to move downtown, where shopping and entertainment options are diverse and support a work/live/play lifestyle.

In addition, the city’s main sporting arena, the Devaney Sports Center, and the city’s auditorium, the 7,500-seat Pershing Center, were both showing their age compared to the sleek, modern facilities of today’s arenas.

Lincoln needed a new arena to accommodate modern events and maintain its traditional role as an entertainment and sports draw for the state.

Mixed-Use at the Core

The redevelopment of the West Haymarket involved several components: apartments, retail, parking garages, restaurants, hotel rooms, and its cornerstone, a 470,000-square-foot arena projected to draw 700,000 people a year. The project is estimated to generate more than $260 million of economic activity in the community each year.

The original estimate of $344 million included new infrastructure, the land purchase, moving the railroad tracks, environmental cleanup and three parking structures.

The city along with the University of Nebraska-Lincoln created a joint public agency to share ownership of the arena. The university, which is the primary tenant of the arena during the basketball season, leased the arena for 30 years. The public/private partnership — including more than $30 million in private donations — funded the arena project. TIF funding was also used for the project. It is noteworthy that there was no property tax increase for the citizens of Lincoln.

A number of high-profile mixed-use projects are completed or under construction in a six-block area surrounding the new Pinnacle Bank Arena, and further redevelopment is evident across the city. The first project to open in fall 2012 was the 124-room Courtyard by Marriott, which was the first new hotel to open in downtown Lincoln in 12 years.

The downtown area has three full-service hotels, including the Holiday Inn, Embassy Suites and the Cornhusker Marriott. The Holiday Inn spent $2 million on upgrading and modernizing its facilities recently while the Cornhusker Marriott, under new ownership by Marcus Lincoln Hotels LLC, is undergoing a multimillion-dollar renovation project.

A year later, the West Haymarket saw the first new mixed-use project for the area open in years. The Canopy Lofts, a six-story, mixed-use building located directly across from the arena and along Canopy Street features retail on the street level and 71 loft-style apartments on the upper floors.

Shortly thereafter came the unveiling of the state’s first designated entertainment district, The Railyard, which sits east from the Canopy Lofts. The Railyard offers restaurants, bars, live music and its most dominant feature is the Cube, a large high-definition screen that is 14 feet long and 40 feet wide on the north side and 14 feet long and 14 feet wide on the west side.

Lincoln real estate firm WRK LLC partnered with Chief Industries Inc. to develop Canopy Lofts and The Railyard.

What’s Next?

Speedway Properties, a locally owned commercial real estate investment company, is finishing its redevelopment project that includes a 104-room Hilton Garden Inn hotel and the conversion of the former Tool House Building, located at 800 Q Street, into the Arena Lofts. The mixed-use project will include 68 apartments and 19,000 square feet of retail.

The cost of the entire project, including the Hilton Garden Inn and the Arena Lofts, is approximately $18 million, of which $6.9 million is the hotel cost.

The Hyatt Place hotel, the last of the three Haymarket-area hotels to open in the past 18 months, occupies the first four floors of the Hobson Place building, with 32 high-end condominiums occupying the three top floors. This was another project developed by WRK and Chief Industries.

The momentum continues as Project Oscar, a $16.8 million, 80,000-square-foot office and retail building is under construction.

The building will serve as the corporate headquarters for local engineering firm Olsson Associates. Olsson will occupy the second and third floors of a four-story building by late 2014. Scott-Woodbury-Wiegert LLC is developing the project.

The West Haymarket redevelopment project has been a once-in-a-lifetime opportunity for Lincoln. The Haymarket District and the Pinnacle Bank Arena have taken an underutilized site and transformed it into a vibrant area. Its impact has fostered a more dynamic and energetic feel to Lincoln.

— By Diana Schilf, Business Development Manager, NAI FMA Realty. This article first appeared in the April 2014 issue of Northeast Real Estate Business magazine.

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