After more than an hour of discussion capped by a narrow vote, the North Platte city council agreed Tuesday, Sept. 3 to give Chief Development a $1 million forgivable loan.
The vote was 5-3, with Ty Lucas, Jim Carman and Ed Rieker voting no.
With the council’s approval, Chief’s real estate holding company, Prataria Ventures, LLC will receive $1 million as soon as they obtain their first building permit to get started on what everyone hopes will become a $30-40 million development.
The loan is no-interest and the company won’t have to worry about repaying it for six years, and then only if they fail to build $10 million in new property.
Prataria will use the generous loan as seed money to develop in North Platte. They aim to build warehouses in the city’s industrial tract west of the Wal-Mart distribution center, as well as commercial buildings on Halligan Drive near I-80, plus a planned residential community west of Iron Eagle golf course, also visible from I-80.
The company has a solid history, operating in Nebraska since the mid-1950s. The parent company, Chief Industries, started building grain bins and expanded into other ag-related manufacturing. They’ve been developing property for decades, helping with the Haymarket redevelopment in Lincoln, and other projects in Norfolk and Lincoln. Currently they are building a new hospital in Grand Island, part of a 103-acre development called Prairie Commons.
Bullington said the company’s immediate goals in North Platte are to build $3.5 million in warehouses in the industrial area on the south edge of the city, plus $3 million or more in commercial buildings near I-80.
The majority of the council favored giving Prataria some incentive to develop in North Platte, but the price was a little steep for some members.
Tighter requirements proposed, rejected
Councilman Ty Lucas, a former president of the North Platte Chamber of Commerce board of directors, repeatedly voiced reluctance. Lucas said it felt like giving away the farm; that $1 million from the city’s quality growth fund would be the largest single withdrawal from the fund in the city’s history. He referred to the difficulty of raising that much money to replace the loan.
Lucas suggested putting $1 million in reserve for Prataria until it builds $5 million in new property, then the company would get the money. Lucas also wanted to Prataria to build $15 million in new property before the $1 million loan would be forgiven.
His motion to that effect failed, 5-3. Lucas, Ed Rieker and Lawrence Ostendorf cast the only yes votes.
Bullington said delays kill developments and time is of the essence. During the discussion, he said the company is already lining up potential investors. He said construction costs are so high these days that TIF is needed to install the infrastructure — streets and utilities. He said most cities don’t have the money to put in the infrastructure.
Bullington and Chamber/DevCo Executive Director Gary Person predicted that the new development, most of which will be visible from I-80, will attract other developers.
“One thing we’ve found,” Bullington said, “is that investment begets more investment. Also, lack of investment begets more lack of investment.”
He said since the project hit the newspapers, the company has had a “pretty good amount of interest” from potential investors. Person said one of the city’s development partners — the Nebraska Public Power District — plans to use the project in its presentations.
Mayor Dwight Livingston called it an “opportunity to change the entryway to North Platte.”
Councilman Jim Backenstose called it “a once in a lifetime opportunity.”
Councilman Glenn Petersen called it “an opportunity we haven’t had in a long time. We might not get another opportunity like it in a long time.”
Councilman Ed Rieker asked Bullington if the developments are contingent on tax increment financing for all the properties. Bullington said yes.
He said Chief would like to start building warehouses this fall, but also admitted there are significant challenges, not only getting TIF for the construction, but finding construction workers to extend the street and utility lines.
During the discussion, Bullington said Chief wants to see the Iron Eagle golf course continue to be a stable operation, so the company can develop the residential community to the west with golf cart paths running through it – a golf cart community.
In response to a question from Councilman Jim Carman, Bullington said Chief does not want to operate Iron Eagle, but would look at all options and try to help if the city pulls the plug on the course.
The council chamber was packed when the meeting began, with people spilling into the hallway.
Earlier in the meeting during a public hearing on the budget, 10 people spoke against the city’s continued funding of Iron Eagle. Most of them called for a public vote to decide if the city should continue to own the course.
Two people spoke in support of Iron Eagle.
Bullington had a suggestion — that the city issue a request to companies for proposals to take over the course, and see how much interest is out there.
“That would be a direct way to approach it,” Bullington said.
Money to study recreation center, multi-sport arena
In other action, the council approved a recommendation of Quality Growth Fund citizen’s advisory committee for a $20,000 grant for a feasibility market study and financial analysis on improving the city recreation center and building an indoor multi-sports arena.
Spokeswoman Megan McGown said the study will look at four options, including private ownership of the recreation center.
The council voted 5-3, with Lucas, Carman and Rieker voting no.
Lucas said considering a multi-use facility would complicate efforts to upgrade the recreation center, with city leaders getting embroiled in debates over location and costs.
But McGown said the study would aim to avoid duplicate aspects of the two facilities, and determine if they should be separate, side-by-side, or combined.