CHICAGO — Nebraska voters in Tuesday’s primary green-lighted several borrowing requests and a constitutional amendment that will allow local governments to issue tax-exempt debt on behalf of nonprofit organizations.
Omaha voters approved five separate bond requests totaling nearly $80 million for capital projects.
In Lincoln, a high-profile plan to build a $344 million bond-financed basketball arena advanced when voters approved a $25 million general obligation bond issue that provides a piece of the project’s financing.
The arena will be located on a stretch of blighted rail yard west of Lincoln’s downtown. It is the largest project in the city’s history. Officials had agreed to abandon the project if voters did not approve the ballot measure.
Triple-A rated Lincoln partnered with the University of Nebraska to form a joint public agency to issue all the bonds, which will carry the full faith and credit pledge of the city. The agency is expected to issue up to $200 million of debt this year, followed by $120 million in 2012 and $24 million in 2013, the year the arena is set to open.
The agency will own the arena and rent it to the city. The city in turn would rent it to the university, which plans to have its Huskers’ basketball teams play there for the next 30 years, starting in 2013.
To pay off the debt, Lincoln plans to raise the sales tax rate on bars and restaurants by two percentage points, pushing the rate to 9% from the current 7%, and by four percentage points on hotels and car rentals.
The publicly financed side of the development includes the new arena as well as new roads, parking lots, and an outdoor festival space. The privately financed piece features a new hotel as well as retail, residential, and office space.
Meanwhile, the third time proved the charm for a measure to amend the state constitution to allow cities, counties, and villages to issue tax-exempt debt on behalf of nonprofit groups.
Nebraska is one of nine states that until this week did not allow nonprofit organizations — with some exceptions, such as hospitals and colleges — access to tax-exempt financing.
The newly approved measure will amend the constitution to allow for authorization on the state level to comply with the federal tax code permitting 501(c)(3) charitable groups access to tax-exempt revenue bonds if they have a government entity willing to issue the debt on their behalf.
It’s the third time the measure has appeared on the ballot. Voters rejected similar measures in 2002 and 2006. The new authorization takes effect immediately.
In Omaha, voters approve five ballot requests that total $79.3 million to finance a series of infrastructure projects across the city. The bonds will be repaid with property taxes and will replace recently retired debt, city officials said.
Proceeds from roughly half of the bonds will finance street and highway improvements, and the remaining dollars will go to parks, sewers, and public safety projects.