Omaha Could Bond for Streetcar Line

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DALLAS – The Omaha City council is considering several revenue streams to support borrowing that would help finance a proposed $156 million streetcar system.

The city is in the early stages of exploring financing options to fund the project – a so called urban circulator that would link downtown Omaha to the city's midtown area.

An analysis lists tax-increment financing and parking revenues as potential revenue streams that could back bonds to fund a portion of the project that's been on the city's to-do list since 1994.

The analysis, put together by project developer HDR Inc. and filed with the city council last week, projects operating costs at about $7.5 million a year. Omaha Mayor Jean Stothert said in a statement that she does not expect to raise property taxes to pay for the project.

"The mayor is committed that there be no increase in property taxes," said Omaha City Clerk Buster Brown.

Early projections in the study estimate that $40 million could be raised through TIF borrowing. Another $21 million could be raised from parking revenue bonds.

The city may also support the project by issuing up to $10 million in bonds backed by other revenue streams or with a general obligation pledge.

The city is also considering applying for up to $78 million in Federal Transit Administration grants. HDR noted that source is not guaranteed to come to fruition. In the event that the federal grant is not secured, it's likely that the city would have to contribute in excess of $10 million in bonding to close the funding gap, according to the report.

Former State Sen. Heath Mello, who is challenging Stothert in this spring's mayoral election, has other financing ideas. He has proposed creating a city "infrastructure bank" to combine public and private money for major projects such as a streetcar. He said the city should also pursue state funding, such as increased money from gasoline taxes. Money from the state infrastructure bank "is a real possibility," he said.

Financing options are far from final. The city plans next to form a committee to discuss the financing options with a final recommendation expected to go to the mayor in October, said Brown.

The proposed Omaha streetcar would resemble Kansas City's $102 million which was funded via a series of tax assessments and included some borrowing.

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