Bellevue balks at proposed fixes to ‘Good Life' law, though hearing draws mostly support

Yahoo

20-03-2025

The City of Bellevue's planned indoor water park is the centerpiece of the state-approved good life district in that Sarpy County city. Revisions to the Good Life law were the topic of a public hearing in Lincoln on Wednesday. (Courtesy of City of Bellevue)
LINCOLN — On the eve of a ground-breaking event for Bellevue's state-approved 'good life district,' Nebraska lawmakers considered proposed legislation that Bellevue contends could throw its mega tourism project into turmoil.
Indeed, officials of the state's third-largest city believe that parts of Legislative Bill 707 and a related amendment — which are intended to update earlier versions of Nebraska's Good Life laws — appear aimed at 'harming' Bellevue's planned indoor water park.
They cite the potential annual loss of more than $1 million in revenue the city had projected based on the previous law. And with Bellevue already having invested $40 million into its district, a city representative told the Nebraska Examiner that a lawsuit against the state may be on the horizon.
'It feels like they're trying to frame the discussion around the Bellevue district attempting some kind of shenanigans,' Harrison Johnson, Bellevue's director of community and economic development, said in an interview. 'We think the way we're approaching this is the most responsible and transparent way to deliver value for taxpayers.'
Bellevue's opposition to the proposed legislation — introduced by State Sen. Brad von Gillern of the Elkhorn area and named a priority bill of Speaker John Arch of La Vista — is the latest uproar in an ongoing saga featuring the state's Good Life Transformational Projects Act, enacted in 2023 and an update passed in 2024.
Mayor Rusty Hike of Bellevue was the lone opponent testifying at a public hearing Wednesday before the Legislature's Revenue Committee. Bellevue is one of four good life districts approved by the Nebraska Department of Economic Development. Five are allowed under the law.
A representative of the City of Grand Island, where another good life district is underway, testified in a neutral capacity and briefly updated the committee on the local 875-acre project site led by a private developer, focused on sports tourism and projected to lure 300,000 out-of-state visitors a year.
Grand Island City Administrator Laura McAloon did voice concern, however, that further delay and 'lack of certainty' about the law could cause problems firming up a financial plan.
Also testifying was Nebraska Attorney General Mike Hilgers, who said he had no position on the proposed legislation but became involved because of legal questions stemming from the DED-approved good life district in Gretna and original applicant Rod Yates' request to withdraw.
Hilgers helped bring bickering parties to the table and believes he found common ground and an 'agreed upon framework' for a few key points.
'They will unlock value in Gretna, but I think they are valuable for all the projects,' he said.
One point involves control over the property within a district. In Gretna, Yates wanted to develop the entire 2,000 acres, even though he owned just a slice. Gretna officials balked at Yates' demands, which they said could have led to the use of eminent domain.
A proposed solution specifies that other property owners could develop their own land.
Said von Gillern: 'There's language coming … to ensure no one developer can negatively stifle another development opportunity. Again, furthering development potential and increasing sales tax revenue for the state.'
Another point would require the city, state and developer to agree to a memorandum of understanding covering various potential conflicts and ensuring 'transparency' in protecting taxpayers, said Hilgers.
Von Gillern told committee members that it became obvious as the previous Good Life legislation played out that 'additional guardrails' were needed to clarify confusion.
Several elements created concern, said von Gillern, including how over $2.2 million in state sales tax revenue was lost as progress on the Gretna district was delayed.
The law, as originally written, created a major incentive: State sales taxes imposed within good life districts were to be cut in half, from 5.5% to 2.75%. The idea was to recapture the difference to help finance unique entertainment and shopping districts that over time would draw more tourists and rake in more money for the state.
But to collect the difference and direct it to district development efforts, the approval of local voters is required to trigger the host city to create an economic development program for the new district.
An average of $300,000 a month in state sales tax revenue was forfeited in Gretna, the state's biggest and most high-profile good life district. A successful January vote has now allowed Gretna to start, this month, collecting that revenue for future use in the district.
Von Gillern said his bill proposes a resolution safeguarding against that same situation. Among other other changes:
Specifies that eminent domain will not be used to force the sale of land in a district.
Firms up the definition of new-to-market retail and transformational projects, which are required of districts.
Some language changes are still being hammered out, he said, including details involved in terminating a district's special designation that opens the door to the incentive.
While the applicant for Omaha's approved good life district did not testify, applicant Curt Hofer of Avenue One in west Omaha submitted a written objection to von Gillern's proposal.
State Sen. Eliot Bostar of Lincoln, a committee member, asked von Gillern about Omaha, noting that Hofer said the proposed changes would 'destroy' his project.
In response, von Gillern said he believed Hofer's complaint stems from the developer's request to expand the 200-acre retail and entertainment district.
A proposed change in LB 707 says the state 'may,' not 'shall,' grant a request by an applicant for expansion of boundaries. Hofer was not immediately available for comment.
Two proponents representing Kearney questioned why state officials had not yet responded to the application for a Kearney good life district featuring a $225 million retail, restaurant and entertainment project envisioned to bring more than 6,500 jobs.
Applicants from Kearney and Papillion have requested to be the fifth and final district allowed under the law.
Bellevue was the fourth to be approved (last July) by DED. The anchor of its estimated $1.36 billion site — an indoor water park believed to be the fourth largest of its kind in the country — would have a retractable roof and resort-style recreation area.
A mix of commercial venues at the site includes a theater and golf sports complex.
Bellevue stood out among the good life districts because the applicant was the city and not a private developer.
Johnson has said that since the city wouldn't be remitting any of the eliminated state sales tax to a private developer, there was no need for a special election.
Occupation taxes assessed in the district essentially would recoup the eliminated state sales tax, he said, and help the city pay for infrastructure and construction of amenities on the site.
Bellevue officials took issue with a handful of provisions in the von Gillern proposal. One aimed at Bellevue, Johnson said, prohibits an applicant, if that applicant is a political subdivision, from being exempt from sales tax on building material purchases for a new business that will offer taxable sales in the district.
Another, he said, allows the DED to terminate a district if the host city has not created an economic development program within three years of being established. Such a program would follow an election, said Johnson, and Bellevue's plan did not call for an election.
Johnson said Bellevue sees von Gillern's proposed changes in LB 707 and Amendment 615 as being 'extraordinarily hostile' to Bellevue's plans and 'punishing its taxpayers with what amounts to significant fines for using a law the Legislature passed in 2023.'
Hike told the committee the amendment would cap an occupation tax in a way that would 'endanger the tax receipts the city would require and has projected to fund the project.'
Von Gillern did not hold back on his concern about Bellevue.
'It was never intended for a public entity to own or operate a good life district,' he said. 'A tax exempt would not collect sales tax on materials used in construction and under some circumstances not collect sales tax. Again, clearly not the intention of the bill.'
Von Gillern said he did his own calculations on tax exemptions related to building materials.
'I don't think the state should be subsidizing the construction of a pool complex that is being built with the complete intent of increasing tax revenue for the state of Nebraska. It's working in the exact opposite direction.'
Von Gillern said he was a fan of good life districts before, and remains so, if changes are made to existing law. He said he believes both his and Hilgers' recommendations are applicable to all districts.
The public hearing was combined with Bellevue State Sen. Rick Holdcroft's LB 510, which also related to good life districts. Holdcroft said he would defer to von Gillern's bill and amendment as the preferred course.
Holdcroft, when he introduced LB 510 in January called it a 'placeholder' to be defined later, but he said it proposed to look out for the needs of Gretna taxpayers and a prohibition of eminent domain was a key element.
Eight people submitted written objections to LB 707 and no one wrote in support.
The Revenue Committee took no action, though several committee members commented that the changes moved in the right direction.
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