After diligently and steadily reviving its downtown over three decades, Omaha may, in the next two years, strike the motherload. With the approval of the Nebraska Legislature, the city's voters can decide whether to build a $200 million convention center on the northern edge of the city's pulsating downtown. An adjacent sports arena could follow, or even be included in the original project if financing falls into place.

"This is huge," says Richard Secor, vice president of business development for The Lund Co., Omaha. "I think it would help the proliferation of additional shops and restaurants."

The proposed convention center, the dream of Omaha civic leaders for several years, would bring to $1 billion the amount of construction generated in the downtown area, says Jay Noddle, president of Grubb & Ellis/Pacific Realty in Omaha.

Noddle adds that the downtown development alone is phenomenal. The convention center would come on top of a two-part First National Bank project, an Omaha World-Herald expansion, renovations of two government buildings, the recently-completed renovation of City Auditorium, the near-completion of the Marriott Courtyard Hotel, the latest building on the ConAgra Inc. headquarters camps and numerous multifamily renovations.

Office tower makes the list Included in the list is First National Bank of Omaha's 638-ft. office tower, a $200 million project - to be located at 16th and Dodge Street - now under construction. "There is nearly a billion dollars worth of work that is absolutely happening," Noddle says. "You can add to that the possibility of three or four major employers looking for headquarters or campus-style facilities, one of which could be located downtown."

City officials see the addition of a building that will change the skyline as a potential catalyst for development throughout the downtown area, hoping that it might inspire Union Pacific Railroad to build a new headquarters building.

First National Bank of Omaha's skyscraper is in addition to a $100 million technology center planned by First National at 16th and Capitol Ave. The tower is designed by Omaha-based Leo A. Daly, designer of the Woodmen Tower, which at 498 feet, is the tallest building in Omaha. The new building would be slightly taller than the tallest structures in Des Moines, Iowa, Kansas City, Mo., and St. Louis. Kiewit Construction Co., also of Omaha, will start work on the 576,000 sq. ft. building this year. Delivery to tenants is expected in 2002.

According to studies by the Building Owners and Managers Association (BOMA), total office space in Omaha grew by an average of 295,461 sq. ft. per year in the last decade. "The office market is still hot," says Trenton Magid, president of Omaha-based World Group. There's not a lot of space available for 50,000-sq. ft. users. As a result, more [speculative building] is taking place."

While all the public signs are good, developers can't help but assume that a boom cycle that has stayed high throughout the 1990s will swing downward at some point. "Publicly, it's all optimism," Noddle says. "Privately, there continues to be some concern that at some point it will cool down." There are already some indications that commercial development in Omaha may be moving beyond its peak. "The office market has softened," he adds.

Noddle adds that the ability to lease 5,000 to 10,000 sq. ft. is slowing down in the office market. "I think we'll see rental rates pull back 8% to 15% on the 10,000-sq. ft. spaces," Noddle says. "There's not much effect on the larger blocks."

Bennett Ginsburg, president of Omaha-based Mega Corp., says the city is experiencing the same robust economy as the rest of the country. "Omaha is doing well, and that has led to the real estate market doing well," Ginsburg says. "In the last two or three years, it's sort of been a landlord's market."

Expansion to the west Besides the real estate excitement downtown, the city's progress includes continued demand for retail space at hot spots such as 78th and Dodge, West Maple Street and West Center, as well as development of industrial sites on the southwest edge of town spurred by a new Caterpillar tractor plant.

The city continues to move westward along Dodge Street, the city's main east-west drag. The latest approved development is at 180th Street and West Dodge Road, a $90 million office, retail and apartment project planned by The Howard Kooper-Tom Fellman Partnership of Omaha. Planners report that, in the next decade, the 180th Street development is likely to duplicate the buildup that occurred along 144th Street in the 1990s.

One newly announced development would be Omaha's largest since the Regency was built more than 30 years ago. Omaha-based Utopia LLC, formed by Kevin Irish - president of the Omaha office of CBS Home Real Estate - paid $13.5 million for 225 acres between 168th and 180th Streets on West Center. The development will have 215,000 sq. ft. of retail space; nearly 1.5 million sq. ft. of office space sprinkled on three sites; 700 apartments; and 100 single family homes valued at $450,000 or more. In most respects, the real estate story in Omaha is just a new verse of the same song.

Retail sales soar Omaha's retail space appears to have stabilized, with a reduced supply of available space for sale or lease. Vacancy rates in Omaha dipped from 6.38% in 1997 to 4.15% in 1998, according to surveys by BOMA in Washington, D.C. Led by Omaha, the retail sales in Nebraska showed their biggest increase of the last decade in 1998, according to a University of Nebraska business research bureau. The statewide increase was 6.7%, about 1.5 percentage points higher than personal income growth.

Dodge Street continues to take on a new look as old buildings come down and new ones go up. New Tower Plaza shopping center - being developed by Omaha-based Tower Group - which has about 103,000 sq. ft. of retail GLA, has spurred other activity along Dodge Street near 78th. The 8.4-acre plaza consists of a 28,709-sq. ft. building for CompUSA and a 74,291 sq. ft. building divided among 20 other stores. Rents in the area range from $14 per sq. ft. to $18 per sq. ft., triple-net.

"If you would have asked me a year ago if [property owners] would be getting these rents at 78th and Dodge, I would have said you were crazy," says R.J. Neary, vice president of Investors Realty in Omaha.

Downtown multifamily picks up Omaha's current economic condition plays well for the multifamily market, which has seen occupancy rates remain steady at around 95% for five consecutive years, says Omaha appraiser Chris Mustoe. NuStyle Development Corp. of Omaha continues to make news in its niche by converting old buildings into new apartments in the downtown area.

Despite concern for overdevelopment, occupancy rates in Omaha apartments have remained high, moving from 96% in the spring of 1998 to 97.5% in the spring of 1999. About 2,500 new apartments were added to the market in 1998, compared to 2,285 in 1997 and 2,132 in 1996. The low point of the 1990s was in 1994 when 447 units were approved.

Mustoe says Omaha is seeing an increase in upscale apartments to meet demand for "renters by choice," who choose expensive living over home living. Due to demand, Mustoe expects rent increases of about 1% to 2% in 1999.

Hotel projects abound Excitement in the real estate market has not isolated itself to the multifamily sector. Hotel projects also have been piquing attention in downtown Omaha, with "renovations" as the watchword. Marriott International is spending $22.8 million to convert the former Briggs plumbing supplies warehouse and a five-story abandoned dairy into a 181-room Courtyard hotel.

To compete more effectively in Omaha's improved hotel market, the 89-room Redick Plaza Hotel has undertaken a $1 million renovation. The 11-story art deco building at 1504 Harney St. was built in 1931 as an office and parking building, and then converted to a hotel in the 1980s.

The hotel, which is listed on the National Register of Historic Places, had low occupancy as part of the Radisson Hotel chain and was removed from its system last year. Owned by a limited partnership based in Philadelphia, the hotel is on its way to joining the Best Western system.

Renovations aren't limited to downtown Omaha. Construction began in March on a $6.7 million project to change Omaha's Holiday Inn at 655 N. 108th Ave. into a ritzy Crowne Plaza hotel. The changeover is part of $1.5 billion program by Bass Hotels & Resorts of Atlanta to upgrade all Holiday Inns.

As Omaha's skyline gets a makeover and civic leaders dream of a new, state-of-the-art convention center, a city whose past had so much potential but not much action is turning some heads. Now, with retail hotspots popping up around the city, hotel projects flourishing and downtown occupancy rates remaining steady, Omaha is making its mark and showing a promising future.