David Levy is realistic. Levy, chair of the real estate section at Omaha law firm Baird Holm, knows that commercial real estate activity is increasing across the city in which he works.
But he also knows that if the cities across the state of Nebraska had more financial tools at their disposal, they would be able to attract even more new businesses and construction projects in 2013.
“In Omaha and Nebraska, we lack many of the tools that other states and cities have to spur development and to spur growth,” Levy said. “We have tax increment financing, but that is our primary, and in large measure only, significant tool that we can use as a financial incentive to attract growth.”
What financial tools are Omaha and the rest of Nebraska lacking? Levy would like to see the state give cities the ability to use state historic tax credits to encourage developers to invest in rehabbing historic properties. He’d also like to see Nebraska pass legislation to exempt wind-energy projects from sales taxes.
The wind-energy matter is an especially important one. Wind has the potential to be an even bigger industry throughout Nebraska. Unfortunate for Omaha and the rest of the state, about 30 states today don’t charge sales tax on wind projects. It can be difficult, then, for Nebraska to compete with those states that offer this incentive, Levy said.
“In a competitive environment, when you are competing with other states, when you don’t offer what they are offering, it makes it more difficult,” Levy said. “Over the long term, it can slow your growth.”
There is some hope. The state legislature is now considering bills that create a modest historic tax credit and exempt wind projects from sales tax. There are other bills under consideration that would boost the strength of the state’s TIF program.
But no one knows if these bills will pass.
“My belief is that we need to act more urgently,” Levy said. “We are not always as competitive as we could be. There is a finite supply of projects out there. If we wait too long to add these tools, we might not get another chance at some of these opportunities.”
