City Council hears plans for renovated Bishop Heights shopping center | Local Government

Developers want to turn the old Shopko that anchored the Bishop Heights shopping center at 27th Street and Nebraska 2 for years into new commercial space, possibly with a 150-room hotel.

That’s part of the redevelopment plans for the now nearly vacant center that will ultimately include 230 luxury apartments, new office space and some significant trail enhancements along bike trails that run along the east and north portions of the property.

“The vision for the site is to create a revitalized pedestrian-oriented neighborhood destination providing a mix of amenities for nearby residents,” DaNay Kalkowski, the attorney representing three developers involved in the project, told the City Council Monday.

The council is considering zoning changes and whether the redevelopment plan conforms to the Lincoln-Lancaster County Comprehensive Plan. They will vote at the June 20 meeting.

The shopping center has remained nearly vacant since Shopko closed in 2019 and the retailer declared bankruptcy. A Wells Fargo bank branch and an Arby’s remain there, and the fast-food restaurant is interested in updating the building.

RED Development, which owns the building that used to house Shopko and other businesses, plans to demolish it and develop either 70,000 square feet of commercial space with retail shops, restaurants and offices, or 50,000 square feet of commercial space and a hotel.

EPC Real Estate Group, an Overland Park, Kansas-based company plans to build a five-story, 230-unit luxury apartment complex.

White Development Co. owns the former U.S. Bank branch building on the northwest part of the site, which it plans to demolish and develop into one larger office building or two smaller ones, with a maximum of 45,000 square feet of space.

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Two bike trails run adjacent to the land, and Kalkowski told the council developers have plans to make significant trail upgrades.

Kalkowski said because the development has 1,474 lineal feet along the trails, there will be some parking lots abutting those trails, but the developer will include berms as barriers. Developers also will encourage tenants to add patios and decks.

Trail improvements include adding three new sidewalk connections to both the Helen Boosalis and Rock Island trails from the apartments and commercial areas, additional landscaping and building shared trailhead parking stalls and installing bike racks along the south side of the property, where the Rock Island trail runs along Nebraska 2.

Some neighbors have expressed concerns about the potential for increased traffic, but a traffic study submitted with the plans shows that while traffic would increase in the morning, it would drop by 28% in the evening and by 18% overall.

Developers also hope when the South Beltway opens it will reduce truck traffic along Nebraska 2, Kalkowski said. The existing 27th Street — which has never been widened — creates a situation the developer must work around.

“I think we’re just dealing with an existing situation and there’s not a lot that can be done at this stage to make it better,” she said. “We’re working within a built environment and community decisions made to keep it that way.”

The cost of the development is estimated at nearly $90 million, with nearly $78 million coming from the developers and anywhere from $9 million to $11 million coming from the city in the form of tax-increment financing, which allows developers to use future property taxes generated by projects to pay for certain upfront costs.

The City Council previously approved a blight designation for the center, which makes it eligible for TIF, and the Lincoln-Lancaster County Planning Commission voted unanimously to find the plan in conformance with the city-county Comprehensive Plan.

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