Why It Matters
A state board in Nebraska has approved the use of a public sales tax incentive to fund construction of a professional soccer stadium in Omaha and a youth volleyball complex in Lincoln. The decision marks a policy shift by Governor Jim Pillen, who had previously resisted approving the incentive for sports facility projects. Nine other proposals from cities across the state were rejected, raising questions about the criteria used for approval.
What Happened
The Sports Arena Facility Financing Assistance Act Board met Thursday in Lincoln and approved applications from two projects. The City of Omaha and Union Omaha professional soccer club won approval for a $140 million open-air downtown soccer stadium with 6,500 seats. The City of Lincoln and nonprofit Nebraska for Volleyball received approval for a $17 million youth sports complex featuring indoor volleyball courts.
Both projects will use a turnback tax mechanism, where a portion of new state sales tax revenue generated within 600 yards of the facilities goes toward paying off construction bonds. For larger cities like Omaha and Lincoln, up to 70 percent of new state sales taxes can be directed to bond repayment. City voters must approve bond issuance in most cases.
The board rejected nine other applications from communities across Nebraska, including proposals from Douglas County, Gretna, and Valentine. Some applicants had waited nearly 18 months for a decision.
By the Numbers
The Omaha soccer stadium carries a price tag of $140 million and will seat 6,500 fans. The facility is planned to serve Union Omaha’s existing professional men’s team and a new professional women’s team. The Lincoln volleyball complex will cost $17 million and include a minimum of eight indoor courts, with capacity for up to 12 courts, plus training and concessions areas.
A rejected Douglas County proposal sought state assistance for a $63 million sports complex. A Gretna cheer and dance facility rejected by the board was projected to cost $28.5 million.
Under the turnback tax structure for smaller cities, 25 percent of all state sales taxes in the town can be redirected for five years to support qualified projects.
Zoom Out
Sports facility financing through state sales tax incentives has become a contentious issue in Nebraska and other states. Supporters argue the mechanism captures revenue from new economic development that would not otherwise exist. Critics contend it diverts tax dollars from state coffers and creates winners and losers based on political considerations rather than objective criteria.
Professional soccer stadiums have gained momentum across the country as lower-tier leagues expand. Union Omaha competes in a professional league below Major League Soccer. The approval positions Omaha as part of a growing number of mid-sized cities investing in soccer infrastructure.
What’s Next
Union Omaha officials said they plan to break ground on the downtown stadium in the fall. The Omaha project envisions a privately developed district around the stadium featuring housing, retail, and entertainment venues. Lincoln’s volleyball complex is planned near 30th Street and Folkways Boulevard.
Rejected applicants expressed disappointment and questioned the board’s criteria. One representative said his organization’s proposal is unlikely to move forward without state assistance. Another said a backup funding plan might be pursued for a Gretna facility.
Governor Pillen said he voted favorably for the two projects whose development did not rely too heavily on state tax assistance and which he considered sound investments. He indicated he weighed area competitors and whether the public incentive would create an unfair advantage.